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User Info Yes, Rates Are STILL Going Higher in forum [Market-Ticker]
Stoic
Posts: 99
Incept: 2021-09-12

LC SC
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@Hyem

I don't see how it could go any other way. The laws of economics have been suspended for a while now but they have not been obliterated and they will eventually take their rightful place as being supreme. If this doesn't happen the Dark Ages will look like a Utopia, for everyone, including the people responsible. They know this.

Stoic
Indianarube
Posts: 558
Incept: 2020-03-22

NW Indiana
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This reminds me of the "Waterlilys and Pond" Ticker. I wonder how rising rates are going to effect the government's (Federal, state, and local) ability to finance projects and refinance their debt? This will get very ugly, very quickly. Exponents are a bitch. Maff is hard.
Tappedout
Posts: 83
Incept: 2020-09-21

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I grew up in the Detoit area. When the economy boomed, every plant was working 3 shifts, and plenty of overtime was to be had.

A percentage of people lived like the music would play forever. Boats. RVs. Snowmobiles. A second home "up North. "

And when the music stopped, it was a fire sale. People learned painful lessons, and moved on.

But now we have an entire generation who has never lived through a real recession, much less a depression.

No telling how this will play out, and over what time frame. But there's a world of hurt coming.
Seektruth
Posts: 1262
Incept: 2007-09-01
A True American Patriot!
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What goes up must come down. You can only suspend the laws of physics (and math) for so long. Popcorn on standby.

I've reduced my 401k contribution from the max to the amount my employer matches (5%). I never put much into stocks anyway, even in the 401k. But I'm just gonna keep the powder dry and plow into 30 year treasuries when the time comes, if it comes without complete societal breakdown. In which case, none of our 'investment' plans will matter much.

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Truth is out of style.
Ocdawg
Posts: 260
Incept: 2019-03-14

Let's go Brandon, WI
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At the risk of exposing my naivete (and banhammer), I'm reminded of something my dad said long ago (he passed when I was 16)... "War always seems to wash out the debt."

So what's that little "skirmish" in Ukraine really about again and Karl's Ticker on Gampy **** Pants assigning land for loading resources ("We are now at war with Russia") which similar got us into WWII?
And if war is really war, how can Bono and The Edge go sing songs with Zelensky invite and nary a bullet fired?smiley

Things that make you go, "Hmmmmm"...
smiley

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"I have certain rules I live by... my first rule...
I don't believe anything the government says. The government doesn't lie; it engages in disinformation"
-George Carlin smileysmileysmiley

Reason: Spell
Ewtnewbie2
Posts: 174
Incept: 2021-09-13

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Yeah, great ticker for sure and the Truth is in there, whether the Ministry of Truth wants to approve it or not. #FJB

Reviewed our finances and plans going forward this weekend. All is on track.

Lots of cash, holding a small amount in a non-market-correlated mutual fund that trend follows using futures as the trading vehicle, so it isn't invested in QQQ/AMZN/AAPL/NFLX but rather short Euros, short ES, etc..., and a dabbling of holdings in TBT & SQQQ, and wait for it: roughly 1% of our net worth is invested in the stock market inside a 401k. No wonder we are sleeping extremely well at night while others are starting the "I'm getting worried" talk when we get together as friends. If you were 100% invested in STAWKS--you should be worried and losing sleep. When the next big bounce comes from the upcoming lows, to get everyone excited that new highs are coming and everything is fine--SELL Mortimer, SELL!!!!

The small business and associated real estate are in the middle of being sold with the due diligence period going on right now. Would close tomorrow IF the banks and buyer would do so, but they have to go through the dog and pony show of looking like they are doing something to earn their fees. We missed our perfect window to sell off a house into the white hot market, but we'll reassess once the small business is sold to see if the housing market has any legs this summer.

Good luck to us all that have our eyes wide open and can see the trouble coming. We're going to need this forum to share our experiences over the next few years.

Thanks as always Karl for making the difficult topics easy to understand. You are a gifted teacher and communicator. Please keep it up as long as you can. It is truly appreciated.
Dbigkahunna
Posts: 240
Incept: 2010-01-10

Giant Side of Texas
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What should happen and what will. only in my opinion, are two different things.
Rates should be 6-7%. Will they rise above 3%, I don't think it will be allowed to happen. While it is completely necessary to correct the imbalances, continued raising into the present recession and a looming election to me does not seem doable. It's gonna be someone's legacy, but you can bet Powell is not going to let it be his.
Or is going to do try to do everything in his power to fight it off.
Is there anything a broke ass retired welder in the oilfields of west Texas can do about it? Other than be out of debt, have a little land and equipment with ability to fix things?
Nope!
Me and my bride won't starve to death.

