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Between a rock and a hard place - time bomb
Central banks are between a rock and a hard place. Inflation is really taking off:
Guardian: Public expectations of inflation soar to highest for nine years
Marketwatch: Fed's Plosser pushes for quick rate hikes
Banking Times (UK): Central bank body warns of Great Depression
My comment:
If they hike rates, banks are toast - finito. Credit systems, especially real estate, is crashing or showing intense strain worldwide - and with it the banks. If they don't hike rates, fiat money is going down the drain. It is very, very tricky to get that balance right. This way inflation - boom! That way - banks - boom! There are so many lag effects and psychological factors that the price of money is impossible to set without a market. For now, ECB is playing lead hawk to the detriment of the US. But just you wait until the recession hits Europe for real. Even in my tranquil oil-rich corner of Europe, real estate is just starting its sky-diving. The political tone in media coverage of "debt slaves" with a total-debt-to-yearly-income ratio of 5 or 8 or 9 finally hitting the brick wall sounds an ominous tone, if not the death knell, for the local banking system here.
Hurry up and crash. Fools! Vault cash reserves in US banks are down to about 150 USD per person. It's a time bomb.
Meanwhile, in other news, gold is down... (shakes head)
Guardian: Public expectations of inflation soar to highest for nine years
Marketwatch: Fed's Plosser pushes for quick rate hikes
Banking Times (UK): Central bank body warns of Great Depression
My comment:
If they hike rates, banks are toast - finito. Credit systems, especially real estate, is crashing or showing intense strain worldwide - and with it the banks. If they don't hike rates, fiat money is going down the drain. It is very, very tricky to get that balance right. This way inflation - boom! That way - banks - boom! There are so many lag effects and psychological factors that the price of money is impossible to set without a market. For now, ECB is playing lead hawk to the detriment of the US. But just you wait until the recession hits Europe for real. Even in my tranquil oil-rich corner of Europe, real estate is just starting its sky-diving. The political tone in media coverage of "debt slaves" with a total-debt-to-yearly-income ratio of 5 or 8 or 9 finally hitting the brick wall sounds an ominous tone, if not the death knell, for the local banking system here.
Hurry up and crash. Fools! Vault cash reserves in US banks are down to about 150 USD per person. It's a time bomb.
Meanwhile, in other news, gold is down... (shakes head)
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