Allowing Excess To Build Up
A report from the Jackson Hole News & Guide. “In an unprecedented move for the Federal Reserve Bank, a group of 10 high-ranking officials met with more than 120 activists Thursday evening at Jackson Lake Lodge, providing inspiration to local organizers. The normally tight-lipped Fed fielded questions regarding a lack of diversity among the leadership and racial disparities within the economy. Officials included Stanley Fischer, vice-chairman of the board of governors, as well as Gov. Lael Brainard and eight of the 12 district presidents.”
“The face-to-face was organized by a wing of the Center for Public Democracy, calling itself Fed Up. Though mostly comprised of community organizations from around the country, many of which deal with far worse unemployment rates than Teton County, their plight rang true in Jackson Hole, recently ranked the most unequal metropolitan area in the nation.”
“While officials from the Federal Reserve said they sympathize with those still struggling, they said raising interest rates will help stave off another recession by reducing the potential for inflation and safeguarding the long-term stability of the economy. ‘If you look at those periods [with very low unemployment rates] we have a recession shading shortly thereafter,’ said Eric Rosengren, president of the Boston Federal Reserve Bank. ‘The reason is because we were overshooting during several of those periods.’”
“‘My goal,’ he said, ‘is to actually make sure we do get maximum employment, and one of the ways you do get maximum employment is to make sure you don’t allow excess to build up to the point that you actually have another recession, which hurts everybody in the room, including the populations you’re most concerned with.’”
From CNBC. “As jittery businesses and tight-fisted governments cut spending this spring, American consumers went shopping. That helped keep the U.S. economy moving ahead, but just barely. In a closely watched speech Friday, Fed Chair Janet Yellen offered a fairly upbeat assessment of the latest data and other recent reports, pointing to the strength in consumer spending despite the overall weakness in GDP. She also noted that the job market continues to improve.”
“‘In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,’ Yellen said.”
“The government’s latest read on the gross domestic product pegged the second-quarter advance at just 1.1 percent, a bit slower than the original estimate reported last month. Most of the weakness is coming from big cuts in spending and investment by businesses — down 9.7 percent in the second quarter. That belt-tightening by businesses on investment in new equipment and buildings could be a sign of a deeper slowdown ahead, according to economists at Credit Suisse.”
“‘Extended periods of falling real business investment are strongly associated with U.S. recessions,’ they wrote in a note to clients. ‘That’s why the recent three consecutive quarters of contraction are concerning.’”
“The latest data also showed that after-tax corporate profits fell at a 2.4 percent rate last quarter after rising an 8.1 percent pace in the first quarter. Weaker profits could make it harder for businesses to limit an anticipated rebound in business spending. Businesses have also been slashing inventories, which dropped by $12.4 billion in the second quarter. The drop in inventories lopped 1.3 percent from GDP growth, the biggest drag in more than two years. It was the fifth straight quarter that inventories weighed on output.”
“Thanks to a rebound in the housing market, the construction industry has enjoyed strong gains, with overall output up 29 percent over the last three years, based on the latest GDP numbers. Other big gainers include hospitality and health-care companies. The biggest industry slump has come from the mining sector, where the plunge in oil prices has produced a 50 percent contraction over the last three years, forcing sharp cutbacks in hiring.”
From MarketWatch. “The U.S. economy, by some measures, has recovered from the Great Recession: The unemployment rate is only half what it was at the worst, real gross domestic product is about 10% larger than the previous peak, and personal wealth has risen by more than $20 trillion as the stock market and the housing market have bounced back. But everyone knows the recovery has been uneven.”
“Most troubling, there’s still very little investment in the buildings, equipment and intellectual property that we ought to be putting into place today as the foundation of our prosperity tomorrow. Who’s preparing the United States for the 21st century? Nobody, really. Not the 22 million private businesses, not the 118 million households, and not the 90,000 state, local or federal government agencies.”
“Since the recession, investments have fallen sharply, and they haven’t gotten back up again. It seems that everyone is still scarred by the Great Recession, and by the collapse of asset bubbles in 2000 and 2006.”
“Gross domestic investment totaled about $3.6 trillion in the second quarter of 2016, about 20% of gross domestic product. That may seem a large sum, but it’s the lowest share of GDP, except during recessions, since 1947. And, unfortunately, even that weak number grossly exaggerates the actual contribution of this investment in creating new productive capacity for the economy. Why is the figure exaggerated? Because these data are reported on a gross basis, without subtracting the depreciation of capital assets such as equipment, buildings, software and the like.”
“After you subtract the capital that’s used up, net investment totaled only about $750 billion in the second quarter, or 4% of GDP, about half of the average over the post-war period. In fact, net investment has been running at the lowest rates since the Great Depression of the 1930s, suggesting that U.S. investment itself is in a depression.”
