There is no such thing as gooder. 
The correct word is better. (Good, better, best)
Posted on 04/30/2008 5:26:52 PM PDT by Kaslin
Monetary Policy: Yes, the economy has dodged a bullet — for now — and the Fed deserves credit. It moved fast to cut rates when things got dodgy. That said, some now want to raise rates to boost the dollar. Huh?
Bad idea. The economy's still not out of the woods. Payrolls have shrunk for three months in a row, with 232,000 jobs lost and unemployment rising to 5.1%. And more may be in store.
In the latest GDP report, personal consumption spending rose just 1%, its weakest performance since a nine-month recession in 2001. Purchases of durable goods plunged a scary 6.1%, a sign that consumers are really struggling. A falloff in spending, a collapse in home prices and a decline in employment: All in all, not a pretty picture. So what's keeping the economy afloat?
Exports, for one thing. They made up a third of GDP growth in the first quarter, and they're up only because the dollar's down. Just look at the robust results from big exporters such as ADM, John Deere, Caterpillar and Boeing.
As for prices, core personal consumer expenditures inflation — a gauge favored by the Fed — rose in the first quarter at just a 2% annual rate. Sure, our inflation is worrisome, but it's almost entirely an oil- and food-related phenomenon.
(Excerpt) Read more at ibdeditorials.com ...
I am not sure which is the more laughable notion at this point: that the Fed believes in "core inflation" or that the FED thinks that the rest of us believe in "core inflation,"or whether the rest of us believe that the FED believes in core inflation. I just believe my checkbook at the end of the month. I don't care whether it is "core" or "volatile" it is under a lot of stress.
“We might avoid a recession altogether.”
Housing? Prices dropping, defaults and foreclosures increasing. Long way to go here (imo)
Commercial realestate? More shoes dropping. The whole mess is spreading. I’m not betting on avoiding recession.
You gotta understand that William J. O’Neill and IBD are the permatouts to beat all permatouts. These guys entire business model is based upon an ever continuing nonbursting Greenspanian credit bubble.
Ain't I sounding like a modern day freeeper now? : )
The FED did not bail out Bear Stearns. The FED did not bail out Bear Stearns. The FED did not bail out Bear Streans. Oooooommmmmmmmmmmmmmmmmmmmmmmmmmmmmmm...............mmmmmmm......
“Sure, our inflation is worrisome, but it’s almost entirely an oil- and food-related phenomenon.”
O-kaaaaaay. Other than food, transporatation, and housing what do people spend their money on anyhow?
I have a suggestion. Let’s redefine core inflation to exclude housing, food, clothing, and transportation, and of course, taxes. We’ll just measure inflation based on the cost of cell phone service and cable. Burt only if it doesn’t go up by more than .1%. But since we have a “core” inflation number already, we’ll have to rename this new index the “really, you-can-believe-us,-we-wouldn’t-lie-to-you” inflation index. (/s)
I got myself a DVD player and drove down the price of inflation way down.
Wow. I tend to agree with the IBD’s political editorials, but on this score, I don’t see how they can be more wrong. For investors, short term, I guess it makes some sense to try and prime the pump once more and lower rates again; but in the long term, this is economic suicide. Demand from asia and tightened supply explained oil’s rise from $40/barrel to $80; but the rise from $80/barrel to $120 and up is due almost entirely to the collapse of the dollar, which is entirely the fault of the Fed’s easy money policy.
So what if the mortgage industry collapsed and some or many banks fail? Let them fail. Let the Recession take place and be done with it. The worst that would happen is we would have a moderately poor economy that would give us time to seriously reconsider the whole monetary system.
Boosting the money supply in increasingly ineffective attempts to tweak the market is a fool’s game and the whole house of cards will come tumbling down and we could face not just a bad economy, but the collapse of the entire nation itself. Countless civilizations have been done in by their own flawed monetary systems. It is not inconceivable that we could do to ourselves what all the terrorists in the world would be unable to do.
The US economy has changed its monetary system several times in its history, most recently in 1971 when Nixon abandoned Bretton Woods. When the US left that version of a gold standard, it was predicted by many that within 50 years, it would come back to haunt us, since all the there would be no disincentives to prevent the Fed from increasing the money supply. It depended upon having not just wise men running the Fed, but prophets who could predict exactly the right interest rate to set. It also depended upon actual legitmate statistics, not BS like “core inflation”—a number so meaningless that when people quote it in support of any theory they are either idiots or are trying to pull one over the public.
Even if we don’t go with a Gold standard, we have to tie the money supply to some finite commodity in order to reign in the “wise men” at the Fed who will bring nothing but ruin sooner or later. Bush 41 once suggested a “basket of commodities” approach, but since that time, no one is even considering the fatally flawed monetary system we have. It’s by far the biggest problem our nation faces domestically.
Unfortunately, "core inflation" already excludes all energy costs (gas, oil, electricity, etc.), and all food costs. That's why it's such a joke. For more eye-opening revelations about what a crock the numbers are nowadays, check this site:
http://www.shadowstats.com
But we do. We've got Goggle and Yahoo for national pride.
Look to the schools who lay on great debt to the students and then let many of the youngsters fail by absenting the school, the deans, the advisors, and the teachers from any duty to care "in loco parentis" They create a trapping cauldron of immoral chaos.
Look to the greedy commercial credit line issuers who prey on the dim, the weak, the hopeful. Look to the perverted Senators, the corrupted Representatives who enable and assist in welding the leg shackles unto a good percentage of the electorate -- a chain gang of profit for the few. The few who bribe the perverted and corrupted legislators to create their slave business by shrewd regulation.
Encouraging borrowing by the vulnerable discourages Liberty, and it is Liberty that would be our strength, except we have shackled and trapped our tomorrows for the sake of profit and cash today.
Whenever someone mentions the supposedly extinct buggy whip industry I think it's counted the Consumer Price Index.
Free Lunch for Everyone? If rate cuts to 2% are good, then cuts to -5% should be even gooder! !
Just remember, the men of the Fed are smarter than the market!
How much easier can economics get?
Ron Paul, dismissed as a kook, was a notable exception. I'm proud to say I voted for him.
The Fed keeps creating new bubbles to solve ones that has crashed. They lowered interest rates to save the economy when the Dot.Coms crashed and the financial scandals and 9/11 happened.
That help create the Housing bubble but is saved the economy. Well the Housing bubble has now busted so they are weakening the dollar to save the economy.
That has driven up commodities prices and I heard on the radio that farmers borrowed 20% more at fairly low interest to plant crops. The Commodities bubble will build until it pops and the farmers and domestic oil producers will face many of the same situations they faced in the 1980’s.
But knowing the Fed they will create another bubble to save rural banks since the banking system in general is having problems.
I agree with you, we need to go ahead and let the economy suffer a recession if it has to without the fed trying to save the economy. We are becoming like an heroin addict who needs the Fed fix more and more.
There is no such thing as gooder. The correct word is better. (Good, better, best)
“Core inflation” figures = Soviet style statistics.
Using the Carter-era methodology, we have an annual inflation rate between 8 and 11%.
“The Fed keeps creating new bubbles to solve ones that has crashed. “
Agree 110% It’s a big scam, they need fixed rules (gold?), the rest is counterproductive.
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