Here it is in a nutshell. I think Greenspan was far too loose with his monetary policy during his tenure, always ready to ease at the slightest dip in the markets and at the first cry of "Wolf!" I think Bernanke did the same when he took over. I think normal business cycles should be allowed to play themselves out, just as isolated forest fires should be allowed to play themselves out from time to time, so as to avoid the dangerous accumulation of deadwood that could result an uncontrollable blaze. However, Bush really did let the wolf out. The fire was real and serious. So, what the Fed had been doing unnecessarily and at the drop of the hat for so long leading up to the recent financial debacle, was using up much needed bullets. However, those bullets are now needed. The uncontrollable fire needed to controlled, and the wolf had to be put down. How's that for mixed metaphors? Is your head spinning yet?
Your graph makes the point that inflation is currently ticking up, is that the point you were trying to make? The non food/oil graph looks a little more stable but the reason for that is because the banks arent lending, wait to see what happens when the banks open up the spigots again.
That is ultimately what it amounts to. There are people I come across who are completely unaware of where the dollar index is trading or that gold and silver have rallied immensely in the past two years. As I've said a number of times, the price of gasoline is about the only thing that wakes the masses from their slumber. You can just see the members of the politburo squirm when gas prices get back to historic highs as it really puts a tremendous amount of political pressure on every elected official. Without the pain at the pump, the theft would be even more brazen as we live in a nation of ignoramuses.
Regarding inflation data. We've had many debates on here in recent years about the inadaquacy of the official statistical measurements. I'm sure some of you saw or heard about that MIT dynamic prices paid index that was recently previewed. It's been mentioned that it could revolutionize the way we evaluate inflation data, but there is also a tremendous amount of political red tape (and opposition, let's face it) to anything that could possibly give the marketplace a true picture of inflation.
forget fires and wolves, however colorful as they might be. do you, or do you not, believe that the federal reserve is the primary responsible party for a lower dollar by printing trillions, and secondly, do you acknowledge a lower dollar being the link to higher commodity goods? these are softballs, gabby.
QE2 will not end in june/july. it will be renamed QE3. todays action in the gold and silver market says the fed is not to be believed.
Central banks serve a useful function when properly managed. Meanwhile, your questions are rhetorical.
not according to milton friedman and others. since most central banks are beholden to politicians they are destabilizerrs. they create inflation and distortion in markets. friedman would have allowed M2 to grow by a steady 3%/yr. QE or printing of money is based upon a false theory that depreciating a currency brings economic prosperity. not only is it false but brings about the opposite result.
I agree completely, but confused none the less. If Obama and his crew are socialists, wouldn't they be transferring money from the banks/corporations to the people instead of stealing money from the people to give to the banks/corporations? I've said it before and I'll pose the question again. I don't know what the hell we have at work in this country, but it ain't socialism, and it sure as hell isn't capitalism, so what is it?
I don't think there is any argument over the truth in the title of this thread. The only argument is between ETers about each other!