Wednesday, October 28, 2015

No rate hike until this administration is over now.

I think the Fed had a couple of chances to do a small rate hike this summer without much problem. Since they found that so impossible, you really don't think they are brave enough to hike in an election year. Do you? I personally will never believe that. And anyway, their insistence on how great the economy is doing is causing the dollar to rise again. When I first started watching it - it was around 98.50ish. It fell to around 93.ish. Right now it's at 97.61. Pretty close to when I first started watching it. That tells you there is no inflation on the planet.

Last night I looked in to look at what was up for sale, and was surprised to see at least fully half of the houses in my city back in markdown. There was one markdown from September, but they really started in earnest in October. Which pretty much fits with what people are telling me. Something happened about a month or two ago and things started slowing. Interest rates are pretty much in the 3.65 ish range. You can find them at 3.52, or a couple of them at slightly over 4%.

With the strong dollar, oil is going to keep puking blood putting more deflationary pressure on everything. These are things that will not resolve themselves quickly. It looks like my call that deflation will persist this whole administration seems to be playing out exactly that way. I'm a little surprised it takes so long to filter though the economy though.  I started calling this wave at least November of 2014.

"I've been saying for months - if higher oil prices bring inflation - what do lower oil prices bring? Now we get to see how low oil goes. Where it stops - no one knows."

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