The boom purely exists because of 13 years of fiscal stimulus⌠basically 0% interest rates and Federal Reserve asset purchases. Because of inflation, that must end. So the tide is reversing, and stock and bond prices are falling, housing prices will be falling, the wealth effect will run in reverse, and people who bought assets at or near the top are going to be badly hurt. And if they donât raise rates and do QT, weâll be in a financial repression regime with deeply negative real interest rates, the Fed will continue to wage war on regular people who depend on US Dollar savings as a store of value. Itâs ugly no matter how you slice it. People will be poorer after a time, and they wonât know why, and you may get autocrats from the Right or the Left elected to office. These are fraught times for America.
Itâs like the late 1960s, everyone thought the âNifty Fiftyâ era would go on forever, no one could have foreseen a decade later weâd be wallowing in Stagflation, The Misery Index, Vietnam would be lost, weâd have Iran Hostages, the Dow and S&P would have lost MUCH more than half in inflation adjusted terms, and weâd have 18% mortgages.
The people who live in a bubble donât know they are in a bubble until it pops.
Check out this thread:
Just not NORTH Americans