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Replying to Avatar Bobby

This is the reason why inflation isn’t going away. Preston Pysh explains it well. The Treasury and Fed are giving mixed signals. They are raising rates (hitting the brakes) and yet still expanding the money supply (hitting the gas).

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This is a reverse repo.

“The party executing the reverse repo sells assets to the other party while agreeing to buy them back later at a slightly higher price.”

Marty Bent has an excellent post on how visible this is in the grocery store through something called shrinkflation. Basically, everything is getting smaller as a way of hiding that the dollar is losing value rapidly.

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MonKota 2y ago

Driving a massive economy in the rear view mirror has always troubled me……

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Bobby 2y ago

Yea, it feel like one big economic experiment, and we are the mice getting electrocuted.

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