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Blessed, Grateful and Living a Dream
Bzelbob
Posts: 232
Incept: 2021-09-12

Jacksonville
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@Disgusted
Quote:
Ole Jerome said he's manufacturing a "soft landing" the other day.

Like a diving airplane you can build up enough airspeed to pull back up and glide, ...but sooner or later you run out of altitude!

Soft landing my ass.

Better fasten those seat belts now. (If we're lucky we'll hit the trees, not the mountain...but I'm not betting on it!)

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"Threats are illogical. And payment is usually expensive." - Sarek of Vulcan
Cvdoc
Posts: 523
Incept: 2009-06-11

Washington, DC
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I bonds are great idea. Doesnt match inflation but as Ive watched money seeming made in the stock evaporate, I decided to take some money off the table.

I own my own business. Business is good due to the specialty Im in but I think a depression is coming by years end. Also, the amount of Vax injuries Im seeing and hearing about are incredible. I think in 5 years even the most oblivious will look back and think, what the hell.

As an aside. Clarence Thomas, the justice hasnt hired a clerk from an Ivy League school for 20 years. My respect for him just tripled. And it was pretty high before.

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Few men desire liberty; most men wish only for a just master.
Sallust
Eoinw
Posts: 81
Incept: 2021-07-14

Canada
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@ Synopsis

I've wondered what local government balance sheets look like. Especially after shutting down small businesses(and all that tax revenue) for two years. Where I live, they've even closed the beach the past two summers! Who needs tourist revenue? One thing I'm sure of is that not a single government job has been cut.

Totally out of touch with reality. It's got to be a scary ending to all this. What kind of society will be left if things fall apart locally?
Eoinw
Posts: 81
Incept: 2021-07-14

Canada
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I have an idea! While a serious economic correction is exciting, why not make it really interesting by finding a million ways to divide citizens against each other? Must we settle for an economic collapse, when we can have a social collapse?
Redjack
Posts: 1438
Incept: 2018-01-29

Iowa
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Starting to hear locally that that some big employers are, well not laying off but creating conditions where people will leave. Forcing day shift people on rotating shift. Cutting raises to 2% across the board. Not hiring full time but part time workers (which isn't working). Big Green is only hiring on contract for all positions. Max contract is six months.

All signals that things are going to get interesting soon.
Flappingeagle
Posts: 4581
Incept: 2011-04-14

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Let me throw out an idea but with a slight twist.

Yes rates will eventually get to 6 or 7% as that seems to be a "natural rate" (whatever that is) given the way an economy naturally seems to work.

The "slight twist" is that I expect to see the MoaTW (Mother of all Train Wrecks) happen long before we get to 6 or 7%. Only after an ungodly amount of pain in the aftermath will we see 6 or 7% interest rates.

Flap

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Here are my predictions for everyone to see:
S&P 500 at 320, DOW at 2200, Gold $300/oz, and Corn $2/bu.
No sign that housing, equities, or farmland are in a bubble- Yellen 11/14/13
Trying to leave the Rat Race to the rats...
Marathon345
Posts: 11
Incept: 2021-05-20

Cleveland
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I dont comment a lot but I have been an avid reader of TG for about two years now.
Karl, thank you for sharing your wisdom and knowledge with us. I have learned so much from you and the folks who comment.
As you have predicted consumers should be prepared to see their Auto and Homeowners insurance rates go up. I work for a very large property and casualty company. The truth is these companies are either losing money or making very little on underwriting. They have been propped up by large returns on their investments. This is about to dry up. There only choice will be to raise rates. Those rate increases will be large.
I also have been watching the revenue reports from the State and local governments. After they get done slopping through the stimulus money I expect tax revenue to start falling.
Heartlander
Posts: 1654
Incept: 2021-02-25

Kansas
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Quote:
What we've done to Russia with sanctions has slammed the door on sequestering trade flows in dollars.
...
This in turn means that every dollar spent in deficit by the federal government will instantly be reflected back into inflation.
...
Either the current rampaging inflation is stomped on now or we're going to get a nasty recession and probable civil unrest -- or worse.

So basically we're willing to see our own country go up in flames -- literally; the rioting and burning will make us long for the mildness of the summer of 2020 -- all just to poke our finger in the eye of one Vladimir Putin.

Such is the power of brainwashing.
Nadavegan
Posts: 534
Incept: 2017-05-03

The South
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Bring on the civil unrest. There are only 3 ways out of this toxic society: guns, handcuffs, or war. We all know there will be no handcuffs - no one will be held to account for any of the medical or financial******of our society and the poisoning and victimization of our children. War could easily turn nuclear. Therefore, civil unrest is the most likely and most preferable outcome.

