What did Joe Biden do to cause so much inflation, and what should Joe Biden do to curb inflation?

[Mac1958]

It seems to me if you are right, they had no need to hear you given you said they agree you are right. Sort of like we all have watches set precisely and I say it is 1 pm and all agree. They already have watches and I gave no new input.
My problem, and please clear it up, I posted figures saying 2.3 Trillion went into the economy yet per you Biden pumped in 11 trillion. We have a problem Houston.

Biden did not add $11 trillion.

That was the amount the Fed injected into the system between 2009 and 2020. $9 trillion was quantitative easing, $2 trillion was to grease short term credit markets. The whole time, we knew it was inflationary, but given the damage done to the system by the Meltdown, it essentially had to be done. At least most of it.

 

[Robert W]

Biden did not add $11 trillion.

That was the amount the Fed injected into the system between 2009 and 2020. $9 trillion was quantitative easing, $2 trillion was to grease short term credit markets. The whole time, we knew it was inflationary, but given the damage done to the system by the Meltdown, it essentially had to be done. At least most of it.

Clearly earlier I misunderstood what your message is.
Since this is your business, how do you rate Biden as to dealing with inflation? You bring up a topic that once was talked about a lot more. Quantitative easing. I suspect most here forgot about it mostly. I presume you agree with the lessons of Milton Friedman??

 

[Mac1958]

Clearly earlier I misunderstood what your message is.
Since this is your business, how do you rate Biden as to dealing with inflation? You bring up a topic that once was talked about a lot more. Quantitative easing. I suspect most here forgot about it mostly. I presume you agree with the lessons of Milton Friedman??

No, Friedman was essentially a libertarian, and was against pretty much all regulation. Alan Greenspan was a big fan of his, and he himself admitted to Congress his role in the Meltdown, when he steadfastly refused to regulate the very derivatives that damn near killed us.

I don't give Biden much credit on inflation. The Fed's interest rate increases are what brought it down, at least for the most part. Which is good, since the Fed played a large role in the inflationary spike when it sat on its hands for far too long and didn't raise rates quickly enough.

 

[Robert W]

No, Friedman was essentially a libertarian, and was against pretty much all regulation. Alan Greenspan was a big fan of his, and he himself admitted to Congress his role in the Meltdown, when he refused to regulate the very derivatives that damn near killed us.

I don't give Biden much credit on inflation. The Fed's interest rate increases are what brought it down, at least for the most part. Which is good, since the Fed played a large role in the inflationary spike when it sat on its hands for far too long and didn't raise rates quickly enough.

I am less interested in your belief as to Friedmans social leanings as he was well known for his financial leanings. As you told us here, you lecture on financial issues, I am surprised you put down Friedman given his prominence in the financial world. I owned a Mortgage firm when The problems took place. Bush got unfairly blamed. Greenspan was unfairly blamed. Derivatives had some effect. But we have to look at the roots of lending, my field of expertise, and explain what role both Fannie Mae and Freddie Mac played. We need to understand the poor loans so eagerly pushed into the market by some big players. Lehman Brothers in other words. They caused a wave of lenders to offer high cost, high interest rate to borrowers who were pretty likely to default. Borrowers at the street level are not sophisticated as a rule. I met few borrowers, even well educated in fact, who truly understood the home mortgage market. I was in the middle of this.

We have observed as you say the impact of the Feds. We saw a change in the feds once Biden took charge. He selected those who you say slow walked hiking interest rates. I like to quench the fire to stop fires. But pouring fuel on a fire and they saying look at me, I cured inflation is what people read and actually are not well suited to understand.

Here is a way to put it in writing. We have left wing financial experts. We have right wing financial experts. They seem not to meet in the middle very often.

 

[Robert W]

No, Friedman was essentially a libertarian, and was against pretty much all regulation. Alan Greenspan was a big fan of his, and he himself admitted to Congress his role in the Meltdown, when he steadfastly refused to regulate the very derivatives that damn near killed us.

I don't give Biden much credit on inflation. The Fed's interest rate increases are what brought it down, at least for the most part. Which is good, since the Fed played a large role in the inflationary spike when it sat on its hands for far too long and didn't raise rates quickly enough.

President Bush pleaded a lot of times with the Congress to change regulations in order to head off the crash. Democrats in Congress denied there would be a crash and turned Bush down as to the proper ways to head off the crash we all enjoy chatting about.

 

[Mac1958]

I am less interested in your belief as to Friedmans social leanings as he was well known for his financial leanings. As you told us here, you lecture on financial issues, I am surprised you put down Friedman given his prominence in the financial world. I owned a Mortgage firm when The problems took place. Bush got unfairly blamed. Greenspan was unfairly blamed. Derivatives had some effect. But we have to look at the roots of lending, my field of expertise, and explain what role both Fannie Mae and Freddie Mac played. We need to understand the poor loans so eagerly pushed into the market by some big players. Lehman Brothers in other words. They caused a wave of lenders to offer high cost, high interest rate to borrowers who were pretty likely to default. Borrowers at the street level are not sophisticated as a rule. I met few borrowers, even well educated in fact, who truly understood the home mortgage market. I was in the middle of this.

