Posted on 04/17/2014 6:32:50 AM PDT by SeekAndFind
We have all been watching a long mystery with no ending: What the Federal Reserve governors are trying to do, how they intend to do it and why they imagine their efforts will work.
The key questions boil down to two: (1) What target should the Fed aim at, and (2) what policy instruments should it use to hit that target?
The Fed's only explicit target — an unemployment rate of 6.5% — was shrewdly discarded as "outdated" as that target grew near. Actually, the idea of focusing on unemployment is outdated, since it presumes that high unemployment guarantees low inflation — as though stagflation in 1975 or 1982 could not have happened.
Why not simply target inflation? Ben Bernanke advocated inflation targeting before 2002, when he became Fed chairman. On Nov. 21, 2002, he gave a speech warning that inflation was too low, threatening deflation.
(Excerpt) Read more at news.investors.com ...
This whole thing WILL come to a head. The whole economy is like a beater car that’s been repaired with duct tape, wire, and some thicker motor oil.
It doesn’t keep running that way indefinitely. It does eventually break down.
The only thing keeping western civilization together right now is the duct tape of media lies and the wire is things like “QE infinity”. The thicker oil is a rank and file population that doesn’t want to see anything but the pink ponies, so they buy it, knowing deep inside that it’s not true.
And one day an event happens that brings the whole thing down. The longer it is allowed to continue on as “business as usual” even though it is anything but, the faster and greater the calamity will be when that event happens.
The whole of western civilization is waiting for the one black swan.
Bump
The Phillips Curve is DEAD!
I agree 100%.
Our government isn’t about jobs. Problem is neither are Republicans.
Nobody is about jobs.
Everyone is sending jobs to China, which now exports more than America does in the world.
Bring back American jobs. Now.
The problem (imho) is that people seem to have gotten it in their little minds that the Fed controls the economy. Left wingers push it so they can avoid being blamed for all the harm they're doing. Right wingers push it so they can sell their gold for $2k/oz. Economists push it so they'll get named to cushy gov't positions. Fact is that raising GDP by cutting interest rates never really worked that well and is now totally spent.
“I don’t want to ruin your evening after such a pleasant dinner. But if you wish to know who is at fault for hollowing out the welfare of middle-income workers and the American economy, kindly do not look at me or my colleagues at the Fed. When you go home tonight look at yourself in the mirror. We at the Fed are providing more than enough monetary accommodation. You elect our fiscal and regulatory policymakers. It is time for them to do their job, to ally themselves with us to achieve a fully employed, prosperous America. Only you, as voters, have the power to insist that they craft policies that are needed to restore American prosperity. Please do so.
Have a most pleasant evening! “
~ Richard Fisher, Dallas Fed Chairman, February 11, 2014
They can’t handle the money.
We seriously risk electing the next Hitler on a promise to recreate the WPA.
What cracks me up is when the say the Fed needs to keep interest rates low to SUPPORT the economy or just the FED needs to support the weak economy.
What exactly does the Fed do to support the economy? Make money out of nothing? That’s really just stealing Gradpa’s retirement to support others. He and people (savers) like him are the ones really supporting the economy. (and getting hosed by fed policies).
Eventually the amphetamines wear off and you have to take a long nap.
For that to happen we’ll have to fracture into a dozen or more little parties and be willing to let a simple plurality elect the President.
Hitler only came to power via a fractured political landscape. IIRC he was at best a 30% vote getter which means 70% of German voters rejected him. Keep that in mind when people are calling for more than 2 parties. The solution can be worse than the disease.
Worse, Chinese jobs are fleeing to lower cost areas of Asia like the Phillipines, Vietnam, Malaysia, etc. So now we have to bring back American jobs from the Phillipines and pull them through China, just to get them back here. That's one way.
The other is to lower the tax/regulatory burden on growth right here at home. You know, the place where we have the most power to change things.
I’m not sure what your post represented.
I do know however that China is playing America.
China runs a MASSIVE trade surplus with America. It grows every year.
China does not allow American direct investment. Nor does China allow Americas to actually buy property in China.
China is approximately the same size as America. China currently sells a whole bunch to America, does not allow Americans to directly participate in China’s economy, and does not allow Americans to buy actual property in China.
Yet we have a whole segment who is ready to sell off America to Chinese.
Sorry.
You’ll have to explain why selling off America to Chinese is a good thing.
I think it is actually a good thing, to bring back American businesses to America.
So I come into your store and buy a widget. You’re selling it for $10. I pay $10 and you give me a widget. Do we now have a trade imbalance?
I’ll tell you what.
When America spends 440 Billion last year buying stuff from China, but China only spends 122 Billion in the same year buying stuff from America.
We have a (very serious) trade imbalance.
When America spends 440 Billion last year buying stuff from China, but China only spends 122 Billion in the same year buying stuff from America.
“When America spends 440 Billion last year buying stuff from China——”
—
$440 billion on inferior merchandise AKA crap.
.
Cringing Negativism Network buys $440 Billion of stuff from 1010RD. I never buy anything from you. Where’s the imbalance?
It’s like going to the grocer. You get $100 in groceries and your grocer gets one hundred US dollars.
Groceries = $100
The equation balances. Capisce?
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