Rate Hike or not

[william the wie]

US GDP is being revised up for a change but Inflation, wages and other countries, particularly the BRICS, are having problems. When at least three nuclear armed countries that can reach out and touch us are concerned about US interest rates that changes things. So, whenever the rate hike hits it will have to be modest but how modest and how soon should it be.

 

[Toro]

Yes.

It's not a 0% economy any more.

We aren't the central banker to the world.

 

[Toddsterpatriot]

Do it. Now.

 

[william the wie]

Yes.

It's not a 0% economy any more.

We aren't the central banker to the world.

Agreed but everytime I see estimates of foreign loans and capital flight based on fake export and import certificates in China the numbers seem surreal. If China's GDP growth is now significantly less than that of the US (Faber's estimate of 3% seems to be the consensus) then the Fed could bust several bubbles in the multi-trillion range. I would advocate a 10 basis point rate hike for at least 20 months so blaming the round eyes will be a very hard sale. It looks accommodating and diplomatic without being any such thing..

 

[EdwardBaiamonte]

US GDP is being revised up for a change but Inflation, wages and other countries, particularly the BRICS, are having problems. When at least three nuclear armed countries that can reach out and touch us are concerned about US interest rates that changes things. So, whenever the rate hike hits it will have to be modest but how modest and how soon should it be.

everyone on the planet agrees it should be modest, it will be 25 basis points, and it can be reversed overnight if need be. So, it should be done immediately in order that some vague semblance of rational capital allocation be recalled and eventually, after many rate hikes, become an important factor in economic decisions again.

 

[EdwardBaiamonte]

what is interesting though is that if you abolished the Fed and let banks make their own decisions about how much money to print you seemingly would get the same result we are getting now. This seemingly is due to the greater understanding of monetary policy that is now widely diffused throughout the banking community.

 

[william the wie]

Central Banking was developed in the Netherlands to finance their 80 year war of independence. While central banks must operate continuously as an instrument of foreign policy such as our sanctions wars with various countries it does distort the economy in dangerous ways. Concentrating on P&L with little but some interest in cash-flow and effectively no interest in balance sheet issues is the cause of the distortion.

 

[EdwardBaiamonte]

Central Banking was developed in the Netherlands to finance their 80 year war of independence. While central banks must operate continuously as an instrument of foreign policy such as our sanctions wars with various countries it does distort the economy in dangerous ways. Concentrating on P&L with little but some interest in cash-flow and effectively no interest in balance sheet issues is the cause of the distortion.

nice to see an illiterate liberal cut and paste but subject is rate hike or not!!