“Business fixed investment has fallen for three quarters in a row, the first time that’s happened outside of a recession or its immediate aftermath since the mid-1980s. Investments in oil-drilling equipment and structures tanked in 2015 when the price of oil fell, and haven’t recovered. Investments in information-processing equipment (such as computers and semiconductors) have risen at the slowest pace in the post-World War II era.”
“Why aren’t businesses investing more? Because there is already too much productive capacity in the world for the level of demand. Prices are generally falling or growing only tepidly, especially for manufactured goods. Vacancy rates for stores and offices are high. There is no great need to invest in high-tech equipment such as computers or chips because there haven’t been any great leaps forward recently. The old equipment works fine. (I’m using a six-year-old computer to write this.)”
“The business investment story is well-known, but fewer people are aware that investment by households and government agencies is equally bleak, but for different reasons. What do households invest in? Mostly real estate. After the housing bubble burst about a decade ago, home buyers became more cautious. Few buyers believe today that real estate is a sure-fire way to double or triple their money. Slower population growth is also working to reduce the need for additional housing units.”
“As a result, net investment by the household sector was just 1.3% of GDP in the second quarter, about half of the post-war average. New construction will probably increase modestly in coming years, but no one expects the same level we saw in the bubble years, or in the 1950s and 1970s when millions of housing units were built each year.”
“We have an economy that’s underperforming, but no one is willing or able to invest the sums needed to build the offices, factories, mines, computers, machinery, roads and airports we’ll need in the future. Business leaders don’t see a quick payoff in long-term investments, and public officials can’t fill the gap because the public thinks austerity now is better than growth tomorrow. Somewhere, someone needs to find some courage, or we’ll be doomed to decades of disappointing growth.”
Re-posting this from last night:
‘Central bankers in charge of the vast bulk of the world’s economy delved deep into the weeds of money markets and interest rates over a three-day conference here, and emerged with a common plea to their colleagues in the rest of government: please help.’
‘Without that, they said, it would be hard to convince markets and households that things will get better, and encourage the shift in mood many economists feel are needed to improve economic performance worldwide.’
‘ECB executive board member Benoit Coeure said the bank was working hard to prevent public expectations about inflation from becoming entrenched “on either side” - neither too high nor too low. But the slow pace of economic reform among European governments, he said, was damaging the effort.’
‘One of the central worries is that households and businesses have become so cautious and set in their outlooks - expecting little growth and little inflation - that they do not respond in expected ways to the efforts central banks have made. That has included flooding the financial system with cash, and voicing a steady commitment to their inflation targets in an effort to make people believe they will be met.’
‘Kuroda acknowledged that household expectations have not moved, and said the BOJ was prepared to continue its battle to figure out how to shift them. In modern monetary theory, households and business expectations are felt to play a defining role in spending and investment decisions, and thus in shaping inflation and growth.’
“Japanese inflation dynamics remain vulnerable,” Kuroda said. “It could be that long-term inflation expectations are yet to be anchored in Japan” at the bank’s 2 percent target.’
‘In a lunch address by Princeton University economist Christopher Sims, policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future. “Fiscal expansion can replace ineffective monetary policy at the zero lower bound,” Sims said. “It requires deficits aimed at, and conditioned on, generating inflation. The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”
‘It was not clear whether such ideas will catch on. But there was a broad sense here that the other side of government may need to up its game.’
“The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”
Seems like a dangerous strategy to rely on monetary fooling games as the source of future economic growth.
There are ten tractors in an economy, represented by 100 dollars, the total currency of that village economy. I print up another 100 dollars and now there are 200 dollars. But there are still only 10 tractors.
However, if I give my friend 50 dollars, it’s much easier for him to buy a tractor.
How the wealth is redistributed is almost like magic - no one actually loses any currency. That seems to me to be a good description of Fed policy.
Thew way it is done is to lend your friend the $50. Sure it is easier for him to buy a tractor. You get the skim forever.
This is an incredibly apt metaphor for what is happening in Europe, where companies are now apparently issuing new bonds specifically for the ECB to buy up.
Of course, the ECB decides which of its friends get the new, free money.
“…companies are now apparently issuing new bonds specifically for the ECB to buy up.”
If a private citizen cooked up such a scheme and got caught, they would face a long prison sentence.
If a central banking coalition does it, then by definition it is legal.
“However, if I give my friend 50 dollars, it’s much easier for him to buy a tractor.”
That sounds more like a wealth redistribution scheme than a recipe for economic growth.
Depends on if he plans on using the tractor to farm, or to rent it out, or to use it as collateral on a 20/1 leveraged bank loan.
Hey, it worked for Chinese copper importers……
Of _course_ he will rent the tractors out! These are rent-seekers funded by the Fed that we’re talking about!
And note that with $50 to spend in a $100 economy (each tractor is worth $10), the “friend” will be able to own a big part of the market for tractor rentals, overnight.
