Hey, Mr. Kust, a little off-topic, but I’ve been wanting to recommend a book that might interest you, maybe even give you topics for discussion in your Substack. It’s the 2016 book, “Crude Nation”, by Raul Gallegos, about the unraveling of Venezuela’s economy due to socialism, wokeness run amok, graft, and general government incompetence. Gallegos was the finance writer stationed in Caracas for the Wall Street Journal, and in that capacity had access to all the insiders of Venezuela’s banking world and power players. His stories of how socialism destroyed everything - despite all that oil wealth- have really stayed in my mind. There are some seriously important lessons to be learned from this book for our own country!
As usual, central planning shows its ass. The question that I occasionally ponder is: What would interest rates currently be if the market had set them?
There is, of course, no good way to answer that question.
However, we can reasonably infer from interest fluctuations since last fall that the current upper bound for what the markets are willing to tolerate on Treasury yields is between 4 and 5 percent, depending on maturity.
We're pushing the edge of that envelope with interest rates right now, and it will be interesting to see how much higher they can go before another liquidity crisis erupts.
If we look at the history of interest rates, however, we can see that interest rates were generally in this same 4-5% range during the sixties, and expanded to an upper bound of between 6 and 7 percent during the 1990s.
So it is quite possible interest rates would not be much higher than they are today, although without the asset devaluations and liquidity drains the Fed has catalyzed by pushing rates to this point.
The contest is always between the authoritarians and the libertarians. Between those obsessed with ruling and enslaving others and those determined to live and die as free people.
The irony is that the authoritarians peddle lies, and base everything upon lies. Which is why I am always hopeful the libertarians will prevail in the end.
Many of the writers on Substack have claimed, and documented, that literally millions of people are out of the workforce because of disabilities caused by the Covid shots. But these, of course, are not discussed, acknowledged, or accounted for in any of the official job-market statistics. So the Fed’s calculations and remedies are going to be off base in any case. Maybe someday, economics students will have an interesting historical case study in scrutinizing this.
That is almost certainly a relevant factor--one that would be quickly quantified if the Fed and the BLS gave any thought about the cohort of workers not in the labor force.
A presumably and historically "tight" job market and yet 5 million workers remain sidelined three years after the pandemic and the lunatic lockdowns. Something is way wrong with that picture.
I’ve been libertarian-oriented in my thinking for more than fifty years, so I’ve never had much faith in government. But now, jeez, the government incompetence and general insanity is just off the charts.
Ha! I haven’t heard that one yet - ‘Xiden’. Appropriate for a complacent stooge of China. (Ever since the lockdowns, I’ve always thought of him as Dictator Joe, although Dementia Joe is just as accurate.)
Hey, Mr. Kust, a little off-topic, but I’ve been wanting to recommend a book that might interest you, maybe even give you topics for discussion in your Substack. It’s the 2016 book, “Crude Nation”, by Raul Gallegos, about the unraveling of Venezuela’s economy due to socialism, wokeness run amok, graft, and general government incompetence. Gallegos was the finance writer stationed in Caracas for the Wall Street Journal, and in that capacity had access to all the insiders of Venezuela’s banking world and power players. His stories of how socialism destroyed everything - despite all that oil wealth- have really stayed in my mind. There are some seriously important lessons to be learned from this book for our own country!
I'll check it out. Thanks!
As usual, central planning shows its ass. The question that I occasionally ponder is: What would interest rates currently be if the market had set them?
There is, of course, no good way to answer that question.
However, we can reasonably infer from interest fluctuations since last fall that the current upper bound for what the markets are willing to tolerate on Treasury yields is between 4 and 5 percent, depending on maturity.
https://fred.stlouisfed.org/graph/?g=11CYE
We're pushing the edge of that envelope with interest rates right now, and it will be interesting to see how much higher they can go before another liquidity crisis erupts.
If we look at the history of interest rates, however, we can see that interest rates were generally in this same 4-5% range during the sixties, and expanded to an upper bound of between 6 and 7 percent during the 1990s.
https://fred.stlouisfed.org/graph/?g=15Ie4
So it is quite possible interest rates would not be much higher than they are today, although without the asset devaluations and liquidity drains the Fed has catalyzed by pushing rates to this point.
😁🙌 Live free!
This is a showdown between the socialists and the capitalists.
It has always been thus.
The contest is always between the authoritarians and the libertarians. Between those obsessed with ruling and enslaving others and those determined to live and die as free people.
The irony is that the authoritarians peddle lies, and base everything upon lies. Which is why I am always hopeful the libertarians will prevail in the end.
Truth is our superpower (okay, that was cheesy!).
Not so cheesy when it’s true! The truth will win out in the long run - it’s just a matter of how much damage will be done in the short term.
Many of the writers on Substack have claimed, and documented, that literally millions of people are out of the workforce because of disabilities caused by the Covid shots. But these, of course, are not discussed, acknowledged, or accounted for in any of the official job-market statistics. So the Fed’s calculations and remedies are going to be off base in any case. Maybe someday, economics students will have an interesting historical case study in scrutinizing this.
That is almost certainly a relevant factor--one that would be quickly quantified if the Fed and the BLS gave any thought about the cohort of workers not in the labor force.
A presumably and historically "tight" job market and yet 5 million workers remain sidelined three years after the pandemic and the lunatic lockdowns. Something is way wrong with that picture.
I’ve been libertarian-oriented in my thinking for more than fifty years, so I’ve never had much faith in government. But now, jeez, the government incompetence and general insanity is just off the charts.
Yet the economy remains "strong."
Does it?
That is what Joe Xiden tells me.
Ha! I haven’t heard that one yet - ‘Xiden’. Appropriate for a complacent stooge of China. (Ever since the lockdowns, I’ve always thought of him as Dictator Joe, although Dementia Joe is just as accurate.)
Alright, Dementia Joe Xiden.
Gbil7, why don't you start your own Substack?