Ask Paul Volcker
Readers responded to questions to pose to a former Fed chair. “If you could ask Paul Volcker one question about the housing market situation, what would it be?”
“Former Federal Reserve Chair Paul Volcker is often lauded on this blog for having the gumption to crank overnight rates up high enough to crush inflation in the late 1970s. He is also a board member of my graduate institution. We are a very small school, and I have had the pleasure of his company on a couple occasions.”
“If we can develop some cogent and appropriate questions, I’ll be glad to email Paul the top choice. Obviously I can’t guarantee a response (or, perhaps, a public response), but I have always found him to be frank on other topics. Maybe we can get an exclusive.”
One asked, “Whither the symbiosis?”
Another, “I’d just like to hear Volcker’s predictions on what he sees as the outcome of all of this.”
One requests a prediction, “I would love to know where he thinks the rates should be right now/near future and why.”
Another wants an insiders view. “Well of course he has a better view of how the fed comes to decisions and the political pressures that are put upon it tha we do. So: ‘What does HE think is the most likely Fed RESPONSE (short and long term)to a RE disinvestment caused recession.’”
When this long time reader emailed me with this suggestion, I asked that it be posted in the topics thread. I am requesting that any emails sent be CC’d to me so I can have an idea of what is exchanged.
Even if Mr. Volcker never gets these questions, it would be interesting to hear what readers might ask.
a) Given the history and the “accomplishments” (or lack thereof) of the Federal Reserve since its creation in 1913; why shouldn’t the United States withdraw the Power it gave to the Federal Reserve. After all, the Federal Reserve failed to accomplish all of its objectives. It didn’t protect the value of the US Dollar, it greatly failed to stabilize the U.S economy as its policies were in place while heading into the Great Depression of 1929, and the Fed was also in charge while the U.S headed into several recessions
(50s, late 60s, 1975, Black Monday in ’87).
b) Why are politicians so ignorant and allow a private company to charge the country interest on the money creation when the country would have the authority to print its own currency at its sole discretion without the associated cost of interest?
c) What policies would you personally put in place, at the current time, to preserve the remaining value of the U.S Dollar?
d) At the current time, would you rather invest $1,000,000 in the U.S Housing market, in Gold & Silver, or have it in a FDIC bank account that is insured for $100,000?
nVest80:& all
My repsonse could get me shot BUT here it goes,
a) But haven’t we provided credit to the great unwashed? Spit on the Constitution, and gave wealth & prosperity to millions of Americans? While my benefactors rule the world? How much more could have we done (stolen)?
b) Politicians are not ignorant just human and greedy, thus corruptable. And if you haven’t noticed we don’t waste time “printing money”,it is blinkity blink ions, on computer screens NOW! Don’t look now, but just about everyone uses ATM’s and has direct deposit! Peolpe go to work and we place credits on an account with your name. {Go to answer (d) to find out what we do with that } You see, there is only a small % of money in greenback currency…therefore we the Kings (i mean the FED), have elliminated any chance of bank runs and delflation. There is no money to meet a BANK RUN demand, so stay home log on the internet and find your ions on account with your favorite bank.
We are all past that printing era thing..
c) Since, I am the man who presented President Nixon with the ultimatum {from my benefactors} for the US to drop{default} the gold standard once and for all, thus overnight bankrupting the United States for the 2nd time in 50 years back in the 60’s. I must admit the only option left now is “a SIGMA event” dollar revaluation. Let me explain: “YOU get less but we make you feel like you have more with things like Social Security. While my benefactors & I get much much more for fixing things for the 3rd time.”
Any more policy questions?
d) Since my friends & I “the benefactors” stole most of the known gold already, we are buying real companies, with hard assets (like private prisons & drug companies from you know who - the Government), and lending you lemmings money so we can foreclose later while you pay us an ever larger % of your labor in interest and taxes.
But your question was, ” What would I rather invest in if I only had $1 million. I would lend it out 12 times to YOU and your ilk, & if you don’t pay l’lI foreclose your property and if you committed fraud I’ll throw you into one of my prisons, either way I’ll have have the government bail us out again. You see we have the monopoly money and the gold so we make the rules.
Here’s a tip, I see another great harvest like REVCO of the 1970’s {Hillary C. was great the last time and we have timed her return campaign perfectly for the next S&Lbanking disaster}. Don’t you think?
