The Joe Biden stimulus package
Discussion
So, Mr Biden is going to borrow trillions of dollars and scatter them about. But what I can't work out is whether that's a good thing for the markets, because people and businesses will be better off, or bad for the markets because the country gets trillions more more into debt. What does the panel think?
$2 trillion. Sorted.
Next year. $3tn... Just live off debt, great while others are funding it.
For now foreign central banks are willing to buy a lot of this debt... would you?
Once it’s just the federal reserve printing money to buy all the government bonds it really is going to be hyper inflation time.
USA had big stick. China has a big stick now too. And probably won’t be buying as much USDT again.
It’s only going to carry on for so long.
Next year. $3tn... Just live off debt, great while others are funding it.
For now foreign central banks are willing to buy a lot of this debt... would you?
Once it’s just the federal reserve printing money to buy all the government bonds it really is going to be hyper inflation time.
USA had big stick. China has a big stick now too. And probably won’t be buying as much USDT again.
It’s only going to carry on for so long.
Benbay001 said:
In the short term, it can only be good.
In the long term, who knows?
We can deal with that in the long term.
Sums it up perfectly.In the long term, who knows?
We can deal with that in the long term.
What i am struggling to get my head around is where the extra financing comes from? Is there an infinite amount of spare cash available?
Or does it simply mean a a few $trillion supplied to AAA countries at 0.5%, inevitably deprives countries in Africa and South America of funds, or they end up paying 10% and upwards.
Mr Whippy said:
$2 trillion. Sorted.
Next year. $3tn... Just live off debt, great while others are funding it.
For now foreign central banks are willing to buy a lot of this debt... would you?
Once it’s just the federal reserve printing money to buy all the government bonds it really is going to be hyper inflation time.
USA had big stick. China has a big stick now too. And probably won’t be buying as much USDT again.
It’s only going to carry on for so long.
It is OK, as the debt will be paid off by future generations (and they can't vote yet, or aren't even born yet), as long as the current generations get that warm feeling, that is all that matters, out of control debt with no concept of how it will be paid off, not a problem...Next year. $3tn... Just live off debt, great while others are funding it.
For now foreign central banks are willing to buy a lot of this debt... would you?
Once it’s just the federal reserve printing money to buy all the government bonds it really is going to be hyper inflation time.
USA had big stick. China has a big stick now too. And probably won’t be buying as much USDT again.
It’s only going to carry on for so long.
Spending money without any responsibility is so, so easy...
Seems to me in many ways “printing money” is fine if it keeps the real economy moving.
My concern is around the things it causes some investors to believe - namely that stock prices will inevitably keep on rising. If the real economy is struggling, which is why the money printing gets done in the first place, performance of many businesses is clearly under pressure and not booming. But you end up with booming stock prices when there’s often no growth to support them. And at the same time we have retail investors leaping on the bandwagon in the belief, “upwards only, innit”.
Time to think hard about a bit of portfolio rebalancing IMO. It’s been a great ride to date but just at the moment I can’t see much real substance supporting the house of cards.
My concern is around the things it causes some investors to believe - namely that stock prices will inevitably keep on rising. If the real economy is struggling, which is why the money printing gets done in the first place, performance of many businesses is clearly under pressure and not booming. But you end up with booming stock prices when there’s often no growth to support them. And at the same time we have retail investors leaping on the bandwagon in the belief, “upwards only, innit”.
Time to think hard about a bit of portfolio rebalancing IMO. It’s been a great ride to date but just at the moment I can’t see much real substance supporting the house of cards.
dingg said:
Business (ergo the market) will continue to be supported, it's either print money now and keep the population employed or print money later when its all went pop.
I know which way everyone prefers.
These are unprecedented global times
The question IMHO is 'Is it sustainable?' I don't see how it can be, any more than Tesco could open 100 new branches a year for ever. When and how it will stop being sustainable is the thing to determine, but that's above my pay grade.I know which way everyone prefers.
These are unprecedented global times
dingg said:
Business (ergo the market) will continue to...
I'm not convinced that connection can be sustained for ever. Giving businesses money to fill an existing hole doesn't generate any future returns, it just moves the furniture around a bit. And with the likelihood of future tax rises to pay for it all (which tend to slow an economy) the picture looks even more perplexing.dingg said:
Business (ergo the market) will continue to be supported, it's either print money now and keep the population employed or print money later when its all went pop.
I know which way everyone prefers.
These are unprecedented global times
But print money later means money goes into viable enterprise.I know which way everyone prefers.
These are unprecedented global times
Print money now means money goes into viable and unviable enterprise, often to the detriment of viable enterprise.
Which means bailouts to prevent failure weaken the economy further rather than strengthen it.
Everyone prefers the route for an easy life today, but it’ll mean misery a short while down the road for the majority.
Teddy Lop said:
I'm very concerned.
But while running is not an optimum lion risk management strategy, the time to reconsider it isn't while being chased with one close behind you.
But you have to stop at some point and take the lion challenge head on and that'll be when there's a working vaccine that most have been jabbed with and sufficient therapeutics to stop the hospitals being overwhelmed, I reckon we'll be out of the woods by the autumn, as always time will tell. But while running is not an optimum lion risk management strategy, the time to reconsider it isn't while being chased with one close behind you.
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