Thursday, January 8, 2015

The Fed Manipulated Boom is On [Unemployment Claims Since the 2008 Crash in One Chart]

A byproduct of this is that the desire to hold cash balnces will shrink. Thus, accelerating price inflation is around the corner,

1 comment:

  1. Here is one wrinkle in that:

    Average wages are down. I'm not discounting inflation because I see it all over the place, especially in basic essentials like food and toiletries. Plus, there is a massive tech industry bubble.

    With all the Fed pumping, there is massive tech seed and investment funding that is way beyond anything reasonable. I see a huge amount of people jumping ship at established firms to go chase their start-up ideas.

    As long as we see the Fed printing at rates you're showing in your alert weekly, you're going to feed this bubble. But 95% of these tech ventures are only there because of the easy money. Once the printing stops, the funding dries up, and it is the Greenspan 2000 Dot-Com bubble all over again.

    So, I agree that the desire to hold cash balances has the potential to shrink, but the situation is very precarious if the Fed takes away its gateway drug. You're going to see wages fall much more, much faster once those high paying jobs go poof, and the Silicon Valley real estate boom goes with it. We'd be right back to deflation 2009.