Signed,
Pall Volk’r &friends..
Totally agree. He really only jacked up rates to save their scam, not America. The elites (aka Illuminati) have a vested interest in keeping their goose that lays golden eggs alive.
I’ll read this thread carefully tomorrow and start crafting a letter. Will pass it by you before I send it.
I would ask this. Paul, Why is the FED needed?
Great Question!
Yeah…..At the time you jacked up interest rates to the moon did you consider what it was going to do to Hundreds of Thousands of honest prudent business people who lost everthing that they had including their families…..???
It sure screwed my dad over and changed our family dynamic forever (although my parents didn’t divorce).
So maybe what the Fed should have done was lower rates to zero and kept them there for a couple of years?
Not sure what he should have done, and neither is anybody else who’s honest. The only thing I’m sure of is that the situation is so complex that anybody who thinks they understand it all and knows what the solution is, is a deluded fool. I do doubt that letting the interest rates go as high as they did was the best idea, but I’m willing to believe I’m incorrect. And I’d also like to point out that there is somewhere between twenty-x percent and 0 percent, so I don’t know why you take my comment to mean the Fed should have lowered interest rates to zero. Seems like some sort of unnecessary hyperbole. There most likely was a point between the two extremes that was “better”.
How old are you guys, Viking and scdave?
You must remember the 1970’s. I really can’t, maybe the end of them… but I do recall the economy of the US was in terrible shape at the time. Every time people turned around, they were paying more for something. That’s no way to have it…
Volcker did what had to be done. That simple.
Paul Volcker certainly made the best decision (no sarcarsm here at all). If we were on a gold standard, the same situation would have developed. The government spent too much money in the 1960s and 1970s on war and welfare. Things appeared to be as though they were getting out of hand. I was 20 years old in 1979 and remember those days very well, as I was politically very aware and read some of Ludwig Von Mises books, Murray Rothbard’s, Harry Browne’s, Howard Ruff, and Robert Ringer. How many other 20 year olds at that time had the clarity (I never did drugs) and non-conformity to agree with the libertarians who said “government is the problem?”
I was not aware at that time of what Paul Volcker was doing to fix the economy. It wasn’t until a decade later that I realized he started this cure under Jimmy Carter, not under Ronald Reagan, yet Reagan fans credit Reagan with the 80s and 90s economies. Volcker was the primary cause of the 80s and 90s boom. Reagan deserves some credit still, for deregulating the economy and coaxing the Democrat-controlled Congress to cut taxes from the 70% max down to 35%. Those acts were also very important to make America more competitive. Ironicallly Japan was supposed to be superior to the United States. I remember in 1989 when the arrogant Japanese high mucky muck said Americans spend Monday at work talking about their weekend and Friday all day at work talking about what they are going to do on the weekend. With such a smug arrogant attitude as that, it’s as if the ancient Samurai Gods punished the entire nation of Japan in the 1990s for one man’s arrogance.
“The only thing I’m sure of is that the situation is so complex that anybody who thinks they understand it all and knows what the solution is, is a deluded fool.”
There are folks who know exactly what’s going on; they’re scripting it. Others, like this hottie don’t have clue what’s going on, and don’t care either.
my earliest financial memories are Baskin Robbins going from 25 to 28c (1975), Bubble Yum going from 20 to 25c (1977?), and postage going from 13 to 15c (1978).
As Jimmy Carter said, Inflation “is many strange and mysterious things interacting in strange and mysterious ways.” BS. The mistakes were by the American people in accepting the Vietnam War and War on Poverty, just like now our problem is our acceptance of the 8 to 10 billion per month being spent on death and destruction in Iraq/Afghanistan. It’s pure insanity and anyone who thinks there aren’t economic consequences to such a twisted sense of priorities is wrong. When hyperinflation takes hold, as it inevitably will at some point, I seriously doubt that many real estate transactions will be taking place. People will be scrambling just to put food in their bellies as the value of their currency blows away in the wind.
Good evidence shows that economies with less inequality grow more than economies with greater inequality … so where’s the beef?
