Fed announces policy shift on inflation (borrowing, buying, sell, lower the interest)

[lchoro]

Europe, Japan, and US probably could've been saved without going the way of ZIRP or NIRP when you understand that the central banks remit net profits back to their governments. Those governments would essentially pay zero percent on much of their debt. With yields pegged on sovereigns, corporates and municipals would follow.

Ya, the economists talk about inflation. When CPI was too hot, they went to core CPI. When that was too high, they went to the GDP PCE deflator and then finally to the core. It is telling that they're progressively lower because the effects of shelter are gradually removed. Both Greenspan and Powell have acknowledged that the measurements were low compared to the real world.

[EDS_]

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.

That's nonsense as falsified by a middle schooler's understanding of economic history. Since 1940 we've had 3 years of general price deflation per CPI.........only one of those since 1955.

Where your house of cards falls apart, I think any way, is you seem to think that a recession must yield delfation and that's just bogus - across the first world/OECD there have been hundreds of well understood growth, inflation, recession progressions since 1930s and not many have lead to deflation.

[EDS_]

Originally Posted by lchoro

Europe, Japan, and US probably could've been saved without going the way of ZIRP or NIRP when you understand that the central banks remit net profits back to their governments. Those governments would essentially pay zero percent on much of their debt. With yields pegged on sovereigns, corporates and municipals would follow.

Ya, the economists talk about inflation. When CPI was too hot, they went to core CPI. When that was too high, they went to the GDP PCE deflator and then finally to the core. It is telling that they're progressively lower because the effects of shelter are gradually removed. Both Greenspan and Powell have acknowledged that the measurements were low compared to the real world.

Tweeking measures over time as some become outdated or superceeded by better sub-measures, more/faster/better data etc. should be expected.

Doctors don't practice medicine now as docs. did in the 1950/1970s.

[bale002]

Originally Posted by SkyDog77

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.

Maybe, but "spent it" is already past tense and I don't buy it. We'll see.

They've been tinkering at the margins of the monetary system for some twenty years now without comprehensively taking into account the real economy on US soil, and I don't expect anything significantly different on that score going forward.

Good Luck!

[Johnhw2]

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?

C
I know an economist with the Dallas Fed who was base in Houston for a while. We had a monthly breakfast to discuss Houston economy and implications for the large MPC's we owned. A U of H professor joined us when he could. I assume you are not talking about the same guy I knew, Bill Gilmer?

[Di3s3l_Pow3r]

inflation on everything except wages and real estate, actually real estate will get crushed as people are spending more money on necessities

[Taggerung]

Originally Posted by C2BP

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!!!

Yeah, the financial system is utterly addicted to cheap credit. You can take that away, but not without causing a horrific and possibly fatal withdrawl.

The bubble now is so large that it can never be allowed to deflate. A deflation really wants to happen, but at this point it would be total chaos. But delaying the day of reckoning will ultimately make the final collapse much more devastating in the long run.

[SkyDog77]

Originally Posted by C2BP

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!!!

[Thatsright19]

Unskilled and unaware of it.

[C2BP]

Originally Posted by Taggerung

Yeah, the financial system is utterly addicted to cheap credit. You can take that away, but not without causing a horrific and possibly fatal withdrawl.

The bubble now is so large that it can never be allowed to deflate. A deflation really wants to happen, but at this point it would be total chaos. But delaying the day of reckoning will ultimately make the final collapse much more devastating in the long run.

I once saw a Beavis and Butthead episode where they each had a box of candy bars to sell. Butthead bough a candy bar from Beavis for a dollar and Butthead ate the candy bar. Beavis then bought a candy bar from Butthead with the dollar he just gave him and Beavis ate the candy bar. They went back and forth with the same dollar until both had eaten all the candy bars. It kind of reminds me of our Zombie Economy propped up by the FED with a massive shrinking of GDP.

The FED is the enemy of the American people. How can anyone have any trust or hope in this criminal and corrupt organization and the entire system? Starting with Alan Greenspan all previous FED members since 2001 should be arrested and publicly prosecuted for treason.