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Fed raises interest rate .75bps

BeefJerky

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How many under 50 Americans do you think have value for metal? I am not arguing the historic value of gold and silver here, or that they may have their day, again, but I am probing for actual relevance to young Americans today. They grew up with everything digital and electronic. It’s what they know. Cash is even foreign to them. They know Venmo and other electronic transfer mechanisms, and they are being taught that metals are a barbarous relic. So, when people like us are largely gone from the scene, then what? What’s your junk silver or gold stacks worth to someone who has no commonality in base valuation?
You should visit r/wall street silver. Lots of young pioneering stackers on Reddit.

I actually know lots of 30 something metals buyers. Most were buying crypto too. They are now leaning more towards metals.
 

gnome

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This only hurts those applying for a mortgage or the everyday person who must use credit cards to buy everyday needs.
FJB.

It slows down the entire economy. Housing market is a huge sector. Auto loans. Obviously higher payments on credit cards affect discretionary spending on retail, dining, travel, etc.

But that's just the consumer credit side. A great many corporations borrow money to grow. And corporations employ a lot of people - we're starting to see layoffs in housing and tech sectors.

I don't have any clue whether 0.50, 0.75, 1% or 5% hike is the better move - all I know is that the effects are significant for the entire economy.

And, yeah, FJB.
 

Cigarlover

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This is why I been saying cash is king. They have to pop this bubble in everything. As much as it hurts the economy right now, continuing to inflate everything would also hurt. It was at the point where the next generation couldn't buy a home. Lower prices across th board will eventually get people into the housing market that have been sitting the sidelines. If you have been buying at the top or failed to take money off the table at the top then I understand it's going to be painful. For now just stack cash, sit on the sidelines and wait until the inflation numbers return to normal. Normal is 2-3%. Powell cant back off until then. Will he have the balls to go high enough and really deflate everything? Will congress cut spending to pay the interest in the debt or will they raise taxes? Interesting questions soon to be answered.
 

Juristic Person

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maybe for the US but not for other countries. China and Russia will have at least some type of gold backing as well as commodities in their currency. What will the US have?
The US will have bombs.
 

Juristic Person

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.75 rate hike and the Dow bumps up 1%? What the absolute….??? Would it have tanked with .5 or 1, but .75 is juuuusssst right?

I’m at the point of being convinced that there is no “playing” of any wealth medium for the common man, and I’m beginning to wonder if gold is the past, as SLV posited.
The bump was a result of the fed doing what was expected. It will continue to bottom out from here.
 

Tbonz

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FED raises .75 bps, and pumps liquidity into the market for a bounce, and then today comes. Rude awakening, and I would have to guess that there will be more pain coming for quite a while.

Cash/gold is king, but I can see that the dollar is in a pickle, as well as our economy. Interest rates are going to go up and that is going to make the federal debt much more expensive. The dollar has been the reserve currency, that looks like it is coming to an end.

I do not see a way to kill inflation without killing the market, and at the same time killing our economy. People aren't going to hire into a slow down, and wages are not going to catch up to inflation, and costs of things are not going to contract, we are screwed whatever way we go. I don't think that the rest of the world will be doing much better.

Russia successfully protected their currency by jacking up interest rates, and it has come back stronger. Not sure what the Russian government deficit is, but I am sure it isn't near what we have.

Japan is printing money, China has bank runs, England is raising rates, this is shaping up to be a cluster f'ck where no one is safe.
 

Juristic Person

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We have been in an everything bubble for a very long time. Just looking at when Trump took office the dow was at about 18k or so. 4 years later we are at 34 or 35k. Thats about theclearerst example of a blowoff top that I have ever seen. IMO 18k was over valued so going back to just 18k would be a start. Housing is another bubble that needs deflating. Recessions are good and since we haven't had one in a very long time now is the time to have a prolonged one and get rid of the excesses in the economy. I'd like to see housing cut in 1/2 and same with the market including gold and silver. It can happen if the fed can raise rates high enough. Maybe up to 5% this year and then 7 or 8% next year. If that slows inflation. At the same time state and federal governments need to layoff huge amount of people as well as cut salaries by at least 30%.
Welfare needs to be eliminated, pensions cut severely and an end to the useless government programs that funnel money back to politicians and their families. If it takes a decade to do that it would be fine by me. Mush healthier economy will follow.
After the the peak of the 2006 RE bubble, housing values were cut in half by 2008. It's been a long and steady climb back up and beyond 2006 levels since then. With this recession being more severe than 2006, RE values will at least be slashed in half again but my guess is they will "reset" further.
 

