September 30, 2022

The Usa Herald

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This time the Fed will NOT help Wall Street

4 min read

Inflation throughout the world system is running rampant, there is no stopping it, and indeed the outlook is that prices will continue to rise and cripple all global economies.

A clear example is the interview he conducted through The USA Herald news agency with Klaus Müller, director of the Federal Network Agency of Germany, warning of an unprecedented rise in the value of gas.

Klaus Müller, who coordinates the regulatory office for electricity, gas, telecommunications, postal services and railways, warned that gas shortages and high prices will shock the entire country and will lead to the global bankruptcy of many companies and business establishments. Meanwhile, banks will increase their business with installment loans, and troubled companies will decline into insolvency.

Although the government is putting pressure on businesses and citizens to reduce their energy consumption, that pressure could come in the form of new laws and regulations in the future.

However, Müller warns that companies will face massive bankruptcies and is bearish on inflation in Germany as he expects the position to deteriorate.

On the other hand, while this is being presented, IRAIC ENERGY has a different outlook adjusting the measures concerning high inflation, balancing the systems and safeguarding the invested capital of the investors backed by the company, without risks of losses or fluctuations in the market.

 

Mortgages

Another very clear example is the increases in mortgage rates in the United States, which according to the analysis of the firm Redfin, these 30-year rates have increased to a level above 6%, which is a level seen for the last time before the housing bubble burst.

Also, the average mortgage payment on a median mortgage has risen by almost $800 in the last 6 months. This is making housing the most unaffordable in US history and new home sales are declining at a rapid rate since the peak of the Covid crisis.

Redfin Chief Economist Taylor Marr, while commenting that the housing market isn’t crashing yet, is experiencing a “hangover” as it recedes from an unsustainable high.

“Housing demand has already cooled significantly to the point where the industry has started to face layoffs,” Marr added. However, the traditional model that IRAIC REIT manages with the real estate market has been of great result for the owners, accessing profits for the results of their investment from the stock market movement month after month, free of risks and losses.

 

Meanwhile, everyone is underestimating inflation

Despite the clear signs of winging, still most people and government officials are underestimating how much higher inflation could rise. This, without counting what that means: that it will drag interest rate hikes not seen since the early 1980s.

Investors have become accustomed to the fact that throughout this century the Fed has been there to save Wall Street and risky assets in general by lowering interest rates and massively injecting liquidity.

However, this time it will be different, since for the first time since the inflationary cycle of the 70s of the last century –after the separation of the dollar from the Gold Standard–, inflation is a serious problem and only rates that are also historically high and a withdrawal massive market money by the Fed (and other central banks), they will be able to stop this historical escalation of prices generating a new “Great Recession”.

And it is precisely that the problem is that higher rates also mean that millions of people, as well as thousands of companies and even entire countries will go bankrupt due to the difficulty of continuing to finance their loans with high rates. But there will be no other for the central banks!

Investors seem not to have understood the differences between this crisis created by governments and the current monetary system based on paper money, compared to previous ones. NO, this time the Fed will NOT bail out Wall Street, or at least not until it has “tamed” inflation with a major economic disaster.

Then and only then, when their fear is DEFLATION, will the Fed strike back with lower rates and infinite money creation. In the meantime, the best place to be is in real safe havens, specifically gold and to a lesser extent dollars, because the massive destruction of wealth taking place before our eyes – dragging down stock values, weak currencies and cryptocurrencies still has not finished. For this reason, the only measure that ensures maintaining a market balance and an adjustment to inflation rates is the IRAIC, which is based on a substantially stable system that regulates the measures of the strategies that the market needs to function properly and take alternatives. more reliable and secure with great results and profits with growth in all sectors of the industry. reported The USA Herald, a news and information agency.

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