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Keith Taylor's avatar

Why didn't it occur to me until you mentioned Soros plots that Nazi Satanist commie Jew Soros is behind this? Of course he is! It's as obvious as the fake Moon landings and the millions of illegal votes. I'm just slow sometimes.

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Last Hussar's avatar

Right, the ACTUAL explanation.

In times of recession you want to be putting money into the economy. You do this with tax and interest rate cuts. This puts more money into people's pockets, which they can spend, supporting the economy.

For some time the US economy has been rising; employers are feeling this with unemployment going down, thus pushing wages up. As an economy grows there is more money in the system, which causes inflation. Governments therefore take money out of circulation by putting up Interest, and if brave, tax. This reduces the overheat, with the benefit they have money to prepare for when they have no money; infrastructure improvement and deficit reduction. When recession hits they have capacity to pump the money back in.

What the US has done is inject a stimulus into a buoyant economy, increasing the risk of overheating. Wall Street are spotting that this will need to be brought under control, but instead of braking a little bit, maybe 1 point rise, the brakes will need to be slammed on hard. An economy can handle a gentle slow, 1% added every few months, but the current model will require a big jump all in one go. This will damage consumer confidence, and severely affect their spending power, hurting the economy.

Imagine driving on a hilly road, with a speed camera at the bottom of each hill. You use the accelerator on the up slopes, then gently coast down, using the brake for a nice gentle coast past the gatso. Wall street are panicking that the GOP are stood on the Gas pedal going down, and the only way not to total the car is hard late braking.

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