World Blog by humble servant. First interest rates rise affecting the drivers of the US economy
September 1, 2006 1. First interest rates rise affecting the drivers of the US economy, housing, but before that auto production goes from bull to a bear markets. 2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella – Goldilocks situations. 3. We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announced poor earnings, making the Dow fall faster than it rose, moving it deeply into the red. 4. The formula economically is inherent in #2 which is lower economic activity equals lower profits. 5. Lower profits leads to lower Federal Tax revenues. 6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is a...