That's because QE feeds invisibles. QT reverses the process. It's a particular problem for asset valuations. I asked Grok why- here's what it came up with:
'Many invisibles, like intellectual property or digital platforms, derive value from future cash flow expectations. Higher interest rates from QT increase discount rates used in valuation models, reducing the present value of these assets. This could depress valuations of tech firms, media companies, or other intangible-heavy sectors, as seen during the 2022-2023 tightening cycle when tech stocks slumped.'
Basically, it destroys value which is largely fictional. Don't get me wrong. Sometimes such devaluations hit companies of real future worth. For investors, it can be a great fire sale. When the Dot.com bubble burst there were a number of technology-based companies with really innovative new products, which were unfairly tarnished by adjacency to businesses which were pure hype.
The prime example would be digital media which promised new customers in the key demo, despite using an obsolete corporate media formula which consumers had deliberately moved away from because they didn't trust the formula.
So after a couple years of reprieve, the government will do what they do best. Waste money and crush savers and retirees.
Lower interest rates are not the solution. Rates are too low as they sit, well below the LT historical average. The problem is massive budget deficits by a government unwilling to control spending. All lower rates do is allow them to continue to drive the deficit higher and higher.
It’s unbelievable to me that a person of your stature and intelligence would support lower rates in lieu of an actual reckoning that would begin the process of unwinding a completely fake economy.
Maybe you need to revisit the tulip chart from nearly 400 years ago.
Exactly. We wonder why Americans don't save, but how can anyone teach children to save when the banks pay virtually nothing? I can remember when "passbook savings" were REQUIRED to pay 5.25%. This should come back again, but this time maybe 6 or 7% due to inflation. The banks managed to kill that requirement and savers are punished every time in favor of debtors and we wonder why our economy gets worse with each new cycle of artificial stimulation. In other words, the US economy cannot stand on its own two feet anymore. It needs continual shock therapy. Onward through the fog until we have 2008 but perhaps 5 to 10 times worse. Naturally, those advocating all the shock therapy will blame everyone else.
Indeed. I remember as well. Along with when credit cards were essentially a ‘luxury’ item and the interest rate was capped at some reasonable amount. A combination of many things, the demise of Glass Steagal, Congress becoming a way to obtain massive wealth, corrupt and compromised oversight to name three set the country in a path from which it will never return.
I’ll likely be dead, which is what they want anyway. But eventually the peasants will revolt French Revolution style. It won’t matter in the end. Although it would be amusing to stick around long enough to willingly take part.
My dad was an American NCO who married an English schoolteacher and then went into the oil business when he'd qualified for his half-pension. The UK back then wasn't big on consumer lending or credit cards. When we moved to the States for a year, he had real difficulties getting a mortgage because he had virtually no borrowing on his credit history.
The Peasant's Revolt is likely to be populist in orientation. I'm not a fan of Thomas Picketty, but one thing he got right was in assessing that the two power elites vying for control in the West are the Merchant Right and the Brahmin Left. However, it's a little more complicated than that. The Merchant Right actually breaks down into Merchant Right and Crony Capitalist, and although some of the Crony Capitalist element has now aligned with Trump out of pure self-interest (mainly because they realised that the Brahmin Left's energy policy threatened their interests existentially), most of it is still in bed with the Brahmin Left. It definitely depends upon the sector they occupy.
Anyway, my point would be that despite the Trump Counter Revolution almost all institutional power in America is still aligned with the Brahmin Left. If there is going to be a Peasant Revolt it will be against the Brahmin Left, because Trump's Counter Revolution fails at an economic level.
Still, it could be worse- you could be living in the UK, like me!
Very interesting. So fascinating that you, as a Brit, understand more about the reality here in the U.S., than 99% of the people that live here. And although it is definitely a complete debacle, I cannot disagree (at least not yet) that it could be worse. I do expect it to get much worse, and whether we have done the correct things to prepare for that eventuality, we will not know until some future time. Or, we may never know. I just turned 70, my wife if 45 years is 69 (I married a younger woman lol) so we may be dead before the revolt, or be to decrepit to participate.
Where in the UK do you live?
We have been to the UM twice, far back enough in time that it was a different place I think. In 1980 my brother was living in Germany and we went to visit him for a bit, and then did the tourist thing to London, Paris, Berlin, Rome, etc. we did that shortly before we got married
And then in the mid 90s we took our then 12 and 8 year old boys on a 3 month van trip, staying off the beaten path and travelling in tandem with a Brit and his wife and kids. He was a Londoner, a physicist, and he had moved his family to the U.S. to take a job for 5 years at a University and they bought a house across the street. Our kids were the same age, wives were both teachers, and we all became very good friends. When his contract was over they decided to move to Australia but ended up not liking it so back to London they went.
And while he was between jobs, after getting resettled in London he sent me a note with a proposal. And that resulted in our family of four and his of 5 renting two VW camper vans (we were so far ahead of the curve) and spending nearly 3 months on the road on a driving and camping tour of Europe. He spoke German and was passable in a couple other languages. I can do a bit of German and I dusted off my HS and University French and we put a few 1000 KMs on those vans as we explored all of the places the tourists rarely go. It was lovely, with some language practice, their local knowledge, the kids all became best friends and remain so to this day.