Party at my house when it kicks off, you are all invited - just keep your hands where I can see them until I assess the situation. :)
Thombradley
Posts: 159
Incept: 2021-11-01

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GE back in the great recession was HOURS away from defaulting when they couldn't rollover their paper when the markets froze. Voila Ally bank was formed and they offered above prevailing interest rates to entice deposits. Not sure how the strategy works but it was part of bailing their ass out. We need some of that old time religion (war) as the song goes.
Joancrawford
Posts: 247
Incept: 2013-10-14


Online
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Indianarube-Exponents are a bitch. Maff is hard.

Maffs BE Hard. Fixed it for ya! Looks like we're in for nasty weather (h/t CCR).

Does this mean the U.S. Treasury bonds I invested in over 15 years ago are actually going to be worth something? I've been in and out of stocks for twenty years. Missed many a bull run, with the brief exception of three years ago when I put my big toe back in the water. Picked up some coin and put it back into cash about a year ago.

We'll see if I live long enough to outlast my investments. Maffs be hard. Gnome sane?

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Don't f*ck with me fellas! This ain't my first time at the rodeo.

America-it was a good run while it lasted. RIP!
Thombradley
Posts: 159
Incept: 2021-11-01

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Ive always been an opportunistic shopper especially food (part of being raised by depression era parents) so the rise in food prices hasn't really got my attention. I see something on sale, I buy a ton of it vacuum seal and freeze it and I'm good to go for weeks if you don't mind eating the same thing days on end. I can live on 15 bean soup with pork hocks for a week. Gets old though.

Long way around the barn here so inflation hasn't touched me yet but my aging pup is on prescription dry dog food. In January it cost 90 and change for a 27 pound bag. Last week when I bought it it was 130 WTF. I can absorb inflation, I fill up my car every three weeks or so. KD your article got me thinking of the impact of what's going on has on the fabric of society. Im long 9 MM
Fredx
Posts: 38
Incept: 2019-01-01

north of Montana
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Dr. Copper seems to agree with Karl too.

Inline

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Never underestimate the power of stupid people in large groups
Abelardlindsey
Posts: 1242
Incept: 2021-03-26

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I was going to say that we now see clearly the cryptos are no digital gold. But why is gold declining as well? You would think in this environment that people would be running to gold, and they're not.

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It's all in the mitochondria.
Abelardlindsey
Posts: 1242
Incept: 2021-03-26

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One of the many stupid things the Biden administration did was to impose all kinds of sanctions on Russia without consulting with the FED prior to doing so. Worse, we (our political class) stole their foreign reserves that were in our banks. Now no one right in the head anywhere in the world is going to keep their money in our banks or even invest in our country, knowing there is the possibility of it being stolen by our government. So, the Biden administration took an existing disaster and made it even worse.

You will note the Ruble is now up to where it was before all of this bruhaha started in Ukraine.

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It's all in the mitochondria.
Winesorbet
Posts: 408
Incept: 2010-08-23


Online
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@JesJohn JPMC agrees with you. Maybe you should BTFD afterall????
Raftermanfmj
Posts: 4980
Incept: 2010-09-06

USA
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Its probable a significant part of the upswing in consumer credit utilization is due to a growing number of disillusioned simply cashing in their asset of a good credit rating while they can for the express purpose of an intentional / strategic default.

Its a rational choice to stock up on arms and beans and other non-perishables after you learn the definition of unsecured debt and you expect things to devolve rapidly on the COL and employment fronts.

And it just so happens two of the biggest inflow states TX and FL have particularly strong bankruptcy protections for their citizens

Many people are realizing theres no such thing as a social contract and the phrase is simply propaganda or word-magic used to cozen the gullible and having done so theyre taking action.

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This world is a comedy to those that think, a tragedy to those that feel. - Horace Walpole

The universe is not only stranger than we imagine; it is stranger than we can imagine. - Haldane's Law
Ihatebarkingdogs
Posts: 42
Incept: 2009-03-26

Torrance Calif
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Quote:
This reminds me of the "Waterlilys and Pond" Ticker.


I remember that ticker too. But the lilies never covered the pond. I've tried to understand why they didn't then, but eventually they will. Probably to do with the destruction of the USD as the Reserve Currency, and all those foreign-held USDs being repatriated into anything of value in the USA that is not nailed down. Everything.

There is another quote from back in the timeframe of the Waterlily Ticker:
Quote:
What can't go on forever, won't.

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