Is this an industry saying?

Because otherwise the exchange rate has been about where it is now to substantially worse for the rest of the data set.

Personally I believe it is due to the last of the boomers retiring. Economists/analysts are not used to thinking about demographics and they have a blind spot on this ever more important topic.

This is not the case and is actually impossible. Impossible they will maintain them or higher. And impossible we would recover.

The US is headed towards $1T in interest payments alone annually.

$34T in national debt AND $213T in unfunded liabilities. 2/3 of the budget is non-discretionary

The longer they stay elevated the more the average interest rate on debt goes up. For the US and the world since it's the reserve currency. This pisses everyone off.

Rates will go back down to around 2% because the US AND the world cannot sustain an expensive dollar. There's 65T in eurodollar debt (US dollar denominated debt) globally. [1] I've seen higher estimates too.

"Approximately half of all cross-border loans, international debt securities, and trade invoices are denominated in U.S. dollars, while roughly 40 percent of SWIFT messages and 60 percent of global foreign exchange reserves are in dollars." [2]

We aren't going to end up back around 2% because the Fed wants to. It's because we have to. You cannot maintain the world reserve currency at these rates after everyone got drunk off the lower rates for decades. And you cannot have the debt load we have and maintain these rates or higher. There's no easy way out of a debt spiral.

Just my opinion but rates will go lower. Printing will go into hyperdrive. Inflation will rip. There will be more unrest. Personally, I'm holding inflation-hedging assets.

[1] https://www.weforum.org/agenda/2023/01/65-trillion-debt-bank...

[2] https://libertystreeteconomics.newyorkfed.org/2022/07/the-u-...

Historically they are not low at all relative to inflation and considering how highly the government debt to GDP ratio is raising them further would lead to severe issues. Since a surplus or even a balanced federal budget is basically politically (probably financially too) impossible at this point high growth + low rates + predictable moderately high (2-3%) inflation is the only way to keep public debt from spiraling out of control.

> risk a similar situation as the early 80's.

IMHO the early 80s are about as relevant today as the 30s were back then. So a bit but not a lot. The global economy and financial system (and the position US has in it) is extremely different

Yet the Fed is talking about rate drops. We're also seeing rising consumer defaults and more perilous bank debt. And those great job numbers aren't that great since we're seeing higher part-time and low wage jobs than before. I'm not sure we're going to really avoid anything.

Record? I guess you didn’t live through the 1970s, much less post WWI and WWII.

Of course the deflation of the 1930s was even more destructive!

But considering the US gov deficits I would assume more inflation is to come with actual devaluation.

And export oriented companies are making money. But trickle down economics is a myth, so it's not benefitting the workers. The executives are doing nicely so good for them I suppose.

If you are going to southern China you wouldn’t be save so much going over far east Russia anyways, I guess.

Also, Chinese airlines can’t overfly Russia on the way to the USA, at least for newly approved flights: https://www.reuters.com/world/chinese-airlines-avoiding-russ...

Just 12*2 weekly round trip flights between the USA and China really sucks. There were a lot more before the pandemic. But it seems like we are going to 35 soon? https://simpleflying.com/us-china-lift-number-weekly-flights.... (Or already?)

Much food and natural resources are imported, not to mention anything dollar pegged like smartphones are simply getting more expensive. Seriously, stuffs like iPhone and GPU feel stupidly expensive but when you check the price in dollars, they look acceptable.

The problem is a lot more noticeable for foreigners living in Japan temporarily because they don't think of their worth in the local currency. They then generalize their problems to the rest of the population.

When you think of your money in dollars, and you see it going down a lot, it looks like a life or death crisis. But the average person in Japan sees prices go up a bit, which is frustrating, but not to the same degree.

Japan

GDP: $4.230 trillion GDP Per Capita: $33,950 Expected 2024 Growth: 1.0%

Germany

GDP: $4.4 trillion GDP Per Capita: $52,800 Expected 2024 Growth: 0.2%

Are you claiming the Fed has directly purchased US stocks? I don't think they have.

I've only ever seen reports of them buying government and mortgage debt: https://www.cnbc.com/2022/12/22/how-the-federal-reserve-affe...

You can argue the purpose of these actions was to prop up the stock market, but I don't think they've ever intervened in as direct a manner as the Bank of Japan has with buying company stocks.

The way this is handled is standard inflation adjustment based on things people actually use.