We retired early in 2011, sold our house (at a loss) and moved into our 35 ft sailboat with a 5 year plan 15 years later we are still living on the boat. It’s been quite an adventure and we are somewhat terrified that we are eventually going to have to give it up and move back on land. We pretty much stopped our long distance travelling during Covid due to all the restrictions that various countries put in place and we came back to the U.S. in 2020 and have been living on the boat in a marina in the winter and sailing in the Great Lakes in the summers. Last winter we got off the boat for a few months and rented a condo in South Carolina. It worked out ok so we are going to do it again this winter. Easing, as my wife says, back into a life on land a little bit at a time. She was Dx with early stage Parkinson’s two years ago and although there has been zero additional progression and other than internal tremors and occasional balance issues, has no other symptoms. But even though we talk about taking off again for one last adventure to the islands, it seems like maybe there’s just more risk in that than we need at this point. So, we will get off the boat in October, store it in a heated building, load up the SUV (we just bought a vehicle two weeks ago, prior to that we hadnt had one since 2015. When we needed one we would just rent something) and head to SC and maybe try and figure out what we are going to do next.
Maybe that will depend on the macro factors at play. What’s the old Chinese proverb? Something like…may you be blessed to live in interesting times.
I live in Norfolk It's idyllic. Until recently, we had managed to escape most of the negative effects of mass migration, but that is changing. A friend recently visited Norwich and went into a pub. Although the pub was pretty full, he was one of only two Brits drinking there. It probably wasn't a very accurate sample. He hadn't gone into the pub at a time when Brits would normally be there, and the fact that the pub catered to the low cost end of the market, probably oversampled non-British.
It's not race, it's culture- as witnessed by the fact that the whole thing which drove Brexit was a massive influx of White Eastern Europeans. Most Brits actually like a fair degree of cultural diversity in their towns and cities, but because the foreign-born tend to cluster in urban settings, with citizens spending more time in suburban and rural settings, the ratios in towns and cities skew heavily. As I stated, most people like some diversity, but they tend to baulk at finding themselves a small cultural minority within the retail and leisure hubs they used to love frequenting. Underlying it all is a fear of losing their own culture, and a way of life.
It's not that I really know that much about conditions on the ground in America, although I do read and watch a lot of material from America. It's more that borders tend to be even more porous with regard to ideas than people. One can find a silly educational fad in America, delve deeper, and find that something similar is being tried all of the Anglosphere as well as parts of Western Europe. Many people thought Trump was an isolated cultural phenomenon, with one possible parallel in Brexit. But the smart commentators in the podcast space, including Left-leaning economists like Mark Blythe, were noting that populist movements were sprouting up everywhere in the West, and that the Overton Window was shifting the Right, especially amongst the young.
I'm sorry about the wife. I'm a primary carer for my mother, and it's hard watching her cognitive decline (although obviously Parkinson's is a different set of symptoms). My mother has mobility issues, but hers are more related to arthritis. I imagine you've already eliminated all the usual factors like inner ear and blockages, dehydration, vascular and blood flow issues and are on to things like managing the environment. I didn't expect handrails would be so easy to fit- the critical factors seems to be knowing someone with a decent drill!
I imagine you and your wife have been on a reasonably high dose vitamin D since the start of the pandemic. My mother is particularly vulnerable, so I had her (and myself) on vitamin D before the first lockdowns happened. It's good for health generally. We also take combined vitamin C and zinc supplements. You might want to get your wife's bloods checked, although I imagine you have already. B6 and B12 seem to be particularly important for Parkinson's. According to Grok, some people swear by cod liver oil. Funnily enough, my mum needed B12 load up shots when I had her levels checked.
Boat living is definitely the way to go. What a great time you must have had! It's become increasingly common here in the UK, what with the housing crisis, and in one year prices doubled. I have several friends and acquaintances who have taken the option, although obviously it doesn't suit everyone. 35ft is about ideal. I can understand why you made the shift though. Challenging for someone with mobility issues.
I don't wish to be morose, but I would make sure you are contingency planned when it comes to fall risks. EMTs tend to operate on a triage basis, with emergency cases served first. It might be worth building a relationship with a local driver who happens to physically fit and/or building relationships with neighbours. This should be a long way off, and doesn't happen in most instances, but it should be noted that there a thriving resale market for electric wheelchairs and mobility scooters in many places. When my great uncle needed one we were able to get a great deal through a local charity-orientated business.
On a more positive note, it looks like you've made a good choice with SC. It seems to be pretty well planned out in terms of catering well for people with mobility issues.
Thanks for sharing all that. And for the kind words. Ya she is doing fine really. She has a great attitude. She’s a saint really. She never complains. And not 1 out 100 women would live on a small boat and do some of the things we have done.
It’s interesting though. Because in early November 2021 we went to visit my dad in hospice in Wisconsin. We didn’t find out until a couple weeks later that the day before we arrived the entire staff and residents of the living facility, nursing home, and hospice had all gotten a Covid booster and a flu shot. Including my dad, who was in his last weeks. We spent 2 full days with him in a small poorly ventilated room. Then we returned to the small town in NC wherecwechadvour boat for the winter. And my wife got really sick. We had a full med kit, including antibiotics, steroids, HCQ, IVM, Nebulizer and Oxygen. But after 10 days of struggling her 02 dropped below 90 and wouldn’t come back and she started to get panicky. And being on the boat, it was just not a good situation. The small town we were in had a small community hospital and she ended up going there. Of course she tested positive at 35 cycles. But the real issue turned out to be double pneumonia and it took IV antibiotics and IV steroids, along with high flow oxygen for 72 hours to get her back above 95 on her own. Thankfully they did not have any vent machines so that wasn’t a risk. And she told them no Remdesivir, although they somehow ended up giving her one dose per her chart. My cynical nature tells me they did that so they could get paid. Anyway she was out on day 4, they needed the bed and she wanted to leave. It took her 6 months to recover and the internal tremors began within a couple days after she was back on board.
