10% Interest Rates or $10 Gasoline-You Pick
At some point we will have to admit inflation is out of control. $3 Gas, $4 Gas, $5 Gas......who knows exactly what that point is where material changes will have to take place in our society?
Currently, some of our largest financial institutions are paying about 10% to borrow money or raise capital. If banks have to borrow at 10%, they will have to charge us more than that to stay in business.
Right now huge industries are laying off 20% or more of their workers. Airlines, Autos, Banks/Finance, Construction, Real Estate, and related businesses. The layoffs are causing lower revenues in those areas and lower tax receipts. As a result of declining revenues, local and state governments have just started annoucing cutbacks.
As a nation, I am not sure we understand the gravity of the problem. Many of our banks are in serious financial trouble. We have stagnant wages and out of control costs around the world. Truckers are blocking borders in Europe. There is rioting in the streets over food prices in a number of countries. California is being forced to layoff or reduce pay of fire fighters, police officers, and school teachers as their expenses are rising rapidly.
At what point is enough enough and what solutions could be imposed?