Jan 6, 2022
Summary:
Tapering is real, but the real question at hand is to what extent
the Fed will be able to do this. I sit down and chat with David
Scranton to discuss the Federal Reserve’s pursuit to raise rates,
and whether or not this can be achieved in a calculated manner to
avoid a potential recession. There are many factors at play that
are making it more difficult to bring these rates up, and this will
dictate how inflation looks in 2022. Tune in for more.
Highlights:
-People forget that inflation comes from an increase of demand and
a decrease in supply
-Since it is coming from both sides, the tapering may push the
demand down too far, creating a recession
-It’s important to get long term rates to rise before short term
rates, but this may or may not work
-They may have to sell some of the bonds off the balance sheet, but
this may not be the most viable solution
-All of the money going into assets is going to make it harder for
the Fed to raise long term rates
-It’s almost too late to transition to a nation that saves rather
than spends because of what is happening with inflation
-China is going through a property debacle in light of the real
estate issues
-When we have inflation, currency is getting devalued—but this
typically comes with the assumption that this is only happening in
a few countries
-If this was happening in every country, it would be a wash
-With lower rates, the economy is reasonably healthy
-A year from now, it’s likely that the market is going to be
higher—with the caveat being that the Federal Reserve raises rates
too fast
-Another area of responsibility is ensuring the stock market never
goes down, which is not feasible
Useful Links:
Financial Survival Network
Sound Income Strategies
What Will the Fed Do Next? with
David Scranton
Why You Should Plan to Retire Young
and Retire Rich – Robert Kiyosaki and David Scranton