I’ll never know. But I will also never be convinced that whatever happened to her wasn’t contributory to the PD issue starting (there is a family history). Neither of us got jabbed. We are always outside a lot and get plenty of sunshine and I spent 10 years in the restaurant business and a couple years as a baker so we eat well and reasonably healthy. Can’t have a garden on the boat. Haha.
Anyway, beyond the internal tremors the only other symptom is an occasional involuntary shaking of her left hand and sometimes she will feel a bit dizzy if she gets up to quickly after being in one place too long. But she can walk 5 miles no problem and is still painting and doing all the boat maintenance stuff etc. so we are hopeful that what she has is what she will have, since it hasn’t gotten any worse.
When we go to SC this winter she will be going to Duke Health Systems movement disorder clinic for a full evaluation and a 2nd opinion. So that will be interesting.
I had Stage 4 papillary thyroid cancer in 1995 and I went to Duke for all my treatment and radiation over a pretty intense 30 month timeframe. And I still go back once per year to get checked. Probably not really necessary anymore but my case was pretty rare and was a nice success story and I like the doc. So we will be taking a medical road trip in November I guess.
We had all our parents still alive, all in their 90s in 2020. My mom died at age 92 in late 2020. My dad died in late 2021 at age 94. My MIL died in late 2022 at age 94. And the my FIL died in April of this year at age 99. And with the exception of my MIL in her last couple months, none of them had cognitive issues. In fact, my dad was in the process of writing his 3rd book and he was still doing chapter outlines on the day he went to sleep and didn’t wake up the next morning.
So I cannot personally relate to what you are dealing with but I can imagine that it has to be very emotionally draining. I can say we feel very blessed that we did not have those issues and all 4 of our parents did quite well right up to the end. And we miss them very much.
I hope you enjoy the weekend. We are heading across the state from the Lake Huron side to the Lake Michigan side to visit our youngest son and his wife. They live in a cabin in the woods, have a huge garden and chickens and ducks.
Interesting take on the inflation bugaboo. I’ve always wondered why inflation isn’t reined in by increasing bank reserve requirements, limiting how much they can lend and the resulting multiplier effect. I assume it’s because that would hurt bank earnings, while increasing interest rates hurts the consumers more - we wouldn’t want to get the bankers mad.
They sometimes do. The problem is the banks then demand interest for holding greater reserves. Don't get me wrong, they might have a valid point at a much lower level, but they shouldn't be demanding rates within the range of bond yields. The other problem is that bank reserve requirements aren't conventionally seen as an inflation fighting tool. Instead, they tend to be increased because of fears about the risks of sector resilience.
Critics might argue that the Fed sets IOR rates, but that's a distinction without merit. The Fed and the major banks have long had a deeply incestuous relationship, often to the detriment of smaller players in the sector.
I think Vance might have brought it up recently. Farage did, here in the UK.
I have to wonder if there is ANYTHING Donald Trump proposes with which you totally disagree. Mostly, these could be White House press releases. Trump talks out of both sides of his mouth. The jobs report is wrong, the economy is roaring, but interest rates should be cut because, well, the government debt, you know the deal. So punish savers and the elderly who often rely on CDs to reward more government spending and debt. What did YOU do to the National Debt, Trump? Raised it some more, both now and in the future, but that's inconvenient to speak of.
Lower mortgage rates will simply reignite the housing pricing acceleration and houses will still be as unaffordable as ever. At least with higher interest rates, prices had started to drop to be sold. This also accelerates the gap between rich and poor because the rich can borrow money to make more money. You claim the rich hold Treasuries. No, the rich invest in the stock market and real estate. No one gets rich, or stays rich holding Treasuries. How do lower interest rates help consumers? So they can borrow some more?
Let's face it; our economy is in such bad shape that it constantly is poked and prodded with this stimulus or the other. Good economies can be left to themselves; we are now a banana republic, making nothing and pretending the US is still in charge of the world. Brazil and India are showing us they don't have to jump when we say jump. Long-term, the Dollar is toast and Donald Trump has done his best to kill it and promote BRICS+ plus. The more he threatens them, the more they know why they want to join it. BRICS+ is not anti-US or anti-Dollar; it is about trust and respect between counties who trade with their own currencies. Clearly, a subversive organization. /sar
The Brics are just a puff of piffle in this time of monetary madness... How much SA Rand is in your bank account? How many rubles do you use in any transaction? The world does not want Rubles, they want DOLLARS.
The US Treasury wants the dollar to lose value, so they can print more dollars so every country has to acquire more DOLLARS to complete the same transactions they did the month before. Everyone wants off the dollar train, but it is so much easier to accumulate more dollars than challenge the system. Lowering value of the dollar creates need for more dollars. This is way, way, way worse than Fentanyl addiction. Trump will lower interest rates to 2 percent, the world will boom for 3 years. Then President Vance will have to get really and I mean really, creative.
Invest accordingly. No need to tell me how horrible and wrong this will be. The government is telling you what they are going to do. So, buy gold, silver and STOCKS to the moon. Its like the Babe pointing to right field with his bat. You know what he is going to do. DON"T BET AGAINST THE ORANGE BABE!
