Posted on 05/08/2021 8:15:45 AM PDT by Rummyfan
Treasury Secretary Janet Yellen got into trouble Tuesday for telling the truth. That morning, at a conference sponsored by the Atlantic, she raised the possibility that one day the Federal Reserve may raise interest rates "to make sure our economy doesn't overheat."
Anyone with a basic understanding of economics knew what she was talking about. The combination of President Joe Biden's gargantuan spending and the accelerating economic recovery may well lead to a rise in consumer prices and hikes in interest rates. But an end to the Federal Reserve's program of easy money would hurt asset prices and possibly employment as well.
Which is not what most investors want to hear. When Yellen's words reached Wall Street, the market tanked. By the afternoon she was in retreat, telling the Wall Street Journal CEO summit that she had been misunderstood. "So let me be clear," she said. "That’s not something I'm predicting or recommending."
No, of course not. But it still might happen anyway.
A specter is haunting the Biden administration—the specter of inflation. Past inflations have not only harmed consumers, savers, and people on fixed incomes. They have also brought down politicians. Among the risks to the Democratic congressional majority is a rise in prices that lifts inflation to near the top of voters' concerns, coupled by the type of Fed rate increase that hits stocks and housing. Inflation is one more signpost on the road to Republican revival, along with illegal immigration, crime, and semi-closed public schools embracing far-left critical race theory.
(Excerpt) Read more at freebeacon.com ...
Inflation? “ But it still might happen anyway.“
Are they living under a rock? What happens to products when commodities spike? Corn 🌽 for the local chicken farm is at $7.34/BU. CargillAg Dayton oh paying 6.99 spot price. (52wk low $3.02).
welcome back carter
18% negative amortization mortgages were fun
Glad I locked in to a 1.85% rate in February. I *should* be safe for the next 5 yrs, and then it’s paid off.
“Free to Choose” is one of the most influential books I have read and still has a prominent place on my living room bookshelf.
Anyone who buys food knows inflation has been going on for years..
12 oz instead of sixteen oz for the same price or higher
But they last couple months it has hit the meat department hard...
Yes at the food store it is across the board. Pointed that out to my wife this AM on something we buy...up 25% this year, so far.
The Bidet’s admin solution is to send out more script.
Despite what she said, all major stock indices rose fairly substantially on Friday. Seems like they would have dropped because of Yellen’s comments and a much lower than expected job numbers report.
I just rebuilt an older vehicle because it was cheaper to reupholster and paint an old car then buy a new car. I have a 2017 whose monthly payments nearly equal my mortgage payment. (Mrs. Goat's toy) The rebuild cost me the equivalent of four monthly payments on the 2017. My point being consumers adjust their spending and purchases which will hurt some businesses and create more problems for the economy. In the short term it will help some business like the shop that rebuilt my car, he is backlogged and turning away work.
My daughter is a Millennial with degrees in Business and Economics. While not woke she does occasionally, on social issues, display that youthful trait of being a know it all. However, she read comments on social media about some thing Biden said last week and she went off. She said, “How can these people be so stupid, why are so many people my age ignorant of the inflation all this is going to cause.” I had to smile. Dad's not so dumb after all 😀
I welcomed her to the Seventies as we are looking at a Carter economy and the return of stagflation. Hope all those dumb$hits like all that “free money.” It is going to bite them in the ass in a big way.
Huge increase in money supply leads to increased aggregate demand, which leads to increased aggregate sales revenues, which leads to increased aggregate profits, which leads to increased average rate of profit, which leads to increased interest rates.
The second best President in the world came after Carter.
Agreed, but we have to survive and get to that point.
I remember from one of the Hitchhikers Guide to the Galaxy, where a group of phone sanitizers settled on a planet and decided to use leaves as currency, which led to hyper-inflation and complete deforestation.
It seems that, as usual, the dems read fiction and decided it would be a good idea, not understanding it was written to be taken as absurd.
Mark
That’s how I feel about Capitalism And Freedom. One of only 3 college textbooks I still have.
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