patrick.net

My guess is that they will use emerging markets as an excuse not to raise rates.

Total government spending (federal, state, and local) is flat since 2009. Private investors and corporate entities are hoarding cash.

Odds are that the Fed does not see a huge risk of inflation at this point, so they'll do nothing.*

*Except continue to eat babies alive and rape Liberty, but we already knew that.

Yep. The Fed started creating a mess about 10 years ago. This is not independent of what others have done to our economy in that time, but I would appreciate seeing the Fed fix what they contributed to the clusterfuck and stop pandering to the wealthy

Even if int rate hikes do nothing for my bank accounts, why can't I demand a symbolic gesture from the Fed? The wealthy get theirs from her every month or so!

JH says

Even if int rate hikes do nothing for my bank accounts, why can't I demand a symbolic gesture from the Fed? The wealthy get theirs from her every month or so!

If the wealthy get money from bank interest, they won't spend it. If the value of their shares go up they will spend it! Don't you see - it's like when their shares go up, they start throwing chips for tips like a casino gambler...

You forgot that they have a secondary objective to keep inflation/deflation in a narrow range. Thus the tapering may not finish as soon as you may think.

tatupu70 says

How does keeping interest rates low for debtors (middle class) help the loaners (wealthy)?

Low rates stimulates two things. First, irresponsible borrowing and unsustainable debt loads. Second, stimulates the broader economy, which is 70% driven by consumer spending. #1 hurts borrowers in the long run and #2 helps both but owners of wealth more.

JH says

First, irresponsible borrowing and unsustainable debt loads. Second, stimulates the broader economy, which is 70% driven by consumer spending. #1 hurts borrowers in the long run and #2 helps both but owners of wealth more.

Nope--they make borrowing cheaper which does increase debt load, but sustainably so because interest load is reduced.

Stimulating the broader economy helps everyone. There is no downside.

You seem to be in favor of cutting off your nose to spite your face. If you want to reduce wealth inequality and hurt the rich--the way to do it isn't through recessions or depressions. The cure is obvious--look at what worked in the 40s.

tatupu70 says

which does increase debt load, but sustainably so because interest load is reduced

No, I disagree. Look at the charts of debt load over the past 30 years. Stimulated (and sustainable) economy my ass.

tatupu70 says

look at what worked in the 40s

Deficit spending on a war. Fabulous. W tried that in Iraq and now Obama is trying it in ISIS. There is no downside, I get it.

JH says

Yep. The Fed started creating a mess about 10 years ago. This is not independent of what others have done to our economy in that time, but I would appreciate seeing the Fed fix what they contributed to the clusterfuck and stop pandering to the wealthy

Correct. As soon as the markets give in significantly or house prices slump they will fire up QE5 to help their cronies, no worries ;)

mell says

JH says

Yep. The Fed started creating a mess about 10 years ago. This is not independent of what others have done to our economy in that time, but I would appreciate seeing the Fed fix what they contributed to the clusterfuck and stop pandering to the wealthy

Correct. As soon as the markets give in significantly or house prices slump they will fire up QE5 to help their cronies, no worries ;)

Or if inflation trends below 2.2%, fire up the QE machine..............

Analyzer says

mell says

JH says

Yep. The Fed started creating a mess about 10 years ago. This is not independent of what others have done to our economy in that time, but I would appreciate seeing the Fed fix what they contributed to the clusterfuck and stop pandering to the wealthy

Correct. As soon as the markets give in significantly or house prices slump they will fire up QE5 to help their cronies, no worries ;)

Or if inflation trends below 2.2%, fire up the QE machine..............

You're right, forgot about that one also - we cannot have the spectre of deflation upon us, never! Let's keep debasing ;)

JH says

No, I disagree. Look at the charts of debt load over the past 30 years. Stimulated (and sustainable) economy my ass.

You're making the assumption that the additional borrowing is due to lower rates. I disagree.

JH says

Deficit spending on a war. Fabulous. W tried that in Iraq and now Obama is trying it in ISIS. There is no downside, I get it.

lol--you need to look at your history books again. The war isn't what led to 30 years of good times. Look at tax rates over that time period. Look at the corporate profits. Look at the strength of the worker class vs. the owner class. The Fed is a distraction. QE is a distraction. Look elsewhere to find the root cause of our issues today.

mell says

Correct. As soon as the markets give in significantly or house prices slump they will fire up QE5 to help their cronies, no worries ;)

Not that you'll ever answer, but how does QE help their cronies??? Specifically?

Or how does newly created money find its way to cronies?

