Bernanke led economy proving critics clueless

[Oddball]

“The criticism about the Fed being inflationary is not fact-based,” said Mark Gertler, an economics professor at New York University who has co-written research with Bernanke. “In terms of an inflation record, the facts are the Fed has been as close to impeccable as you can possibly get.”



Bernanke Economy Shows Critics Wrong on Fed - Bloomberg

 

[Truthmatters]

did you miss the part that shows Bernanke was proven right?

 

[Mad Scientist]

The Fed is printing it to buy our debt so the Gov't can continue to spend.

Well that's not true. The Fed is not allowed to buy bonds from the government. They're only allowed to buy treasuries in the secondary market.

The Feb buys 25 Billion a month in Treasuries. But it's from third parties so it's ok? That makes it Constitutional?
Hint: The 3rd Party is the Bankers friends who make commissions off the sales. Wake up!
Fed Seen Buying $25 Billion a Month in Treasuries After QE2 Comes to End - Bloomberg

Hey, either the Fed is criminally stupid or just plain criminal. Which is it?

 

[DSGE]

Yeah it's not being lent out. It's just sitting there in the banks' deposits at the Fed earning 25 basis points of interest. I think that's pretty shitty. I want enough of that money to get out into the system to return nominal income to its pre-crisis trend, and pull the rest of it out of the system. The best way to do that is by the Fed properly easing monetary policy ; that is, not printing more base money, but guiding expectations about the future path of nominal income. The fact that interest rates are forecast to be near zero through 2014 is outrageous. That's the Fed admitting that they're not going to ease policy enough and that the economy will remain depressed through 2014. So what they should do is aggressively ease by setting an NGDP target, get the economy out of this shithole, and get everything back to normal where we can stop paying banks to hold money we gave them.

The Bailout was because Banks had bought Derivitives and were gonna' fail so the Fed printed money that they could put on their balance sheets and "appear" solvent.

... The bailout was done by the Treasury who took equity stakes in the banks. Why are you even talking about the bailout? How is that relevant to anything I said?

You haven't done any research into what the Banks have been "investing" in have you? You should, it's pure crap.

Yeah I have. But again, how is this relevant?

The interest rates can't be raised because if they were; A. the gov't couldn't borrow money anymore because B. The interest on all the existing loans would eat up 100% (or more) of the tax revenue.

We're talking about the Fed Funds Rate, not the interest rate on long bonds. The Fed has virtually no control over the rates on long bonds. Hey they tried! It tooks billions and billions and billions of dollars worth of open market purchases just to budge long rates a few basis points.

Aside from that, the government don't get to tell the Fed how to conduct monetary policy. They get to give them a mandate - "stable prices and maximum employment" - but aside from that the Fed is extremely independent.

 

[Mad Scientist]

did you miss the part that shows Bernanke was proven right?

You probably believe that Unemployment is 8.3% as well.

 

[DSGE]

The Feb buys 25 Billion a month in Treasuries. But it's from third parties so it's ok? That makes it Constitutional?

That makes it consistent with the Federal Reserve act, yes. Because it's from third parties, the government isn't able to fund any of its operation through asking the Fed to monetize some debt for it. The only way the government can get money (other than taxation) is to find creditors who are willing to lend to them.

Hint: The 3rd Party is the Bankers friends who make commissions off the sales. Wake up!

The third parties are primary dealers in the Repo market. But yeah, I'm sure you're right. All the central banks in all the world have been set up to conduct monetary policy, administered by professional academic economists from various universities; all the statistical bureaus have fudged all their numbers to make the inflation results look legit; all the governments who set up the central banks, who insulated them from short-run political pressures to pursue inflationary policy by making them independent; all did so specifically so that a couple of bankers could make some commissions. What the fuck are you on?

Hey, either the Fed is criminally stupid or just plain criminal. Which is it?

Or a third option, you don't know shit about monetary economics but want to be on team "let's be angry at banks"?

 

[TakeAStepBack]

It's an entertaining race to the bottom. That said, i would plan accordingly.

 

[samjones]

You want to make money off of what you bought low in the gold market.

Sell it NOW

I really think you're over your head here. the idea behind hedging with gold is NOT to make dollars. You completely fail to see what we're saying here.

Since gold is trading at the top 1/3rd of a bubble, buying it would be foolish. I feel sorry for the people who got killed on the real estate bubble (me and about everyone else). You have to buy, own and live in a home.... pretty much in America you have to.

The future gold bubble victims. Just foolish and greedy and they're going to get what's coming to them.

 

[TakeAStepBack]

Keep holding your dollars as a long term financial future and I'll keep putting mine in commodity. I've been studying the boom/busts for years. Gold is not in a bubble. The dollar is.

 

[itfitzme]

The injections of base money from QE ...

I haven't been able to find data that differentiates the monetary base into reserves and cash. QE being an increase someones cash. I don't know if it is a matter of finding the time series data that someone has been kind enough to put together, or searching through the news reports. It would be more accurate if the Fed simply published it.

 

[syrenn]

 

[DSGE]

The injections of base money from QE ...

I haven't been able to find data that differentiates the monetary base into reserves and cash.

Monetary Data - FRED - St. Louis Fed

There's a whole thing for "Reserves" and it's got two measures of currency, "the currency component of M1" and "currency in circulation". Not sure what the difference is...

QE being an increase someones cash.

... QE is a large expansion of or change in the composition of the central bank's balance sheet. What do you have against reserves?

 

[expat_panama]

Keep holding your dollars as a long term financial future ...