Your first paragraph makes no sense. Russians have Rubles in their bank accounts and South Africans have the Rand in theirs. This is largely the case the world over. Most people have their national currency which they use in their bank accounts. This is not earth shattering. BRICS+ countries trade externally among themselves in their own currencies. It is as simple as that. Nothing complex at all.
What you don't acknowledge is that weaponizing the Dollar, particularly illegally seizing Russian assets, did more for BRICS+ than any other action. When you weaponize your currency, no country wants to hold more than absolutely necessary which is why so many central banks are buying gold. In fact, gold has just passed the Euro as the second highest asset in central banks. The nice thing about gold? No one can sanction it.
Printing more dollars equals more inflation, period. It may not show up immediately, but it WILL show up. I thought the economy was roaring, as least if you believe Trump. Roaring economies don't need low interest rates. Two percent interest rates punishes savers and rewards debtors. Is that what we really want to encourage? Gold might go to the moon, but silver is very unlikely to, as it is primarily an industrial metal. Since the 1980s, it hasn't done much. As for the Casino Stock Market, it is detached from reality in a country which makes little other than weapons and debt of all kinds.
Trump has now driven India into the arms of China. First, Russia and China are now friends and now India. Who is Trump to tell India where they have to buy their oil? The arrogance is driving away friends and making enemies. India cancelled a number of arms deals with the US.
Brazil is now selling its coffee to China. Trump tariffed Brazil because he didn't like their internal politics. How would we view someone who did the same to us? We had a Trade SURPLUS with Brazil. That will now evaporate.
The Orange Emperor doesn't realize he is the world's biggest ad for BRICS+ because he shows how those who trade with the US are treated, like peasants!
As long as interest is charged, it never goes back to the money pool, so it inevitably causes inflation. Perhaps that's what Bush may have meant, when he said if people knew what's being done to them, they would rise up with pithforks:
And the Fed issues money in the form of a loan at an interest to the taxpayer, which the usurping govt spends like a drunk sailor. The Treasury prints, and it goes over the the private Fed's vaults by the weight...
Out of QE during the plandemic, 6% went to the people at a rate of $600 a week for months, and in some places being continued at $400/mo for a few more, only to destroy small- and medium-sized businesses...
Most of what you say makes sense in the real world. But news to Red, we are not living in a reality-based world. I realized when the US Treasury owed 1 trillion dollars that it would not be paid back. So what does it matter if it is 1 trillion, 30 trillion or 330 trillion. IT IS NEVER GOING TO BE PAID BACK, and the world will keep using the dollar becasue the rest of the currencies in the world are as bad or worse. It is easy to use the dollar, and as it goes down the countries need more dollars and more dollars and more dollars.
All of the Bric countries except Russia use the dollar in international transactions. The pitiful amount of transactions in their own currencies is truly irrelevant to the use of the dollar in world financial transactions. You brought up Bric countries as if they are relevant, and they are as relevant as a pimple on the ass of an elephant. Every one of the BRIC countries is near bankruptcy, as is the dollar. SO WHAT. They do not quit using the Dollar because their own currencies are wrecks too.
Inflation’s definition is currency printing by govt - band rising prices are usually the result. You are asking if 1% rates will raise prices. The answer could be Yes - if supply doesn't increase with loosening monetary policy such as lowering interest rates to 1%.
If Trump (or anyone) jammed short-term rates way down while inflation is still lurking in the system, here’s what could happen:
Long-term rates could rise, not fall
The Fed controls the short end (overnight → 2-year range), but the market sets the 10–30 year yields.
If investors think cheap money will ignite another inflation wave, they’ll demand higher yields to hold long bonds.
This is what we call a steepening yield curve — short rates plunge, long rates climb — which can actually tighten mortgage rates even as the Fed cuts.
Housing frenzy 2.0
everyone from first-time buyers to hedge funds would stampede into real estate to “lock in” before the market wakes up.
That would light a fire under home prices again, worsening affordability and pushing rents higher.
Bond market tantrum risk
If the bond market thinks the Fed is ignoring inflation risk, it can sell off hard. This happened in the ’70s, and long yields blew past 15% in the Volcker era because the market lost confidence in the Fed.
Once that confidence is gone, you can’t get it back without serious economic pain.
QT as a counterbalance is shaky
In theory, dumping $7T of assets could drain liquidity and offset low rates… but that assumes the Fed actually does it aggressively.
The last few times they tried meaningful QT (2018–2019, 2022–2023), the markets panicked and the Fed slowed down. Wall Street tends to scream when the punch bowl is yanked.
Bottom line:
Artificially slamming short-term rates lower in this environment is like flooring the gas while you’re already skidding on ice — you might keep moving for a bit, but you’re building up for a harder crash. The bond market would smell the inflation risk immediately and could drive long-term rates up, not down, which breaks the “cheap mortgage” dream.
Every time the Fed has tried material QT since 2008 the financialized economy goes into tail spin. 😂
That's because QE feeds invisibles. QT reverses the process. It's a particular problem for asset valuations. I asked Grok why- here's what it came up with:
'Many invisibles, like intellectual property or digital platforms, derive value from future cash flow expectations. Higher interest rates from QT increase discount rates used in valuation models, reducing the present value of these assets. This could depress valuations of tech firms, media companies, or other intangible-heavy sectors, as seen during the 2022-2023 tightening cycle when tech stocks slumped.'