Yes, Soc. Sec. as implemented was kind of dumb, but most of the welfare programs represented a very small part of the Fed. budget, and most of that was spent (ie, went back into the economy) as people on the edge have needs (true needs–food, shelter, heat, clothing, soap) far exceeding their income.
The war was the true budget buster.
By less inequality, do you mean Cuba and the USSR?
Welfare costs nearly as much as wars, because welfare never ends. It also takes a sizable portion of the population and turns them into zombies that consume and do not produce. Their children turn to crime and cities are torn apart.
Welfare and wars are two things we could do without.
By less inequality, do you mean Cuba and the USSR?
Of course not, Mr. Straw Man.
We’re talking about market economies with a strong middle class.
Like Japan post WWII-1990 (Japan has among the smallest economic inequality of developed countries). Granted they haven’t grown much lately, but that has nothing to do with equality issues.
Switzerland over the past 100 years.
Singapore over the last few decades. Ditto South Korea and Ireland. All have achieved strong economic growth while reducing inequality.
And last but not least, the US from 1945-1980, which experienced the greatest economic growth and growth in equality of any country in history. Until you-know-who took over.
Baloney.
Japan = monoculture
Switzerland = monoculture
Singapore = monoculture
South Korea = monoculture
Ireland = monoculture (until very recent economic boom)
USA 1945 to 1980 = monoculture (as compared to today)
Getting everyone with the same, or nearly so, background and values on the same page economically is a piece of cake compared to the great “experiment” that is the United States.
Give me a break.
“The mistakes were by the American people in accepting the Vietnam War and War on Poverty, just like now our problem is our acceptance of the 8 to 10 billion per month being spent on death and destruction in Iraq/Afghanistan.”
Good call Bubbleviewer! However, we are able to eventually pull-out of military efforts, but the War on Poverty will never end, and past efforts have simply increased the number of people in dependency.
I have no problem with us going to Afghanistan to fight al Qaeda and their allies. The Iraq situation in Gulf War I & II were not needed and only destabilized the region. Saddam was not an enemy of ours until Bush Sr decided to help out his oil buddies in Kuwait.
In 1906, before the FED, J.P Morgan and other bankers had to bail out the NYSE because they suddenly ran out of call money, thus nobody had money to buy stocks; Jessie Livermore made a fortune shorting and was told to stop by Morgan’s representitives because he was about to ruin the country.
These were the seed that eventually led to the FED; never again did anyone want to depend on a J.P Morgan to bail out the system.
FWIW.
yep comrad “techie”, sounds like you have the party MYTH down! …Unfortunately you are missing a few facts, because it was the banking cartel that planned the Fraud on the American public & Morgan was principal ring leader in the creation of the FED.
One only has to analized the results to determine that they are the exact opposite of the state goals of Congress at the time, {a govt. institution would disarm & harness the “money trusts”}
Harold Kellock biographer of Paul M Warburg, writes,” It was a bloodless revolution…..he imposed his idea on a nation of 1 hundred million people”.
Sutton, a research fellow at the Hoover Institute for War Revolution & Peace writes,” Warburgs revolutionay idea to get the American people to GO TO WORK for (read -” be slaves for “) Wall Street was astonishingly simple…. Even today ..acedemic theorticians cover their blackboards with meaningless equations….. about inflation etc.
Well it’s a job creation gimmick for economists.
Was the Fed funds rate negative, after adjusting for inflation, when Volcker took over? We might never know because nobody seemed to have a handle on it. IMO, the people who were hurt from the rate increases should look to the reason for the inflation in the first place, not the medicine.
I agree. Those rates went up because they had to. I was in college when inflation hit. The price of things like milk and eggs doubled overnight. My roommates and I went from a varied diet to about zero. It was very real.
It’s absolutely not true that the rate jump was bad across the board. I did not lose my teaching job, nor did anybody else I knew lose their job during that period and the jump in rates was a huge boon to savers.
Try 18% on a CD. What we have now is a War on Savers. Whatever may happen to end that, I’m all for it.
Honestly, I know I’m an extremist when it comes to saving, but the past 10 years have been an all-out credit pump and completely anti saving.
If rates need to go to 20%, put ‘em there. Not everybody will get hurt from that. Some people will benefit- a LOT.
Just as not everyone has been hurt by the credit binge, not everyone would be hurt by a savings binge either.
