‘Ridiculously stupid’ economic policies have the U.S. hurtling toward a ‘perfect storm’ of economic pain

[Dont Taz Me Bro]

I've been critical of the low interest rates for several years. They result in reduced savings and cheaper borrowing costs which entice people to take on additional debt burdens they normally wouldn't. Additionally, it still amuses me the stupidity of people who thinking shutting down most of the world economy for months over a virus with a 99% survival rate and then dolling out "free" money wasn't going to massively backhand us in the end. You've been seeing the effects of it for the past two years in shortages and high prices.

The U.S. economy’s paradigm shift away from the era of low interest rates and “free money” is going to be painful, according to billionaire investor and Bridgewater Associates founder Ray Dalio.

The Federal Reserve has a difficult task ahead of it: Bring down soaring inflation without triggering a severe and prolonged recession. But the central bank may have its work cut out for it as it deals with what Dalio calls a “perfect storm” of crises.

“Because of the size of the issues we are dealing with, it’s not something we are used to because of its magnitude,” Dalio said in an interview with Bloomberg Wednesday at the Greenwich Economic Forum in Connecticut.

Dalio, who last week ceded control of his $150 billion investment firm, said that the U.S. is facing a triad of conflicting challenges: A bad economic situation caused by rising debt levels and “ridiculously stupid” low interest rates, political infighting between Democrats and Republicans, and the economic consequences of the Ukraine War.

“Traditionally those three things are the perfect storm. They all affect each other,” Dalio said.

‘Ridiculously stupid’ economic policies have the U.S. hurtling toward a ‘perfect storm’ of economic pain, Ray Dalio says

The U.S. economy is up against three big challenges as the Federal Reserve attempts to steer a way out of soaring inflation.

www.yahoo.com

 

[Mac1958]

Pour $11 trillion of pure stimulus into the economy over 12 years, spend like a drunken sailor, have global supply chains freeze up and watch the Fed fall asleep at the interest rate switch for over year, and you'll get what we've gotten.

This has been a wide-ranging group effort.

 

[1srelluc]

I wonder why CDs have not gone up more than they have 3.81% is the best I can find on a one year CD. Most are 3.50%.....Still double what they were a couple of years ago.

One year is the same as a 5-year.

https://www.synchronybank.com/banki...ea5303e8addbd38148&utm_term=five year cd rate

 

[shockedcanadian]

I've been critical of the low interest rates for several years. They result in reduced savings and cheaper borrowing costs which entice people to take on additional debt burdens they normally wouldn't. Additionally, it still amuses me the stupidity of people who thinking shutting down most of the world economy for months over a virus with a 99% survival rate and then dolling out "free" money wasn't going to massively backhand us in the end. You've been seeing the effects of it for the past two years in shortages and high prices.

The U.S. economy’s paradigm shift away from the era of low interest rates and “free money” is going to be painful, according to billionaire investor and Bridgewater Associates founder Ray Dalio.

The Federal Reserve has a difficult task ahead of it: Bring down soaring inflation without triggering a severe and prolonged recession. But the central bank may have its work cut out for it as it deals with what Dalio calls a “perfect storm” of crises.

“Because of the size of the issues we are dealing with, it’s not something we are used to because of its magnitude,” Dalio said in an interview with Bloomberg Wednesday at the Greenwich Economic Forum in Connecticut.

Dalio, who last week ceded control of his $150 billion investment firm, said that the U.S. is facing a triad of conflicting challenges: A bad economic situation caused by rising debt levels and “ridiculously stupid” low interest rates, political infighting between Democrats and Republicans, and the economic consequences of the Ukraine War.

“Traditionally those three things are the perfect storm. They all affect each other,” Dalio said.

‘Ridiculously stupid’ economic policies have the U.S. hurtling toward a ‘perfect storm’ of economic pain, Ray Dalio says

The U.S. economy is up against three big challenges as the Federal Reserve attempts to steer a way out of soaring inflation.

www.yahoo.com

I'm a huge fan of low interest rates. You want to stimulate risk, investment, innovation. You hamper it drastically when rates are high, basically forcing people to pay the vig on top of trying to run a profit.

The issue has been massive government spending that refuses to accept the limits and restrictions that normal citizens have. All to fund wealthy idiots who fund their campaigns while politicians made out like bandits.

No citizen can just borrow endlessly, but government fools say "F my country, I jut want to make everyone TODAY happy while pocketing some myself, in the long run, it's someone elses problem". Media, owned by wealthy fools and whose journalists aren't really journalists always agree.

The same logic is applied in Canada and with police forces which I call out constantly. Guess what? The Piper eventually comes calling, sooner rather than we expected with such massive spending in short periods of time.

 

[Concerned American]

I wonder why CDs have not gone up more than they have 3.81% is the best I can find on a one year CD. Most are 3.50%.....Still double what they were a couple of years ago.

One year is the same as a 5-year.

https://www.synchronybank.com/banking/cd/?utm_source=bing&utm_medium=Brand&utm_campaign=CD&utm_content=CB_SB_S_GO_CD_O&sitecode=CB_SB_S_GO_CD_O&gclid=f6578be4528710ea5303e8addbd38148&gclsrc=3p.ds&msclkid=f6578be4528710ea5303e8addbd38148&utm_term=five year cd rate

A couple weeks ago I found one for 4.1% for a year.

 

[Silent Warrior]

I wonder why CDs have not gone up more than they have 3.81% is the best I can find on a one year CD. Most are 3.50%.....Still double what they were a couple of years ago.

One year is the same as a 5-year.

https://www.synchronybank.com/banking/cd/?utm_source=bing&utm_medium=Brand&utm_campaign=CD&utm_content=CB_SB_S_GO_CD_O&sitecode=CB_SB_S_GO_CD_O&gclid=f6578be4528710ea5303e8addbd38148&gclsrc=3p.ds&msclkid=f6578be4528710ea5303e8addbd38148&utm_term=five year cd rate

Banks deposit rates are reflected by their current and future need for funds. If lending demand is down, they don't need the funds and pay lower rates. Of course they make their money on loan interest income, not saving interest expense. I knew a bank customer who always claimed if banks would pay 8% on savings and charge 5% on loans they would have all the business they wanted. Never could convince him the bank would go broke that way. Unfortunately his opinion is shared by many.

 

[basquebromance]

government likes to be seen as "doing things", as responsive to citizens' economic plight when things go bad. ironically, government makes things WORSE. just let the free market handle it, and things will get better eventually

a bad economy is temporary, Jan 6 is forever!