gnome

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After the the peak of the 2006 RE bubble, housing values were cut in half by 2008. It's been a long and steady climb back up and beyond 2006 levels since then. With this recession being more severe than 2006, RE values will at least be slashed in half again but my guess is they will "reset" further.
RE is not the same sort of bubble it was in 2008.

Yes, housing is expensive and unaffordable, but there just isn't that much supply to be dumped on the market.
Household debt is nowhere near 2008 levels.
You don't have all the crazy subprime loans. (yes, some). Haven't had a massive boom of first-time RE flippers leveraged beyond common sense.

Will RE cool off, yes. 2008 crash, no. The pain will be elsewhere.

Screen Shot 2022-06-16 at 12.24.56 PM.png


Screen Shot 2022-06-16 at 12.17.30 PM.png
 

nickndfl

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Housing starts were off 14% monthly. Builders are finishing up what's in the pipeline. That behavior might actually keep resale prices high due to supply constraints.
 

Uglytruth

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Housing starts were off 14% monthly. Builders are finishing up what's in the pipeline. That behavior might actually keep resale prices high due to supply constraints.
So materials should come down along with people looking for remodeling work.
 

southfork

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The media got behind the 0.75% hike to sell it. Then the banksters juiced the markets to make it look like happy days are here again. Mark my words the stock market is going down again. Today was smoke and mirrors.

What needs to be done is the opening up of domestic oil production and the construction of new gasoline refineries. We also need to build semiconductor plants in this country. Then we can sleep better at night.
Right you were, down like a sinking ship
 

EO 11110

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So materials should come down along with people looking for remodeling work.
think it's started. lumber i heard is way down from the top
 

gnome

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Margin debt overlayed with S&P. Sadly we don't get FINRA margin data until 6 weeks after. May number coming in the next week or two.
Surely, it will show further deleveraging, but how much?

All the leverage from the covid "stonks only go up" bubble have been drained, back to peak of 2018 - but money supply is much higher.

In theory, one would want to trade the inverse of this chart. Buy aggressively on margin whenever FINRA is approaching or below zero and unwind leverage as it lifts off.



263e2ed28e9526cb6eeabcf1ad33e4b3.png
 

Joseph

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Sometimes I wonder. Frankly I think gold is the past - we aren't going back to a gold standard. Crypto currency makes the most sense for fast trade on a global level. CBDC is the future. Like it or not. Our opinion doesn't matter to them.
Crypto (BTC) crashed from $70K --> $20K in two weeks. Why ?

Roosevelt confiscated gold. You think this Manchurian candidate won't pull the plug on Au in a minute ?

I have what I have. My focus today is to continue to SHTF stockpile as best I can , and fortify the home front against the starving metrosexuals, LGBQT+P crowd, MS13, BLM, and all other ill prepared progressives.
 

Avalon

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Avalon

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Is anyone else feeling like this rate hike could be the trigger that starts the dominos falling?
 

ZZZZZ

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Is anyone else feeling like this rate hike could be the trigger that starts the dominos falling?

Or in the case of the precious metals, ignite the rocket.
.
.
 

Avalon

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Or in the case of the precious metals, ignite the rocket.
.
.
That's possible once people start rushing to metals. Will it matter though? Remember what some of us have always said. When metal go to the moon we might not like the world we are living in. Still aside from preps it may give our families a chance.
 

edsl48

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This has been predicted before. Can the USA pay the interest on its debts if the rates go up? Predictions said the country would reach a point where it could not...stay tuned this is gonna be good
 

Joseph

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Or in the case of the precious metals, ignite the rocket.
.
.

:2 thumbs up:

Jim Rickards: His Gold Price Prediction Explained...($50,000+ IS POSSIBLE!!)​

314,024 views
Dec 6, 2019

 

Joseph

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Mujahideen

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We are going to keep running into bull shit until we realize that creating money out of thin air has consequences.

