U.S. Fed Rate Hike Today . . . .

[errolanderson]

In all likelihood, the Fed will hike rates 1/4% later today. Timing of rate hikes couldn't be worse (IMO).

The U.S. economy is now contracting with GDP stalling below 2%. Department store retail sales have plunged 15% to 2008 levels. The value of all Dow Jones companies has now fallen to 2010 levels. And the U.S. government can't remotely pay the added interest charges on their $20 trillion debt.

Some analysts suggest if Yellen triggers a U.S. recession with ill-timed rate hikes, she will simply print more money (QE4) . . . translation: a global currency war. Total economic disaster in-the-making (IMO)

[farming101]

Inevitable

2% growth compounded chart. Value 100 in 1776

[SASKFARMER3]

Saving going to start rising.

[farmaholic]

I am so out of my element here..... but can someone tell me how you can expect something to grow forever at the same rate? Errol? Doesn't it defy laws and logic? Won't it collapse under it's own weight? Why the hell can't society(or who ever) take it's medicine?

I really don't understand.

or do I?

[biglentil]

[QUOTE=Total economic disaster in-the-making (IMO)[/QUOTE]

Careful Errol the people with their heads in the sand that hold fiat paper near and dear to their heart will label you a doom and gloomer.

[ajl]

Today's rate rise just like the previous ones and the taper tantrum will be a yawner. Already priced in. It is high time financial repression ends and a rate rise will encourage growth as there is less need to hoard assets as well as allows the greenback to function as a store of value. If the US has 2% real growth, it is the envy of the entire rest of the world as in most places growth is really inflation.

[errolanderson]

Another tidbit . . .

Apparently, the Canada Pension Fund purchased Neiman Marcus luxury retailer based in LA for $6 billion in 2013. Hudson Bay is now rumored to be interested in buying up the financial remains.

[biglentil]

I am so out of my element here..... but can someone tell me how you can expect something to grow forever at the same rate? Errol? Doesn't it defy laws and logic? Won't it collapse under it's own weight? Why the hell can't society(or who ever) take it's medicine?

I really don't understand.

or do I?

Cut spending or raise taxes and commit political suicide or print:

[the big wheel]

Come on people stop the fake news Errol!!
President Chump s policies on day one lead to an immediate turnaround in the USA economy. Unemployment lowered output increase trade increase the Mexican funded wall. All of this while Obama was wiretapping his offices. Yet through this adversity pres Chump is making America great again.
All of the leading cabinet ministers are multi billionaires. This one move eliminated the buy off of cabinet ministers because now the ones doing the buy off are the cabinet ministers. Brilliant.
The stock exchange is flying based on this solid improvements to the country.
What will happen once the reality of Chumps actions hit home?

[rockpile]

Errol, could a one quarter percent hike be that severe or would it just be a shot over the bow to temper consumer debt. I read a lot of opposing viewpoints from analysts this morning some saying it would strengthen the USD against foreign currencies. Way over my head, lol.

[errolanderson]

rockpile . . . 1/4% sounds like nothing. But when your country has a $20 trillion debt plus consumer spending is holding your economy together, it is significant. In my view, a total of 3/4% hike in rates would be enough to send the U.S. into a serious recession. This will be Yellen's 2nd hike totalling 1/2%.

The clock is ticking (IMO) . . . .

[dmlfarmer]

Errol: I am wondering what you think the US should have done differently since 2008? You were opposed to the QE and now to interest rate increases. Given hindsight is always clearer, what should the US have done instead of dropping interest rates as low as they did and increase the money supply to get out of the recession. And what do you think they should do now?

[errolanderson]

Errol: I am wondering what you think the US should have done differently since 2008? You were opposed to the QE and now to interest rate increases. Given hindsight is always clearer, what should the US have done instead of dropping interest rates as low as they did and increase the money supply to get out of the recession. And what do you think they should do now?

dml . . . I am opposed to QE central bank intervention as the writing was on-the-wall that Keynesian economics of money printing would only 'kick the can' down the road and actually contribute to a much worse debt crisis, which we are witnessing right now. Government debt is now far too deep for QE to work and now it has turned into a global currency war.

Pick your poison . . . Pay now and pay for a much problem later, but that is now water under-the-bridge. Asset classes including stock markets, art, classic car, luxury real estate are overvalued (IMO). Realize low interest rate policy contributed to these bubbles, but QE money printing was the key force.

So what advantage did you get right now with all this central bank intervention supporting markets artificially? The debt problem is now far worse. If you believe that was a great move and the only move, then enjoy what lies ahead.

dml . . . to answer your question, yes I would have done a lot of things differently. It would have been painful, but there may be a chance of a true market recovery by now . . . .

[sumdumguy]

If Trump turns off the outflow of money that funds the climate change hoax, he will save billions. more than covers the extra service of debt.

[Oliver88]

If Trump turns off the outflow of money that funds the climate change hoax, he will save billions. more than covers the extra service of debt.

Agree 100%

Hopefully this change in direction in the US will help bring some common sense to north of the border as we are now seeing carbon tax/cap and trade wealth redistribution experiments in several provinces.