Comments by "Ray Bod" (@raybod1775) on "Allianz's El-Erian comments on Fed moves, Biden and oil" video.

  1.  @akashgjoshi  If there were no savers, we no longer have a capitalist economy because all money would be borrowed from the quasi-government agency called the Federal Reserve, like in a fully national socialist or communist economy. In a capitalist economy, money has value and private parties borrow money from others in the private economy. In case you don’t know, there’s a thing called “The Federal Reserve Act” so it’s not a private entity.
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  2. Fair trade is a fantasy. Politicians are totally corrupt and disloyal to their country and people that elect them.
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  3. You are assuming heavily borrowed businesses and corporations are productive, which they are not. I refer to them as zombie corporations that live off the largess of Federal Reserve cheap money policy. Money needs to retain value for a modern economy to work. The economy needs to be expunged of these dead weight corporations to clear the way to newer and more efficient businesses. That’s the way capitalism is supposed to work.
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  4. Recessions are healthy for a capitalist economy because it wrings out the least effective businesses. We’ve missed a couple healthy recessions because of Fed easy money and now zombie businesses have accumulated, blocking the way to new and better businesses forming.
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  5. No, the Federal Reserve having a $9 trillion balance sheet of non-productive debt is inexcusable. That’s $9 trillion of inflation that will work through the economy.
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  6.  @harrychu650  Raising interest rates increases the value of dollars which decreases inflationary pressure. Costs for risky borrowing like stock margins goes up which limits increases in stock prices. The greater the return on bonds, the more valuable bonds are compared to stocks and real estate, etc. This further reduces pressure on asset prices. It will help offset some extra spending in Ukraine. Another $1 trillion spending could add an additional 3% to 4% inflation unless the Fed absorbs those Treasuries into its balance sheet by selling other corporate bonds they already own. Fed doesn’t seem to do much right so we’re in for a lot of high inflation for the foreseeable future.
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