Updated: Jul 29
Some Hyperbole to Make a Point. First, just heard Roe v. Wade was just overturned by the U.S. Supreme Court, which will be the big news of the day. This may cause a lot of havoc, because some will be extremely upset, but I hope in Christ it does not cause havoc. Brace yourself. Be safe. Peace.
The Dow Jones stock market dropped 11 out of 12 weeks to close last week ending June 17. The Dow has dropped worse than it did at the beginning of the Great Depression in 1929, which was a 10 out of 11 weeks closing down. We will see today if the Dow ends on a weekly down again. Whether it does or not, some comparisons on the market are at the point where we have to go back all the way to the Great Depression, which should tell you something. I have said before in a previous post, I think we are headed for either a Greater Depression (federal interest rates go up) or a Dollar currency collapse (federal interest rates stay the same or go down).
Cryptocurrency has lost over 66% value compared to it's November 2021 peek. Bitcoin, which is largest of cryptocurrency's traded on the market, as of this morning was a little over 21,000 and had reached a low dropping below 18,000 to the dollar back on June 18. The volatility of the cryptocurrency market as a whole remains high in my opinion.
President Biden ran with a campaign promise to rid fossil fuels.
He even mentioned above, it is why the Obama administration started shutting down a lot of coal plants and production. The gasoline and diesel market is currently priced high, and probably going higher. Biden has been releasing national security fuel reserves and now tabling a federal tax holiday on gasoline. Along with governmental pressures, including overly exporting oil and natural gas alongside reduced resource infrastructure, none of these actions are enough to off-set the underlying problem forcing the gas price rapidly higher in the first place, which is inflation. Raising the current federal interest rate of 1.5% higher than the federal inflation rate of around 17% (8.6%) is what the economy as a whole needs. The Federal Reserve Bank is nowhere near putting that move on the table, which thereby threatens a collapse of the dollar. The gas for Russian rubles (due to Western sanctions), which probably will expand to other commodities like wheat for unfriendly countries, threatens the only sector that has kept the U.S. dollar value high for decades, which is world currency status, especially as the Petrodollar. This means other nations always have to possess U.S. dollars to sell and trade on world markets (there's where a lot of the vast printing of dollars ends up) giving the dollar it's higher value, even though the dollar has been inflating since 1913. Yet, those days might be ending. The Fed has a hard time deciding whether to raise the current 1.5% interest rate .5% or.75% each month putting their target moves way-off the necessary rate hike above 17% (and climbing); so, things do not look good.
The Federal Reserve and U.S. Government put the market where it currently is. The low federal interest rates by the Federal Reserve contributes to a debt and high price economy. The U.S. gov't is the other contributor by spending way beyond it's income, which comes from taxes alone. Today, the U.S. gov't collects 4.4 trillion dollars in taxes but spends $6.1 trillion. The U.S. National Government Debt is $30.5 trillion. The U.S. Total Debt, which includes National, State, Local, Business, Household, and other Financial Institutions is $91 trillion. Where does the U.S. gov't get the extra money to pay for it's day-to-day spending costs, that has made such a debt, since the math between spending and taxes does not equate? The short answer: U.S. Treasury Bonds, which are loans. The U.S. gov't borrows these loans from itself, which triggers the Federal Reserve to print more money (digital printing now-a-days). More printed money is inflation, which makes higher prices and weakens the overall economy. This is what we see now and have periodically seen: the Great Depression, 1970s inflation, Dot.com Bubble burst, 2008 Great Recession, etc. My question is how is the U.S. Government, which includes it's 1913 established central bank called the Federal Reserve, supposed to fix what it does not want to fix because it is the one causing the problem? You tell me.
(some hyperbole to make a point)