Fed Jabbertalky

imageThe monthly rush to speculate on whether and when the Fed will actually get around to raising interest rates is underway in earnest.

The minutes of the previous Fed meeting seem to hint that the “recovery” may be far enough along to raise rates in December.

But before you get really excited, let’s look at a little hard reality.

First there is the 10-year Treasury.  Check the chart over here and you will see that in the past year we have already seen almost 2.5% and on Wednesday, the 10-year closed at 2.269%.

What that seems to tell me is that the market isn’t too sure about this yet.  If it was, the rates might already have moved back up to nearer that 2 1/2% level.  Or, they will edge up in coming weeks ahead of the mid-December meeting with the decision due on the 17th if I’m  reading their calendar right.

imageGold is looking pretty skeptical, too.

As the pre-open chart from our friends over at Kitco shows (click here for current), there hasn’t exactly been a rush to load up on the yeller dog.  In fact. I would think that if the Fed really were about to raise rates, rather than just talk our ears off, again, we would be seeing a lot more reaction than the muted response evident so far.

Still, the hype machine is ramping up:  “U.S. Federal Reserve signals December rate hike more likely” is how one outlet is seeing it.

Here is the exercise I keep running through my head.

Let’s say that the Public Debt is really $18.7-trillion dollars.  I know, it’s more, you know it’s more – likely closer to $25-trillion – but let’s pretend, since that’s how mass delusions work.

Let’s also think that the current interest rate is 2.25% for the long term debt and say that it goes up to 2.5% by the time of the Fed meeting and they really raise and it goes to 2.75% subsequent to their meeting.

At 2.25%, the interest ALONE on the federal debt is (at least) $420.75 billion per year. 

Let’s also assume only working people pay for the national debt.  As one of about 148-million people working, your piece of the rock is $2,842.90 per year just for the debt service.

Now, let’s see what 2.75% does, shall we?

Clicks up to $680 billion of interest expense and your working person’s share is what?

$4,594.60.

In other words, the portion of working person debt service will go up how much?  61.6%!

Now pretend you are a working person.

Let’s see what’s on the horizon for 2016 just on Obamacare:  Penalties are going up dramatically – to 2.5% of modified adjusted gross income.  If you make $80,000 as a couple and have skated on healthcare, that would be a potential hit of  $2,000 for not getting Obamacare. 

Since two people are working, that’s an increase of $2,000 on top of $3,503.40 which is two working people’s share of the higher interest rate on the national debt.  $5,503 or $458.61 in monthly income. You enjoying this?

For those who have not been sliding – and have been in the program, the employer mandate will be fully implemented in 2016 and that will further eat into what’s available for wage increases.  What are those?

When all is said and done, it looks to me like between Obamacare *(where many plans will be increasing fees 20%) tossed on top of a 61.6% hike in every worker’s share of the public debt will just about run a stake through the myth of recovery.

I think the Fed knows it, I think the market knows it, I think real estate prices will be coming down, and I am not looking for a huge run-up in inflation until the price of gasoline starts to rise.

But in the meantime, the price of gold is either skeptical because the gold market doesn’t believe the Fed yet, either.  OR since the increases in healthcare costs are still ratcheting up, no one will have the money to buy gold and we are setting up for what I have been telling you will be the post election let-down.

That’s when the democrats will seize the White House again, the yet-to-be-indicted Hillary will be anointed, and we will keep our borders open and voting machine records will still not be auditable.

Makes you proud to be an American, don’t it?

You can find the Fed Minutes over here.  It’s better fiction than my latest novel.

It is easier for the Fed to pump money out the back door than be transparent – a word which has so little application in public life today that it serves no purpose other than to describe lingerie.

Still, Employment Isn’t Bad

In fact in this morning’s weekly update we find this:

In the week ending November 14, the advance figure for seasonally adjusted initial claims was 271,000, a decrease of 5,000 from the previous week’s unrevised level of 276,000. The 4-week moving average was 270,750, an increase of 3,000 from the previous week’s unrevised average of 267,750.

And yes, there is a ton of new home construction going on here in the Phoenix area, so the numbers are not completely unbelievable.  Just mostly, at least for the 94-million who would like to be working.

But if you have fewer people in the workforce than is 2008, it’s statistical magic, that just happens to smell differently.

The Philadelphia Fed outlook continues to improve, though:

Manufacturing conditions in the region showed slight improvement this month, according to firms responding to the November Manufacturing Business Outlook Survey. The indicator for general activity was slightly positive this month, following two months in negative territory. Indexes for new orders and shipments remained negative, although they increased from lower readings in October. Firms reported slight increases in overall employment this month but declines in average work hours. Manufactured goods prices were near steady. The survey’s future indicators showed improvement. Only a small percentage of firms expect a downturn in business activity over the next six months.

More on the Philly Fed website here.

The futures are about flat, Copper is down to $2.07 which means war is becoming affordable again…

Post Paris

While the open-door idiots continue to bring in Middle East military-aged men, we can’t help but notice that Donald Trump’s rankings are rising.  Ted Cruz will also likely benefit because both are quite articulate and adamant about open border idiocy.

It seems that only big events, like Pearl Harbor and 9/11 make it past the mental fog bank that engulfs the nation’s capitol.

Breitbart is reporting 8 Syrians have been caught at the Texas border.  I don’t know how stupid people in Washington are on this stuff, but it’s well past very in any language.

While the neighborhood-organizer-in-chief is touting “nothing to fear from widows and orphans” we have to notice is was a woman terrorist who blew herself up this week and that the Boston Marathon bombers arrived as kids.

