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Monetary & Housing Policy Thread: Fed Adopts Evans Rule

KillSwofford said:
I didn't say you said it, I said you act like it.[SUP]1[/SUP]

I don't know what your point is saying that a business has to have people spend money to make money.[SUP]2[/SUP] Um...true? yes? Doesn't change that if the value of people's money is systematically whittled away over time, it creates disincentive to save and incentive to spend. Good for big business, bad for people that would like to spend responsibly for things they need, and save as well to provide a safety net for themselves. Ah but that's where the vast increase in the size of government comes in...you don't have have your own safety net, they'll make one for you! All you have to do is give up, yes, more of your money, power and freedoms[SUP]3[/SUP].

You stumbled into my point yet again in another part of your post when you said "oh sure, easy money helped" but then tried to marginalize.[SUP]4[/SUP] It didn't help, it was the thing. It's exactly what Krugman called for and it's exactly what took place. The NASDAQ bubble -- aka not real growth -- burst and so a new ruse was needed to create the illusion of real growth. Krugman knew that. So what's the new bubble now?

Not really interested in market psychology because it only followed exactly what Krugman wanted.[SUP]5[/SUP]
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1. Based on what? Do you think that I think Carnegie didn't have a successful business because the Fed wasn't around during his days? GMAFB

2. You, a couple posts ago: "Savers are getting creamed because corporate America doesn't make money from people not spending it." Nobody can make money from people not spending it, this has nothing to do with "corporate America." Savers are getting creamed because my interpretation is correct, there are a lot of people willing to lend money or pay down debts (savings actions) and not a lot of people who want to borrow. Supply and demand in action.

3. More Austrian hysterics, and I'd like to note that the personal savings rate is actually positively correlated with inflation.

4. No I didn't, I told you what actually happened. Monetary policy did lower rates, but it was still the banks' actions, abetted by hapless ratings agencies, that extended credit without regard to the borrower's ability to pay, under the assumptions of ever-rising house prices. Greenspan and Bernanke didn't build that.

5. I can't believe that I forgot about how Krugman was secretly controlling Greenspan, Bernanke, and Wall St during the Bush years. Not being interested in market psychology when discussing bubbles seems... unwise.
 
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I don't agree 100% with what he's saying, but making this kind of video is a good way to move up in the all-important Central Banker Power Rankings. The Central Banker Power Rankings are, of course, like sports power rankings and not rankings of Central Bankers' actual power.
 
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2. You, a couple posts ago: "Savers are getting creamed because corporate America doesn't make money from people not spending it." Nobody can make money from people not spending it, this has nothing to do with "corporate America." Savers are getting creamed because my interpretation is correct, there are a lot of people willing to lend money or pay down debts (savings actions) and not a lot of people who want to borrow. Supply and demand in action.

Point was more that corporate America doesn't benefit from incentivizing saving. It benefits from incentivizing spending.

3. More Austrian hysterics, and I'd like to note that the personal savings rate is actually positively correlated with inflation.

Obviously you have an inherent bias against the Austrian school, which is fine. But it seems clear that based on it, we can't have a reasonable conversation on this. Plus, I just got done dealing with a computer virus for two days...have sort of lost the starch for this. All questions will be answered in time.

Interesting though that TPTB are having to artificially depress precious metals prices though. Those Austrians and their hysterics...
 
Monetary debasement, impoverishment of society relative to the state, devastating business cycles, financial bubbles are all direct results of Central Banking.

The war machine and money machine go hand-in-hand. We abandoned the gold standard so it would be easier to justify insane wars. Instead of having to finance wars with sound money, we can just print that money out of thin air.

-Bailouts for the big financial firms
-They coordinate the inflation of the money supply by establishing a uniform rate at which the banks inflate (this makes the fractional-reserve banking system less unstable and more consistently profitable than it would be without a central bank
-They allow governments, through inflation, to finance their operations far more cheaply and surreptitiously

This is all a win-win for them because they can hide all of the real economic issues and kick it down the road for another group of people to worry about.

Any type of job creation going on right now is mainly temporary jobs. Over 53% of college graduates can't find a job or are underemployed. I don't think there is anything that indicates we are heading in the right direction with the Federal Reserve.
 
PirateDeacon said:
Monetary debasement, impoverishment of society relative to the state, devastating business cycles, financial bubbles are all direct results of Central Banking.

The war machine and money machine go hand-in-hand. We abandoned the gold standard so it would be easier to justify insane wars. Instead of having to finance wars with sound money, we can just print that money out of thin air.

-Bailouts for the big financial firms
-They coordinate the inflation of the money supply by establishing a uniform rate at which the banks inflate (this makes the fractional-reserve banking system less unstable and more consistently profitable than it would be without a central bank
-They allow governments, through inflation, to finance their operations far more cheaply and surreptitiously

This is all a win-win for them because they can hide all of the real economic issues and kick it down the road for another group of people to worry about.

Any type of job creation going on right now is mainly temporary jobs. Over 53% of college graduates can't find a job or are underemployed. I don't think there is anything that indicates we are heading in the right direction with the Federal Reserve.
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Monetary debasement and financial bubbles occurred many centuries before recognizable central banks. The largest bubble in the nation's history happened under the gold standard and during the emasculation of the 2nd Bank. Impoverishment of the public relative to the State is well below its historical peak (1000BC or so and the pyramids, or possibly 16th to 18th century Slave Coast societies).

Whole lot of sound and fury here.
 
Shit, to the extent that the greenback made it easier for Lincoln to win the Civil War and free the slaves, "unsound" money may be responsible for the greatest expansion of freedom in US history.
 
BUMP!

http://www.federalreserve.gov/newsevents/press/monetary/20121212a.htm

In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored.
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From this to that in just over a year. Central Banking is a-changing.
 
I guess this answers the mortgage question I asked a week ago. Should be looking at continued lowered rates until unemployment starts to move sub 7. Amirite?
 
Assuming banks in your area are actually passing along low rates. And that the economy doesn't start suddenly booming.
 
TuffaloDeac10 said:
Assuming banks in your area are actually passing along low rates. And that the economy doesn't start suddenly booming.
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I think that is a pretty safe assumption. Especially if we go over the cliff in a few weeks. Even if we don't go over the cliff, we are going to start taking money out of circulation through some sort of measure of tax increase and spending reduction. Even if the economy continues to grow, it is going to grow at a slower pace simply because it is first going to have to make up the cash flow we will be taking out to pay some government bills.
 
Your Keynesian lean there is going to provoke an angry and dumb comment from TR, you know. He is championing fiscal reform as the path to growth.
 
Fiscal Reform is not the path to immediate recovery, in fact it does not aid it at all in my opinion. What fiscal reform does is prevent long term disaster. In reality we should be cutting back during boom times and spending right now, but because of the huge cluster of the 2002-2010 we are forced to both recover and cut spending. It is not ideal, and it will be a slow recovery. But if we are not smart about our spending we are going to dig ourselves such a huge hole trying to stimulate the economy into recovery, that we will never be able to get out of it. So in my amateur opinion it is better to recover slow and smart and during the next boom, use the extra cash to pay down debt. Then when we hit another rough patch (which will eventually come) we will have more flexibility to stimulate growth.
 
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