TPS Posted June 8, 2011 Author Share Posted June 8, 2011 Because the Fed policies are very much hyperinflationary, and the only reason the Fed has gotten away with it is the US role as the reserve currency. Now, square the benign attitude towards Fed's monetary actions with a view on the longevity of the US dollar standard. You can't be a proponent of both. Disagree. They've gotten away with it because of 9-10% unemployment. My position for the past several years is that monetary policy is not very effective in severe recessions. The Fed has flooded the system with liquidity, but they have been pushing on a string. International reserve currency status has played a bit part. Link to comment Share on other sites More sharing options...
GG Posted June 8, 2011 Share Posted June 8, 2011 Disagree. They've gotten away with it because of 9-10% unemployment. My position for the past several years is that monetary policy is not very effective in severe recessions. The Fed has flooded the system with liquidity, but they have been pushing on a string. International reserve currency status has played a bit part. They've gotten away with it only from domestic policy makers on the basis of the rainbow farting economy. But these are not the people who drive the yields. You do agree that pumping this much liquidity into the system would cause interest rates to rise if investors reset their expectations of the US economic growth? Very few central banks could get away with such a prolonged QE unless there were other reasons to own that country's assets. Link to comment Share on other sites More sharing options...
Magox Posted June 8, 2011 Share Posted June 8, 2011 (edited) I believe this is an important point to note. All bond increases and decreases are not made equal. If a bond is rising in value, there are many plausible reasons for its increase same vice versa. In other words, you can´t rationally point to the bond market and say ´Hey, the 10 year bond is gaining value, Ahaaa that means the market is pointing to deflation!´ Or ´Look, the 30 year is dropping lock a rock, Hyper inflation is coming´ A bond increase can be due to a slowing economy, deflationary pressures or just a store of value when people become afraid. A bond decrease can be due to higher inflation, healthy economic growth, or fears of sovereign debt default. Also, I personally dont put much weight into the Fed´s preferred gauges of inflation like our lil buddy TPS does, every day average people look at what they are paying at the pump, grocery store, health care costs, store etc. These are the gauges that most people care about, not some calculated gauge that places much of its weighting on rental prices/wage inflation and other metrics used by todays economists. Sorry TPS, inflation is already here and its only going to get worse. Even though I do believe you may see it cool off in the short term. . Edited June 8, 2011 by Magox Link to comment Share on other sites More sharing options...
TPS Posted June 8, 2011 Author Share Posted June 8, 2011 They've gotten away with it only from domestic policy makers on the basis of the rainbow farting economy. But these are not the people who drive the yields. You do agree that pumping this much liquidity into the system would cause interest rates to rise if investors reset their expectations of the US economic growth? Very few central banks could get away with such a prolonged QE unless there were other reasons to own that country's assets. The Fed can get away with it as long as the economy stumbles along and unemployment is above 8%. Under these conditions, there are few other alternatives. Even if China et al stopped buying, yields would rise a bit, but not because of inflation. As for your question, that's the point we're arguing: yields did rise with QE2 because of expectations, which haven't materialized to the extent believed. When or if growth seriously takes hold, yields will rise; but until then, the FED can push on a string all it wants without much of an impact. As for the CPI Mag, I don't disagree that as an average indicator it doesn't tell us how those below the average are affected in a worse way. That is, for those at the bottom, they are more affected by changes in gas and food prices than the average consumer--there's no doubt. However, since you don't buy the CPI as indicator (but you seem to be ok with all other data), it's pointless to debate. Your answer will always be, "by my definition, I am correct." You're bordering on DCTomophobia, defined in Webster's as "fear of being wrong..." Link to comment Share on other sites More sharing options...
3rdnlng Posted June 8, 2011 Share Posted June 8, 2011 I see the gerbil has moved to the frontal cortex. I don't need mrknowitall dexter to defend me from a nitwit. Go find a simpleton thread, so you can feel on par. I'll let you know that I learned at the same esteemed houses of learning that produced the world's only rainbow farting unicorn, so I'm at least as competent as the morons who are running this place. But even the unicorn knows it has a fatal flaw, in that eventually it will have to adhere to the laws of arithmetic. I beg to correct you. Yes, the gerbil is talking, but Dave in Norfolk talks out of his ass, so where do you think the gerbil really is located? Link to comment Share on other sites More sharing options...
DC Tom Posted June 8, 2011 Share Posted June 8, 2011 I don't need mrknowitall dexter to defend me from a nitwit. That was beautiful... Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted June 15, 2011 Share Posted June 15, 2011 They've gotten away with it only from domestic policy makers on the basis of the rainbow farting economy. But these are not the people who drive the yields. You do agree that pumping this much liquidity into the system would cause interest rates to rise if investors reset their expectations of the US economic growth? Very few central banks could get away with such a prolonged QE unless there were other reasons to own that country's assets. This is such an idiotic argument. If ifs and nuts were candy and nuts, everyday would be Christmas. Sure, if this was a full employment economy they wouldn't be fighting deflation, but it's not. @maggox, demand, demand demand, that's were the inflationary pressure is coming from. I read one estimate that said by 2023 a majority of world citizens will be "middle class." I've owned Deutche Bank Commodities for a year now... Link to comment Share on other sites More sharing options...
GG Posted June 15, 2011 Share Posted June 15, 2011 This is such an idiotic argument. If ifs and nuts were candy and nuts, everyday would be Christmas. Sure, if this was a full employment economy they wouldn't be fighting deflation, but it's not. @maggox, demand, demand demand, that's were the inflationary pressure is coming from. I read one estimate that said by 2023 a majority of world citizens will be "middle class." I've owned Deutche Bank Commodities for a year now... Deutsche Bank Commodities? WTF are those? Beer swilling guys in lederhosen? Link to comment Share on other sites More sharing options...
DC Tom Posted June 15, 2011 Share Posted June 15, 2011 This is such an idiotic argument. If ifs and nuts were candy and nuts, everyday would be Christmas. Sure, if this was a full employment economy they wouldn't be fighting deflation, but it's not. @maggox, demand, demand demand, that's were the inflationary pressure is coming from. I read one estimate that said by 2023 a majority of world citizens will be "middle class." I've owned Deutche Bank Commodities for a year now... What the bliddy foch? Do us all a favor, and go back to posting pictures of your nuts on twitter. Link to comment Share on other sites More sharing options...
Dave_In_Norfolk Posted June 15, 2011 Share Posted June 15, 2011 What the bliddy foch? Do us all a favor, and go back to posting pictures of your nuts on twitter. Brilliant argument! For an idiot! Link to comment Share on other sites More sharing options...
Magox Posted June 15, 2011 Share Posted June 15, 2011 This is such an idiotic argument. If ifs and nuts were candy and nuts, everyday would be Christmas. Sure, if this was a full employment economy they wouldn't be fighting deflation, but it's not. @maggox, demand, demand demand, that's were the inflationary pressure is coming from. I read one estimate that said by 2023 a majority of world citizens will be "middle class." I've owned Deutche Bank Commodities for a year now... everything isnt black or white, there are many shades of grey in between. Monetary hawks and righty propogandists will blame the falling dollar and loose monetary policy while others will blame demand for higher prices. I believe the truth lies somewhere in the middle. In any case, demand will continue to rise for quite some time and loose monetary policy will remain as well...So, we better get use to it and not trust in the Ben Bernankes characterization of this phenomena as being ´transitory¨ Link to comment Share on other sites More sharing options...
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