Basically, it destroys value which is largely fictional. Don't get me wrong. Sometimes such devaluations hit companies of real future worth. For investors, it can be a great fire sale. When the Dot.com bubble burst there were a number of technology-based companies with really innovative new products, which were unfairly tarnished by adjacency to businesses which were pure hype.
The prime example would be digital media which promised new customers in the key demo, despite using an obsolete corporate media formula which consumers had deliberately moved away from because they didn't trust the formula.
So after a couple years of reprieve, the government will do what they do best. Waste money and crush savers and retirees.
Lower interest rates are not the solution. Rates are too low as they sit, well below the LT historical average. The problem is massive budget deficits by a government unwilling to control spending. All lower rates do is allow them to continue to drive the deficit higher and higher.
It’s unbelievable to me that a person of your stature and intelligence would support lower rates in lieu of an actual reckoning that would begin the process of unwinding a completely fake economy.
Maybe you need to revisit the tulip chart from nearly 400 years ago.
Exactly. We wonder why Americans don't save, but how can anyone teach children to save when the banks pay virtually nothing? I can remember when "passbook savings" were REQUIRED to pay 5.25%. This should come back again, but this time maybe 6 or 7% due to inflation. The banks managed to kill that requirement and savers are punished every time in favor of debtors and we wonder why our economy gets worse with each new cycle of artificial stimulation. In other words, the US economy cannot stand on its own two feet anymore. It needs continual shock therapy. Onward through the fog until we have 2008 but perhaps 5 to 10 times worse. Naturally, those advocating all the shock therapy will blame everyone else.
Indeed. I remember as well. Along with when credit cards were essentially a ‘luxury’ item and the interest rate was capped at some reasonable amount. A combination of many things, the demise of Glass Steagal, Congress becoming a way to obtain massive wealth, corrupt and compromised oversight to name three set the country in a path from which it will never return.
I’ll likely be dead, which is what they want anyway. But eventually the peasants will revolt French Revolution style. It won’t matter in the end. Although it would be amusing to stick around long enough to willingly take part.
My dad was an American NCO who married an English schoolteacher and then went into the oil business when he'd qualified for his half-pension. The UK back then wasn't big on consumer lending or credit cards. When we moved to the States for a year, he had real difficulties getting a mortgage because he had virtually no borrowing on his credit history.
The Peasant's Revolt is likely to be populist in orientation. I'm not a fan of Thomas Picketty, but one thing he got right was in assessing that the two power elites vying for control in the West are the Merchant Right and the Brahmin Left. However, it's a little more complicated than that. The Merchant Right actually breaks down into Merchant Right and Crony Capitalist, and although some of the Crony Capitalist element has now aligned with Trump out of pure self-interest (mainly because they realised that the Brahmin Left's energy policy threatened their interests existentially), most of it is still in bed with the Brahmin Left. It definitely depends upon the sector they occupy.
Anyway, my point would be that despite the Trump Counter Revolution almost all institutional power in America is still aligned with the Brahmin Left. If there is going to be a Peasant Revolt it will be against the Brahmin Left, because Trump's Counter Revolution fails at an economic level.
Still, it could be worse- you could be living in the UK, like me!
Very interesting. So fascinating that you, as a Brit, understand more about the reality here in the U.S., than 99% of the people that live here. And although it is definitely a complete debacle, I cannot disagree (at least not yet) that it could be worse. I do expect it to get much worse, and whether we have done the correct things to prepare for that eventuality, we will not know until some future time. Or, we may never know. I just turned 70, my wife if 45 years is 69 (I married a younger woman lol) so we may be dead before the revolt, or be to decrepit to participate.
Where in the UK do you live?
We have been to the UM twice, far back enough in time that it was a different place I think. In 1980 my brother was living in Germany and we went to visit him for a bit, and then did the tourist thing to London, Paris, Berlin, Rome, etc. we did that shortly before we got married
And then in the mid 90s we took our then 12 and 8 year old boys on a 3 month van trip, staying off the beaten path and travelling in tandem with a Brit and his wife and kids. He was a Londoner, a physicist, and he had moved his family to the U.S. to take a job for 5 years at a University and they bought a house across the street. Our kids were the same age, wives were both teachers, and we all became very good friends. When his contract was over they decided to move to Australia but ended up not liking it so back to London they went.
And while he was between jobs, after getting resettled in London he sent me a note with a proposal. And that resulted in our family of four and his of 5 renting two VW camper vans (we were so far ahead of the curve) and spending nearly 3 months on the road on a driving and camping tour of Europe. He spoke German and was passable in a couple other languages. I can do a bit of German and I dusted off my HS and University French and we put a few 1000 KMs on those vans as we explored all of the places the tourists rarely go. It was lovely, with some language practice, their local knowledge, the kids all became best friends and remain so to this day.
We retired early in 2011, sold our house (at a loss) and moved into our 35 ft sailboat with a 5 year plan 15 years later we are still living on the boat. It’s been quite an adventure and we are somewhat terrified that we are eventually going to have to give it up and move back on land. We pretty much stopped our long distance travelling during Covid due to all the restrictions that various countries put in place and we came back to the U.S. in 2020 and have been living on the boat in a marina in the winter and sailing in the Great Lakes in the summers. Last winter we got off the boat for a few months and rented a condo in South Carolina. It worked out ok so we are going to do it again this winter. Easing, as my wife says, back into a life on land a little bit at a time. She was Dx with early stage Parkinson’s two years ago and although there has been zero additional progression and other than internal tremors and occasional balance issues, has no other symptoms. But even though we talk about taking off again for one last adventure to the islands, it seems like maybe there’s just more risk in that than we need at this point. So, we will get off the boat in October, store it in a heated building, load up the SUV (we just bought a vehicle two weeks ago, prior to that we hadnt had one since 2015. When we needed one we would just rent something) and head to SC and maybe try and figure out what we are going to do next.
