Fed on brink of fifth(?) round of quantitative easing

[larry_vw_1955]

And here we go again:


https://www.nytimes.com/2023/09/28/briefing/government-shutdown.html

What’s next
The outcome remains uncertain. The Republican faction might ultimately accept small, symbolic spending cuts and claim victory. Or the government might shut down this weekend.

That would be like a double whammy with the migrant situation going on. But I guess as long as they can keep paying each migrant their $2200 per month or whatever it is, I guess that's ok if Federal employees don't get paid. 

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[o_e_l_e_o]

And here we go again

Government shutdown avoided for now, which can only mean one thing! Money printer goes BRRRRRR:

The US added - checks notes - $275 billion in debt in, uh, ONE DAY

Total US debt is now $33.442 trillion, hit $33 trillion just 2 weeks ago, and on pace to rise by $1 trillion in 1 month.

WTF is going on

$1 trillion in a month is absolute insanity. Here's a post I made two years ago:

It took the entire history of the US until 1996 to rack up $5 trillion in debt. It then took 13 years until 2009 to add another $5 trillion on top. The last $5 trillion we've added didn't even take 2 years.

The debt is growing exponentially quickly. And check out this graph of the interest payments we are paying on that debt: https://fred.stlouisfed.org/series/A091RC1Q027SBEA
3 years ago it was $500 billion. Now we are about to hit $1 trillion a year, just on paying the interest.

Anyone who thinks this is sustainable is crazy.

[cryptosize]

And here we go again

Government shutdown avoided for now, which can only mean one thing! Money printer goes BRRRRRR:

The US added - checks notes - $275 billion in debt in, uh, ONE DAY

Total US debt is now $33.442 trillion, hit $33 trillion just 2 weeks ago, and on pace to rise by $1 trillion in 1 month.

WTF is going on

$1 trillion in a month is absolute insanity. Here's a post I made two years ago:

It took the entire history of the US until 1996 to rack up $5 trillion in debt. It then took 13 years until 2009 to add another $5 trillion on top. The last $5 trillion we've added didn't even take 2 years.

The debt is growing exponentially quickly. And check out this graph of the interest payments we are paying on that debt: https://fred.stlouisfed.org/series/A091RC1Q027SBEA
3 years ago it was $500 billion. Now we are about to hit $1 trillion a year, just on paying the interest.

Anyone who thinks this is sustainable is crazy.

At best I expect the USD to last until 2030, no later than that.

It will probably collapse around 2026-2027, due to Taiwan's invasion and the collective West imposing sanctions on Made in China products (which will trigger hyperinflation Weimar-style)...

[larry_vw_1955]

Government shutdown avoided for now, which can only mean one thing! Money printer goes BRRRRRR:

you have to print more money to take care of all the migrants. don't you?

Total US debt is now $33.442 trillion, hit $33 trillion just 2 weeks ago, and on pace to rise by $1 trillion in 1 month.

WTF is going on

well, take $12 billion per year for nyc and multiply that by 50 states, we don't even have to include alaska. that gets you to over half a trillion dollars just for right now for supporting migrants. now to you that might be peanuts but what happens if 200 million migrants end up making it in before we close the borders? what happens if we never close them?  

Anyone who thinks this is sustainable is crazy.

you said that before this migrant thing even happened. how much more so now that it has?

At best I expect the USD to last until 2030, no later than that.

they'll just make social security checks bigger to account for the lowering value of the usd. mcdonalds workers will be complaining about only making $35 per hour. it's just not enough to live on...

[o_e_l_e_o]

you have to print more money to take care of all the migrants. don't you?

This increase in federal debt has almost nothing to do with the migrant crisis.

well, take $12 billion per year for nyc and multiply that by 50 states, we don't even have to include alaska. that gets you to over half a trillion dollars just for right now for supporting migrants.

The $12 billion figure for New York is over 3 years, and will not be reflected to the same level across the other states. But even so, we just added $275 billion to the debt in a single day. The money for migrants pales in comparison.

We've added another $33 billion since I made that last post ~24 hours ago.

[larry_vw_1955]

This increase in federal debt has almost nothing to do with the migrant crisis.

well it's not helping things. and i'm not so sure it has "nothing to do with it". it has everything to do with it and over the coming years it will have even more to do with it. just watch and see. watch them print more and more money.

The $12 billion figure for New York is over 3 years, and will not be reflected to the same level across the other states.

chicago ? maybe you didn't hear about chicago. once chicago is full it will be another city and so on and so forth.

But even so, we just added $275 billion to the debt in a single day. The money for migrants pales in comparison.

maybe right now it does but what if there was 100 million migrants. each one costs you $20,000 per year. you do the math.

We've added another $33 billion since I made that last post ~24 hours ago.

that's nothing compared to 100 million times 20,000.

