NEW! The Fed Flunks: My Speech at the New York Federal Reserve Bank
By Robert Wenzel
Paperback
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In April 2012, Robert Wenzel delivered a speech at the New York Federal Reserve that rocked the financial world. The Fed Flunks contains the speech he delivered, plus two other essays. In addition, Wenzel explains in The Fed Flunks just how it came about that he, a major critic of the Fed, was invited to deliver a speech at the Fed, how the event was almost sabotaged, who was at the speech and the reaction of the Fed economists there.
Product Details
ISBN 9781312047235
Copyright Gallatin House LLC (Standard Copyright License)
Edition First Edition
Publisher Gallatin House
Published May 15, 2014
Language English
Pages 73
Binding Perfect-bound Paperback
Interior Ink Black & white
Weight 0.35 lbs.
Dimensions (inches) 6 wide x 9 tall
I believe that those numbers are nominal values. If you factor in currency devaluation (even using the bogus CPI numbers) the story is much worse. Am I wrong in my assumption that the values are not adjusted for inflation?
ReplyDelete"Also, I was wondering what metric you used to conclude that home prices were overvalued in 2004 and 2005."
ReplyDeleteThe telltale sign of an econometrician.
@graham dugas
ReplyDeleteFactoring in purchasing power parity would likely illustrate a massive devalution of housing.
Measuring houses in terms of Gold would be even worse (for the Fed's position).
Using the following data gathered from Wolfram Alpha charts and Kitco:
2001 Jan. Avg home price: 156,600
2011 Q3 Avg home price: 170,000
2001 Jan. Gold price per oz: 272
2011 Q3 Gold price per oz: 1620
Cost of home in gold in 2001: 575.7oz of gold to buy a house.
Cost of home in gold in 2011 Q2: 104.9oz of gold to buy a house.
I used 2001 as the base to get a pre-bubble number but post-nasdaq burst.
"Also, I was wondering what metric you used to conclude that home prices were overvalued in 2004 and 2005."
ReplyDeleteI suppose the metric of "common sense" is not the one he is looking for...lol
Anyway, that being most likely the case I love Anon @ 9:08AM's use of gold.
Gold is the ultimate long term BS eliminator in stuff like this...which is why I liked it the first time I saw Peter Schiff using it for the DOW in 06' when I was just beginning to wake up. Thankfully I moved my and my wife's entire 401k into gold in 06'....
It may not be Austrian, but it is what I used back in '04 to determine that we were in a housing bubble, and that my family should rent and not rebuy.
ReplyDeleteHistorical home price to rent ratio: 9 to 11
Actual home price to rent ratio over 2001-2004:
'01 -- 14
'02 -- 16
'03 -- 18
'04 -- 21
It'll be fun to see your response to the "what metric" question.
ReplyDeleteTo paraphrase the Mel Brooks film "Spaceballs" just before Dark Helmet is going to ludicrious speed.
ReplyDelete"Sir, shouldn't you use econometrics?"
Dark Helmet: "Econometrics this!"