Posted on 12/15/2015 3:41:27 AM PST by expat_panama
The Federal Reserve has kept interest rates at near zero since the 2008 financial crisis. To raise them, it has come up with a new set of tools. Produced by Katy Burne, Christopher Kaeser, Arielle Ray and Mark Scheffler.
But Fed officials face a troubling question: Jobs are on track, but inflation isn't...
...well below the Fed's 2% target.
[snip]
Low inflation-and low prices-sound beneficial but can stall growth in wages and profits. Debts are harder to pay off without inflation shrinking their burden.
[snip]
Former Fed Chairman Ben Bernanke, in an interview, pointed to Congress as one culprit for inflation's weak performance. As Fed chairman, he urged Congress in the aftermath of the recession to temporarily boost government spending and focus on longer-run measures to control debt. By raising demand, that spending would also boost inflation. After an $830 billion stimulus plan in 2009, however, Congress turned to shorter-run budget cutting.
...the central bank can only do so much to stabilize the U.S. economy if lawmakers are working against Fed efforts.
[snip]
Debate over inflation and its causes has come to a boil in recent months, with other theories joining Mr. Shirakawa's ideas about aging countries and Mr. Bernanke's blame of stingy fiscal policy.
[snip]
A Wall Street Journal survey of economists in August found two-thirds of them still believe there is link between lower unemployment and higher inflation.
But the relationship is affected by outside factors.
[snip]
When businesses and workers expect high inflation, they try to command higher prices and wages... ..."No one is planning for higher inflation. My contacts just don't expect it."
(Excerpt) Read more at wsj.com ...
[wiping face] What I'm saying is that politics aside imho we're seeing the world's lemmings race to the sea and our leaders are clueless. Again.
Meanwhile the article may be a long read w/ too many numbers but I found it compelling -after weeding thru the sick lib bias.. At least look at the pictures graphs.
Inflation isn’t missing, it’s just camouflaged.
missing inflation? Not according to my grocery bill under Odumbass
Everything is smaller, and more expensive.
My average bill used to be $150. Now I am lucky to spend less than $300
As far as those 0% rates go....definition of insanity applies. They keep doing what isn't working, unless the goal is to destroy the middle class.
A happy Tuesday morning everyone! Stocks bounced back up yesterday, we can say it was just a typical 'dead-cat-bounce' like we see all the time in a crash but the fact remains trading volume's up.
Futures are together today on the idea that stock indexes are pointing up, and while metals may seem off they're at least not plunging. Any more. For now.
Huge data flood today and (imho) they'll all be watching this stuff:
8:30 AM Core CPI
8:30 AM CPI
8:30 AM Empire Manufacturing
8:30 AM Core CPI
8:30 AM Empire Manufacturing
10:00 AM NAHB Housing Market Index
4:00 PM Net Long-Term TIC Flows
Lots of news (End of Year Tax Selling Puts a Damper on the Stock Market; Does It Create a Buying Opportunity?) too but I'll be hanging out on the econ threads:
Apparently the ass hats that wrote this never do their own shopping. DO NOT tell me that there is NO INFLATION. A simple test is to have found an old grocery receipt for basic items as compared to today’s prices for the exact same items. Many of those items have nearly doubled in price.
Once again, the so-called experts use the same BS, “tell them what you want them to hear”.
Thanks for posting this. Personally I think there is so much political/government and insider manipulation of the markets such that most of us are only along for the ride. Compounding this, economics is not a hard science, and often the people doing the ‘driving’ (e.g. the Fed) don’t know what the right thing to do is, and can’t accurately predict the consequences of their actions (particularly if they are blinded by their ideological leanings).
“Many of those items have nearly doubled in price.”
Yes. Plus some of the ‘big’ expenses in life, like health care, and college/university tuition have skyrocketed - while salaries have stagnated.
As a matter of fact, I did find an old register tape recently from about 30 years ago, and you’re right, it was shocking. Apart from a few meat items, there was NOTHING else on the tape over a dollar.
Thank you. Or it's being ignored. Obama certainly doesn't want a rate hike.
Saw through this BS after the, jobs are on track lie.
U6? I’d say 20%
Food is still high though gas is cheap...and gas being cheap adds more unemployment from the oil cracking industry.
USD velocity is putting on the breaks...Baltic dry index sucks.
The lies continue...some are so fooled they buy 300 presents for their 3 kids and pile them up past the Xmas treetops.
Beam me up Scotty!
The Federal Reserve and economists are as honorable as first research study scientists and statisticians. Won’t it be nice when the One who knows the hearts and minds of man rules? Joy to the world, everyone!
Inflation has nothing to do with growth except growth in the money supply which is, of course, shrinkage in the wallet. If the Government wants growth then the government should abolish corporate taxes and 90% of business regulation. Then there will be GROWTH. The downside would be that the increase in available jobs would be so phenomenal that no one would notice the illegals anymore. If the government also abolished all government aid at all levels to illegals then the illegals would cease to be a problem. The lazy ones would go home and the industrious ones would learn English.
——Debts are harder to pay off without inflation shrinking their burden.———
Ha,ha, ha.......Finally an admission
The US Federal debt of $18 trillion is hard to pay off with no inflation
The inflation target must be higher on the order of say 6% to really make the debt easier to pay
The inflation isn’t there because the banks have not put money into the economy. It is all sitting in reserves. If a bank can hit their “net interest margin” targets with zero risk, that is the best thing.
Once rates start to go up in the market, that money is going to come rushing out. Then you will see inflation. And it won’t be camouflaged.
Wages in my job, security guard, have actually declined 10% over the last 5 years compounded by more diligence in avoiding overtime.
Apparently nobody at the feds eats food.
Economics is not an exact science. In real science, F always equals ma, E always equals IR, and E always equals mc^2, at least for things you can measure on earth. In economics, results are governed by decisions made by financially struggling families over whether to buy extra baby formula, or steak. Rib-eye rarely wins. These real economic decisions are governed by the confidence that one has about what is expected to happen next week, next month, and next year. Reality wins over propaganda most of the time. Reality tells us that it’s not some bogus employment rate number that counts, It’s whether, or not, MY job will be there. When that’s not secure, the baby formula wins.
For almost anything that isn't directly tied to commodity-based prices, prices have been pretty stagnant. Go to an electronics or furniture store and see how cheap some things have become that used to be considered very expensive.
One of the more alarming numbers I've seen in recent days is that the posted prices for transporting a loaded shipping container from Asia to the U.S. are almost less than the cost of actually transporting it. In other words, the shipping lines are practically transporting them and making no money on it at all.
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