The Fed has tamped inflation down but there are headwinds arriving from labor shortages needing higher compensation. The consumer doesn't see much decline with food, fuel and rents increasing faster than the CPI suggests. That pushes the need for more pay with hopes that spiral can be restrained.
I worry that Russian fuel production will decline as a result of poor maintenance and China returning to work increasing demand as supplies are reduced. The Fed eased a little to see if earlier hikes have been adequate given the lag in effects. I still think they will be happy with 5% rather than 2% until some government spending can get resolved. US future obligations remain an issue but not sure what that means for the UK or EU. I suspect unfunded pensions remain an issue everywhere.
The WHO is way in front of their skis. Hope they can be restrained by wiser heads. The power grab seems insane. WHO do they think they are? Quite agree the experts have really mucked things up and need to be held to account as we emerge from a nightmare.
All good observations HH, thank you and yes, pensions are a major problem throughout the west. The global financial system will have to be reset eventually - this year will be 'interesting' I think. This article explains the dilemma quite well: https://mises.org/wire/end-monetary-hedonism
Ah yes, thanks. When there is no time value to money - zero interest, we must hold some other asset. So we invested in a tangible, shares, property. That bubble must get popped to restore value to money - at least enough to somewhat match price inflation. And it seems we must have inflation to service national debt.
Yes, bang on HH. The problem jumped into the limelight in Oct 22 when Liz Truss' policies caused interest rates to spike and nearly crucified the pension funds - the BoE had to field a rescue and Liz was crucified. Here's what happened as a primer in this murky area of Ponzi finance.
"Pension funds are a cornerstone of the economy, helping scoop up huge amounts of stocks and bonds issued by companies that need cash to operate and grow. Liability-Driven Investment (LDI) has worked in times of steady markets and rates, but has been found wanting when markets move suddenly, potentially freezing pension funds. https://www.reuters.com/markets/europe/what-is-ldi-liability-driven-investment-strategy-explained-2022-10-04/
The Fed has tamped inflation down but there are headwinds arriving from labor shortages needing higher compensation. The consumer doesn't see much decline with food, fuel and rents increasing faster than the CPI suggests. That pushes the need for more pay with hopes that spiral can be restrained.
I worry that Russian fuel production will decline as a result of poor maintenance and China returning to work increasing demand as supplies are reduced. The Fed eased a little to see if earlier hikes have been adequate given the lag in effects. I still think they will be happy with 5% rather than 2% until some government spending can get resolved. US future obligations remain an issue but not sure what that means for the UK or EU. I suspect unfunded pensions remain an issue everywhere.
The WHO is way in front of their skis. Hope they can be restrained by wiser heads. The power grab seems insane. WHO do they think they are? Quite agree the experts have really mucked things up and need to be held to account as we emerge from a nightmare.
All good observations HH, thank you and yes, pensions are a major problem throughout the west. The global financial system will have to be reset eventually - this year will be 'interesting' I think. This article explains the dilemma quite well: https://mises.org/wire/end-monetary-hedonism
Ah yes, thanks. When there is no time value to money - zero interest, we must hold some other asset. So we invested in a tangible, shares, property. That bubble must get popped to restore value to money - at least enough to somewhat match price inflation. And it seems we must have inflation to service national debt.
Yes, bang on HH. The problem jumped into the limelight in Oct 22 when Liz Truss' policies caused interest rates to spike and nearly crucified the pension funds - the BoE had to field a rescue and Liz was crucified. Here's what happened as a primer in this murky area of Ponzi finance.
"Pension funds are a cornerstone of the economy, helping scoop up huge amounts of stocks and bonds issued by companies that need cash to operate and grow. Liability-Driven Investment (LDI) has worked in times of steady markets and rates, but has been found wanting when markets move suddenly, potentially freezing pension funds. https://www.reuters.com/markets/europe/what-is-ldi-liability-driven-investment-strategy-explained-2022-10-04/
If you would like to know how LDI is meant to work in good times: https://www.investopedia.com/terms/l/ldi.asp
"