The NR economic columnist and resident scholar at the American Enterprise Institute, Michael R. Strain, tells us price inflation is not a big concern at present. He writes at NR:
I’m [sic] my column yesterday I argued that because inflation isn’t a problem and the labor market is, the Fed needs to proceed with patience in its return to “normal” monetary policy.This even though price inflation is bumping up against the Fed's own price inflation target.
Close data observers like my favorite Keynesian economist Martin Feldstein see exactly what is going on. Feldstein writes:
At a time when inflation is already close to 2% or higher, depending on how it is measured, the real federal funds rate would be at zero at the end of 2015. Instead of ensuring price stability, monetary policy would be feeding a further increase in the inflation rate... With short-term unemployment currently at 4.2%, the inflation rate is indeed rising, and...research suggests that it will increase further in the months ahead.-RW
The author's name is appropriate, because he must have strained his brain to conjure up that column.
ReplyDeleteHe writes, "...the Fed needs to proceed with patience in its return to “normal” monetary policy."
Allow me to interpret this for those who haven't drowned in Fed Kool-aid: They can never raise rates short of a full blown dollar crisis, because doing so crashes stocks and housing markets, (the asset classes they needed to goose to get the "wealth effect" in gear), making the TBTF banks insolvent, not to mention the FDIC, Fannie Mae and Freddie Mac.
The elephant in the room is the Fed itself. What happens to an entity with a $4.5 trillion balance sheet if and when rates normalize? Is the Treasury going to bail it out? With what, pray tell?
Further, there is a Hard Logic Problem. This current round of Catastrophic Nonsense began from the plaintive cry from someone who said, "Give me a trillion dollars or we're all gonna die!".
ReplyDelete"Normal Monetary Policy" either created this End of Innocence or NMP had its Path stolen and replaced with more and more Central Planning and Market Interventions. If NMP created this Chaos then there should be no turning back to a system that crashes as it did. If the Path was stolen then where are the handcuffs? Central Planning destroyed Market Decisions and if there is a return to NMP then there NECESSARILY would be an acknowledgment that the choices made were radioactive and deadly.
"The Market can function only when we believe that the Market is making the right decisions - That is, decisions we approve ahead of time..." NONSENSE!
CW
Census Bureau Worker Blows The Whistle On The Employment Report
ReplyDeleteIt’s pretty much been accepted for many years now that the economic data being reported by the Government is unreliable and fraudulently manipulated. Toxicity + toxicity does not equal purification. Not only does the Government manipulate the data to suit its needs – like reporting a sub-6% unemployment rate a month before mid-term national elections – but the data itself is one big fraud.
A whitleblower from the Denver Census Bureau office has opened up to the NY Post’s John Crudele. I’m sure she took the story first to the Denver Post. But the Denver Post is nothing more than a megaphone for whatever news the powers that be want the hoi polloi to ingest. For instance, the Denver Post did not even report the story on the Goldman Sachs/Fed tapes.
At any rate, I encourage everyone to read the article linked at the top. In a testament to the complete criminality that has engulfed our political and economic system, I’m sure this story will be swept under the rug and this whistleblower will be silenced.
http://investmentresearchdynamics.com/census-bureau-worker-blows-the-whistle-on-the-employment-report/
everything is manipulated....