The economy is strong according to the Fed and every analyst that gets pararded across Bloomberg and CNBC. I leave out Fox Business because that's a political show that has little to do with the economy. But basically the rise in Gold is just a geopolitical hedge according to the Punditocracy, while the US economy - though suffering from a temporary inflation headache due to covid and covid spending - is basically Strong.
On the other hand, consider this:
US consumer debt is at an all time record high. There is now 20 Trillion dollars of consumer debt, up over five trillion in the last four years.
There's a record 1.3 trillion dollars of credit card debt with delinquencies up 100 percent from last year.
Auto loan delinquencies are the highest on record.
78 percent of Americans live pay check to pay check.
US Corporate Debt is now 13.7 trillion up 100 percent in the last 15 years. And this stands at 50 percent of GDP.
Corporate Defaults have soared by 80 percent since last year.
Corporations must refinance 1.8 trillion dollars by 2025 that was originally borrowed at rates several hundreds of basis points lower than rates are now.
Private Credit - loans to smaller companies - that can't float bonds or get bank loans stood at 100 billion dollars in 2010. Now it stands at 1.7 Trillion dollars.
The US Golvernment has a trillion dollars in INTEREST PAYMENTS alone next year.
Since 2010 US total debt to GDP was 60 percent. Now it is 120 percent. And growing exponentially.
The national debt is 733 percent of national revenue.
20 percent of that revenue is spent on interest payments.
Meanwhile the ten year bond is nearly 5 percent.
Powell is dying to bring it down Because at that rate our economy will die from interest payments and impossible refinancings.
Everyone knows this.
But inflation is still way out of control.
And to bring that rate down means even higher inflation.
To bring that rate down precipitously means HYPERINFLATION.
To leave it up means STAGFLATION.
And worst of all if the Fed lowers Fed Funds rate and the long rates continue to rise?
Game over.
Nothing to see here....
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