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When this thread started on 4/25/2010, the hottest financial book out was Michael Lewis' "The Big Short". The sub-prime bond market collapsed in 2007 and 2008, taking out the rest of the economy. The aftermath was 10% unemployment and unprecedented US Government spending and risk guarantees to prop up Wall Street firms that would have otherwise ceased to exist. All the perpetrators of this disaster walked away multi-millionaires and billionaires, leaving the rest of us holding the bag. No criminal suits were brought against the bankster execs, except for a few small fry scapegoats. The SEC suit of Goldman Sachs and JP Morgan were a sham puppet's court and the Dodd-Frank financial reform didn't come close to addressing the underlying problems, and it has since been gutted. All of it was window dressing for an American public that isn't sophisticated enough to even begin to understand the nature or scope of the greatest public Treasury/Fed/Wall Street heist in US history that is still underway.
As of 2019, the bottom line is that the US debt continues to soar on the back of 9 years of unprecedented monetary and fiscal stimulus, and is now clocking in at $22 Trillion. The end of deficits is nowhere in sight. Even though the Fed has been raising interest rates and shrinking their balance sheet, INFLATION has been bouncing around, recently dropping as low as 1.5% in March. The future for Inflation is uncertain, but the stock market feels frothy, and the monetary and fiscal stimulus efforts seem to have reached their last gasps.
This thread was started with the idea that these monetary and fiscal policies would inevitably result in inflation, especially now with the deregulation of banks and deficit binges that are ongoing. The only questions left to ask are as follows:
* When will we start to see inflation get out of control? Or does a massive debt to GDP ration mean deflation is now the dominant worry, as we saw in Japan?
* How far will the Fed go to protect stock markets?
* Who will benefit and how will they benefit? Who will lose and how?
* How can we position our portfolios for this to ensure we don't lose big?
* What publicly traded companies, sectors, or instruments will benefit and which will lose in a rapid inflationary environment or a deflationary one?
* When will the Fed lose the stomach for raising rates and stop quantitative tightening? When will they reverse course and engage in ZIRP or even NIRP and QE?
* What will be the immediate consequences in the market and how can we get ahead of that trade?
Latest Inflation Readings:
Treasury Yields (Watch for inversion or steepening):
Atlanta Federal Reserve's GDPNow:
The only rule on this thread is that we keep it civil. If someone demonstrates uncontrollable vitriol, I'll give one or more warnings, and then ultimately ban the instigator. Try to make your points without insulting people. If that is too much for you, then there are other threads where you may be welcomed, but not here.
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