 

[STT]

The ironic thing is migrants might easily be more of a benefit then cost to an economy providing they are able to work and provide a supply of labor to successful business.  China now has a falling working population which has lost them an advantage they had previously.  Its messy perhaps because it should be known and trained labor entering am economy should be done properly but its not new.

   The debt will be exponential because the worth of each dollar is becoming less.  Also alot of the money spent is not as effective in moving the economy as last time it was spent, the danger it ends up doing nothing at all and mostly over taxes business.   Inflation is a tax is a succinct fair statement imo

[larry_vw_1955]

The ironic thing is migrants might easily be more of a benefit then cost to an economy...

that is highly doubtful. but we'll see. meanwhile someone keeps posting the following on different youtube videos:


Approximately 25 million people are still left behind in Venezuela that will gradually make their way toward the Southern border due to word of mouth, in addition to over 600 Million from surrounding countries, that will be encouraged to come and finally end up in New York, Chicago, Denver and other cities around the US. There are also thousands of unwanted pregnancies developing as we speak, by among the ones already here, and pregnant women, prior to their arrival, for the objective of obtaining free food, medical care, and financial assistance among other governmental benefits. Allowing them work, will not give any relief to the already existing financial burden on the U.S government, you ask WHY? because, once they earn any little money, they will prefer to pocket the money, and not want to spend it on personal expenses, nor shelter, pretending they are still broke as they will just continue to blend in with the other asylum seekers to continue receiving all benefits, they've been receiving from the start. Remember they have already been spoiled with free handouts that are so easily given to them! Why pay for food and shelter now? all they will do is pocket the money, and send it back home to trigger more to come. As far as the national guard being sent out, they are really being sent out there to greet and assist the invaders with their luggage, to make sure they make it through the border crossing safe and sound, right?  GOT IT!!

The debt will be exponential because the worth of each dollar is becoming less.  Also alot of the money spent is not as effective in moving the economy as last time it was spent, the danger it ends up doing nothing at all and mostly over taxes business.   Inflation is a tax is a succinct fair statement imo

get ready to kiss your social security benefits goodbye folks if you live in the usa. that will all go to supporting the migrants. for sure. plus alot more than that.

imagine what 600 million people would do to the country. it would be like the government had to turn football stadiums into living arenas. no more NFL on monday nights! 

[Don Pedro Dinero]

The ironic thing is migrants might easily be more of a benefit then cost to an economy providing they are able to work and provide a supply of labor to successful business.

Depends. If the speed at which they enter is too fast there are going to be more problems than benefits and to think otherwise is to be too naïve. Migrants are not going to find work from day one, but they are going to need food, shelter, and in some cases medical care. Besides, do you think that if a lot of them come in, it will help the wages of the working class to go up? On the contrary: there will be more people looking for those jobs and they will come from countries where they are paid much less. Many employers are happy with immigration because they pay them less and even under the table.

I don't think the mayor of New York, a Democrat, has suddenly become a racist:

In Escalation, Adams Says Migrant Crisis ‘Will Destroy New York City’

The debt will be exponential because the worth of each dollar is becoming less.  

I was reading the thread and was thinking about this. We have to factor in real inflation, that as outrageous as it is that debt is increasing, we also have to think that the unit of measure, the dollar, is worth less and less.

[naikturun]

I wanted to ask if dollars are continuously being printed and you said that in the last 3 years they have printed almost the same as 14 years ago.
So why is the dollar price against other currencies still said to be stable, even strengthening in several other currencies, for example in my country the USD has strengthened by almost 10% from the beginning of this year until now.
Does this indicate that all countries are also doing the same thing as America is doing?
any opinion would be appreciated.

[o_e_l_e_o]

So why is the dollar price against other currencies still said to be stable, even strengthening in several other currencies, for example in my country the USD has strengthened by almost 10% from the beginning of this year until now.

There are other factors to consider. If printing money was directly proportional to inflation, then inflation for USD would be >10% rather than 3%. You need to consider where that printed money is going, who is benefiting from it, and what they are doing it with it. If we print $1 million and a bank just takes that a sits on it, then it has little effect on the economy and on inflation. If we print $1 million and a bank loans it to someone to start a business, who then uses that money to hire five people and pay their wages, who then use that money to pay their rent, and the landlords then use that money to buy their groceries, and the stores use that money to pay their suppliers, and the suppliers use that money to buy gas for their trucks, and the gas station uses that money to pay their employees, and so on, then that money has a much larger effect on the economy.

Exchange rate is based more on the strength of the economies (and future predictions about those economies) than on the total monetary supply.

Does this indicate that all countries are also doing the same thing as America is doing?

Yes, this is also true, and many countries are printing at a faster rate than the US. Look at countries experiencing hyperinflation, such as Venezuela for example.

