re: Trump calls on FED to cut rates; hints at Powell being fired soon

quote:

---

You don't understand what you're addressing. There is a difference between a price delta and inflation. E.g., Goods were approximately 9% more expensive in 2015 than in 2010, representing a 9% bump in price through 2015. Yet inflation in 2015 was just 0.12%

---

Inflation may have been 0.12% in 2015, but it would have to be higher from 2010 to 2014 to for goods to have been 9% more expensive, which it was (1.6, 3.2, 2.1, 1.5, and 1.6% respectively).

quote:

---

and if they held pat from that point, inflation would be zero. Do you follow.

---

It would be zero on a go-forward basis, but definitely not zero on a T-12 basis. Economic metrics don’t just ignore shocks.

quote:

---

That initial bump doesn’t just “not count” in the inflation calculation over a period of time. Producers don’t drop their prices back down after the initial shock, so the higher prices are sustained from that point forward.

---

People constantly say this, but you're only looking at one variable. Tariffs do not increase all prices. Much of the time, it simply shifts purchases to the domestic item, which does not increase prices.

Companies can also eat some or part of the tariffs. Anti-tariff bros pretend that every single penny of a tariff is always passed on to the consumer, and that simply isn't true.

If this never happens, then you should be able to see a dollar for dollar increase in every foreign product. If a 20% tariff is added to washing machines, then they should increase by 20%. We all saw this never happened in Trump’s first term.

You also don't consider companies like Walmart. They don't make their money on high profit margins. They make their money on volume. If Kroger raises prices, Walmart can keep theirs the same and increase market share. Why would Walmart change their business model when it's proven successful?

As more production moves back to the US, costs decrease through economies of scale and innovation. This long term outlook is another facet of tariffs routinely overlooked.

Price increases also lower demand which brings prices down until the happy medium is found.

The market adjusts. It's not this huge monolith that only ever responds in a single way as the "free market" crowd falsely pretends.

quote:

---

Your numbers are wrong but the debt increases occurred primarily because of a virus intentionally created by the Chinese. We’re obtaining compensation for that now via the tariffs.

---

You’ll get lots of DV’s but no counter argument.

Know why?

Because no one wants to go on record disputing your extremely logical position.

quote:

---

and if they held pat from that point, inflation would be zero. Do you follow?
---
It would be zero on a go-forward basis, but definitely not zero on a T-12 basis.

---

Negative.
If, in Year-1, tariffs bump CPI from 320 to 335, then Year-2 ends with a CPI of 335.
What is the inflation rate for Year-2?

Y2Y inflation measures are always "T-12".

Further, insofar as tariffs bump price, which in turn dampens demand, they would be expected to be disinflationary in subsequent years. What should the Fed response be under those conditions?

quote:

---

hints at Powell being fired soon

---

A little about Judy Shelton, a potential candidate for Jpow’s replacement:

quote:

---

Judy Shelton’s proposal of gold-backed government bonds

Another possible use for the US gold treasure comes from Judy Shelton. Many years ago, Judy Shelton, who is seen as a possible successor to Jerome Powell, whose term ends in 2026, presented her plan for a gold-backed government bond.

The plan is simple and includes two main components: gold convertibility and the revaluation of the US’s current gold reserves mentioned above. Selected US Treasury emissions with a 50-year term, for example, would include an option for the bondholder to redeem the bond for a predetermined amount of gold per USD 1,000 face value in gold.

Regardless of whether this plan is implemented or not. It is further proof that gold is seen as a serious asset for solving serious economic problems.

---

quote:

---

So happy I bought about 5 years ago. Sitting at like 2.3pct interest. I was also able to sell a house before interest rates went crazy.

---

It took almost 2 years for our new home to be completed. During that time, we had no idea when it would be finished so all we could do is wait. We just landed during the bad time.


We will fix it when they come down. Id like to see 5 or 5.25 and I will refi.


Then a 29 foot CC with twins will be where my 25 footer is right now.

quote:

---

You have idiots that say inflation was coming down with Biden....my god, it went through the roof (higher than what they were reporting)

---

Thats after Biden admin changed the metrics of calculating inflation so it wouldn't as high!!!

Melt

quote:

---

What are the indicators that show rates need to be cut?

---

Inflation on the CPI being below their target once correct shelter is being used

UE rate increasing. Retail sales will be very low next month. Negative GDP