| The economy is not fine. It is like a race car, insofar as the problem scope is one of lagging indicators and hysteresis, (i.e. speed and fuel), but not as you elaborate. Starting in 2010, the FED started quantitative easing. This marked the abandonment of the sound dollar policy. The economic fallout we face today are the natural consequences of money printing and the economic dynamics that worsen it. You fail to realize the scope of the issue. In 2020/2021 the Saudi's abandoned the petrodollar agreement. This dramatically reduced the demand for our printed currency which our country has used to fund its deficit spending, and export debt to the nations who had to hold it. With the abandonment, the entire pool of printed money that nations had to hold to purchase goods like Fuel shrunk dramatically. At the same time, we had the pandemic, where we printed even more money which caused inflation and had to raise our rates to slow that down (rates don't stop inflation, it just slows down or speeds up the mixing). Today we are faced with high rates, and high inflation. They will need to cut rates to encourage growth, but inflation will become hyper-inflation when it does. The chaotic warblings of the market have caused shortage in non-discretionary goods. If one has been paying attention, you'll have seen the warning signs like frozen foods being consistently out, eggs increasing to almost a dollar per egg, and fast food now costing double for a single serving. There are still shortages too despite this. Illiquidity in the debt market is all well and good in terms of velocity of money, but at the point where shortages occur and persist beyond 30 days, you've missed the mark dramatically. You fundamentally misunderstand inflation and how interest rates affect it. |