So it is with QE.
“The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”
I thought we crossed that bridge October 22, 1981.
Only Yesterday—-How The Federal Debt Went From $1 Trillion To $18 Trillion in 33 Years
by David Stockman • December 5, 2014
In the great fiscal scheme of things, October 22, 1981 seems like only yesterday. That’s the day the US public debt crossed the $1 trillion mark for the first time. It had taken the nation 74,984 days to get there (205 years). What prompts this reflection is that just a few days ago the national debt breached the $18 trillion mark; and the last trillion was added in hardly 365 days.
http://davidstockmanscontracorner.com/only-yesterday-how-the-federal-debt-went-from-1-trillion-to-18-trillion-in-33-years/ - 101k -
“Crowding out and high consumer price inflation never occurred because the Greenspan Fed launched the entire world economy down a path of massive credit expansion and financialization—–an insidious process engineered by the concerted action of all the major central banks. That convoy of money printers generated large but dangerous central bank “vaults” where Uncle Sam’s debt has been temporarily sequestered.
It was the equivalent of a monetary roach motel: the bonds went in, but they never came out. What happened in practical economic terms is that central bank fiat credit was substituted for real savings from privately earned incomes in the financing of public debt.”
“I thought we crossed that bridge October 22, 1981.”
Thanks to a bad case of financial amnesia, we get to cross the same bridge over and over and over again!
We really do have to end the FED. Enough is enuf.
Hope you are not relying on Fed-UP crowd to help you in that matter.
When 95% of the ‘Murican electorate bend over for Republicrat duopoly politicians who are in the bag for the Wall Street-Federal Reserve Looting Syndicate, we are nowhere near ending the Fed.
These political races have turned into reality tv. Seems all they do is try and expose the other person and their faults.
The other night I stopped on cnn for a minute and they were ripping on trump about discriminating at some building.
Then I flipped to fox and they were ripping on clinton and had julian assange on talking about some dirt he had.
I saw a tv add by clinton the other day about creating millions of jobs and just had to laugh.
They did create millions of jobs.
In China, Mexico, etc.
Or, that the jobs created in the US were all low paying McJobs.
Everone should know by now that the Clintons are masters of “weasel-words”, and parsing the definition of “is”.
What exactly is the definition of “is”? I guess it depends on what “be” is.
is
Definition of is
present 3d singular of be
dialect present 1st & 2d singular of be
dialect present plural of be
“These political races have turned into reality tv.”
We are lucky to have a reality TV star for one of the candidates. He has instant cred with Joe Six-pack and TV wrastling fans.
‘While officials from the Federal Reserve said they sympathize with those still struggling, they said raising interest rates will help stave off another recession by reducing the potential for inflation and safeguarding the long-term stability of the economy. ‘If you look at those periods [with very low unemployment rates] we have a recession shading shortly thereafter,’ said Eric Rosengren, president of the Boston Federal Reserve Bank. ‘The reason is because we were overshooting during several of those periods.’
‘raising interest rates will help stave off another recession’
Recessions happen periodically. Nothing can stop them in a fiat money business cycle.
‘a wing of the Center for Public Democracy, calling itself Fed Up’
CPD is funded primarily by a Facebook founder. (Not Schmuckerberg). Their big deal is the Fed shouldn’t raise rates. Here is the Fed saying, golly people we have to raise rates or you’ll be eating gruel.
‘another recession, which hurts everybody in the room’
We care about the small people:
https://m.youtube.com/watch?v=th3LtLx0IEM
Asset inflation is never a problem.
But God forbid that expectations of wage inflation get into J6P’s pointy little head. Can’t let that happen, so that kind of inflation needs to be crushed.
And how soon we forget why the “official” unemployment rate is so low. Figures don’t lie, but liars figure. Just add all those people not”officially” counted as being unemployed anymore, and tell me how your “official” number looks then.
In the meantime, new inefficiencies in US business are stacking up. S##t-canning your old guys/experienced help and replacing them with low wage newbies continues to lead to more “can’t find experienced help” stories. What isn’t reported is the exceptionally high rate of screwups/effed up projects/rework caused when the low wage newbies get in over their heads.
The problem gets worse when you find out how few successful foremen/supervisors/ project managers are out there. These positions need to be filled by someone, so they are also going to low experience newbies.
OTOH, companies will be able to pass the cost of these effups along to their customers, because they don’t have anyone that knows how to manage projects either.
(The -fixr is finding himself being called more and more by people trying to sort out these projects. Not much to salvage after the fact. All I can tell them about are the glaringly obvious eff ups.
Seems like the business rule is “robbing Peter to pay Paul is okay, as long as you can send Peter’s bill to someone else”
“Asset inflation is never a problem.”
Just don’t call it ‘inflation.’ It’s ‘wealth effects’!
