Why Obama Will Likely Be A One Termer

[Annie]

For all the descriptions of compassion, this administration wouldn't know it if it kicked them in the face. They look at the poor, they look at the CEO's, they look at Union and government workers. They don't look at the multitude of those trying to survive on flat and falling incomes in the middle class. They do not look at those that were middle class that have fallen into lower groups via unemployment and underemployment. Now they are setting us on a road of a decade or more of misery and we know it:

News Headlines

Secret Walmart Survey Shows Inflation Already Here
Published: Thursday, 11 Nov 2010 | 2:59 PM ET

By: John Melloy
Executive Producer, Fast Money

Beyond the money

There might not have been a second round of quantitative easing, if Federal Reserve Chairman Ben Bernanke shopped at Walmart.

A new pricing survey of products sold at the world’s largest retailer [WMT 54.13 -0.21 (-0.39%) ] showed a 0.6 percent price increase in just the last two months, according to MKM Partners. At that rate, prices would be close to four percent higher a year from now, double the Fed’s mandate.

The “inaugural price survey shows a small, but meaningful increase on an 86-item grocery basket,” said Patrick McKeever, MKM Partners analyst, in a note. Most of the items McKeever chose to track were every day items like food and detergent and made by national brands.

On November 3, the Fed announced its much-anticipated purchase of $600 billion in Treasury securities. An effort to keep market rates low since the central bank’s benchmark rate is already at zero. The Federal Open Market Committee’s statement said, “Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate.”

But since that statement, interest rates have actually gone up, backfiring on a Fed chief who wants his quantitative easing to spark inflation of 2 percent annually. A moderate amount of inflation would be considered good for the economy. The problem is that inflation is already running well above a healthy level, investors said, Bernanke is just not looking in the right place, like a Walmart.

“I suspect that when the Chairman thinks about reflation he has a difficult time seeing any other asset besides real estate,” said Jim Iuorio of TJM Institutional Services. “Somehow the Fed thinks that if its not ‘wage driven’ inflation that it is somehow unimportant. It’s not unimportant to people who see everything they own (homes) going down in value and everything they need (food and energy) going up in price.”

...

I've thought it wrong when food and energy were removed from the CPI years ago. Now with the real estate bubble, it's really messed up.

 

[Sallow]

We need a little inflation. Contrary to popular belief..the economy is a fluid ever changing thing..it is not stagnant. And those that believe that one size fits all in every cycle of the economy (TAX CUTS..YEAH), are doomed to wreck it every time.

 

[Annie]

We need a little inflation. Contrary to popular belief..the economy is a fluid ever changing thing..it is not stagnant. And those that believe that one size fits all in every cycle of the economy (TAX CUTS..YEAH), are doomed to wreck it every time.

Did you fail to read the article or just have comprehension issues?

 

[goldcatt]

As things stand today I'd say Obama looks like a one-termer. But 2 years is a lot of time in politics. I have no idea what's going to happen between now and November 2012.

 

[Sallow]

We need a little inflation. Contrary to popular belief..the economy is a fluid ever changing thing..it is not stagnant. And those that believe that one size fits all in every cycle of the economy (TAX CUTS..YEAH), are doomed to wreck it every time.

Did you fail to read the article or just have comprehension issues?

Nope.

What I think is happening is deliberate.

I think Bernake is trying to create inflation.

The idiots that wrote the OpEd are probably to stupid to understand why..

 

[Annie]

So you didn't read a CNBC article because of what you thought they were saying. Ok. In fact, they stated the same as you and Bernake, problem is that already inflation is on pace to be double where he wants it in one year. He's not looking at food costs, nor in all likelihood gasoline costs.

 

[Sallow]

So you didn't read a CNBC article because of what you thought they were saying. Ok. In fact, they stated the same as you and Bernake, problem is that already inflation is on pace to be double where he wants it in one year. He's not looking at food costs, nor in all likelihood gasoline costs.

Like I posted. That may be deliberate.

Now play economist and try to figure out why such a strategy would be desirable and wanted.

At least try.

 

[Annie]

So you didn't read a CNBC article because of what you thought they were saying. Ok. In fact, they stated the same as you and Bernake, problem is that already inflation is on pace to be double where he wants it in one year. He's not looking at food costs, nor in all likelihood gasoline costs.

Like I posted. That may be deliberate.

Now play economist and try to figure out why such a strategy would be desirable and wanted.

At least try.

I can't think of a reason with this economy and the amount of un/underemployment that anyone would purposefully set off inflation beyond 4% in a year. Educate me, wise one. One caveat, if it's the 'cheaper dollar' argument for debt payments, I do believe China and the rest of the G-20 made it pretty clear that tit for tat is in store.

 

[Baruch Menachem]

Behrenke is trying to kick start asset prices, like houses, so that people will no longer be under water and will feel more comfortable spending money.

However, asset prices still aren't recovering yet.

But prices for essentials are starting to go up a lot.

We aren't getting the benefit of the inflation they want, but we are starting to suffer the effects of inflation on things that are really going to hurt.

Wages aren't going up either.

We are returning back to the glory days of the 70s, where we had miserable levels of unemployment and horrible inflation at the same time.

The next two years are going to be ugly.

 

[Sallow]

Behrenke is trying to kick start asset prices, like houses, so that people will no longer be under water and will feel more comfortable spending money.

However, asset prices still aren't recovering yet.

But prices for essentials are starting to go up a lot.

We aren't getting the benefit of the inflation they want, but we are starting to suffer the effects of inflation on things that are really going to hurt.

Wages aren't going up either.

We are returning back to the glory days of the 70s, where we had miserable levels of unemployment and horrible inflation at the same time.

The next two years are going to be ugly.

That's sort of a start in the right direction.

And what did Paul Volcker do?

 

[Annie]

Behrenke is trying to kick start asset prices, like houses, so that people will no longer be under water and will feel more comfortable spending money.

However, asset prices still aren't recovering yet.

But prices for essentials are starting to go up a lot.

We aren't getting the benefit of the inflation they want, but we are starting to suffer the effects of inflation on things that are really going to hurt.

Wages aren't going up either.

We are returning back to the glory days of the 70s, where we had miserable levels of unemployment and horrible inflation at the same time.

The next two years are going to be ugly.

That's sort of a start in the right direction.

And what did Paul Volcker do?

Baruch Menachem pretty much summed up what the article was saying. Now you were going to tell us why it's a good idea to begin an inflationary spiral which by definition the Fed would not be able to control. Instead of intimating you have the justifications, how about just putting them out clearly?

 

[Sallow]

Behrenke is trying to kick start asset prices, like houses, so that people will no longer be under water and will feel more comfortable spending money.

However, asset prices still aren't recovering yet.

But prices for essentials are starting to go up a lot.

We aren't getting the benefit of the inflation they want, but we are starting to suffer the effects of inflation on things that are really going to hurt.

Wages aren't going up either.

We are returning back to the glory days of the 70s, where we had miserable levels of unemployment and horrible inflation at the same time.

The next two years are going to be ugly.

That's sort of a start in the right direction.

And what did Paul Volcker do?

Baruch Menachem pretty much summed up what the article was saying. Now you were going to tell us why it's a good idea to begin an inflationary spiral which by definition the Fed would not be able to control. Instead of intimating you have the justifications, how about just putting them out clearly?

Do you think Federal Interest rates at zero are healthy?

Really?