I wouldn't characterize my posts as either frantic or gibber

Posted on: August 17, 2018 at 14:50:44 CT

ish, but to each his own I guess.

There are multiple moving parts and rising prices could actually be good if they were moderating problems from abnormally low prices, or slowing an economy that was overheated.

The effect of "sucking money out of consumers' pockets" is also somewhat offset by potential profits in stockholders' portfolios, more jobs in the oil sector and so on, but I think virtually all economists are going to agree that rising fuel prices are going to have a net braking effect on an economy. Relatively large and abrupt changes are generally more likely to have significant adverse effects.

In this case, that braking effect could be exacerbated by a generally increasing interest rate environment.

I do think that interest rates have been artificially low for quite some time & the market equilibrium may in fact be quite a bit higher than they currently are. But even if that is true, it doesn't mean that rising interest rates wouldn't also have a tendency to brake the economy.

But, if the economy is on the verge of overheating and heading into inflationary territory, a bit of braking could be a good thing, preventing a worse crash later.

The risk in my opinion, is that we are already in bubble territory and have been for quite some time. Even a moderate braking that would theoretically be more sustainable for the economy could be the pin ***** that pops the bubble that was blown back in Obama's time in office.

If you look at the unprecedented inflation in the money supply after the 2007-2008 financial crisis, it's easy to see why some economists say that we're living in the midst of "The Mother Of All Bubbles". Donald Trump seemed to believe we were during the election campaigns, of course.

If we are already in bubble territory, we're at risk of having that bubble or bubbles pop. Sometimes it doesn't take much to suddenly ***** a bubble.