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No thank you.Target rate 3 - 4 percent maybe?
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You can also use the rule of 72 for expenses like inflation or interest:
If inflation rates go from 2% to 3%, your money will lose half its value in 24 years instead of 36.
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With the national debt approaching $35 trillion, there are only two ways out of the situation — defaults or printing more money, McDonald told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News.
"The only way to get out of that kind of debt hole is if you keep inflation above interest rates. That's how you monetize the debt," McDonald said. "That is why [the Federal Reserve] needs a much higher inflation target. It'll [be] a slow, manageable default. But it's the only way out of this colossal debt hole."
In order to tame inflation back to 2%, the Fed needs to keep raising rates, but it can't do that without triggering a 2008-like financial crisis, McDonald pointed out.
"[Powell] should raise rates another 150 basis points. But if you push rates up from here, you will very quickly bring on a financial crisis much worse than Lehman," he said.
Fed will have to raise its 2% inflation target
The Fed will have to cut rates to avoid a banking collapse and a brutal recession. However, first, it must raise the no-longer-attainable 2% inflation target. "[The Fed] will start circulating the white papers and working with other central bankers worldwide to pitch this in a group setting," McDonald noted.
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The 2% is a congressional mandate. ...
And it was originally 1%, +/- 1%Nope. It is a policy the Fed decided upon themselves.