“find some courage, or we’ll be doomed to decades of disappointing growth.”
the “growth” thing isn’t always helpful. Past debt fueled growth already guarantees decades of disappointment ahead.
‘Why aren’t businesses investing more? Because there is already too much productive capacity in the world for the level of demand. Prices are generally falling or growing only tepidly, especially for manufactured goods. Vacancy rates for stores and offices are high.’
Look at the graph for construction at the CNBC link. It’s booming and we know what’s booming.
‘there is already too much productive capacity in the world’
Que Krugman with a phony space alien invasion.
In a way there is too much capacity. Every third world country cranked up capacity, in the hope that “rich” first worlders will buy everything they made. Everyone wants to be an export driven economy, selling stuff to us. The problem with that plan is that:
1) First worlders aren’t all that rich. This was painfully apparent during my recent trip to Central Europe. While it might be part of the EU, wages there are comparable to those in your better 3rd world countries.
and 2) There aren’t all that many first worlders.
But the EU has freer hc
We don’t and half of our population are lucky duckies, so we aren’t doing all that much better.
It reminds of me that accidental comedian from India: “There aren’t enough homeless billionaires to live in the houses were built for them.” It’s not too far off from what happened with apartments here in the US. Everyone built Grade A, hoping to attract the few people who were rich people to afford them but didn’t want to buy.
Houses are no different. Sucks for rental apartments because you can’t mortgage them.
“‘My goal,’ he said, ‘is to actually make sure we do get maximum employment, and one of the ways you do get maximum employment is to make sure you don’t allow excess to build up to the point that you actually have another recession, which hurts everybody in the room, including the populations you’re most concerned with.’”
What about the excesses we are seeing in the housing market, such as unprecedented rates of price appreciation relative to tepid income growth in many markets? Won’t it potentially hurt the economy when the second wave of housing bubble collapse eventually washes through?
‘What about the excesses we are seeing in the housing market’
This wealth effect idea is nuts.
‘Central banks may do more harm than good, says head of India’s central bank’
“A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan
Won’t it potentially hurt the economy when the second wave of housing bubble collapse eventually washes through?
Ah, but it won’t hurt the investment banks the next time around…
See, thing are going right on plan.
Say what you will about slavery. At least they had “maximum employment”.
And they dwelt in a $500K McMansion up until when they lost their McJob…
“The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”
WTF does this mean exactly? Future inflation?
As I understand it there are really two types of inflation.
Inflation from creating more money thus a lower value thus prices generally go up. Something generally has high value because it is scarce and low in supply.
Inflation from natural supply and demand forces. If there is more demand for something than supply, prices generally go up.
So future inflation here basically means printing more money to pay off old debts?
IMO the fundamental flaw is QE and easy money are deflationary.
I don’t think anyone knows how this will play out in the long run.
First deflationary then Inflationary? That’s my guess and dollar collapse will be the end result. When will that happen? It’s anybody’s guess; 2 yrs or 20 yrs.
‘When will that happen?’
A while back I decided it’s more important to understand what is happening now than to predict the future. If you look at the Friday post, all of those falling and oversupplied markets are off of a historic boom.
The big thinkers at Jackson Hole seem to have missed this detail:
QE => Rate suppression => Artificial asset price inflation =>
Overinvestment => Overcapacity => Deflation
I guess you could look at it that way. Can you explain what your thinking?
The way I interpret that is that in the long run the demand from the stimulus will eventually run out and prices will fall?
I think that’s why peter schiff said “QE is like a roach motel, once your in you cant get out”.
That is the problem the FED finds itself in right now. They don’t want the pain.
When this guy talks about relying on future inflation to pay the bills now it seems to be two outomes.
1. It means future currency supply
2. The dollar would become more valuable due to an increase in demand over supply. History has shown that is hasn’t been the case.
Somehow some people think that prices just naturally go up over time.
“Somehow some people think that prices just naturally go up over time.”
But not everyone agrees.
I try to stay out of politics and policy too much, and this may not make sense at all. But sometimes I wonder if our traditionally loose immigration and look-the-other-way situations, is the only way they think they can ‘pick up the slack’ from all this over-investment and over-capacity. What do most poor countries have the most? People. Perhaps if you bring them here, you can turn them into nice little consumers and they will soak it up, and maybe ignite some more of the inflation they want.
It does seem like we’re caught between the forces of inflation and deflation, at different times in different spaces, sometimes overlapping to different degrees. It confuses me. It’s almost like the Fed is trying their hardest with their air-pump trying to inflate the balloon, but the balloon has some pin-holes in it, and so it keeps deflating at the same time, and it’s just back-and-forth trying to keep it all going.
I don’t know if there will be a single end-game, total hyperinflation or total deflation. Perhaps one could structure their finance to protect against both “final outcomes”. Maybe 50% cash, 50% gold. But then again, there may not be one of those “final outcomes” but instead something nobody can predict.
