Originally posted by Kamban
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2. Yes, that's odd that they sat on their hands for ages and now are freaking out for some reason and say they are going to go crazy on interest rates.
I think they'll probably settle on a middle path and it's hard not to listen to what the Fed says, but yeah if you have the balls to go the opposite of what they say at extremes then that could be profitable. Hard to know when the extreme is. 2% on 30 year mortgages was, but so hard to go against the Fed and the crowd at that time. And now I wonder whether the pendulum has turned the other way and too many rate hikes are priced in. But maybe more can be priced in.
3. I actually think the social infrastructure stuff has value.
But as far as inflation goes, I think higher interest rates will not increase supply of commodities, probably the reverse.
Demand destruction via higher rates at this point is a de-facto tax on the middle class, so I wonder whether it really has legs.
I mean who does moderate general and wage inflation affect the most: Asset (equity and bond) owners.
Who does it affect the least (and probably benefit): the lower and middle class, those with few assets
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