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Federal Reserve has previously announced a tentative timetable for the start of tapering QE and the start of lifting interest rates off of the zero bound. Based on their recent implementations of the program, there is no overlap in time when interest rates are nonzero and ongoing asset purchases. Historically, that hasn't been the case. It's just the way the Bernanke Fed has been doing things since they've forced yields on government debt nearer the zero bound.
The Fed can't raise the prime rate appreciably ever again. The federal government can no longer raise the prime lending rate much and still be able to afford the $28 trillion national debt, which is rapidly going to be $40 trillion, certainly before the end of Kamala Harris's 2nd presidential term.
When high inflation comes, we are not going to have any way to fight it.
Buy gold.
I disagree, but only with your timeline. I see the US hitting 40 trillion before 2024. Possibly 50.
I disagree, but only with your timeline. I see the US hitting 40 trillion before 2024. Possibly 50.
I didn't want to be an alarmist. 2024 vs 2028. Still recent and we will still be screwed.
I do not disagree with your assessment that a $50 trillion national debt is lurking around the corner. There is no fiscal discipline of any kind any more.
I didn't want to be an alarmist. 2024 vs 2028. Still recent and we will still be screwed.
I do not disagree with your assessment that a $50 trillion national debt is lurking around the corner. There is no fiscal discipline of any kind any more.
What is the long term consequences of that level of debt, that is one topic I am not very well read in yet.
I didn't want to be an alarmist. 2024 vs 2028. Still recent and we will still be screwed.
I do not disagree with your assessment that a $50 trillion national debt is lurking around the corner. There is no fiscal discipline of any kind any more.
When you allow companies to shield 4 trillion dollars offshore in Ireland to avoid US taxes for 20 years, its' a good sign they don't care. At the same time (2003), they passed laws requiring more government work be contracted out to these companies. It's a bid to prop up the bubble after it burst in 2001.
The huge money injections for consumers have been spent on food and rent. They are a replacement for lost income. The pandemic did not destroy any housing, although it did disrupt the food supply. You haven't seen much inflation after all these measures because supply was not impaired as much as demand.
If food supply was down, why didn't food prices go up?
If demand was impaired, then we should have deflation, we're not seeing that either. The commodity prices are flat or if they are declining, it's a trend years in the making.
It's this crazy K shaped economy that no one knows how to figure out.
If food supply was down, why didn't food prices go up?
If demand was impaired, then we should have deflation, we're not seeing that either. The commodity prices are flat or if they are declining, it's a trend years in the making.
It's this crazy K shaped economy that no one knows how to figure out.
When you write this stuff are you joking around or serious?
The overall economy is in something between a V and an U shaped recovery. The K shape notion simply splits better and worse performing sectors or groups into separate lines and that looks bad and underscores weakness in certain areas but that's not how GDP works.
To continue real GDP was minus 3.5% for 2020 (first estimate for 4Q - '20). Given the first two quarters of '20 that number is shockingly good. The Trend line indicates that 2Q '20 - 2Q '21 will be up.
Literally everyone in economics knows what is going on and what K shapes are/what they mean.
When you write this stuff are you joking around or serious?
The overall economy is in something between a V and an U shaped recovery. The K shape notion simply splits better and worse performing sectors or groups into separate lines and that looks bad and underscores weakness in certain areas but that's not how GDP works.
To continue real GDP was minus 3.5% for 2020 (first estimate for 4Q - '20). Given the first two quarters of '20 that number is shockingly good. The Trend line indicates that 2Q '20 - 2Q '21 will be up.
Literally everyone in economics knows what is going on and what K shapes are/what they mean.
When I say "understand" I mean how to respond. Obviously we can see in hindsight what has happened. Somehow I doubt that last part, because they cannot explain where the inflation is. That only makes me even more curious about where it is.
If the economy is shockingly better than expected, then why the heck do we need stimuli? Sounds like the K is worse than you're letting on.
No, I don't think the economists have a strong command of what's going on right now, since much of what they predicted was wrong, and the pandemic has flummoxed most of them. Or at least not all of them. One of them who I think gets it is Abhijit Banerjee, who's been saying for years we need better ways to calculate GDP that takes into account inequality.
Last edited by redguard57; 02-08-2021 at 10:40 PM..
When I say "understand" I mean how to respond. Obviously we can see in hindsight what has happened. Somehow I doubt that last part, because they cannot explain where the inflation is. That only makes me even more curious about where it is.
If the economy is shockingly better than expected, then why the heck do we need stimuli? Sounds like the K is worse than you're letting on.
No, I don't think the economists have a strong command of what's going on right now, since much of what they predicted was wrong, and the pandemic has flummoxed most of them. Or at least not all of them. One of them who I think gets it is Abhijit Banerjee, who's been saying for years we need better ways to calculate GDP that takes into account inequality.
1. The inflation thing is easy. There is no significant general price inflation because at the crotch of all supply and demand curves we have about the right amount of money in broad circulation. The details are myriad but the guts of the issue really is that simple. I understand that you won't accept what I just said but I'm right and I'd guess deep down you know that.
2. Stimuli are much of the reason the economy has recovered so well. Think of it this way the combination V and U recovery shows what our economy is doing in aggregate. K recovery lines show good and bad or good, better, best areas in the the economy etc. That's all...not surprising...not special...not confusing...not particularly interesting.
3. Yawn, Banerjee is just another in a long line of brilliant but hyper-left Indian economists. GDP measures dollars of economic output, GDP is 2 + 2 = 4, 4 + 5 = 9........adding qualitative inputs may make some people feel better but we literally need the hard numbers. Guys like Sen and Banerjee are the worst economics has to offer.....overtly political types who use economics as a means sell their horribly out of touch politics. Much as with the MMT frauds these guys are selling a bill of goods, a desired wild political shift to the left, as economics.
As an aside it's interning to me that so many Indian economists of note claim to hate The Indian Communists in power but want a world that is very much like that.
3.1. Which economists were way off about the covid bust and recovery?
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