Maybe that will depend on the macro factors at play. What’s the old Chinese proverb? Something like…may you be blessed to live in interesting times.
I live in Norfolk It's idyllic. Until recently, we had managed to escape most of the negative effects of mass migration, but that is changing. A friend recently visited Norwich and went into a pub. Although the pub was pretty full, he was one of only two Brits drinking there. It probably wasn't a very accurate sample. He hadn't gone into the pub at a time when Brits would normally be there, and the fact that the pub catered to the low cost end of the market, probably oversampled non-British.
It's not race, it's culture- as witnessed by the fact that the whole thing which drove Brexit was a massive influx of White Eastern Europeans. Most Brits actually like a fair degree of cultural diversity in their towns and cities, but because the foreign-born tend to cluster in urban settings, with citizens spending more time in suburban and rural settings, the ratios in towns and cities skew heavily. As I stated, most people like some diversity, but they tend to baulk at finding themselves a small cultural minority within the retail and leisure hubs they used to love frequenting. Underlying it all is a fear of losing their own culture, and a way of life.
It's not that I really know that much about conditions on the ground in America, although I do read and watch a lot of material from America. It's more that borders tend to be even more porous with regard to ideas than people. One can find a silly educational fad in America, delve deeper, and find that something similar is being tried all of the Anglosphere as well as parts of Western Europe. Many people thought Trump was an isolated cultural phenomenon, with one possible parallel in Brexit. But the smart commentators in the podcast space, including Left-leaning economists like Mark Blythe, were noting that populist movements were sprouting up everywhere in the West, and that the Overton Window was shifting the Right, especially amongst the young.
I'm sorry about the wife. I'm a primary carer for my mother, and it's hard watching her cognitive decline (although obviously Parkinson's is a different set of symptoms). My mother has mobility issues, but hers are more related to arthritis. I imagine you've already eliminated all the usual factors like inner ear and blockages, dehydration, vascular and blood flow issues and are on to things like managing the environment. I didn't expect handrails would be so easy to fit- the critical factors seems to be knowing someone with a decent drill!
I imagine you and your wife have been on a reasonably high dose vitamin D since the start of the pandemic. My mother is particularly vulnerable, so I had her (and myself) on vitamin D before the first lockdowns happened. It's good for health generally. We also take combined vitamin C and zinc supplements. You might want to get your wife's bloods checked, although I imagine you have already. B6 and B12 seem to be particularly important for Parkinson's. According to Grok, some people swear by cod liver oil. Funnily enough, my mum needed B12 load up shots when I had her levels checked.
Boat living is definitely the way to go. What a great time you must have had! It's become increasingly common here in the UK, what with the housing crisis, and in one year prices doubled. I have several friends and acquaintances who have taken the option, although obviously it doesn't suit everyone. 35ft is about ideal. I can understand why you made the shift though. Challenging for someone with mobility issues.
I don't wish to be morose, but I would make sure you are contingency planned when it comes to fall risks. EMTs tend to operate on a triage basis, with emergency cases served first. It might be worth building a relationship with a local driver who happens to physically fit and/or building relationships with neighbours. This should be a long way off, and doesn't happen in most instances, but it should be noted that there a thriving resale market for electric wheelchairs and mobility scooters in many places. When my great uncle needed one we were able to get a great deal through a local charity-orientated business.
On a more positive note, it looks like you've made a good choice with SC. It seems to be pretty well planned out in terms of catering well for people with mobility issues.
Thanks for sharing all that. And for the kind words. Ya she is doing fine really. She has a great attitude. She’s a saint really. She never complains. And not 1 out 100 women would live on a small boat and do some of the things we have done.
It’s interesting though. Because in early November 2021 we went to visit my dad in hospice in Wisconsin. We didn’t find out until a couple weeks later that the day before we arrived the entire staff and residents of the living facility, nursing home, and hospice had all gotten a Covid booster and a flu shot. Including my dad, who was in his last weeks. We spent 2 full days with him in a small poorly ventilated room. Then we returned to the small town in NC wherecwechadvour boat for the winter. And my wife got really sick. We had a full med kit, including antibiotics, steroids, HCQ, IVM, Nebulizer and Oxygen. But after 10 days of struggling her 02 dropped below 90 and wouldn’t come back and she started to get panicky. And being on the boat, it was just not a good situation. The small town we were in had a small community hospital and she ended up going there. Of course she tested positive at 35 cycles. But the real issue turned out to be double pneumonia and it took IV antibiotics and IV steroids, along with high flow oxygen for 72 hours to get her back above 95 on her own. Thankfully they did not have any vent machines so that wasn’t a risk. And she told them no Remdesivir, although they somehow ended up giving her one dose per her chart. My cynical nature tells me they did that so they could get paid. Anyway she was out on day 4, they needed the bed and she wanted to leave. It took her 6 months to recover and the internal tremors began within a couple days after she was back on board.