[larry_vw_1955]

Depends. If the speed at which they enter is too fast there are going to be more problems than benefits and to think otherwise is to be too naïve. Migrants are not going to find work from day one, but they are going to need food, shelter, and in some cases medical care.

that's why they're going to be putting up facilities to house large numbers of them. i think that's what chicago is going to be doing. sounds like a winner. it gets them off the streets and out of places they don't belong like someone's ymca. at least in the facilities they can get food and medical care and shelter from the winter. they'll just bus them there. yes it's going to cost the taxpayers but as o_e_l_e_o said it's not as big a part of the budget as other things. but it still could be big. 

[Don Pedro Dinero]

So why is the dollar price against other currencies still said to be stable, even strengthening in several other currencies, for example in my country the USD has strengthened by almost 10% from the beginning of this year until now.
Does this indicate that all countries are also doing the same thing as America is doing?

Not exactly. What it means is that in those countries printing is even worse. If you are doing 110 kilometres per hour accelerating to 120 kilometres per hour, it may seem like you are going fast but if you are overtaken by a Lamborghini doing 200 kilometres per hour and accelerating to 300 kilometres per hour, your speed will seem quite stable.

In the same way most countries, which have weaker currencies than the dollar, print more and at a faster rate than the FED does, hence the devaluation of currencies against the dollar. The stability of the dollar does not depend on the fact that it does not devalue, but that compared to the rest it does so at a much slower rate.

[larry_vw_1955]

So why is the dollar price against other currencies still said to be stable, even strengthening in several other currencies, for example in my country the USD has strengthened by almost 10% from the beginning of this year until now.
Does this indicate that all countries are also doing the same thing as America is doing?

Not necessarily. I think more likely what it might mean is that people trust the USA for some reason. No matter how misplaced that confidence and sense of trust might be. We're in a house of cards in reality which is likely to fall down at any time!

[naikturun]

Yes, this is also true, and many countries are printing at a faster rate than the US. Look at countries experiencing hyperinflation, such as Venezuela for example.

now I know why the currency in my country continues to weaken against the USD, and also as you said if 1 million is turned into business it will have a good impact on the economy.
but here it doesn't seem like that, they print but hold most of the money (rich people).
maybe they are waiting for the price of any commodity to fall even further, thus making the economy sluggish and also our government recently banned TikTok shops because they don't pay taxes, and a lot of money flows out of the country, because people who shop there buy goods. straight from China.
because money here always flows out, there is less money circulating inside.

[philipma1957]

jobs reports still unexpectedly good

https://finance.yahoo.com/news/september-jobs-report-shows-pace-161718309.html?

dan.burrows@futurenet.com (Dan Burrows)
Fri, October 6, 2023 at 12:17 PM EDT·7 min read
A "blockbuster" jobs report keeps the Fed's higher for longer interest policy on track.

A September jobs report that showed the pace of hiring sizzled last month keeps the Federal Reserve on track to maintain its higher for longer policy on interest rates, experts say.

U.S. nonfarm payrolls expanded by a surprising 336,000 last month, the Bureau of Labor Statistics said Friday, or the strongest rate of job creation since January. Economists were looking for the addition of about 170,000 new jobs last month.

This means + 0.25 or + 0.50 in Nov

I have a few friends in banking they think 2024 rates will stay high +5% or more for all of 2024.

These high rates are very good for Long Term Care companies in the USA.


In dec 2021 the top five long term care companies were all in financial trouble. As they make their profits via fed bonds. Now that we have had 2 straight years of rising rates those five companies are all doing better. One more year at +5% will help them further.

The U.S. is unique of r it Long term care insurance market in that it is huge as the government

does not do much for old disabled people with dementia and Alzheimers so people pay for private insurance.

these higher rates are a big bailout for those companies. The US does not want to tap these companies out so they periodically do a session of long rate raises to bail them out.

Think of USA wealth like musical chairs. 10 chairs and 8 buckets of money raise rates the money slides to another chair. So far so good until we crash again.

[cryptosize]

So why is the dollar price against other currencies still said to be stable, even strengthening in several other currencies, for example in my country the USD has strengthened by almost 10% from the beginning of this year until now.
Does this indicate that all countries are also doing the same thing as America is doing?

Not exactly. What it means is that in those countries printing is even worse. If you are doing 110 kilometres per hour accelerating to 120 kilometres per hour, it may seem like you are going fast but if you are overtaken by a Lamborghini doing 200 kilometres per hour and accelerating to 300 kilometres per hour, your speed will seem quite stable.

In the same way most countries, which have weaker currencies than the dollar, print more and at a faster rate than the FED does, hence the devaluation of currencies against the dollar. The stability of the dollar does not depend on the fact that it does not devalue, but that compared to the rest it does so at a much slower rate.

