Fed announces policy shift on inflation (real estate, credit, financial, wage)

[TimAZ]

Originally Posted by EDS_

All the CD knashing of teeth noted this is a really good move. And frankly it's not a big deal......The Fed simply adjusted written policy formalizing what they were destined to do.


After the recent GDP contraction The Fed. was simply not going to raise short rates in attempts ward off inflationary pressures seen over a quarter. The risk of setting off a new spate of deflation is simply too great.

In other words after a bust it'd be uttely counterproductive to go on an inflation jihad over a hot quarter.

If it’s “no big deal” then why announce any changes at all? Is this a bass-ackward admission that they cannot or will not defend the USD?

[SkyDog77]

Originally Posted by EDS_

One of my best friends was a research economist at The Dallas Fed. for a couple of decades, running the department for a long time.

He'd say your thesis statement is absurd. The Fed. pays constant attention to inflation/deflation.


___________

What inflation measures did The Fed. claim were wrong?

I studied under one of the San Francisco Fed’s research economists and he constantly talked about inflation/deflation.

[EDS_]

Originally Posted by TimAZ

If it’s “no big deal” then why announce any changes at all? Is this a bass-ackward admission that they cannot or will not defend the USD?

A). Ethics.

B). It's more important to get the US economy back on track than to worry too much about the realtive value of the USD.

Proping up rates in order to strengthen the USD right now would be macro-economic malpractice.....literally equal to the dumbest moves of the Burns & Miller eras.

[EDS_]

Originally Posted by SkyDog77

I studied under one of the San Francisco Fed’s research economists and he constantly talked about inflation/deflation.

That's just how it is.

I'll DM a link to an outline of my firend's cv. Among his research focuses are M&B, economic growth and inflation.

[bale002]

Originally Posted by SkyDog77

... inflation ... If it does go up this time, and there are reasons to believe it will ...

What reasons, exactly, are these?

And no tautologies. Please?

[SkyDog77]

Originally Posted by bale002

What reasons, exactly, are these?

And no tautologies. Please?

The money that entered into the system in 2009 largely sat on bank balance sheets as reserves because of new requirements that were meant to ensure bank stability. The money that just entered the system went directly to people who spent it. The impact on inflation will likely be different because of this.

[C2BP]

Originally Posted by EDS_

A). Ethics.

B). It's more important to get the US economy back on track than to worry too much about the realtive value of the USD.

Proping up rates in order to strengthen the USD right now would be macro-economic malpractice.....literally equal to the dumbest moves of the Burns & Miller eras.

Really now, do you have any, I mean any understanding of how economy supposed to work? Do you even read what you write here?

ZIRP is going to get the US economy back on track? Are you even serious? Do you understand that in a boom and bust economy you have to have the courage to take the bust (the DEFLATION) if you want to have the joy of the boom (the iNFLATION). Can you even slightly understand this? If you can’t then you need to refrain from posting in this forum and take your worthless economic understanding somewhere else.

Folks these are the graduates our worthless education system and Universities are giving us. No real economic understanding whatsoever.

[SkyDog77]

Originally Posted by C2BP

Really now, do you have any, I mean any understanding of how economy supposed to work? Do you even read what you write here?

ZIRP is going to get the US economy back on track? Are you even serious? Do you understand that in a boom and bust economy you have to have the courage to take the bust (the DEFLATION) if you want to have the joy of the boom (the iNFLATION). Can you even slightly understand this? If you can’t then you need to refrain from posting in this forum and take your worthless economic understanding somewhere else.

Folks these are the graduates our worthless education system and Universities are giving us. No real economic understanding whatsoever.

I’ll wait for him to tell you what he does for a living and then you can compare notes on who understands economics better. My guess is that you are not at a good spot on the Dunning Kruger curve.

[Taggerung]

We've reached the limits of growth- there is no more capacity for growth because we live in a finite realm. So the Federal Reserve is trying- in vain- to spur economic growth with endless "liquidity" and "stimulus." Really all this does is create grotesque hyper-bubbles, destroys the savings and wages of the public by decreasing their purchasing power, and horrifically warps the economy. The Fed will keep redefining their "2%" target so that they never reach it, and so can continue their expansionist policy indefinitely. There is only one way this can end- in a global currency and debt collapse.

[C2BP]

Originally Posted by SkyDog77

I’ll wait for him to tell you what he does for a living and then you can compare notes on who understands economics better. My guess is that you are not at a good spot on the Dunning Kruger curve.

His economic understanding is ZERO, I repeat ZERO. It’s people like him that our worthless education system gives us today.

I keep telling you all here for years that economic recovery and real economic growth is imposible until we go thru the dark forest and experience deflation and destroy all our bad debts that we are desperately protecting since 2001. Higher interest rates, that is our medicine, our only medicine. So far nothing has worked, all those monetary tricks and gimmicks didn't work, it made our patient just more sicker.

We should have begun slowly raising rates in 2001, limiting debt after the business cycle ended. High interest rates do many good things for a society. We fear high interest rates because we think our economy needs to grow all the time, to avoid pain -and we know that growth and high interest rates can't go together.

We have been on (the monetary equivalent of) morphine since 2001. We are mostly addicts. Our entire way of life is wrapped up in the morphine lie being protected by the FED-mafia -they are protecting us and themselves.

Yes, we lied to ourselves, and cheated, and tricked, and usurped, and deviled, and devaluated and que'd and zirp'ed and did whatever we could to (steal) borrow money from the future so we could continue to lie to ourselves and avoid the TRUTH.

Nothing will ever work except a massive deflation that will threaten our very existence, as it did 1929-1947. We have to implode out (global) debt bubble. That is the only thing that will fix the problem. But, it will create new problems, won't it?

Good Luck!!!