I’ll never know. But I will also never be convinced that whatever happened to her wasn’t contributory to the PD issue starting (there is a family history). Neither of us got jabbed. We are always outside a lot and get plenty of sunshine and I spent 10 years in the restaurant business and a couple years as a baker so we eat well and reasonably healthy. Can’t have a garden on the boat. Haha.
Anyway, beyond the internal tremors the only other symptom is an occasional involuntary shaking of her left hand and sometimes she will feel a bit dizzy if she gets up to quickly after being in one place too long. But she can walk 5 miles no problem and is still painting and doing all the boat maintenance stuff etc. so we are hopeful that what she has is what she will have, since it hasn’t gotten any worse.
When we go to SC this winter she will be going to Duke Health Systems movement disorder clinic for a full evaluation and a 2nd opinion. So that will be interesting.
I had Stage 4 papillary thyroid cancer in 1995 and I went to Duke for all my treatment and radiation over a pretty intense 30 month timeframe. And I still go back once per year to get checked. Probably not really necessary anymore but my case was pretty rare and was a nice success story and I like the doc. So we will be taking a medical road trip in November I guess.
We had all our parents still alive, all in their 90s in 2020. My mom died at age 92 in late 2020. My dad died in late 2021 at age 94. My MIL died in late 2022 at age 94. And the my FIL died in April of this year at age 99. And with the exception of my MIL in her last couple months, none of them had cognitive issues. In fact, my dad was in the process of writing his 3rd book and he was still doing chapter outlines on the day he went to sleep and didn’t wake up the next morning.
So I cannot personally relate to what you are dealing with but I can imagine that it has to be very emotionally draining. I can say we feel very blessed that we did not have those issues and all 4 of our parents did quite well right up to the end. And we miss them very much.
I hope you enjoy the weekend. We are heading across the state from the Lake Huron side to the Lake Michigan side to visit our youngest son and his wife. They live in a cabin in the woods, have a huge garden and chickens and ducks.
Always fun to see the kids.
Blessings. Eric.
I don’t think Prof St Onge is necessarily supporting this as much as just explaining how the Fed works.
I guess he can chime in if he likes. But he supports lower rates and has written many times that the FED is behind the curve.
Interesting take on the inflation bugaboo. I’ve always wondered why inflation isn’t reined in by increasing bank reserve requirements, limiting how much they can lend and the resulting multiplier effect. I assume it’s because that would hurt bank earnings, while increasing interest rates hurts the consumers more - we wouldn’t want to get the bankers mad.
They sometimes do. The problem is the banks then demand interest for holding greater reserves. Don't get me wrong, they might have a valid point at a much lower level, but they shouldn't be demanding rates within the range of bond yields. The other problem is that bank reserve requirements aren't conventionally seen as an inflation fighting tool. Instead, they tend to be increased because of fears about the risks of sector resilience.
Critics might argue that the Fed sets IOR rates, but that's a distinction without merit. The Fed and the major banks have long had a deeply incestuous relationship, often to the detriment of smaller players in the sector.
I think Vance might have brought it up recently. Farage did, here in the UK.
Bank presidents wield great power in Congress, unfortunately. We consumers, not so much.
I have an Idea....run a government surplus, instead of $2 Trillion Deficits($6k a person)
Also FORCE wall street to invest, not money spin!
All trades or moving money offshore...3% tax on the gross!
Lower rates does not equal inflation. We had zero rates for a decade and no inflation issues.
Inflation came about when we added 40% to M2.
Powell and his side kicks are too dumb to understand this concept.
Lower rates will help boost GDP - but just do not add one more dollar to M2
I have to wonder if there is ANYTHING Donald Trump proposes with which you totally disagree. Mostly, these could be White House press releases. Trump talks out of both sides of his mouth. The jobs report is wrong, the economy is roaring, but interest rates should be cut because, well, the government debt, you know the deal. So punish savers and the elderly who often rely on CDs to reward more government spending and debt. What did YOU do to the National Debt, Trump? Raised it some more, both now and in the future, but that's inconvenient to speak of.
Lower mortgage rates will simply reignite the housing pricing acceleration and houses will still be as unaffordable as ever. At least with higher interest rates, prices had started to drop to be sold. This also accelerates the gap between rich and poor because the rich can borrow money to make more money. You claim the rich hold Treasuries. No, the rich invest in the stock market and real estate. No one gets rich, or stays rich holding Treasuries. How do lower interest rates help consumers? So they can borrow some more?
Let's face it; our economy is in such bad shape that it constantly is poked and prodded with this stimulus or the other. Good economies can be left to themselves; we are now a banana republic, making nothing and pretending the US is still in charge of the world. Brazil and India are showing us they don't have to jump when we say jump. Long-term, the Dollar is toast and Donald Trump has done his best to kill it and promote BRICS+ plus. The more he threatens them, the more they know why they want to join it. BRICS+ is not anti-US or anti-Dollar; it is about trust and respect between counties who trade with their own currencies. Clearly, a subversive organization. /sar
The Brics are just a puff of piffle in this time of monetary madness... How much SA Rand is in your bank account? How many rubles do you use in any transaction? The world does not want Rubles, they want DOLLARS.
The US Treasury wants the dollar to lose value, so they can print more dollars so every country has to acquire more DOLLARS to complete the same transactions they did the month before. Everyone wants off the dollar train, but it is so much easier to accumulate more dollars than challenge the system. Lowering value of the dollar creates need for more dollars. This is way, way, way worse than Fentanyl addiction. Trump will lower interest rates to 2 percent, the world will boom for 3 years. Then President Vance will have to get really and I mean really, creative.
