“The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump wrote. “Do the right thing. April 2nd is Liberation Day in America!!!”
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108 sats \ 3 replies \ @Undisciplined 20 Mar
Print, baby! Print!
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24 sats \ 2 replies \ @justin_shocknet 20 Mar
Lower rates mean less printing, the higher the rate the more currency goes out into the system in the form of interest payments.
Lower rates increase private lending (velocity), because there's less interest stimmies to feed the money lenders.
(Lyn Alden actually did a piece on this calling it "Fiscal Dominance")
Classical "State Banks" had interest rates <2% and surplus instead of debt, inflation was not a problem. Capture by globalist Central Banks causes inflation to justify the higher rates and moves wealth offshore.
Lower rates are Populist-Nationalism
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0 sats \ 1 reply \ @028559d218 22 Mar
Correct me if I'm wrong... but doesn't lower rates mean a faster rate of money (or credit) creation?
That's why when rates are low... it's a 'weaker' dollar. And higher rates are a 'stronger' dollar, everything else being equal?
My understanding of Fiscal Dominance... was that it meant that debt load, rather than Fed Funds, was setting interest rates especially long-term interest rates. It's when the central bank no longer has control over interest rates compared to debt load... the 'fiscal situation' is dominant instead of the 'set' interest rates.
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0 sats \ 0 replies \ @justin_shocknet 22 Mar
Lower rates bring in less NEW offshore fiat because there's less yield to attract them. Its an equilibrium of diminishing return, not a signal of weakness, since the rates can only be low if the dollar can command it in the first place... like everyone wishes they could get 2% risk free on Bitcoin
Correct the fed doesn't control the long end, but the funds rate on the short end trickles out because its a multiple of cash in the system to bid those rates, and short term bills are effectively cash in moneymarkets etc.
I think the stables are how they get people in other countries included in what is effectively the US money market, even if the foreign government doesn't like it.
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36 sats \ 0 replies \ @028559d218 22 Mar
“The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy,” Trump wrote. “Do the right thing. April 2nd is Liberation Day in America!!!”
Trump is an absolute economic moron (in my opinion).
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