I see these blanket statements made on here all the time, but no one can seem to explain to me how exactly it works. Is there a special line at the Fed where cronies line up to get their money? Does it get mailed to them each month? Please explain.

mell says

You're right, forgot about that one also - we cannot have the spectre of deflation upon us, never! Let's keep debasing ;)

No, you're 100% correct. Let's go back to the depression times. I yearn to stand in line with 10,000 of my closest friends at a homeless shelter to get my daily bread. I'm sure 25% unemployment will do wonders for the national debt.

Yes--deflation is great!! More austerity!! Thank you sir, may I have another!!

tatupu70 says

mell says

Correct. As soon as the markets give in significantly or house prices slump they will fire up QE5 to help their cronies, no worries ;)

Not that you'll ever answer, but how does QE help their cronies??? Specifically?

Or how does newly created money find its way to cronies?

I see these blanket statements made on here all the time, but no one can seem to explain to me how exactly it works. Is there a special line at the Fed where cronies line up to get their money? Does it get mailed to them each month? Please explain.

Who benefits most from stock market inflation?

tatupu70 says

You're making the assumption that the additional borrowing is due to lower rates. I disagree.

then we disagree. Sure, it's also due to lower/stagnant wages. So the 1%, rather than increasing middle class wages just gives lower interest rates. Raise the rates and consumers will necessarily cut back on spending and force the wealthy to cut back on hoarding and start raising wages.

tatupu70 says

lol--you need to look at your history books again. The war isn't what led to 30 years of good times.

The war absolutely got us out the of the depression permanently. Too bad wars and deficit spending don't work anymore, eh?

tatupu70 says

Look at tax rates over that time period. Look at the corporate profits. Look at the strength of the worker class vs. the owner class.

For sure. But how do you raise taxes during a depression? You need an economy that is strong, like 1990s and 2000s. Only one guy had the balls to increase taxes. And his work was immediately undone by a Texan. Obama's pathetic attempts at fixing the economy for the middle class have been a complete joke.

I think the narrative of how the economy is doing is solely based on the reports being released for the economic indicator that needs fudging.

These unemployment numbers can flip on a dime, in as little as 24 hours with great amnesia depending on the spin that is needed to accompany the bogus number released yet.

This administration is like a 16 year old Girl, who hasn't mastered the fine art of keeping their shit straight between lies.

Analyzer says

Who benefits most from stock market inflation?

The owners of stock, obviously.

You know why stock prices are rising? Here's a clue:

JH says

The war absolutely got us out the of the depression permanently. Too bad wars and deficit spending don't work anymore, eh?

The war sped up the process for certain. It's effects were pretty much worn off by the mid 40s though--the policies enacted during by FDR are what set the stage for the next 30 years of prosperity.

Wars and deficit spending absolutely still work, but not half assed measures where our spending is given to foreign countries and bailouts are given to the 1%. The key is to reduce inequality and give money to those that will spend it.

JH says

For sure. But how do you raise taxes during a depression? You need an economy that is strong, like 1990s and 2000s. Only one guy had the balls to increase taxes. And his work was immediately undone by a Texan. Obama's pathetic attempts at fixing the economy for the middle class have been a complete joke.

Easy--raise taxes on the 1% and spend it on the 99%. Raise capital gains. Raise the top tax brackets.

Obama has been disappointing, but let's put the blame where it belongs--Congress would not allow taxes to be raised.

tatupu70 says

Wars and deficit spending absolutely still work, but not half assed measures where our spending is given to foreign countries

Most of it comes back to us. These countries are required to purchase our military equipment. Then we arm one group who eventually turns on us and we have to arm their enemies. It's a vicious cycle of economic stimulus masquerading as righteous world policing.

tatupu70 says

Easy--raise taxes on the 1% and spend it on the 99%. Raise capital gains. Raise the top tax brackets.

Obama has been disappointing, but let's put the blame where it belongs--Congress would not allow taxes to be raised.

I partially agree. Congress failed to represent America in 2009. Failed. But I didn't see any real filibusters. Just a bunch of threats from one side followed by whining from the other. And the big boss watched frustrated because he had no experience in governing. He too easily won the primaries in 2008 because everyone liked his speeches.

But "easy" I don't know about that. Political climate today is insanely corrupt. In theory yes, I'm down with redistribution of wealth as a means to build a sustainable economy that is dull, slow, and steady, rather than all repeatedly jumpy up and down.

JH says

But "easy" I don't know about that. Political climate today is insanely corrupt. In theory yes, I'm down with redistribution of wealth as a means to build a sustainable economy that is dull, slow, and steady, rather than all repeatedly jumpy up and down.

Yes, not easy to implement because of the brainwashing from folks who want to keep the status quo. I agree. Just easy to see the solution.

Hmmm, one of the Fed heads is talking about QE5 to combat deflation?

Why the Fed Can’t Do Anything to Help This Stock Market:
http://www.thestreet.com/story/12915857/1/why-the-fed-cant-do-anything-to-help-this-stock-market.html