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Alt 30-07-2017, 13:01   #49
Benjamin
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Stone McCarthy: No More Hikes This Year, Debt Ceiling Can Derail Fed's Balance Sheet Plans

by Tyler Durden, Jul 26, 2017, http://www.zerohedge.com/news/2017-0...ce-sheet-plans

Selection of points made by Stone McCarthy:
  • Due to the disappointing inflation numbers, we do not look for another rate hike in 2017, and for only two in 2018.
  • As expected, FOMC maintained the fed funds rate target range at 1.00%-1.25%. Forward guidance still for "gradual increases" in rates, depending on data.
  • Inflation measures "have declined" and "running below" the 2% objective, a small change the reflects more concern about a sustained inflation undershoot from the "running somewhat below" in the June 14 statement.
  • Inflation expected to "remain somewhat below" objective "in the near term, but to stabilize" over the medium term.
  • Near term risks "roughly balanced", "monitoring inflation developments closely".
  • At this writing we continue to expect that the FOMC will announce the change in reinvestment policy at the September 19-20 meeting to start in October. However, this could be delayed if it looks like an increase to the debt limit is not immediately forthcoming, and with it the risks of the US default on its sovereign debt.
  • Due to the disappointing inflation numbers, we do not look for another rate hike in 2017, and for only two in 2018.
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Quelle: How Big Of A "Deleveraging" Are We Talking About?
by Tyler Durden, Jul 25, 2017, http://www.zerohedge.com/news/2017-0...-talking-about

Zitat:
With economic growth rates now at the lowest levels on record, the growth in debt continues to divert more tax dollars away from productive investments into the service of debt and social welfare.


Dow Jones in der gleichen Zeit:


It now requires nearly $3.00 of debt to create $1 of economic growth:

Zitat:
In fact, the economic deficit has never been greater. For the 30-year period from 1952 to 1982, the economic surplus fostered a rising economic growth rate which averaged roughly 8% during that period. Today, with the economy growing at an average rate of just 2%, the economic deficit has never been greater.

Zitat:
But again, it isn’t just Federal debt that is the problem. It is all debt.

As discussed last week, when it comes to households, which are responsible for roughly 2/3rds of economic growth through personal consumption expenditures, debt was used to sustain a standard of living well beyond what income and wage growth could support. This worked out as long as the ability to leverage indebtedness was an option. The problem is that eventually, the debt reaches a level where the level of debt service erodes the ability to consume at levels great enough to foster stronger economic growth.

In reality, the economic growth of the U.S. has been declining rapidly over the past 35 years supported only by a massive push into deficit spending by households.
Zitat:
As wage growth stagnates or declines, consumers are forced to turn to credit to fill the gap in maintaining their current standard of living. However, as more leverage is taken on, the more dollars are diverted from consumption to debt service thereby weighing on stronger rates of economic growth.

Zitat:
The massive indulgence in debt, or a “credit induced boom”, has now begun to reach its inevitable conclusion. The debt driven expansion, which leads to artificially stimulated borrowing, seeks out diminishing investment opportunities. Ultimately these diminished investment opportunities lead to widespread malinvestments.
Zitat:
Today, we see it again in mortgages, subprime auto loans, student loan debt and debt driven stock buybacks and acquisitions.

When credit creation can no longer be sustained the markets will begin to “clear” the excesses. It is only then, and must be allowed to happen, can resources be reallocated back towards more efficient uses. This is why all the efforts of Keynesian policies to stimulate growth in the economy have ultimately failed. Those fiscal and monetary policies, from TARP and QE to tax cuts, only delay the clearing process. Ultimately, that delay only potentially worsens the inevitable clearing process.
Zitat:
That clearing process is going to be very substantial. With the economy currently requiring roughly $3 of debt to create $1 of real, inflation-adjusted, economic growth, a reversion to a structurally manageable level of debt would involve a nearly $35 Trillion reduction of total credit market debt from current levels.

Zitat:
The last time such a reversion [=a $35 Trillion deleveraging process] occurred the period was known as the “Great Depression.”

Zitat:
This is one of the primary reasons why economic growth (along with lower interest rates) will continue to run at lower levels going into the future. There is ultimately a limit to which indebtedness can supplant actual organic economic growth. The question is whether we have already reached that limit
Charts stammen von https://realinvestmentadvice.com/
Der Artikel ist eine Edition von diesem Original-Artikel: https://realinvestmentadvice.com/how...talking-about/

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Debt drives rates lower....not higher. Debt is deflationary. See chart below and read this: https://realinvestmentadvice.com/the...dp-challenges/ (=Quelle):
  • Personeal income und GDP fallen,
  • Household credit market debt Outstanding steigt exponentiell

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  1. Financial debt (blue),
  2. Government debt (red),
  3. Household debt (green)
Quelle: http://newarthurianeconomics.blogspot.de/2011/09/
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Beste Grüße, Benjamin

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