Bernanke led economy proving critics clueless

[Truthmatters]

why is it the right is willing to follow people who cant get it right like Bohner and Paul?

yet they daily blather all over to insult the people who predicted this mess?

 

[Mad Scientist]

“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.”

Yeah that's why Gold is spiking, because there's no inflation and the dollar is gaining value. It's up nearly 20% on the year alone!

In fact China, India, Brazil and Russia have all made deals with each other to use the dollar exclusively. Oh wait, no they haven't. They're using their own currency.

Well, at least the Dollar is keeping it's position as the World's Reserve Currency. Oh wait, no it isn't. Countries are dumping the dollar.

But that's okay, the economy is improving so there won't be a new round of QE or Money Printing to further de-value the dollar.

Oh wait, yes there will:
Guest Post: The Fed Resumes Printing | ZeroHedge

The press conference suggested that quantitative easing (QE) remains on the table. As a result, new targeted asset purchases by the Fed are likely in our future. These additional purchases with newly printed money could become inflationary. That is why gold shot higher and the dollar weakened in the short term.

But we all have nothing to fear because a guy who is friends with the Ben Bernanke says so!

 

[Truthmatters]

do you realise there are people making money from gold hoarding?

 

[DSGE]

Yeah that's why Gold is spiking, because there's no inflation and the dollar is gaining value. It's up nearly 20% on the year alone!

So if everybody is so on edge about the impending inflation, can you explain why the TIPS spread hasn't exploded?

 

[Truthmatters]

The people currently making money off of Gold will not tell you when to sell.

There is going to be a whole lot of people who bought high and will get screwed.

The people making money on sellling clowns gold wont tell the clowns until its too late.

 

[Norman]

“It just doesn’t look like there’s any evidence right now” of an inflation surge, Hooper said. “There are no alarm bells going off in terms of the current picture.”

of course not. Morons like these do not see the big picture. There are two types of inflation that are discussed and these apologists attempt to carpet roll them. Monetary inflation, and price inflation.

"Monetary inflation" doesn't matter unless it's followed by rising NGDP. If there's a monetary expansion (see, we already have a phrase for "monetary inflation") which doesn't raise NGDP, that means the increase in the money supply is being offset by an increase in the demand for money and hence isn't having any effect on the real economy. When the price level rises, that's when we need to worry about people on fixed incomes and the erosion of the value of savings and whatnot. If "monetary inflation" doesn't result in price inflation, who cares?

Either way, there's no reason to fear hyperinflation (price inflation, the regular and important kind). The injections of base money from QE aren't permanent (although if they announced that they were keeping say... $100 billion of it in there permanently, that would be one way to fix the NGDP problem). They've got a medium term 2% PCE inflation target, and a clear way to control inflation despite the (temporarily) huge monetary base.

I agree.

Except for the fact that there is no way the FED can exit this. If they start selling (instead of buying) US bonds to make the QE "non permanent" US bond rates will surge so it's not really that realistic. Who will fund the deficit?

Meanwhile they have agreed to keep interest rates at 0% so more money will be created.

I believe bernanke is expecting sort of a miracle. I hope it happens but... it almost never does.

 

[Mad Scientist]

do you realise there are people making money from gold hoarding?

Yeah, that would be me. I bought when it was 1450 and now it's 1750. Up 300 in less than a year.

Of course, that has nothing to do with a devalued dollar. I'm sure Ben Bernanke's friend would agree.

This fake, planted article that you posted proves that the Privately Owned Federal Reserve is getting a lot of heat for it's policies, and that's a good thing.

 

[DSGE]

of course not. Morons like these do not see the big picture. There are two types of inflation that are discussed and these apologists attempt to carpet roll them. Monetary inflation, and price inflation.

"Monetary inflation" doesn't matter unless it's followed by rising NGDP. If there's a monetary expansion (see, we already have a phrase for "monetary inflation") which doesn't raise NGDP, that means the increase in the money supply is being offset by an increase in the demand for money and hence isn't having any effect on the real economy. When the price level rises, that's when we need to worry about people on fixed incomes and the erosion of the value of savings and whatnot. If "monetary inflation" doesn't result in price inflation, who cares?