We have observed as you say the impact of the Feds. We saw a change in the feds once Biden took charge. He selected those who you say slow walked hiking interest rates. I like to quench the fire to stop fires. But pouring fuel on a fire and they saying look at me, I cured inflation is what people read and actually are not well suited to understand.

Here is a way to put it in writing. We have left wing financial experts. We have right wing financial experts. They seem not to meet in the middle very often.

The Meltdown was less about the retail selling of the mortgages themselves than it was about what was done with them after they were sold.

When they were then sold off and packaged into CMO's and (even worse) CDO's, that's when it went downhill. Many of the mortgages in those securities were crap (no doc loans, 125% loans, teaser rate loans), and many of the securities themselves were crap, and they still received AAA (that's Treasury-level) endorsements from the paid-off ratings agencies. Then, those who were packaging the shit securities just went bottom fishing and kept putting worse crap into them.

Then companies like AIG were selling default swaps (financial insurance policies) that allowed the banks to take a ton of risk off their books, so that they could BUY AND PUSH MORE SHIT SECURITIES.

And then it got far worse when the banks that put together and sold these shit securities BET AGAINST THEM, screwing up the secondary market and speeding up the collapse.

The mortgage companies knew they could sell off the shit mortgages overnight because the crooks who were creating the shit securities were ready to buy them, package them, and then sell them for big fees. All aided by the ratings agencies and their AAA ratings, which were ALSO shit.

 

[Toddsterpatriot]

No, Friedman was essentially a libertarian, and was against pretty much all regulation. Alan Greenspan was a big fan of his, and he himself admitted to Congress his role in the Meltdown, when he steadfastly refused to regulate the very derivatives that damn near killed us.

It wasn't lack of regulations on derivatives that nearly killed us, it was more likely
all the regulations that pushed banks to add to the supply of crappy mortgages
and the regulations that pushed banks and the GSEs to increase their demand for
crappy mortgages.

 

[Toddsterpatriot]

The Meltdown was less about the retail selling of the mortgages themselves than it was about what was done with them after they were sold.

When they were then sold off and packaged into CMO's and (even worse) CDO's, that's when it went downhill. Many of the mortgages in those securities were crap (no doc loans, 125% loans, teaser rate loans), and many of the securities themselves were crap, and they still received AAA (that's Treasury-level) endorsements from the paid-off ratings agencies. Then, those who were packaging the shit securities just went bottom fishing and kept putting worse crap into them.

Then companies like AIG were selling default swaps (financial insurance policies) that allowed the banks to take a ton of risk off their books, so that they could BUY AND PUSH MORE SHIT SECURITIES.

And then it got far worse when the banks that put together and sold these shit securities BET AGAINST THEM, screwing up the secondary market and speeding up the collapse.

The mortgage companies knew they could sell off the shit mortgages overnight because the crooks who were creating the shit securities were ready to buy them, package them, and then sell them for big fees. All aided by the ratings agencies and their AAA ratings, which were ALSO shit.

Then companies like AIG were selling default swaps (financial insurance policies) that allowed the banks to take a ton of risk off their books, so that they could BUY AND PUSH MORE SHIT SECURITIES.

Meh. The amount of risk they "took off" was a tiny part of the entire mortgage market.

The mortgage companies knew they could sell off the shit mortgages overnight because the crooks who were creating the shit securities were ready to buy them, package them, and then sell them for big fees.

And because HUD forced Fannie and Freddie to buy trillions of dollars of shit mortgages.

 

[Stormy Daniels]

Would you agree that those who can't predict inflation do not understand inflation? As I see this, if they understood inflation, they could predict inflation.

I don't think that's true for anything. A physician may understand cancer, but still be unable to predict exactly who it will hit, or when. Of course, they can still advise you that various things can increase or mitigate your risk for cancer.

 

[Robert W]

I don't think that's true for anything. A physician may understand cancer, but still be unable to predict exactly who it will hit, or when. Of course, they can still advise you that various things can increase or mitigate your risk for cancer.

Have you noticed, that when discussing inflation, there are as many theories as there are responders?

 

[OhPleaseJustQuit]

Have you noticed, that when discussing inflation, there are as many theories as there are responders?

.

Theories are like opinions and we all know what opinions are like.

.

 

[bripat9643]

The inflation was inevitable. Could his spending have exacerbated it? Definitely possible, but this was going to happen.'

How was it inevitable?

We had poured (because we pretty much had to) about $11 TRILLION total into markets in response to the Meltdown, and we all knew that it was going to cause inflation down the road. We kept interest rates artificially low for the same reason. Then COVID hit and global supply chains collapsed when global demand exploded coming out of the lockdowns. Then the goddamn Fed was about a year late in addressing the inflation adequately. By that time, the inflation had begun to feed on itself and we were screwed.

It was going to happen. The Fed has done a very good job since then, VERY good, which mitigates how pissed off I am that they waited so damn long.

Inflation could easily remain below 3.0% for 2024, and we could also have very solid growth with it. No one can predict it, though.

Blah, blah, blah.

 

[Stormy Daniels]

Blah, blah, blah.

That was brilliant.