Like I said, though, stupidity well to the radical left of very and impeachable for failure to defend America from foreign enemies by shifting budgets around in very questionable ways, as I see it.  Unfortunately, the founding fathers left impeachment to Fools on the Hill rather than a jury of 12 peers, unscathed by lobbyists.  How could they have known, though?  Corporations hadn’t seized power, yet.

The GOP still has a testosterone problem that desperately  needs treatment starting with Paul Ryan announcing he heads up the Obama Wing of the GOP in the interest of honesty in advertising.

It’s a very bad time for American noses:  ISIS is rubbing our noses in our own stupidity saying they have been here for years and a neener-neener from them.  And from our political leaders, more BS gets rubbed in the other nostril.

GTFU:  We have passed humanitarian and we are into the main thrust of the  invasion game already.

Whole thing stinks.  Countries, like fish, rot from the head.

Useful Graphic

How the Clintonistas raised $3-billion.

Meantime, she the anointed one still hasn’t been indicted on the email deal, and I would love to be a fly on the wall to hear how to Obama posse is trying to derail justice on this one.

Attorney General Loretta Lynch says president Obama’s opinion on the matter has not influence on what the Justice Department does.

Yeah, sure, you bet’cha.

And I’m the frigging Easter Bunny.

The only good news today is that there’s no shortage of BS in high places.  And on a supply and demand analysis that means the price of BS should be coming down.  And verily, it is.

Comments

Fed Jabbertalky — 18 Comments

  1. “Syrian community leader: ISIS is already in America”

    They are called CIA. Now tell us something we don’t know.

    • The Agency gets “used” because they report to not-very-useful idiots.
      Don’t be so quick to blame the bus. Look at the bus driver first.

      • From Wikipedia : https://en.wikipedia.org/wiki/Central_Intelligence_Agency

        “Several CIA activities have attracted criticism. They include nonconsensual human experiments, extraordinary rendition, enhanced interrogation techniques (torture), targeted killings, assassinations and the funding and training of militants who would go on to kill civilians and non-combatants”

      • Intelligence has its own arms race. Ugly techniques (lsd etc_) was also being done by the Russians and they had their blowb ack in Chechnya. They want the warm water port on the Med and since we have gone more socialist/communist in our leadership, seems obvious to me we are not up to honest competition. oh, gee…ain’t freedom a bitch when someone else is doing it? I’d wager when comes down to many issues, we “out socialize” the Russians, especially when you trend project.
        There is a reason why we have so many expat readers, too: They simply see things more clearly and further in advance than most.

  2. ISIS gonna gitcha!!! Yeah, right. On the border you say? Lordy!! Whatever. Talk to the hand. Maybe we should throw John “Wetstart” McCain in Old Stoney Lonesome for all of his support of these “terr’sts”.

  3. 911 could have been easily prevented @ boarding time in Boston, or not?! How little attention this fact was given always bothered me. Whatever happened to the remains of the plane that hit the Pentagon? I NEVER saw a definitive answer to that question.
    So, why wouldn’t HC get elected POTUS?
    Hokus Pokus, and some more to go!

  4. Talk about stopping/ending terrorism is simply another sign of terminal madness unless the cause is eliminated.

    Take a look at some pictures of the bombed out buildings in Syria, then extrapolate that to Iraq and Libya. Those were all places where people lived. That destruction is directly attributable to your USA government and its policies. The embargo against Iran included medical supplies, which caused thousands of deaths. The USA is now ramping up its Africa command. We are soon going to give those poor bastards a taste of our democracy too.

    If most of the terrorism around the world was not false flag, hidden
    policy of some western government or Israel, the real miracle would be why there is not more in the USA. Actually, it’s not necessary, because the American people cave in to every desire of their government. Congress received more mail about the second Iraq war than any other issue in history, and that mail ran 30,000 to 1 against the war. In the next election, more than 90% of the incumbents were reelected.

    • “The embargo against Iran included medical supplies, which caused thousands of deaths.” The US Govt has, however, been quite generous in spreading “depleted” uranium all over Iran, Iraq, and many other areas. Whatever medicine that gets through won’t help with the deadly effects of that.

  5. yes, interest rates will be moving….in the negative +/-. for some, it already costs to just park cash, and this group will grow….

  6. I am sickened by what has happened to the USA, so much so, that I avoid most news. I will turn 70 in a few months, and, for purely selfish reasons, hope this train wreck holds together until I leave the planet. I am optimistic about me, but pessimistic about the future in general. IMO there is no good short term solution other than Divine or space brothers intervention.

    • Wow, I could have almost written that comment including “70 in a few months”. Also can’t deal with MSM any longer, but with George (Ure), Drudge,0 hedge, various links and a
      going on without having your intelligence insulted. I even find some ironic pleasure in Occasionally tuning in to the propaganda outlets and realizing how transparent the lies are and even how much more transparent the reasons that they are being told.

  7. Hey, when Tim McVeigh bombed the Fed building in OK, what restrictions did you demand be put on white christian fundamentalists?

    • Tim McVeigh never bombed the building. That explosion came from inside the BATF office and blew a crater in the ground. None of the BATF officers we’re killed and there children did not attend school that morning!

    • Timothy McVeigh was an out and proud
      atheist. Take a look at what he wrote
      and at the interviews before his execution.

    • Hey Dan, i think you should check your talking points and do some research. McVeigh was an avowed agnostic and wasn’t religious at all. His motives had nothing to do with religion.