RE:RE:RE:RE:RE:RE:Completely sickI think you are totally correct MM that the Fed and other central banks can't do anything like they did in early 1980. At that time, where I was anyway, the economy went from flat out boom to totally dead in a matter of weeks.
I am not sure what the limit would be on house mortgages in Canada , before the banks that hold those mortgages would need bailouts: maybe double present rates or around 5%?
But I think it will be different this time. In the 1970s America and countries like Canada made stuff. So higher wages really had an impact. Now China, Viet Nam etc. make most of the stuff. And they are getting more efficient and less labour intensive by the year, or quicker.
So there's that.
My guess is that for sure the central banks will raise rates a little, but as you said slowly. On the other hand the Fed and BoC have said they don't think higher rates will much impact inflation, so the raising will be because they feel they need to, for appearances. And it wont be all that much, and if the stock markets don't like it, the raising will stop or reverse.
And then inflation could run pretty hot all through 2022 but not that hot.
I suspect that if the stock markets are balky at the higher rates, nobody will do much besides talk if inflation is 7% next year. And the high inflation will really help out with making the debt smaller without having to actually pay it off. Perfect.
Now to be honest, I have never been right in the past on this stuff, even when it was even more logical.
And then the year after that, if civilization still exists as we know it , well, who knows.