I sometimes think of our economy kind of like a star in space.
Stars are constantly trying to explode because they are working real hard fusing elements together and releasing huge amounts of energy in the process. (inflationary force)
At the same time, their immense gravity keeps that explosion contained. (deflationary force).
The two opposing forces result in a perfect balance — a stable star. I think that is what the Fed is trying to achieve, a perfect balance between these two forces.
But nothing lasts forever. The star will eventually burn off all its fuel and shrink into a colder white dwarf (massive deflation). Or, spectacularly explode itself in a nova (hyperinflation).
Hehe, sorry for the dumb analogy.
OT, but related to past discussions here of political correctness on campuses. This news makes me want to encourage my kids to apply to the U. of Chicago.
Education
University Of Chicago Tells Freshmen It Does Not Support ‘Trigger Warnings’
August 26, 2016 4:29 PM ET
David Schaper
The University of Chicago is welcoming new students to campus by warning them that they might hear things that might make them uncomfortable.
A letter sent by the school this week tells incoming freshmen that the university does not support “trigger warnings” as part of its commitment to freedom of expression.
“Dear Class of 2020 student,” the welcome letter from the school’s Dean of Students John Ellison begins. It goes on to explain the university’s commitment to freedom of expression and inquiry. Students “are encouraged to speak, write, listen, challenge and learn without fear of censorship.”
And that means the school “does not support so-called ‘trigger warnings’ ” to alert students of upcoming discussions or speakers that they might find offensive.
The University of Chicago won’t cancel controversial speakers, and it “does not condone the creation of intellectual ’safe spaces’ where individuals can retreat from ideas and perspectives at odds with their own.”
…
Wow. That is pretty cool actually. In Chicago of all places. Nice. Maybe there is hope in the world. I haven’t completely written-off “millenials”.
I felt inspired to read the Wikipedia entry on the University of Chicago, where I learned that Bernie Sanders numbers among its alumni.
Who’d've thunk Bernie Sanders and Milton Friedman could have occupied the same turf?
I forget who said it, but someone said once,
“the kids are all right”
They may turn out to be better than us.
It’s so cute the Fed thinks it can prevent recessions. Yeah, I’ve heard of the Great Moderation, the Fed was taking credit for that years ago (aside: it’s often considered the period from 1984 to 2004, which contained the debt-fuel expansion of the 80s, the S&L crisis and recession, the tech bubble and burst, and the leading edge of the housing bubble - heck of a moderation. It just goes to show how seat of the pants the world of policy-making economists is, rather than this Spock-like purely logical, emotionless, data driven facade they want us to believe. It’s shows seat-of-the-pants-ism because the financial market insiders saw their wealth skyrocket during this period, even as outsiders saw their net worth devastated by the stock market, leading the insiders to conclude everything was peachy).
But anyway, back to the Fed preventing recessions. Yes, it is a huge economic player, and yes, it is a unique entity in that it can have money printed legally, and yes, it has a magical balance sheet on which debt can be sequestered forever. As such it can certainly influence the economy. But viewing the events of the Great Moderation and now the Great Recession, it seems eminently possible that while the Fed can influence the economy, it merely has the power to redistribute existing wealth rather than create more wealth (which requires innovation, intelligence, hard work, risk-taking and luck) or to prevent recessions.
However, it’s not a symmetrical power (”Just because I can kill someone means I can resurrect them” fallacy). I think they can encourage debt and bubbles and contribute to increased risk of recession doesn’t mean they can encourage the wealth level of an economy to increase.
They can trick people int to working harder and producing more wealth, but not consistently.
They can effect interest rates.
They can print money and buy govt bonds to support deficit spending.
Some even openly buy stocks or corporate bonds.
They seem to be able to do a lot of buying but what about producing?
Is creating more demand really wealth?
I personally have to produce something or give my time to be able to buy stuff I need.
They seem to be able to do a lot of buying but what about producing?
That’s the job of third world sweat shops. Only “losers” sweat and make stuff. “Winners” shuffle papers (AKA “knowledge work) and build equity in their houses and stock portfolios. Or so we are told.
So they can induce the Chinese to produce wealth, which they use to purchase houses here that our descendants cant afford on their paper shuffling incomes.
Seems like higher asset prices are suppose to fix things.
See that’s the problem, right?
Higher would never fix it because you will want higher than higher. It’s never ending cycle…I know only few people get it,
If higher prices were driven by higher wages, that might work.
If higher wages were driven by more valuable workforce credentials and work efforts, then that that might work.
See - say “payday.”
Is Yellen the Felon getting ready to follow the lead of her fellow Keynesian fraudsters by doubling down on the same failed policies of bottomless “stimulus” that benefits only the banksters?
http://www.zerohedge.com/news/2016-08-28/jackson-hole-post-mortem-it-may-take-massive-program-large-enough-shock-taxpayers
In order to retire your gonna have to buy more risk assets such as stawks and homes.
