The wealthy generally sidesteps inflation; it ravages the poor and middle class. From Artis Shepherd at mises.org:
The war of words between President Donald Trump and Fed Chairman Jerome Powell has been revealed as largely histrionic. Like their predecessors—Richard Nixon and Arthur Burns—over 50 years ago, Trump and Powell have been acting out a performative charade regarding when and to what extent artificially low interest rates should go even lower in the midst of persistent inflation. The supposed sparring between Trump and Powell merely guarantees the result both want—more easy money.
In a recent speech at the obnoxious Jackson Hole symposium, Powell incredibly stated that current monetary policy was “restrictive.” He followed that up with veritable chum for easy money sharks: “…the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
Translation: the Fed intends to resume cutting interest rates at the next September meeting. Per the online betting marketplace Kalshi, the odds of a September rate cut immediately shot up from 59 percent to 81 percent. But whether or not Powell and the Fed cut rates in September is almost irrelevant. One need only open his eyes to see the matter clearly.
Money Everywhere
As of this writing, US stock markets are at all-time highs, with valuations (as measured by the CAPE ratio) at levels only seen once before—during the peak of the dot-com bubble in 1999. Within this milieu, margin debt has also hit an all-time high in July, meaning that investors are taking loans to speculate in stocks while ignoring the magnified risk therein.
Junk bonds—a euphemism for sub-prime corporate debt—trade at spreads as tight as they’ve ever been. In other words, investors in the risky debt of poorly performing companies are willing to accept pitifully meager returns in exchange for excessive credit risk.
Statist utopian comrades always hate the middle class.
Proles or wards of the state have no time for bourgeois.
Manboons is not a learning animal.