It’s a shame this country cannot find a balance between saving and credit. But apparently it cannot and must go from one extreme to the other. Time for the savings end of the extreme.
Top three things local and county government representatives can do to promote housing market stability under various assumptions of Fed actions?
keep gov and the fed out of it - they create more problems than the markets
For once, I actually agree with Flat.
Keep the govt out of it, let the lenders and borrowers lose what they signed up to lose.
However, the govt should ensure that there is no fraud in these transactions. Fraudsters should pay a fine 3X what they “stole” from the transactions.
3X what they stole…
How… biblical.
Went to an open house today. We had no interest in going to an open house today… but when we saw that many home for sale on one block… we had to grab the fliers.
Quite a few business people are going to lose their shirts in this one. The shear number of new construction homes hitting the market in the south bay is pure madness. Just as the predominant work force has been priced out…
Got popcorn?
Neil
Very funny. I suppose that Fannie Mae and Freddie Mac are not government backed institutions ? Government is a real estate octopus. When all these unpaid debts go sour and rot the banking system, you can bet all your savings that it’s Uncle Sam, more specifically you the taxpayer, that will be footing the bill. Expect a mega mega remake of the S & L bailout.
Send him all the questions you want: That’s all he has to say is, for you to be able to read and understand what he has already said;
Some thing like;>>> “”I don’t know whether it’ll end with a wimper or a bang”
Of course, he doesn’t know the future, nobody does. What we could ask: Assuming that housing prices decrease on a broad front (as we believe), what is your best-case scenario for the American economy and what is your worst-case? What could the FED realistically contribute to achieve the former and to avoid the latter?
What I would like to know out of personal curiosity - why did hew not continue as chairmen of the FED after 1987? The economy wasn’t bad, previous chairmen had served longer, and, judging from today, Volcker’s health and mind were not compromised then.
Of course, he doesn’t know the future, nobody does. What we could ask: Assuming that housing prices decrease on a broad front (as we believe), what is your best-case scenario for the American economy and what is your worst-case? What could the FED realistically contribute to achieve the former and to avoid the latter?
What I would like to know out of personal curiosity - why did he not continue as chairmen of the FED after 1987? The economy wasn’t bad, previous chairmen had served longer, and, judging from today, Volcker’s health and mind were not compromised then.
Is Ben Bernanke going to follow in Miller’s footsteps or yours (Volcker’s)?
Also of note, Calculated Risk and his blog would probably be interested in this topic. CR has posted a number of Volcker topics.
How did he get the balls to jack up rates the way that he did to quash inflation and ignore the political outcry that came?
Does he feel the situation today warrant similar action?
More importantly, how does he walk with such huge ones?
Does Mr. Volcker agree with the inflation assessments of the current Fed? I don’t mean simply whether the “core inflation” rate, as it is called, is calculated appropriately, but rather whether this “core inflation” is even the appropriate measure to be using. Since, as a real phenomenon, inflation can feed on itself, it is important to know what the “real” inflation rate is, not just keep an eye on some constructed guage of it. Otherwise, the real inflation risks getting out of control.
One of the questions should be: Are we asking the right questions?
‘Paul Volcker, who halted a wage and price spiral as Federal Reserve chairman between 1979 and 1987, said he’s worried both about inflation and pressure on the U.S. central bank to not do anything about it.’
‘I am a little bit more worried about inflation,’ said Volcker. ‘ I am impressed by the degree of pressure, if that is the right word, psychological pressure, political pressure, there is not to do anything about it.’
Scary, really.
Let’s hope BB eventually has balls of steel, too.
I doubt it. Every time I’ve seen him, his voice is cracking, head looks about to break into a sweat, you can almost see him visibly shaking. And this is since his very first appearance last year.
He’s always struck me as a huge, nervous wuss. Unfortunately.
Seeing him being lectured by the REIC/politicians last year was insanity at it’s finest. The hue and cry was “the homebuilders need more access to the Fed”. anybody remember that? Reply from some of the homebuilders? “Oh we’ve had plenty of access, the Fed’s being very nice to us”. (rough quote. lol. but sickening at the same time)
I will be very surprised if Bernanke suddenly gets brave. He may have to be replaced instead. After inflation goes bonkers.