Either way, there's no reason to fear hyperinflation (price inflation, the regular and important kind). The injections of base money from QE aren't permanent (although if they announced that they were keeping say... $100 billion of it in there permanently, that would be one way to fix the NGDP problem). They've got a medium term 2% PCE inflation target, and a clear way to control inflation despite the (temporarily) huge monetary base.

I agree.

Except for the fact that there is no way the FED can exit this. If they start selling (instead of buying) US bonds to make the QE "non permanent" US bond rates will surge so it's not really that realistic. Who will fund the deficit?

Ah, except they don't need to dump their balance sheet holdings in order to raise the Fed Funds rate any more! What most other central banks use to control the interbank overnight rate is called an "interest rate corridor" system. The Fed are paying interest on reserves now. So when lending picks up and starts stoking inflation, the Fed doesn't have to withdraw a huge quantity of reserves by selling a whole bunch of bonds all at once to control it. All it has to do is raise the rate it pays on reserves. The Fed Funds rate won't go below this level, since why would you lend to another bank overnight for less than you can get just getting interest on reserves? IOR lets the Fed control nominal spending while allowing it to slowly unwind its balance sheet.

Meanwhile they have agreed to keep interest rates at 0% so more money will be created.

They haven't "agreed". Their projections, conditional upon the current state of the economy, is that the FFR will remain near zero through to 2014.

I believe bernanke is expecting sort of a miracle. I hope it happens but... it almost never does.

Hopefully they'll get off their arse and aggressively ease.

 

[samjones]

Of course, that has nothing to do with a devalued dollar. I'm sure Ben Bernanke's friend would agree.

This fake, planted article that you posted proves that the Privately Owned Federal Reserve is getting a lot of heat for it's policies, and that's a good thing.

Another Ron Paul Whackjob.

The price of gold has risen in all major currencies. Are you now ready to tell us about the vast global conspiracy that Barack Obama is orchestrating?

 

[Norman]

Ah, except they don't need to dump their balance sheet holdings in order to raise the Fed Funds rate any more! What most other central banks use to control the interbank overnight rate is called an "interest rate corridor" system. The Fed are paying interest on reserves now. So when lending picks up and starts stoking inflation, the Fed doesn't have to withdraw a huge quantity of reserves by selling a whole bunch of bonds all at once to control it. All it has to do is raise the rate it pays on reserves. The Fed Funds rate won't go below this level, since why would you lend to another bank overnight for less than you can get just getting interest on reserves? IOR lets the Fed control nominal spending while allowing it to slowly unwind its balance sheet.

Increasing such rate would increase the deficit of US gov, which means they do have to monetize for pretty much the same amount. I agree they can unwind slowly - but that will probably mean long period of high inflation.

They haven't "agreed". Their projections, conditional upon the current state of the economy, is that the FFR will remain near zero through to 2014.

Sorry for the slip. What I meant is that they will most likely keep interest rates at 0%.


The positive thing is that the US gov budget deficits aren't predicted to be quite as drastic in the coming years. Maybe that's the miracle bernanke has been waiting for

 

[Truthmatters]

do you realise there are people making money from gold hoarding?

Yeah, that would be me. I bought when it was 1450 and now it's 1750. Up 300 in less than a year.

Of course, that has nothing to do with a devalued dollar. I'm sure Ben Bernanke's friend would agree.

This fake, planted article that you posted proves that the Privately Owned Federal Reserve is getting a lot of heat for it's policies, and that's a good thing.

dude you havent made anything until you sell it.

You will be the last to know when sell time comes

 

[Mad Scientist]

"Monetary inflation" doesn't matter unless it's followed by rising NGDP. If there's a monetary expansion (see, we already have a phrase for "monetary inflation") which doesn't raise NGDP, that means the increase in the money supply is being offset by an increase in the demand for money and hence isn't having any effect on the real economy. When the price level rises, that's when we need to worry about people on fixed incomes and the erosion of the value of savings and whatnot. If "monetary inflation" doesn't result in price inflation, who cares?

