You didn't answer my question: (1) or (2)? Is the Fed stupid/destructive or is there something you are maybe missing? :-)
Raising interest rates is NOT going to solve the problems of peak oil and increasing demand in India, China, and Brazil. Nor will it solve increasing demand for Steel etc in India, China, and Brazil.
Mish you are way off the point. The point is interest rate policy and how it is being adjusted on a montly/bi-monthly basis, according to inflation data in particular. The point is NOT oil running out, nor is it China's increasing demand or production which might be a problem in ten years for the US. Interest rate hikes are not done to adjust real rates for the next decade, but for NOW and NEXT YEAR.
That is my position and it is not going to change
You appear to be making the mistake of falling in love with your position. Your "position" should be a rational judgement that can change upon incremental clues to the contrary, rather than some immutable religious belief.
You keep failing to understand the LAGGING nature of rate hikes. All of your analysis fails to take this into consideration.
You've got to be kidding me. Read below, and remember :-)
I believe the neutral rate to be about where we are.
We had this conversation a couple of months ago. I told you where 3m rates were, you said inflation would drop such that it would look, in retrospect, to be a "neutral" rate. That did not happen. Looking back now, all those 3m rates were in fact NEGATIVE.
Then there was last month: 3m yields were about 1.8%. You said they would be "neutral" in retrospect. What happened? They are still NEGATIVE in retrospect.
So, why is it so shocking to you that Fed keeps raising rates, I wonder... |