The bankers, politicians, and lobbyists are milking us everyday folks who just want to make a living.

We are too busy fighting each other to do anything about it.

Some of us with good careers can maybe catch some crumbs but we are up against the house and their casino.
 

Buck

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We are going to keep running into bull shit until we the Fed and Congress realize that creating money out of thin air has consequences.
fixed it...


i was once told that i didn't build it, so, all i ask is, don't blame me when it comes off the rails


this all belongs to the Fed's decisions which included of all things the notation that it's "workers wages" that should be "reduced" to help stem the tide of inflation - Jerome spit that out into a microphone


....i can't make any sense of that ideology, but i know who to blame for Inflation and it has nothing to do with consumers or the prices they pay for goods and services...nor the workers who toil each day just to pay their vig
 

Joe King

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This has been predicted before. Can the USA pay the interest on its debts if the rates go up?
The fed holding almost a third of the govs debt will certainly help, as any debt held by the fed essentially becomes interest free for the gov.
Cant they just print the money to make the payments?
Yes, absolutely!
....but doing so will exacerbate the problem.

As Greenspan told congress, (I'm paraphrasing) they can guarantee payments of any amount necessary, but cannot guarantee the purchasing power of those payments.
 

nickndfl

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We are going to keep running into bull shit until we realize that creating money out of thin air has consequences.

The bankers, politicians, and lobbyists are milking us everyday folks who just want to make a living.

We are too busy fighting each other to do anything about it.

Some of us with good careers can maybe catch some crumbs but we are up against the house and their casino.

The politicians and bankers take their cuts and leave the crumbs for everybody else. Don't expect a rocket ship in metals, but a nice slow burn up is not out of the question.
 

Goldhedge

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WORSE THAN 2008. THEY ARE BURNING DOWN THE HOUSE -- JIM​

 

Avalon

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WORSE THAN 2008. THEY ARE BURNING DOWN THE HOUSE -- JIM​

I watched a Jim Willie interview the other night. I think he might be right about a lot but he seems stark raving mad these days.
 

Avalon

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The politicians and bankers take their cuts and leave the crumbs for everybody else. Don't expect a rocket ship in metals, but a nice slow burn up is not out of the question.
If history repeats itself there could be a huge panic buy into metals with prices that shock the world. It might be a temporary thing like in the past. Then what? Sale gold for dying dollars? Maybe sale and pay off deb or buy tangible goods. Where will it fit into the reset? Will it finally end paper gold or will they just print more to control prices? Will they slap astronomical taxes or even confiscation?
Will the US be forced to start backing its currency with something besides force and debt?
 

edsl48

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Cant they just print the money to make the payments?
That is the problem. Of course they can print but eventually they will print to where the paper has a higher real value than the currency's face value. Hard to believe but we are just about on the "paper standard." Could this be behind the real reason for digital currency?
 

Uglytruth

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Where will it fit into the reset?
I think the question is what side wins? The reset side or the awakening side. EIther way we are in for a hell of a ride.
 

Avalon

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I think the question is what side wins? The reset side or the awakening side. EIther way we are in for a hell of a ride.
As far as dollars go I suspect more than one reset. Unless a miracle happens the US will bring in digital currency that is more bullshit manufactured dollars. With no backing that will fail too. Then the real reset. Your right, fun times ahead. Where does the civil war fit into this?
 

BackwardsEngineeer

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Way back in Ramblings, through Davey's rebuild, onto Foreclosure threads we have been tossing around housing. Go back and read, there are some great nuggets in there over the last couple of years, it'll help serve as a base for what is coming...

Here is the thing, this haven't completely killed it so they are not done. I'll repeat for emphasis, so the ominous music can catch up.... Housing was the only real market moving, they want to completely kill the economy, so they aren't done raising rates... more pain coming in rates. maybe double digits

Layer upon layer, healthcare, food distribution and prep, fuel, natural gas, crypto, metals..... now housing, right before they burn down the bond market leading to the largest stock market rally ever .... then they pull the plug on the USD .

clif noting, any non essential RE should have been sold 6 months ago, including income producing rentals.