Nope. FED has printed more money than any other country.

USD doesn't devalue that much compared to other currencies, because it's required for: 1) SWIFT transfers, 2) petro-dollar (oil payments).

Remove those 2 factors and the dollar will hyperinflate to oblivion.

SWIFT will become irrelevant due to Bitcoin and the petro-dollar will become irrelavant due to renewable energy/ESG requirements.

USD doesn't have any future beyond 2030.

Yes, this is also true, and many countries are printing at a faster rate than the US. Look at countries experiencing hyperinflation, such as Venezuela for example.

now I know why the currency in my country continues to weaken against the USD, and also as you said if 1 million is turned into business it will have a good impact on the economy.
but here it doesn't seem like that, they print but hold most of the money (rich people).
maybe they are waiting for the price of any commodity to fall even further, thus making the economy sluggish and also our government recently banned TikTok shops because they don't pay taxes, and a lot of money flows out of the country, because people who shop there buy goods. straight from China.
because money here always flows out, there is less money circulating inside.

This sounds rather contradictory.

Less money circulating inside reduces inflation, it shouldn't increase it. Which country is that, if I may ask?

US does the same thing in a sense: tons of dollars circulate outside (i.e. bonds held by China, Japan).

If those dollars enter the US territory, a Big Mac will easily cost $100.

[larry_vw_1955]

inflate to oblivion.

SWIFT will become irrelevant due to Bitcoin and the petro-dollar will become irrelavant due to renewable energy/ESG requirements.

not because of bitcoin but because there's some effort underway to replace the SWIFT system with something else at least outside of the USA I recall seeing something about that recently but i couldn't relocate the article.

USD doesn't have any future beyond 2030.

not even for buying big macs?

If those dollars enter the US territory, a Big Mac will easily cost $100.

and mcdonald's employees will be making? $500 per hour at the very least.

just think about it. if some blockchain alternative to swift pops up then that would take care of things that FedNow couldn't so USA residents would never have a need to use bitcoin to "send money" to anyone. as long as they had a bank account but who doesn't have that? you can't survive without that. 

[BlackHatCoiner]

and mcdonald's employees will be making? $500 per hour at the very least.

If you aren't convinced yet that wages don't increase in the same rate as with cost of living, then I don't know what to say. Sure, wages have increased slightly. In my country, minimum wage is 780 EUR as of 2023. A decade ago it was 586 EUR. But, let's have a look on inflation: https://tradingeconomics.com/greece/core-inflation-rate. Surprisingly, in 2013 it was an all time low since 2010 (at -4%!!!). Right now, we're experiencing a market that has went into two years of serious inflation rates.  

- Let's have a look on food inflation: https://tradingeconomics.com/greece/food-inflation. Yep, 10% increase comparably to last year.
- How about CPI transportation: https://tradingeconomics.com/greece/cpi-transportation. I guess we're heading in an all time high there.
- Housing: https://tradingeconomics.com/greece/housing-index. It's nearly linear since 2020. I'm looking forward to know when we'll hit the ceiling there.

But, yeah. 200 EUR extra income can cover all that. Kudos to the governments.  

[naikturun]

Nope. FED has printed more money than any other country.

USD doesn't devalue that much compared to other currencies, because it's required for: 1) SWIFT transfers, 2) petro-dollar (oil payments).

Remove those 2 factors and the dollar will hyperinflate to oblivion.

SWIFT will become irrelevant due to Bitcoin and the petro-dollar will become irrelavant due to renewable energy/ESG requirements.

USD doesn't have any future beyond 2030.


So in your opinion, these 2 factors are what make the dollar still have its value.
If it is your prediction that the dollar will have no value after 2030, then many people should think so too and start preparing where they will save their money.

Yes, this is also true, and many countries are printing at a faster rate than the US. Look at countries experiencing hyperinflation, such as Venezuela for example.

now I know why the currency in my country continues to weaken against the USD, and also as you said if 1 million is turned into business it will have a good impact on the economy.
but here it doesn't seem like that, they print but hold most of the money (rich people).
maybe they are waiting for the price of any commodity to fall even further, thus making the economy sluggish and also our government recently banned TikTok shops because they don't pay taxes, and a lot of money flows out of the country, because people who shop there buy goods. straight from China.
because money here always flows out, there is less money circulating inside.

This sounds rather contradictory.

Less money circulating inside reduces inflation, it shouldn't increase it. Which country is that, if I may ask?

US does the same thing in a sense: tons of dollars circulate outside (i.e. bonds held by China, Japan).

If those dollars enter the US territory, a Big Mac will easily cost $100.

in Indonesia, I don't know whether what I said is true or not, I just expressed my personal opinion.
100$ for a burger sounds pretty scary