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SVTPerformance's Chain of Restaurants
Road Side Pub
SVB is Now In the Hands of the FDIC
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<blockquote data-quote="Klaus" data-source="post: 16893987" data-attributes="member: 190070"><p>The simplest definition of inflation is that it is too much money chasing too few goods. </p><p></p><p>The feds job is to moderate demand. Higher interest decrease demand. Lower rates increase demand. </p><p></p><p>It attempts to do so in a way that maximizes employment. </p><p></p><p>These two functions are the only thing the fed does. It is known as the "twin mandate." </p><p></p><p>So, how does inflation fall? It falls when demand falls. This is not a pleasant experience for the average consumer.</p><p></p><p>Another way of saying there is too much inflation is to say "I have too much money and there is not enough stuff to buy." </p><p></p><p>This is not that bad of a problem when the alternative is "I don't have enough money to buy the stuff that I need." </p><p></p><p>We are headed toward lower inflation but commensurate with that will be an increase in unemployment, corporate defaults, people losing their homes, etc. </p><p></p><p>You will look back on the good old days when people were pissed because they had to wait 12 months to buy a 100k truck. Which was a pain but not an actual problem. Getting fired and defaulting on your mortgage is a real problem.</p></blockquote><p></p>
[QUOTE="Klaus, post: 16893987, member: 190070"] The simplest definition of inflation is that it is too much money chasing too few goods. The feds job is to moderate demand. Higher interest decrease demand. Lower rates increase demand. It attempts to do so in a way that maximizes employment. These two functions are the only thing the fed does. It is known as the "twin mandate." So, how does inflation fall? It falls when demand falls. This is not a pleasant experience for the average consumer. Another way of saying there is too much inflation is to say "I have too much money and there is not enough stuff to buy." This is not that bad of a problem when the alternative is "I don't have enough money to buy the stuff that I need." We are headed toward lower inflation but commensurate with that will be an increase in unemployment, corporate defaults, people losing their homes, etc. You will look back on the good old days when people were pissed because they had to wait 12 months to buy a 100k truck. Which was a pain but not an actual problem. Getting fired and defaulting on your mortgage is a real problem. [/QUOTE]
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SVTPerformance's Chain of Restaurants
Road Side Pub
SVB is Now In the Hands of the FDIC
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