Posted on 06/01/2015 3:01:07 AM PDT by John W
The U.S. Federal Reserve should consider lifting interest rates sooner rather than later to tackle speculative bubbles in the housing and stock markets, Nobel Prize-winning economist Robert Shiller told CNBC on Monday.
"I'm thinking they (Fed policy makers) ought to be considering that, because that is the mistake they made in the past," the Yale University professor told CNBC Europe's "Squawk Box" when asked whether he believed the Fed should raise interest rates soon or later on.
"They didn't deal with the housing bubble that led to the present crisis. There's a suggestion in my mind that they should be raising rates now, (but) unfortunately the latest news looks a little weak on the demand side," Shiller added.
(Excerpt) Read more at cnbc.com ...
Great. Another genius like Alan Greenspan.
The economy is on life support. Let’s try pinching the air tube.
Life support indeed ! The only problem is that the doctors (witch) have the patient on pure oxygen and the say smoke me if you got them.
S/b “em” instead of me unless the witch doctors are demented cannibals, witch seems to be very possible in this new voodoo economics.
I don't care if big banks and other entities implode. If US jobs are protected for US citizens (and kept here) and the US population is stabilized with as many as possible invaders removed, the population can assimilate, become productive, and again be the US we grew up in. Will there be some pain? Well, yes. But the longer this goes on the way things are now, the less chance the US has to regain our footing as a great nation.
No fear. The Fed will raise rates just after Cruz is elected. Obviously the Fed is in collusion with the Rats.
How many times will the Fed screw up and do the wrong thing at the wrong time before people learn that any attempts to control a free market means it’s not a free market.
A free market will regulate itself. Screw up in a free market; you go out of business. Screw up in a government controlled market; you get rewarded with a bailout. It rewards bad behavior and encourages more bad behavior. It also results in financial malinvestment; wasting productive capital by throwing it at politically connected players.
.25 in Sept will not be the end of the world.
The reality is that the market sets the rates. We’re in a world wide deflation. Raising rates would only result in faster deflation because our money is based on demand for debt. Since demand for debt is decreasing and outstanding debt is declining, the remaining dollars (or euros or pounds) increase in value — hence deflation. We’re seeing it first in wages but will soon see it in prices, first in commodities, later in other goods.
“It’s OK”, reading some of the comments (maybe not from this thread...)
The (R) are just as happy to have a fiat currency to buy their votes (the same people that say “Keep your hands off *my* S.S.”). Why else not worry about having $120T+ in unfunded liabilities.
Whom else on the campaign trail has said ANYTHING about enslaving our progeny (as if they give 2 sh!ts about the Constitution, let alone a few spelled out Amendments)?
The Fed, under Ben Bernanke, created a mess for itself that it can’t easily escape. Its holdings of long bonds and mortgages will fall in value by as much as $200-500 billion if they raise short rates back to rational levels, 3-5% for example.
If they try to drain the $2.5 trillion of excess reserves in the banking system by selling securities, their sale will drive their portfolio value down by a similar amount.
And in the worst case scenario, they will end up paying banks as much as $100 billion per year to sit on their excess reserves while driving the value of the Fed portfolio lower in the bargain.
There’s a reason the Fed is reluctant to raise rates. Their balance sheet and their income statement will take terrific hits when they do, especially if they try to eventually return short rates to a more normal 3-5% range.
Yeh crash the stock market and the fragile practically non housing market in one fell swoop. :-)
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