📌 Rethinking Interest Rates and Inflation Most people believe low interest rates cause prices to rise and high rates reduce inflation—but history shows the story is more complex. Between 1960 and 1980, interest rates and inflation actually moved together. When the Fed raised rates, inflation was already rising; when it cut rates, inflation was already falling. This suggests interest rates were reacting, not controlling prices. The key idea: Low rates don’t just boost spending—they also encourage businesses to invest, hire, and innovate. That increases production and supply, which can help push prices down, not up. Today, the relationship is even less clear because debt levels are extremely high. With U.S. debt over 125% of GDP, changes in interest rates behave differently than in the past. The takeaway: Inflation isn’t only about money demand—it’s also about whether businesses can expand and produce more. #Economy #Inflation #InterestRates #Finance #Investing
📌 Why the Economy Feels Like It’s Falling Apart While Markets Hit New Highs A growing analysis says we are no longer living in one unified economy—the system has split in two: 🏪 Main Street – The Real Economy This is where everyday people live, and the picture is getting worse: Credit card debt is at a record $1.3 trillion
Checking balances are down 40% since 2021
Auto and mortgage delinquencies are rising
Layoffs are happening across major companies like UPS, Ford, Amazon, Starbucks, and others Even essential household brands are dropping in value, signaling weakening consumer demand. In short: people are borrowing just to stay afloat. 💹 Wall Street – The Financial Economy Stock markets are booming, but for artificial reasons: A handful of AI giants are carrying the entire rally
Liquidity from the Federal Reserve keeps pushing assets upward
Corporations are buying back over $1 trillion of their own shares
Markets now move on narrative, confidence, and liquidity—not real economic fundamentals Instead of markets following the economy, the economy is now reacting to the markets. ⚠️ What’s the Real Risk? The danger may not be a traditional crash, but a “crash up”—too much money chasing too few assets until belief breaks. The system could fail if: 1️⃣ Liquidity dries up 2️⃣ The AI narrative loses credibility 🟠 A Proposed Lifeboat Some argue that Bitcoin is the asset outside this system—limited in supply, powered by real energy, and not dependent on policy or narrative. #Economy #Finance #Markets #Bitcoin #Investing