The days of riskless viable returns on your money are over. Rates have to stay low to be able to service the national debt.
You buy stocks when you are young. You stay single and childless and rent small for decades and keep buying stock index funds. You can live in ocean climates by renting small and far cheaper than owning an air box. Added benefit is most high paying jobs in high skills are in places with ocean climates. You also have time to stay fit so that you can enjoy your wealth when you are older.
You can work at your own pace later in life so that you can spend more time on important things, like bicycling and drinking good wines.
To each his own. Seems like a sad pathetic lifestyle. I wouldn’t trade my kids for all the gold, stocks, and supermodels in the world. That makes me a very fortunate man.
That, and chicks dig me.
“To each his own. Seems like a sad pathetic lifestyle. I wouldn’t trade my kids for all the gold, stocks, and supermodels in the world. That makes me a very fortunate man.”
+1 - Seriously…. Citizen Kane much?
In a lunch address by Princeton University economist Christopher Sims, policymakers were told that it may take a massive program, large enough even to shock taxpayers into a different, inflationary view of the future. “Fiscal expansion can replace ineffective monetary policy at the zero lower bound,” Sims said. “It requires deficits aimed at, and conditioned on, generating inflation. The deficits must be seen as financed by future inflation, not future taxes or spending cuts.”
This seems to be the statement that everyone is focused on today. But I think it’s important to realize that this is what a Princeton economist—Sims—is urging the Fed to do. Who knows how many governors side with him or even give his testimony credibility.
To me it looks like chaos at the Fed right now. They can’t get growth above 2% and they can’t get inflation to 2%. They’re just treading water. But nothing’s going to change until after the election. The incoming president is going to dictate what the Fed does in December. The incoming president is also going to determine whether fiscal policy (read massive government spending) is going to be used to augment monetary policy. The incoming president is therefore going to effectively set the rate of inflation.
Regardless of who you may want to win the election, you have to admit the banks are firmly in Hillary’s corner. They’ve probably already negotiated exactly what they want from her in return for their support. This future is largely decided. Trump appears to be the wildcard here–not beholden to the banks, there’s no telling what he’ll do with respect to the Fed. Given the intricacies of monetary policy, he could end up wrecking the hole thing despite his best intentions. If things do go awry, he too will end up listening to the banks.
If it ain’t selling lower the price! How complicated can this get?
Why don’t some people have money to spend? Haven’t these boom and bust cycles busted a lot of people?
There aren’t enough good paying jobs being created. Service jobs dont pay much.
Most folks dont want a job anyway. They want opportunity to build a business.
We need more business!
Hillary = Another 4-8 years of the “Vampire Squids”
or
The Donald = Train Wreck
Some people want the train wreck, because many believe “I’ll be killed (figuratively), but at least we’ll take some of the a-holes with us…..” I’m of the opinion that (like the gun nutz) they overestimate their survival skills, and underestimate the survival skills of the opponents.
The question is, what will Trump really do if elected?
The answer = Hillary-Lite. He’s not going to upset any apple carts, least of all his NYC neighbors/buddies. He will continue the Kabuki Theater of waving the immigration/anti-Muslim flag, while making very little effort to actually do anything once in office, because he knows it will get votes, and he can blame any inaction on the liberals/do-gooders/anchor babies.
There is also the “I’m bored” crowd who want to see it all unravel on TV. They don’t have any skin in the game and they want to see the winners brought down.
Im voting for Jill, what do I have to lose? as Donnie would say.
There is also the “I just want to watch the world burn” people.
Yah, for a few minutes there I wuz one of those, until Ben gave me a little attitude adjustment.
There’s also the “I’m scared of the burning world; protect me!” people.
Exactly! That’s why I don’t understand all the hysteria against Trump.
“He’s not going to upset any apple carts, least of all his NYC neighbors/buddies. He will continue the Kabuki Theater of waving the immigration/anti-Muslim flag, while making very little effort to actually do anything once in office, because he knows it will get votes, and he can blame any inaction on the liberals/do-gooders/anchor babies.”
And you know this how? I love people who say stuff like “I’m sure Trump would” and “I’m sure Trump wouldn’t”. It seems to be a trait that both his supporters and detractors have in common.
Aren’t you one of the folks who thought he was just doing it for the attention and would get out well before nomination time?
I think he took one look at the rest of the Republicans running for President, and said to himself “I’m a helluva lot smarter than these guys”
No argument there.
Trump’s problem is that he is a mix of several not-so-attractive personality types, which are coming into focus with not so friendly media attention.
A member of the “born on third base, and thinks he hit a homer” club.
A bad case of “CEO Syndrome”, thinking he has all of the answers, and anyone who disagrees is an enemy to be destroyed.
Tolerating no dissention, he will staff the government with “yes-men”.
