Jerome Powell's Dilemma: Inflation, Debt, Bubble, & Reserve Status of the USD #29

2 years ago
170

The USD-led global financial system faces 4 major challenges in 2022:
1. High and growing #inflation, the result of decade+ #QE
2. High levels of #debt, both governmental and private, the result of decade+ recklessly loose #monetarypolicy
3. Giant #everythingBubble, best represented by #NFT, #crypto, and "hi-tech" "growth" stocks with 1000+ PE
4. USD reserve status exposes a potential for "reverse flow" of exported inflation.

I observe that the #FederalReserve could:
a. Increase interest rates to untenable levels to control inflation, thereby protecting USD's reserve status but causing severe #deflation in the speculative markets.
b. Increase interest rates moderately in an attempt to keep things going "forever", risking USD's reserve status.

I present arguments that besides the aforementioned assets, housing will crash in the coming years. Energy and precious metals may be the good sectors to look for safety. No specific investment advice is given or intended.

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