A Fed that doesn't care about inflation

Discussion in 'Economics' started by detective, Feb 26, 2008.

  1. That is the one bullish scenario that this market is hanging on to. There is a lot of inflation and the Fed just doesn't care and is willing to overlook it or lie about it in order to ease. It is going to end badly in real dollars but in nominal dollars, the stock market could do well. Inflation will be rampant though.

    Just buy commodities and you can hedge yourself easily.
  2. what inflation, there is no inflation, you are joking right?, never even heard that word

  3. sukhen


    You've done a great job Benny for the economy. Isn't Benny a better fit in classrooms? I am full praise of his dancing style to the tune of Trichet. Can Alan G be called again?
  4. Are you serious? It was Greenspan who put us in this situation.

    Bernanke isn't great, but there's only so much he can do after Greenspans buffoonery.

    1) Greenspan let the tech bubble run rampant.

    2) After the bubble popped, Greenspan lowered rates too far and even worse, left them there for wayyyyyyyy too long.

    3) Greenspan told the American public to buy adjustable rate mortgages (when rates were at historic lows) shortly before the Fed began a 2 year rate raising campaign....all the while saying that there is no evidence of a housing bubble!!!!!
  5. Greenspan, Bernanke - they are just doing what the Fed will always do. Inflate so that banks can screw up as much as they want and generally keep turning a profit.

    Plus the fact that nowadays there's no alternative anyway - do you really expect America will pay off its rampant public and private debt in strong dollars. I only take solace in the fact that the baby boomer pensioners won't escape unscathed the way they expected to when their generation set us up for this mess.
  6. banks are so broke that reserves are negative

    and banks keep lending ... with what, I have no idea
  7. mokwit


    This very unfunny clown needs to be boooed off the stage.

    Interest rate cuts are supposed to be used to lower hurdle rate and ease borrowing costs in the lT, but are also used to deal with a short term LIQUIDITY CRISIS, Bernanke is using them to help the banks with their balance sheet SOLVENCY crisis.

    Why doesn't somebody ask him: Are all your actions to assure banking profits, even if at the expense of the citizen, oh no, can't do that as both parties are really vested in the staus quo.
  8. it's polar opposite is the chinese government, which is growing at 10% and tightening monetary policy.

    what does that mean for the future dollar/yuan peg and currency controls.

    in market wizards, soros implied that ultimately, the market wins.
  9. Just today Ron Paul grilled Bernanke again over inflation and once again Ben trys to defer the problem to Congress. Too bad most Americans are too stupid to vote for him.

    <object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/7EQ1sg6GhZE&rel=1&border=0"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/7EQ1sg6GhZE&rel=1&border=0" type="application/x-shockwave-flash" wmode="transparent"width="425" height="355"></embed></object>

    <object width="425" height="355"><param name="movie" value="http://www.youtube.com/v/yybFGh1sUcQ&rel=1&border=0"></param><param name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/yybFGh1sUcQ&rel=1&border=0" type="application/x-shockwave-flash" wmode="transparent"width="425" height="355"></embed></object>
  10. mokwit


    His only answer to every criticism of his flawed strategy is to refer back to "domestic CPI" an extremely questionable measure. Remember, he actually said that as US people bought goods in dollars aweaker dollar would not affect them. He actually said that (as did Nixon in the '70's).

    CPI is low because of distortions in the componenets and through the deflationary effect of outsourcing manufacturing to China. China now has inflation of its own which will find its way into US prices. You only have to look at non China goods such as milk to understand where inflation would be without imported China outsoucing
    #10     Feb 27, 2008