The stock market has no problems and line go up forever.
The market is panicking because this month’s core CPI number is almost exactly the same value it was in December when the federal reserve was just starting to raise interest rates. There was a lot of worry about recession, then gas prices came down and markets seem to have decided the federal reserve had threaded the needle, but there’s no improvement at all and why did anyone think there was? Lowering the interest rates to zero for 10 years, after capitalism died in 2008, never caused inflation in the first place so why would raising them now lower inflation?
So now the market is thinking the federal reserve is going to keep raising interest rates, and they probably will because they apparently believe they have the power to raise and lower inflation and investment by changing short term interest rates slightly.
Well, they probably will decrease inflation, by crashing the economy. So they can’t decrease inflation per se, but they can crash the underlying economy and the huge reduction in demand decreases inflation. And they probably know it & want it. Because it will be good for big corporations in multiple ways;
- more desperate labor force
- big corporations will still be able to get cheap loans (who wouldn’t give loans to Walmart for example), so they will be able to buy their smaller competition
- the Fed might crash the economy by raising interest rates while restarting QE, a money-printing program that is specifically targeted to help only the big banks and big corporations
And if inflation is ultimately caused by shortages due to lack of investment, what happens when the recession/depression ends? Inflation resumes. I’m starting to wonder if the rate of profit is so low now that inflation (fake profits) will be more or less continual as long as capitalism remains dominant. They fixed it by gutting the new deal in the 70s but there’s not a lot left to gut now.
We have high (legal, financial and logistical) barriers to entry for new competition under a capitalist system and the entire economy is dominated by large corporations that are able to raise prices at will? At the same time the government is giving even more money to big corporations and refuses to build even basic state-owned infrastructure to at least alleviate the stranglehold of the big corporations on the entire system, much less talk about nationalization??
Hello, latestagecapitalism!
I don’t know what else to take away from this, but the rising interest rates seem like a nail in the coffin of my chance to own a home. Chances were slim because of how crazy expensive homes are, but add a 5% mortgage on top and it’s impossible
Affordable housing is a historical aberration that boomers took for granted and ruined.
I looked at a graph of housing prices in my town, and it turns out they’ve gone up by around 1000% in 3 decades. I know someone who bought a house in the 70s for less than $10k which is now worth over a million. That’s some serious wealth concentration.
Future generations will be strictly divided between failchildren and everyone else (who will never be able to afford a home)
Home prices will fall because nobody else has access to cheap mortgages anymore either.
my apes are crashing and you laugh?? :bawllin-sad:
my slurps are worthless, and this is funny?? :shrek-pixel-despair:
I’m so glad we don’t tie anything important like employment or retirement to the stock market.
Under capitalism, markets work efficiently through the guidance of the invisible hand and rational consumers