Invest accordingly. No need to tell me how horrible and wrong this will be. The government is telling you what they are going to do. So, buy gold, silver and STOCKS to the moon. Its like the Babe pointing to right field with his bat. You know what he is going to do. DON"T BET AGAINST THE ORANGE BABE!
Your first paragraph makes no sense. Russians have Rubles in their bank accounts and South Africans have the Rand in theirs. This is largely the case the world over. Most people have their national currency which they use in their bank accounts. This is not earth shattering. BRICS+ countries trade externally among themselves in their own currencies. It is as simple as that. Nothing complex at all.
What you don't acknowledge is that weaponizing the Dollar, particularly illegally seizing Russian assets, did more for BRICS+ than any other action. When you weaponize your currency, no country wants to hold more than absolutely necessary which is why so many central banks are buying gold. In fact, gold has just passed the Euro as the second highest asset in central banks. The nice thing about gold? No one can sanction it.
Printing more dollars equals more inflation, period. It may not show up immediately, but it WILL show up. I thought the economy was roaring, as least if you believe Trump. Roaring economies don't need low interest rates. Two percent interest rates punishes savers and rewards debtors. Is that what we really want to encourage? Gold might go to the moon, but silver is very unlikely to, as it is primarily an industrial metal. Since the 1980s, it hasn't done much. As for the Casino Stock Market, it is detached from reality in a country which makes little other than weapons and debt of all kinds.
Trump has now driven India into the arms of China. First, Russia and China are now friends and now India. Who is Trump to tell India where they have to buy their oil? The arrogance is driving away friends and making enemies. India cancelled a number of arms deals with the US.
Brazil is now selling its coffee to China. Trump tariffed Brazil because he didn't like their internal politics. How would we view someone who did the same to us? We had a Trade SURPLUS with Brazil. That will now evaporate.
The Orange Emperor doesn't realize he is the world's biggest ad for BRICS+ because he shows how those who trade with the US are treated, like peasants!
As long as interest is charged, it never goes back to the money pool, so it inevitably causes inflation. Perhaps that's what Bush may have meant, when he said if people knew what's being done to them, they would rise up with pithforks:
https://rayhorvaththesource.substack.com/p/if-people-knew-whats-being-done-to
Where is the money?
https://rayhorvaththesource.substack.com/p/why-is-it-that-i-am-the-only-one
And the Fed issues money in the form of a loan at an interest to the taxpayer, which the usurping govt spends like a drunk sailor. The Treasury prints, and it goes over the the private Fed's vaults by the weight...
Out of QE during the plandemic, 6% went to the people at a rate of $600 a week for months, and in some places being continued at $400/mo for a few more, only to destroy small- and medium-sized businesses...
Most of what you say makes sense in the real world. But news to Red, we are not living in a reality-based world. I realized when the US Treasury owed 1 trillion dollars that it would not be paid back. So what does it matter if it is 1 trillion, 30 trillion or 330 trillion. IT IS NEVER GOING TO BE PAID BACK, and the world will keep using the dollar becasue the rest of the currencies in the world are as bad or worse. It is easy to use the dollar, and as it goes down the countries need more dollars and more dollars and more dollars.
All of the Bric countries except Russia use the dollar in international transactions. The pitiful amount of transactions in their own currencies is truly irrelevant to the use of the dollar in world financial transactions. You brought up Bric countries as if they are relevant, and they are as relevant as a pimple on the ass of an elephant. Every one of the BRIC countries is near bankruptcy, as is the dollar. SO WHAT. They do not quit using the Dollar because their own currencies are wrecks too.
People have little to no money. Their credit cards are tapped out. How can you have inflation when there is no money?
Inflation’s definition is currency printing by govt - band rising prices are usually the result. You are asking if 1% rates will raise prices. The answer could be Yes - if supply doesn't increase with loosening monetary policy such as lowering interest rates to 1%.
If Trump (or anyone) jammed short-term rates way down while inflation is still lurking in the system, here’s what could happen:
Long-term rates could rise, not fall
The Fed controls the short end (overnight → 2-year range), but the market sets the 10–30 year yields.
If investors think cheap money will ignite another inflation wave, they’ll demand higher yields to hold long bonds.
This is what we call a steepening yield curve — short rates plunge, long rates climb — which can actually tighten mortgage rates even as the Fed cuts.
Housing frenzy 2.0
everyone from first-time buyers to hedge funds would stampede into real estate to “lock in” before the market wakes up.
That would light a fire under home prices again, worsening affordability and pushing rents higher.
Bond market tantrum risk
If the bond market thinks the Fed is ignoring inflation risk, it can sell off hard. This happened in the ’70s, and long yields blew past 15% in the Volcker era because the market lost confidence in the Fed.
Once that confidence is gone, you can’t get it back without serious economic pain.
QT as a counterbalance is shaky
In theory, dumping $7T of assets could drain liquidity and offset low rates… but that assumes the Fed actually does it aggressively.
The last few times they tried meaningful QT (2018–2019, 2022–2023), the markets panicked and the Fed slowed down. Wall Street tends to scream when the punch bowl is yanked.
Bottom line:
Artificially slamming short-term rates lower in this environment is like flooring the gas while you’re already skidding on ice — you might keep moving for a bit, but you’re building up for a harder crash. The bond market would smell the inflation risk immediately and could drive long-term rates up, not down, which breaks the “cheap mortgage” dream.