Gridlock will ensue, because Congress is filled with people just like him.
And the problems we have will remain unaddressed. When the SHTF, you can be assured that the wretched refuse will need the Astroglide again.
The good news is that the 1%ers will do just fine. Which means I’ll do okay. Although now as well as I would if there was genuine “growth” in my industry.
Track me down in four years. We can see who is closest to being right.
If anything demanded that the PTB put aside their differences and do something for the common good, 2008-2009 were it. But it didn’t happen. What we got was what would have happened if Roosevelt had lost in 1932.
“anyone who disagrees is an enemy to be destroyed.”
To my knowledge, Hillary and her husband are the ones with the trail of actual bodies and collapsed nations in their wake.
Trump may say “you’re fired!” I don’t think he is in the habit of ordering that people be rubbed out.
“Track me down in four years. We can see who is closest to being right.”
So….you think he’ll win?
“I don’t think he is in the habit of ordering that people be rubbed out.”
Not a fair comparison, as he hasn’t yet had the opportunity.
Nailed it!
Spot on
The answer = Hillary-Lite.
How’s that a train-wreck? Isn’t that “Vampire Squids-lite?”
“Regardless of who you may want to win the election, you have to admit the banks are firmly in Hillary’s corner.”
Cornering the candidates is not a mutually-exclusive activity.
Another Goldman Sachs Alum Joins Donald Trump’s Campaign
by Dan Primack
August 17, 2016, 1:40 PM EDT
Donald Trump has a penchant for Goldman Sachs bankers turned movie producers.
First it was Steve Mnuchin, who in May joined Trump’s campaign as national finance chairman. He also is Trump’s likely pick for Treasury Secretary, and is part of the GOP presidential candidate’s recently-announced economic advisory team.
Now it’s Steve Bannon, who overnight was named CEO of the Trump campaign.
Bannon made his bones as a mergers and acquisitions banker with Goldman Sachs beginning in the 1980’s, at the peak of Wall Street’s hostile takeover and junk bond booms. Most of his work was defending companies from such boardroom assaults ― in keeping with Goldman’s general stance on such things ― but he did later work on supporting some leveraged buyouts before moving into media and entertainment banking.
…
Could somebody please find the correct definition of the word “former” and post it for the Prof? I’m just plain tired of educating the guy. Oh, and while you’re at it, write that so-called journalist at Fortune Magazine and give him the definition of “alum”. Clearly, he can’t tell the difference between a financial bucket shop and an institution of higher (ahem) education.
Is our children learning?
It must’ve burned Nancy Pelosi’s ugly nekkid patootie that Nigel Farage spoke at Trump’s Mississippi rally and got the rock star treatment in front of thousands of Americans.
http://www.zerohedge.com/news/2016-08-28/mr-brexit-trump-new-reagan
Compare and contrast that with her pathetic trolling using Mexican president Calderon on floor of Congress, attacking Arizona:
https://www.youtube.com/watch?v=5xb_KcF2w8w
He deetagreeds weet de low.
The Federal Reserve, “the Fed”, is the central bank of the United States of America that was created in 1913 by Congress. It is a private banking cartel that has a government-granted monopoly on the creation of money and credit. The Fed literally loans “money” (Federal Reserve Notes) into existence. Federal Reserve Notes are paper promises backed by nothing of intrinsic value and they are only functioning as money because the government forces them on the public through legal tender laws. Federal Reserve Notes are referred to as dollars but are not. The definition of a dollar is a weight of silver (371 grains). To put it simply, the Fed is a group of banks running a national counterfeiting operation with the protection of the government.
http://endthefed.org
The criminal fraudsters at the central banks, having lavished countless trillions in “stimulus” on their oligarch pals, now want to escalate their swindles against the 99% by having “governments” - meaning taxpayers and future generations - fund their radical Keynesian experiments. When are the sheeple ever going to wake up and start fighting back against these swindlers?
https://ca.news.yahoo.com/global-central-bankers-stuck-zero-unite-plea-help-123135496–business.html
Charity watchdog: Clinton Foundation a ‘slush fund’
By Isabel Vincent
April 26, 2015 | 7:47am
The Clinton Foundation’s finances are so messy that the nation’s most influential charity watchdog put it on its “watch list” of problematic nonprofits last month.
The Clinton family’s mega-charity took in more than $140 million in grants and pledges in 2013 but spent just $9 million on direct aid.
The group spent the bulk of its windfall on administration, travel, and salaries and bonuses, with the fattest payouts going to family friends.
http://nypost.com/2015/04/26/charity-watchdog-clinton-foundation-a-slush-fund/ - 307k -
“The group spent the bulk of its windfall on administration, travel, and salaries and bonuses, with the fattest payouts going to family friends.”
