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The Ray Rice video for the financial sector has arrived.

Discussion in 'Sports and News' started by YankeeFan, Sep 26, 2014.

  1. cranberry

    cranberry Well-Known Member

    1. Two percent is pretty widely considered the optimum inflation level to achieve price stability AND full employment.

    2. You tend to ignore the "full employment" part of the Fed's mandate.

    The labor market remains soft and the inflation rate low.
     
  2. The Big Ragu

    The Big Ragu Moderator Staff Member

    1. "Widely considered" by who, Charles Evans? That inflation targeting to justify those idiots trying to create inflation (what it really does, and has done throughout its life) is a new construct. Widely considered? It first appeared in their language in 2012. You have to be brain dead or a sheep to listen to some paternalistic overlord, who is given authority over your financial future, tell you that to promote price stability we need to steal 2 percent of every dollar from you every year, and then nod your head in agreement. How exactly does a centrally planned "policy" that is attempting to erode your purchasing power make your life better?

    2) I don't have any clue what you are talking about. The Fed has a dual mandate. It does neither of the things in that mandate. It does a whole lot of other things in the name of that mandate, all of which has created a HUGE mess -- slowly over decades, and now to the point of a looming currency crisis thanks to the Federal Reserve since Alan Greenspan. When I have ever "ignored" anything about the Fed's dual mandate or been critical of what the Fed actually does or how it does it?

    This was from my first post on this thread:

     
  3. LongTimeListener

    LongTimeListener Well-Known Member

    The American dollar is doomed. It falls as soon as the euro does.

    http://www.sportsjournalists.com/forum/posts/3393958/
     
  4. YankeeFan

    YankeeFan Well-Known Member

    Listen now at wbez.org
     
  5. old_tony

    old_tony Well-Known Member

    If you think the country is anywhere near full employment now, you're not paying attention.
     
  6. cranberry

    cranberry Well-Known Member

    I'm not paying attention?
     
  7. YankeeFan

    YankeeFan Well-Known Member

  8. doctorquant

    doctorquant Well-Known Member

    Perhaps because "full employment" is not part of the Fed's mandate?
     
  9. cranberry

    cranberry Well-Known Member

    Sorry. I believe it's worded "maximum employment." Yes, there is a difference. Point stands.
     
  10. doctorquant

    doctorquant Well-Known Member

    Thanks for the clarification. And since you're being so accommodating, I'll note that you're reasonably in good stead (at present ;)) with some financial brains I especially admire:

    [​IMG]

    http://johnhcochrane.blogspot.com/2014/09/optimal-quantity-of-money-achieved.html#more
     
    Last edited by a moderator: Dec 15, 2014
  11. cranberry

    cranberry Well-Known Member

    Sorry, maybe I drank some sort of kool-aid in your book, but I think deflation is something to be avoided and I'm ok with policy (2 pct. inflation target) hedging against the zero bound to support both maximum employment and long-term price stability.
     
  12. The Big Ragu

    The Big Ragu Moderator Staff Member

    Why do you think deflation is something to be avoided? Most people go to the grocery store every week trying to FIND deflation.

    Not that there *is* any deflation (if you are talking about consumer or producer prices, when you say "deflation," and I'll assume it is) running through our economy, nor has there been anything close to it since the Federal Reserve's creation. It's a silly discussion. Anyone who has shopped over their lifetime knows how much less their purchasing power they have than they did [X years ago]. That is despite the fact that we should be seeing deflation due to the productivity gains automation and technology have brought about.

    Even so, let's say this really was an issue. The ONLY people who should be against deflation (again, if you are using the term to mean purchasing power, because we are NOT decreasing our money supply -- we have been creating inflation) are central bankers who subvert our markets and politicians running up debt.

    In a deflationary environment, the price of our debt goes up, and we drown in it quicker. When you are trillions of dollars in debt, and getting closer to your limit and still running up huge deficits, that is a problem. So why not acknowledge what the Federal Reserve really exists for nowadays (the "maximum employment," as meaningless a term as has ever existed, and "stable prices," which is ridiculous given that prices have skyrocketed due to the Fed's actions) -- to monetize our debt. We borrow money, and then intentionally create inflation so we have to pay back less in nominal terms. That allows us to keep running up more debt (at least until we won't be able to). Deflation is their enemy, because it means that we have to pay back more interest in nominal terms, and we drown in our debt in short order.

    By creating inflation, though, they rob savers -- average people -- in order to finance disastrous fiscal policy.

    By the way, cran, how does trying to create 2 percent inflation create price stability? I'd love to hear an explanation of this. Let's say something costs $1 today. 2 percent inflation means that 5 years from now it costs me $1.10. 10 years from now, it costs me $1.21. You call those stable prices?

    What it also does is erodes any savings I try to accumulate for my retirement. Let's say I put away $100,000 toward my retirement today and just let it sit in my mattress. It's great to know that you, and the Federal Reserve (as per the nonsensical inflation targeting since 2012), think it creates a better world making that $100,000 worth $67,000 in today's money in 20 years time.

    The Federal Reserve is on board with that, because they exist to monetize all of the debt running our through our economy, and try to make it the burden of savers today -- through stealth. What is your reason, cran?
     
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