Slightly rephrased from a prior post:
It appears now that the housing atm is drying up, people are going back to credit cards to keep themselves afloat:
http://www.federalreserve.gov/releases/g19/current/
Considering the subprime ‘carnage’ happening now, how long do yu think banks can also continue lending to risky credit-card customers (their formerly ‘most profitable’ customers) and what are the implications to the economy should lenders tighten up on credit-card customers?
It all comes down to making people, financial slaves.
A serf might be a better word.
Gee, that’s really going to up the chances for a response. How about a question instead of an attack?
Why, over the years, has the Fed been so eager for people to go into debt?
Excellent question. Anyone?
More wealth in the hands of fewer players. Notice how all the trust babies got special legislation passed to keep their trusts from dissolving with the deaths of the youngest members? Scary, really.
Yes, good question, but we know the answer already. The government’s debt is as out of control as John Q Public’s debt. So the government announcing J Q Public is in deep debt is like the pot calling the kettle black.
I think there is some logic to this, albeit logic I don’t agree with. I think the debt machine in the US is an effective engine of economic growth. Not only do you get the benefit of consumption and production “borrowed from the future”, but the stress levels caused by debt are useful for keeping people working hard. When you have an obligation to pay every month, it tends to make you “more creative” or at least put more effort into finding out how you can make more $$$ to make the payment.
That said, I don’t personally agree with the sentiment. I think that although it generates economic growth, it’s growth that isn’t necessarily making people happier, as they have to cope with higher stress levels about making their debt service payments. They get their thingies, so if you measure happiness in units of thingies, then it’s OK. But it comes at a cost of a sense of security.
It’s because the banks/lenders make huge amounts of money off of the interest payments of debtors. Right?
I would also ask Mr Volcker if debt is the only way to prop up our economy?
I will leave it to all of you to propose questions for Volker. I would thank him for having the guts to buck political pressure and do what was necessary when he led the FED. It is unfortunately that Greenspan lacked that courage.
1. Are we headed down the same S & L track or worse?
2. If real estate starts a deflationary spiral like Japan, what would you do as Fed chief and what do you think BB is likely to do?
3. Did unlce Al keep rates too low for too long?
4. What should we do about the twin deficits?
I like the questions 1, 2, and 4, especially 1, because it connects and compares the current events with well-known crashes of the past. Question 3, however, is only about the past and reminds me of Monday-morning-quarterbacking.
Over the past few years, the US dollar has taken quite a tumble. How does defending the dollar figure into past/current Fed policy?
What does the huge run-up in home prices say about the Fed’s duty toward price stability?
how is housing inflation so different from core inflation? if houses were 300k and now 700k would you not say the worst is here and that savers have lost. is feb. 23 2007 “black friday” for credit?
Does the Federal Reserve control banks, or is it the other way around?
It’s the other way around. The banks control the FED and the politicians. “We the people at Golman Sachs.” You mean you still believe that democracy prevails. Nice illusion.
With other nations moving away from the dollar, what will that do to interest rates?
Well. Very simple. Much much higher interest rates.
Volcker has been sounding the alarm for a couple of years:
http://news-service.stanford.edu/news/2005/february16/summit-021605.html
Do you think inflation is a monetary phenomenon, or only the increase in the price of a basket of roughly 200 goods and services?
Do you think that the price of stocks, bonds, and real estate constitutes inflation? If not, why? Because these are investments? So if I am new to the job market and want to invest for the future, and my wages have not kept up with the increase in these three areas, how can I possibly have a decent shot to purchase these much inflated investment vehicles to offset inflated prices of the basket of 200 goods and services?
If you do feel they constitute inflation, why aren’t they included in the calculation of inflation?
I would love to hear Congress, who chartered the Fed, ask these questions during testimony. Then we’d have some transparency, and could make monetary decisions according to what beliefs our Central Bank holds.
inflation is when too much money chases too few goods or when people are willing to pay ever higher prices
Yes, but where is the money coming from?
“But where is the money coming from ?”
Answer. From nowhere. You rev up the printing press or the computer. Press on a button and whammo! a gizillion new digits of new credit creation. Wonder what’s happening to the M3 ?
Will China make us one of their providences since we’ll never be able to payoff our national debt?? Should we start learning Chinese??
you must have been too young to watch the we will become a japaneese economic colony on PBS back around 1987
Although I was young at the time, I also believed the Japanese would overtake the U.S. in the global economy.
