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Started By
Message
re: Someone Please Explain How Jerome Powell Is Any Different Than Previous Fed Chairmen?
Posted on 10/8/18 at 12:49 pm to Trump_Gump
Posted on 10/8/18 at 12:49 pm to Trump_Gump
quote:Strike two.
You just quoted yourself. Keep editing son.
quote:
I want low rates so we can continue this economic expansion.
1
Posted on 10/8/18 at 12:53 pm to NC_Tigah
As opposed to high rates which cause recsessions and do nothing to control inflation.
Posted on 10/8/18 at 12:56 pm to NC_Tigah
quote:
False
Page 3 of this thread and still no sources? Defending your socialist ideology must be exhausting.
Posted on 10/8/18 at 1:10 pm to Trump_Gump
I’m tired of Kenyans trying to ruin this country
Posted on 10/8/18 at 1:17 pm to Trump_Gump
quote:No need.
Page 3 of this thread and still no sources?
Your statement is false.
If you next state 2+3 = 6, I'll tell you that's false as well. No sources needed. If you assume differently cite your own sources, and I'll happily address them. Try it. You might learn something.
Posted on 10/8/18 at 1:27 pm to NC_Tigah
quote:
No need.
You lose
Goldman Sachs Finds Fed Causes Most Recessions
quote:
While the answer to the first part remains elusive, and to Goldman it is still relatively low, the answer for the second part is clear: in the post WW2, virtually every recession (and depression) was caused by the Fed. Goldman starts with a historical overview of the causes of recessions. Looking at 33 US recessions since the 1850s, it finds that while many pre-WW2 recessions originated in the financial sector, most post-WW2 recessions were caused by monetary policy tightening and oil shocks and, and sentiment-driven swings in borrowing and investment led to recessions in both eras. A similar IMF study of the key contributors to 122 advanced economy recessions shows that even before 2008, financial crises were a fairly common source of modern recessions too.
quote:
Relying on several historical sources, we identify the key contributors to each recession. Exhibit 3 summarizes our findings. We draw four lessons. First, the most frequent contributors to modern recessions have been monetary policy tightening and oil price shocks, with the former in response to inflation that often gained momentum from the latter. Second, sentiment-driven swings between over-borrowing and heavy investment followed by deleveraging and investment cutbacks contributed to the two most recent recessions and also played a role in early recessions, especially during boom-and-bust cycles of railroad investment. Third, while the financial sector has not been the origin of as many modern US recessions, it was a very frequent source of early US recessions. Fourth, fiscal policy shocks have sparked US recessions, but only in the context of demobilizations from major wars.
This post was edited on 10/8/18 at 1:50 pm
Posted on 10/8/18 at 1:49 pm to buckeye_vol
quote:
Are you arguing that all of the various treasuries (e.g., important 10 year) are determined by exclusively non-market forces, and are you arguing that the market of lenders and borrowers are FORCED to set their rates according to those non-market forces?
I’m only arguing that the fed shouldn’t be setting the rates. Why should one group of people be in charge of this? Statists (those who generally support big government and centralized economic control) see the Fed as a stabilizing mechanism for social economic good and don't bother to think much about it.
Posted on 10/8/18 at 1:55 pm to Trump_Gump
quote:If Trump were really anti-establishment, he'd be shutting down the fed, not appointing another establishment cuck to head it.
I’m only arguing that the fed shouldn’t be setting the rates.
Posted on 10/8/18 at 2:00 pm to Trump_Gump
quote:You just revealed that you didn't live through the Paul Volcker years as Fed Chairman.
The Fed can’t control inflation
Posted on 10/8/18 at 2:08 pm to Trump_Gump
quote:1) It hurts the "savers" in our economy who rely upon earning interest on their savings to supplement their income.
which is why you can’t name a single real life consequence of keeping rates low.
2) It encourages over leveraging (too much borrowing) by companies and individuals.
3) It often leads to asset price bubbles both for real estate and stocks.
4) It usually leads to a weaker dollar as countries with higher interest rates see their currency become more desireable which leads to higher prices paid by American consumers and businesses.
Posted on 10/8/18 at 2:12 pm to LSURussian
quote:
1) It hurts the "savers" in our economy who rely upon earning interest on their savings to supplement their income.
Yes the Fed has definitely hurt the savers over the year. While the progressive tax system and welfare state involve stealing from the rich to give to the poor, the Federal Reserve enables the opposite: stealing from the poor and giving to the rich. The "stealing" occurs via inflation -- the Fed is constantly creating money out of thin air, which causes the dollar to depreciate dramatically over time. This robs the poor of their purchasing power, erodes their savings, and makes it harder for them to get ahead. The "giving" occurs because bankers and those well-connected are able to access this Fed money before it becomes devalued — taking out cheap loans, placing it into an investment that yields a little more than the Fed’s artificially low interest rate, and pocketing the difference.