Either way, there's no reason to fear hyperinflation (price inflation, the regular and important kind). The injections of base money from QE aren't permanent (although if they announced that they were keeping say... $100 billion of it in there permanently, that would be one way to fix the NGDP problem). They've got a medium term 2% PCE inflation target, and a clear way to control inflation despite the (temporarily) huge monetary base.

You make it sound as if American Citizens are using this newly printed money in the economy. They aren't.

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

Also, the Fed made at least 7.7 Trillion dollars in loans to foreign banks. What part of those loans (or Money Injections as you call them) are not permanent?

Is Helicopter Ben gonna' call those Banks and say "Hey I need that money back"?

 

[DSGE]

"Monetary inflation" doesn't matter unless it's followed by rising NGDP. If there's a monetary expansion (see, we already have a phrase for "monetary inflation") which doesn't raise NGDP, that means the increase in the money supply is being offset by an increase in the demand for money and hence isn't having any effect on the real economy. When the price level rises, that's when we need to worry about people on fixed incomes and the erosion of the value of savings and whatnot. If "monetary inflation" doesn't result in price inflation, who cares?

Either way, there's no reason to fear hyperinflation (price inflation, the regular and important kind). The injections of base money from QE aren't permanent (although if they announced that they were keeping say... $100 billion of it in there permanently, that would be one way to fix the NGDP problem). They've got a medium term 2% PCE inflation target, and a clear way to control inflation despite the (temporarily) huge monetary base.

You make it sound as if American Citizens are using this newly printed money in the economy. They aren't.

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 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.

Also, the Fed made at least 7.7 Trillion dollars in loans to foreign banks. What part of those loans (or Money Injections as you call them) are not permanent?

Is Helicopter Ben gonna' call those Banks and say "Hey I need that money back"?

They were liquidity swaps with foreign central banks. Yes, they're temporary. He doesn't need to ask "hey i need that money back" because A) they're central banks, they're good for it or else the Fed will never deal with them again, B) they're collateralized, like all loans the Fed makes. If they default (which they won't), the Fed can just sell the collateral and remove the money that way.

 

[Mad Scientist]

dude you havent made anything until you sell it. You will be the last to know when sell time comes

I'm not buying Gold (and Silver) just to make more dollars. I'm buying Gold as a hedge against inflation Gold was about $260 an oz in 2001, and when the dollar implodes I can trade that in on whatever monetary instrument the Fed (or the UN for that matter) imposes upon us.

2001: $270 oz
2012: 1750 oz
Up 650% in 11 years!

Since Ben Bernanke took over the Fed:
2006: $603 oz
2012: 1750 oz
Up nearly 300% in 6 years!

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

 

[TakeAStepBack]

People just don't see it. I'm also hedging using gold. It's a fine strategy and so far is making my future feel a lot more comfortable in this uncertainty.

 

[Truthmatters]

Gold is going to screw you in the end when you are trying to sell it in a falling gold market and and finding no takers.


Can you say bubble.

You wont get the memo to sell until its too late.

 

[Truthmatters]

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

Sell it NOW

 

[expat_panama]

“The criticism about the Fed being inflationary is not fact-based,”...

Yeah that's why Gold is spiking, because there's no inflation and the dollar is gaining value...

Ah, problem of definitions for 'inflation'. Here's what most people mean when they say "inflaton" (from financial definition of Inflation (economics). Inflation (economics) finance term by the Free Online Dictionary.)--

Inflation
The rate at which the general level of prices for goods and services is rising.​

--and that means inflation has nothing to do with either gold or foreign exchange rates.

 

[Mad Scientist]

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

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.

You have two years to get yer fiscal house in order. Or move to New Zealand like James Cameron is.

 

[TakeAStepBack]

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.