Guess we need to ask why that didn’t happen. Is it because the U.S. was superior to Japan, or because inflation in Japan caused the momentum to shift to other countries with more production capacity and cheaper wages (like Taiwan/China, Indonesia, Mexico, etc.)?
harry dent says it’s because of japaneese demographics where a huge percentage of the population went past the maximum spending age and the next generation was less people
In the end Japan is not a real capitalist country. Their one party rule had some crazy rules, too many things are socialized, the kereitsu system locks out young companies with better ways of doing things and a variety of other things.
The US is more flexible where bad US investments are closed and written off and unlike japan bad companies are closed by the banks instead of giving them loans. imagine of all the useless dot coms were kept alive by constant loans. it’s not an accident that the lower the union membership rate gets the better our country becomes.
it seems that japaneese companies are only very successful in the US. Toyota, Honda, Sony. the playstation was designed in the US and it’s 90% of sony’s profits. toyota and honda are doing amazing things for the us auto industry.
it’s not an accident that the lower the union membership rate gets the better our country becomes.
—————————-
Not sure where you get the idea that our country is better today than back in the unions’ heyday.
I could show you many instances where that is definitely not the case.
There was no competition back in the union’s heyday. The world was still recovering from WWII. Unions are too inflexible in today’s dynamic economy. I do 20 different jobs at work. If I was in a union, then I wouldn’t be allowed to do 19 of those jobs.
I remember an old article about a wheat farmer in the mid west. His neighbors were pissed at him for selling ag acerage to the Japanese (for huge prices, then leasing it back at market rates to grow wheat). He laughed and said “My family has been farming wheat here for 3 generations and that is all this land is good for. Who do you think knows more about what this land is worth? A RE broker in Japan selling this to investors or me?”.
Just like Trump sellin Madison square garden to the Japanese. He got a huge commission and a small stake in it for him to manage it. RE collapsed and in a few years they paid him millions to take it off their hands.
The same thing is going to happen to the Chinese holding all this US$ bonds. Much of it is going delinquent the rest is at 5% with real inflation running in excess of 10% (unless you exclude energy, healthcare, tuition, insurance, taxes, edible food, ammunition and hedonically adjust everything else—-just like the gov does for the CPI).
You do the math, what does is the real cost to the Gov to sell a 5% 10yr bond and then expand the money supply faster than 10%/yr. Hmmm, how about the gov makes 5% compounded…
The big question all the big picture guys are asking is if other markets than the US can absord the worlds consumer production enough to sustain the world economy. If so, the US is in for some very real pain (Depression type stuff) if not the pain will be less severe or just put off till a later date (most likely).
Mandarin is the official name of the language in China.
54,000 ideograms to learn. Good luck. “May you live very interesting times.” It’s the way some chineeses. It’s a curse disguised in a wish.
Cantonese is another choice, but it’s a Hong Kong language. My ex-girlfriend from Hong Kong speaks it. I learned some of it - I cannot write in it but this sounds like “no sept tang yupti quan tone moi”
Mandarin is the official language of China. Cantonese was big in Hong Kong and Canton Province and some of the Chinatowns around the world (a movers and shakers commerce language so to speak).
But for decades now the central government has been pushing hard for a unified spoken language and Mandarin is it.
A year before the Chinese took Hong Kong back, all the PA announcements in Hong Kong (subways, busses, etc.) suddenly changed from Enlish and Cantonese to English and Mandarin, even though very few people there understood Mandarin! And then all of a sudden, people in H.K. were starting to learn Mandarin.
Back on this continent, on one of my frequent trips to Vancouver BC, all of a sudden there were signs popping up everywhere, written in Chinese, for Mandarin lessons for Cantonese speakers.
Learn Mandarin and you can get by all over China, Taiwan, Tibet, Singapore, etc. Learn Cantonese and you can get round Canton Province probably forever and H.K. for another couple decades.
My question for Mr. Volker: can you, from a macroeconomic perspective, characterize the disparity between average house prices and wage/salary growth in this latest housing price run-up, particularly as regards the dynamic of an effectively forced decreased spending on other consumer goods in order to avoid mortgage default? Any other discussion of what other related factors bear importance on this topic would also be appreciated.
