As much as I disagree with the economic philosophical foundation upon which the FED operates, I would never claim they deliberately try to create inflation. They try to contain extremes. They have given up exact implementation of Humphrey-Hawkins because the outcome of that would threaten their power. That is what the 21% interest rates were all about. The FED didn't engineer that, the FED had to get out of the way and let the free market determine where equilibrium was. If they tried to feed money to keep rates from rising, the money would just fuel more inflation. They used to call it backward bending supply curve, more money leads to higher rates. To persist with such delusion would have meant that no one would cooperate with the FED. The market would have withdrawn all trust. Unfortunately, they have forgotten the intensity of that experience. Now they are targeting everything, and that means they will hit nothing. The public will conclude again that the FED intentionally designed the inflation when all they were doing was mistakenly trying to fix what they believe was broken. Pretense to knowledge.
The growing number of layoffs is occurring in Wall Street. Makes a great deal of sense.
You don't export abstractions, you export goods and services.
Russia isn't melting down and neither are the hedge funds. You believe sensationalist news media. You'll never earn a buck that way.
When people work for other's interests, you can't trust them.
Banks haven't been binging on OPM. They made loans to investment firms. If actuarial science is ok for insurance companies, the same can be applied to financial entities. As long as the loans don't become too large, it is a sound investment. The same risks exist with C & I loans with greater instability in return. The banks were doing something prudent. They didn't realize that when something is prudent and successful, it is imitated. Copied to the point where reproduction is lost. Ah, auto-correlative feedback.
Real estate is headed down? Do you live in Japan?
The foreigners are learning to inflate their wages. Once you have something in demand, you can pull all kinds of shenanigans.
There was an article in the NY Times based on a report from the Commerce Dept. showing that black and Hispanics have made the most economic gains and that the elderly were better off than they ever had been.
I hardly dismiss the possibility that Japan in particular, will use capital controls to prevent the tower from collapsing. It isn't bad if they use the time bought by such action to appropriately address a dire need to change the focus of their economy.
You are deceived by the obvious, the press created illiteracy about the world's problems. Right now there are few problems, just a lot of noise from frightened children. They are frightened that their guaranteed existence will be taken away. This will all be forgotten in several months and the bull market will be on again. Things will start to heat up as the world's economies recover, and ours, which is already warm, will be difficult to slow. Your view assumes foreign economies will never recover, that they will remain as they were after WWII. One has to assume that the information age hasn't happened for that to occur. |
