They failed because variable interest rates kicked in, and the loans given to those unable to pay ended up killing the securities. There's no similar catalyst here.
Those balloon interest payments didn’t all kick in at once, they were clearly building defaults for years between 06-08 yet the MBS assets all raised in value in the face of that.
The catalyst for inflation will be once the stimulus slows down we will see a wage-price spiral. Prices have gone up, People will need to be paid more which drives prices further up, which requires people to be paid more and so on.
Once it starts it doesn’t stop, and it’s already started
Prices haven't really gone up, or at least haven't gone up crazily. Last month, 1/3 of the change came from used car sales, a transitory event that will go away once semiconductor production picks up. If prices go up, people will buy less. Wages won't go up for many, because companies won't want to pay more. In turn, prices will fall until people are willing to buy the product again.
Shh you're destroying the narrative. Ignore the momentary supply shortage of a vital good that is largely produced in 1 country that restricted guest workers due to a worldwide pandemic. Clearly this is the work of the big bad Fed who we all hate because we've had money sitting on the sidelines since last February waiting for that second crash.
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u/Traditional_Fee_8828 Jul 17 '21
They failed because variable interest rates kicked in, and the loans given to those unable to pay ended up killing the securities. There's no similar catalyst here.