I would ask this, “The argument I have heard for why we are not experiencing inflation is that wages have not gone up. Is it possible that real wages are falling and we are in a period of inflation?”
Stagnation.
I think we’ve been in a stagflationary period for at least 20 years, but it’s been hidden by the explosion in the credit markets (since 1982).
Meant stagflation, sorry!
OT a bit but why does everyone keep saying the dollar is falling, tumbling etc. If you look at a reasonably long term chart for the euro or pound the dollar has not been doing all that badly. In fact looking at the charts the its really only back to where it was in the 90s. I say this as someone who has 90% of his savings in sterling and would love to see the dollar fall some more.
Take a look at a monthly time scale chart for some of the currencies at
http://www.dailyfx.com/charts/Chart.html
I don’t think the dollar will fall hard (collapse) unless we have some real wage inflation as otherwise a very low dollar will give the US too big an advantage over the other G8 countries.
You can’t tell the dollar is losing value by looking at the euro and pound. They are all falling together relative to real money - gold.
The Europeans have their own housing bubbles to feed.
Its like you and 2 buddies jump off a skyscraper. Just because you can still see eye to eye with each other doesn’t mean you aren’t falling.
One requests a prediction, “I would love to know where he thinks the rates should be right now/near future and why.”
*******
Me, too.
I’d ask Dr. Volcker this: “What does your colleague Dr. Greenspan smoke, and where can I get some for my own use?”
My question……..
Under what pretense (and when) will the dollar be allowed to collapse in order to introduce the Amero?
Ask Volker this:
Does the rampant superficial and often erroneous financial “analysis” everpresent on blogs and websites add to societal understanding (on net) or detract from it ?
On another note, I’d be interested to know how many of the readers and contributors truly understand the difference between nominal and real rates of interest (or return).
Even though there seem to be alot of knowledgeable contributors here, I’d guess it’s pretty low.
regards, john.
What’s the matter John, have a few houses to sell? Save your sanctimony for others…it’s not wanted or needed here.
Why doesn’t the government admit that without having its currency backed by gold, it has powers beyond belief to turn every one of us into serfs by merely printing currency at a faster and faster rate?
I would like to know if he believes the quality of the data being furnished to the current fed is more reliable or less reliable than what he worked with during his term, and in the same vein what his thoughts about discontinuing M3 reporting means for the nation.
Discontinuing the M3 says it all. It’s means.
“Liar liar, pants on fire.”
Of course it is more accurate now.
Shit arn’t the going to start stating the CPI to the third decimal place soon. 3.472% vs just the highly ambigious 3.47%. I mean with that sort of accuracy how can you even think it is not much more accurate?
My question: Where do you have your money invested? Stocks, bonds, gold, euros?
A lot of red cents and nickels.
Silver is just soo cheap that I really prefer it to gold or platinum. The rule is to own a asset that cannot be printed in infinite quantity. By all means, stay away from bonds ! These pieces of paper are even more in a bubble state than real estate. Avoid inflation indexed bonds too. They are a complete fraud because they are adjusted to phony CPI rate. Canadian oil and gas and some mining stocks are still a screaming bargain. Buy cheap companies with loads and loads of free cash flow, cash and hard assets. Avoid the NASDAQ and all that high tech junk. Naturally no real estate.
Junior mining is still quite cheap if you expect gold going to 1,000$ or even 2,000$ in the next five years, which I expect.
WHAT THE HELL DO YOU EXPECT PAUL VOLKER TO DO??
Apologize for working for the Federal Reserve?? Which is NOW in all probablity paying his pension??? I mean, get serious..This guy is a polititican also!!!!
I would leave it to others to ask questions. I would tell Volker “thank you for having the guts to go against the politicians”.
I sure wish Greenspan had displayed the same level of courage.
We owe the chinese about a trillion dollars. What was Trumps answer to debt..if you owe the bank more than they can absorb in losses, you own the bank. Maybe will end up owning China?
boxers or briefs?
Hope it’s not too late to add my question:
As we all know, the Fed was created to protect the US financial marketplace. In light of the recent and unprecedented growth in largely unregulated financial markets ( i.e derivatives and hedge funds), how can the Fed react to insure the future financial stablity of our country ?