Chelsea Clinton: I tried to care about money but couldn’t
BY Leslie Larson
NEW YORK DAILY NEWS
Updated: Monday, June 23, 2014, 5:13 PM
“I was curious if I could care about (money) on some fundamental level, and I couldn’t,” she told Fast Company in an interview that ran in the magazine’s May edition, explaining why she gave up lucrative gigs to join her family’s philanthropic foundation.
http://www.nydailynews.com/news/politics/chelsea-clinton-care-money-article-1.1840138 -
ONCE U LEAVE CA U CANT AFFORD TO COME BACK! LMFAO
Even the Wall Street fluffers over at Business Insider are starting to notice the magnitude of the Canadian housing bubble.
http://www.businessinsider.com/low-oil-prices-and-real-estate-market-are-worries-in-canada-2016-8
Pretty good Little League World Series championship game going on.
End of 4
U.S. (Endwell, N.Y) 2
South Korea 0
Go figure, it did end well for Endwell.
FINAL
U.S. (Endwell, N.Y) 2
South Korea 1
Black militant leader: “We’re being pimped like prostitutes” by Democrat politicians.
http://www.shtfplan.com/headline-news/shock-interview-new-black-panther-leader-destroys-democrat-politicians-were-being-pimped-like-prostitutes-and-theyre-the-big-pimps-pimping-us-politically_08282016
Apple is racking in huge profits on the backs of its Chinese wage slaves, who are seeing pay cuts, while parking money offshore to circumvent paying taxes. Bill the self-described “anarcho-capitalist” approves of this corporate exploitation.
http://www.chinalaborwatch.org/upfile/2016_08_23/Pegatron-report%20FlAug.pdf
Political correctness and blind adherence to The Narrative is far more important than national security.
http://www.breitbart.com/2016-presidential-race/2016/08/28/exclusive-lt-gen-mike-flynn-obama-hillary-ignored-intelligence-not-like-middle-east-wanted-happy-talk/
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered…. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” – Thomas Jefferson in the debate over the Re-charter of the Bank Bill (1809)
It’s finally dawning on at least some blacks that voting for corrupt, feckless Democrats hasn’t improved blacks’ lot in life.
http://www.breitbart.com/texas/2016/08/26/texas-new-black-panther-party-leader-blacks-pimped-like-prostitutes-democrats/
California, meet your future.
http://www.borderlandbeat.com/2016/08/the-war-between-los-zetas-and-cartel.html
Future?? The future is NOW, baybeeeeeeeeeee!
https://twitter.com/EndTheFedDotOrg
‘Property is better bet’ than a pension says Bank of England economist
Chief economist Andy Haldane says pensions are too complicated and property is better due to continuously rising prices
Photograph: Alamy
Guardian staff and agencies
Sunday 28 August 2016 14.47 BST
Last modified on Sunday 28 August 2016 16.43 BST
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Property is a better investment for retirement than a pension, according to the Bank of England’s chief economist, Andy Haldane.
Haldane owns two homes – one in Surrey and a holiday home on the Kent coast. His basic salary at the Bank is £182,000 and he is in line for a pension of more than £80,000 a year when he retires.
In an interview with the Sunday Times, Haldane said he did not consider himself wealthy. “I see myself as not having to worry about money, but plainly not wealthy. I never have [felt wealthy] , and never expect to in this job.”
He does not have a credit card – “I’ve never seen the need for it,” he told the paper. “My spending is all on debit cards.”
Haldane believes that property is a better bet for retirement planning than a pension. “It ought to be pension but it’s almost certainly property,” he said.
https://www.theguardian.com/money/2016/aug/28/property-is-better-bet-than-a-pension-says-bank-of-england-economist
Doomed all doomed.
Turkey has ordered the YPG, a well-trained force that has been the US-led coalition’s most effective ground partner in the war against ISIL, to withdraw to the east bank of the Euphrates River, which crosses the Syria-Turkey border at Jarablus.
“For president Recep Tayyip Erdogan, PKK, YPG, ISIL are just different facades of the same group,” said Al Jazeera’s Hashem Ahelbarra, reporting from Gaziantep on Turkey’s border with Syria.
“And he says his country will definitely use whatever it has to defeat these groups.”
https://uk.news.yahoo.com/erdogan-syria-operations-continue-until-end-193516270–spt.html
Oh, what a tangled web we weave
When first we practise to deceive!
Good golly!
http://www.marketslant.com/articles/why-gold-bulls-should-want-rate-hike
“The shaded region, which is based on the historical accuracy of private and government forecasters, shows a 70 percent probability that the federal funds rate will be between 0 and 3-1/4 percent at the end of next year and between 0 and 4-1/2 percent at the end of 2018.2 The reason for the wide range is that the economy is frequently buffeted by shocks and thus rarely evolves as predicted. When shocks occur and the economic outlook changes, monetary policy needs to adjust. What we do know, however, is that we want a policy toolkit that will allow us to respond to a wide range of possible conditions.” - Yelen