Posted on 10/8/18 at 2:14 pm to Trump_Gump
quote:Nope.
The "giving" occurs because bankers and those well-connected are able to access this Fed money before it becomes devalued
Stop reading ZeroHedge.
ETA: You asked for "a single real-life example" of how keeping rates low harms our economy. I gave four real-life examples. So you moved the goal posts. You're really revealing your ignorance of macro economics.
This post was edited on 10/8/18 at 2:16 pm
Posted on 10/8/18 at 2:16 pm to LSURussian
quote:
You just revealed that you didn't live through the Paul Volcker years as Fed Chairman.
Volcker sent America into the greatest recession of the post war period at the time. What a hero
Posted on 10/8/18 at 2:22 pm to LSURussian
quote:
ETA: You asked for "a single real-life example" of how keeping rates low harms our economy. I gave four real-life examples. S
No, you didn’t. Not one single source was posted.
Posted on 10/8/18 at 2:24 pm to Trump_Gump
quote:More ignorance on your part.
Volcker sent America into the greatest recession of the post war period at the time. What a hero
The U.S. economy had been in a hyper-inflationary period during Carter's Presidency. When Reagan appointed Volcker, Ron told him to "get rid of inflation" and do it sooner rather than later before he had to run for reelection.
Volcker did it by raising rates to unprecedented levels. Banks were having to increase their prime rate as often as 3 times in a week. Prime rate for NY banks went to 21.5%.
And it worked. The resulting recession ended the inflation mindset and we have not seen inflation like that since.
For doing exactly what he was told to do, Volcker was fired (rather, not re-appointed) by Reagan and Ronnie made his Chief of Staff, James Baker, tell Volcker rather than telling him himself.
Once again you moved the goal posts. You said the Fed has no control over inflation. Volcker proved in a big way you're wrong. So when you're proven wrong, you just change the subject. You realize that's evidence of ignorance on your part, right?
Posted on 10/8/18 at 2:29 pm to Trump_Gump
quote:
ETA: You asked for "a single real-life example" of how keeping rates low harms our economy. I gave four real-life examples. S
No, you didn’t. Not one single source was posted.
You told NC_Tigah, "Which is why you can’t name a single real life consequence of keeping rates low."
I gave you four "real-life consequences" of keeping rates low. You're confused what you asked for. You asked nothing about sources. Just examples. I gave you 4 examples.
Posted on 10/8/18 at 2:35 pm to LSURussian
quote:
More ignorance on your part.
Nope, a recession followed. Unemployment rose to near 11%. Manufacturing states were battered by the downturn; the near 17% unemployment rate in Michigan was worse than the state sustained in this latest recession. Mortgage lenders were devastated by high interest rates. The banking system was pushed to the point of insolvency. And while growth snapped back to trend rather quickly after the Fed took its foot offf the brake for good, there was considerable suffering through the recession, and the effects of unemployment, on health and earnings of sacked workers, persisted for years. All worth it for a decrease in inflation? Inflation didn’t even dip below 3% until 1986. What a disaster.
quote:
And it worked. The resulting recession ended the inflation mindset and we have not seen inflation like that since.
Wrong
quote:
Once again you moved the goal posts. You said the Fed has no control over inflation. Volcker proved in a big way you're wrong. So when you're proven wrong, you just change the subject. You realize that's evidence of ignorance on your part, right?
They create inflation; big difference between “creating” and “controlling”.
Posted on 10/8/18 at 2:36 pm to LSURussian
quote:
You told NC_Tigah, "Which is why you can’t name a single real life consequence of keeping rates low."
You posted conjecture without citations, but that’s par for the course with lazy statists.
Posted on 10/8/18 at 2:45 pm to Trump_Gump
quote:
You lose
quote:Sorry, I missed this. You are talking past the point.
Goldman Sachs Finds Fed Causes Most Recessions
I have no qualms with assertions that either overactive rate hikes or underactive reductions (as in 9/07-9/08) contribute to recession.
E.g., the famous 3/08 Cramer "They know nothing!" rant.
Put another way, in many cases differing use of Fed tools could avert or mitigate recession. Of course, differing use of Fed tools assumes tools are actually in the Fed's possession.
Fed rates leading into the 2008 financial crisis were 5.25%. We are nowhere near those numbers now. We need to renormalize rates, then pause.
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