Sorry I missed that --who is is that's advocating holding dollars long term?

 

[TakeAStepBack]

Well, we've got folks in here calling gold in the bubble and others saying sell. But the idea in hedging on gold is not for selling to make more dollars. Nor is gold in a bubble. It was a general statement not directed at anyone in particular.

 

[itfitzme]

That's because the Dollar is devaluing. If you don't believe that, fine.

I just gotta ask...the dollar is devaluing compared to what?

My first interpretation of the statement is that it means, "Gold is going up because the dollar is devaluing. We know the dollar is devaluing because the price of gold is going up." If that is what it means, it is self referential and useless.

 

[samjones]

That's because the Dollar is devaluing. If you don't believe that, fine.

I just gotta ask...the dollar is devaluing compared to what?

My first interpretation of the statement is that it means, "Gold is going up because the dollar is devaluing. We know the dollar is devaluing because the price of gold is going up." If that is what it means, it is self referential and useless.

*EVERYTHING* is devaluing except gold. The Ron Paul Whackjobs stand firm on their Archimedean Point of Gold.

 

[expat_panama]

...folks in here calling gold in the bubble and others saying sell. But the idea in hedging on gold is not for selling to make more dollars. Nor is gold in a bubble...

By their nature, bubbles can't be positively identified until they've passed. Sure, folks can say it is or it isn't and then get a 50% chance of saying 'toldyaso' but it's still a guess. What we do know is that for hundreds of years stocks --even bonds-- have paid better than gold--

--and those that say "this time is different" are usually wrong.

 

[samjones]

What we do know is that for hundreds of years stocks --even bonds-- have paid better than gold--

--and those that say "this time is different" are usually wrong.

Too bad that chart doesn't tell us how stocks and gold will do over the next 3 months.

 

[itfitzme]

What the fuck are you on?

Extended levels stress, especially during formative years, permanently kicks up levels of adrenaline. In the brain, the same chemical structure is nor-epinephrine. The focus becomes narrow, black and white, fixed on an absolute frame of reference, and addicted to being angry.

The amygdala and sympathetic nervous system are in permanent overdrive. When this happens, the brain focuses on less information and makes more tenuous connections. The brain relies less on the cerebral cortex and frontal lobe, which takes too long, and more on the "mamillary brain" to control the "lizard brain".

These get their names because they are common with lower mammals, like dogs, and reptiles. It is apparent when you look at your dog, it has no forehead. There is no cerebral cortex

The mammillary brain consists of the thalamus, the hippocampus and the hypothalamus. The thalamus is a "smaller processor". The hippocampus is predominate in memory. The hypothalamus releases hormones and triggers hormones in the body. This preps the body. At the same time, neural signals propagate down the brain stem, triggering the sympathetic nervous system and amygdala. The sympathetic nervous system regulates the body, the circulatory system and other stuff. The amygdala is a "muscle memory" brain that learns how to coordinate movement. Athletes, like baseball players, have great muscle memory.

This effect stands out in bold relief with PSTD sufferers. Coming back from the war, veterans that were in the heat of combat, will have flashbacks at the sound of a car backfiring. Rape victims also present symptoms. The use of drugs, like meth, are also similar. Early childhood abuse does as well. Early childhood is the worst because the brain develops into the condition. It is permanent.

Obviously, in the finer details it gets more complicated as the brain is a feedback system. Arousal in structures that depend on nor-epinephrine trigger other structures that use serotonin..

You can gauge what is going on by listening (or reading) for certain clues. We rely on external feedback to learn and 'be in touch with reality'. The lizard brain, mamillary brain, and the cerebral cortex, each use more and more external information to reach a conclusion. Each is therefore slower.

You can tell when someone is "not in touch" because they make statements indicating that they dismiss feedback. "I don't bother with graphs", "Data doesn't mean anything" , "Education is a waste of time", "All economists and statisticians don't know what they are talking about", etc. Sweeping generalization allow feedback to be eliminated. Facts don't matter because they already know what the "truth" is. They know because they can feel it. Their intuition tells them so.

You notice, of course, that things become "black and white". "Bankers friends who make commissions off the sales." Either you are Mother Teresa, living in abject poverty to feed the poor or you are completely selfishly motivated. There is no room for more than two possibilities. The concept of "and" eludes them.

The "black and white" description is literal. The thalamus processes primarily in black and white. Color processing is done in the occipital cortex. Obviously, thought processes that develop out of color processing are able to put things into a spectrum, a scale, rather than simplistic black and white categories.

They become fixated on an absolute frame of reference. The dollar is devaluing because the price of gold is going up. It doesn't matter that everything else is stable, even property value. This just means that everything else is devaluing, right along with the dollar. That is a separate issues.
And little things are magnified. A 2% rate of inflation is "out of control", a "massive devaluation of the dollar".

And, as you notice, they are perpetually angry. In fact, they are addicted to it. It is what they live for. Without it, they would simply fall asleep or be distracted by the next squirrel that ran across the yard.

So, it is right on target to ask "What are you on?" or say, "". Crazy is, after all, a disconnect from reality, the rejection of feedback. And there drug is adrenaline.
I am, of course, just generalizing. I'm sure this doesn't fit anyone that comments on-line. There are, of course, bankers that make money for their friends. No one has found that proverbial one handed economist. The CPI is a fixed frame of reference. Suggesting that someone is either an adrenaline junkey or isn't is a bit black and white.

 

[DSGE]

*snip*

Economics, physics, engineering and now neuroscience. I'm starting to get jealous.