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US economic downturn could get 'very serious' as Fed risks crushing demand with rate hikes: Judy Shelton

Oddball

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US economic downturn could get 'very serious' as Fed risks crushing demand with rate hikes: Judy Shelton

Former Federal Reserve Board nominee Judy Shelton warned Friday the Fed's strategy to combat inflation with rate hikes could crush supply and make the nation's economic situation worse. On "Mornings with Maria," Shelton also criticized Treasury Secretary Janet Yellen for endorsing the "wrong initiatives" like more government spending policies and regulations.

JUDY SHELTON: I think it could get very serious the longer it drags on, because if the Fed's efforts to crush inflation are instead just crushing supply, then you won't see much of an improvement on the inflation outlook, which the Fed will take as a sign that they need to be even tougher. And so they end up ratcheting higher and higher. And so I think we're looking potentially at the worst of all worlds - at an inflationary recession or stagflation. And that's what we would want to avoid. But I don't see how they're they're going to get out of this. If you have the Treasury Secretary, Janet Yellen, in her comments yesterday also included remarks praising the Inflation Reduction Act and she knows better. She was endorsing the green agenda. And she said the unfinished business of the Biden administration is to increase taxes on the wealthy and on corporations. These are exactly the wrong initiatives if you're trying to increase supply. What we really need is lower regulation, lower taxes, better energy, better trade policies, and we need to expand supply. Economic growth is not inflationary. Low unemployment is not inflationary. It's the fiscal overspending.

TheReaper says: If there is a wrong choice to be made here you can bet that Taliban Joe will make it. Of course, his choice will be bad but his timing will be impeccable, AFTER the elections.
The easy choices are far in the rear view mirror.....The bad debt was never allowed to be liquidated after the '08 crash....We're going on $8 trillion in Fed funny money printed up and doled out since then.


Better grab your ass....Things aren't going to get better anytime soon.
 

Toddsterpatriot

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The easy choices are far in the rear view mirror.....The bad debt was never allowed to be liquidated after the '08 crash....We're going on $8 trillion in Fed funny money printed up and doled out since then.


Better grab your ass....Things aren't going to get better anytime soon.

What bad debt? Why was it supposed to be liquidated? How? Repaid? Defaulted?
 

Toddsterpatriot

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Defaulted or sold for pennies on the dollar.

Investing in MBSs was a horrible idea and the Fed shouldn't have made the problem worse by bailing out Wall Street and buying them up.

Which ones should have defaulted but didn't and are still a problem?
If they sold for pennies, so what? If they didn't, so what?

Investing in MBSs was a horrible idea and the Fed shouldn't have made the problem worse by bailing out Wall Street and buying them up.

The Fed only bought guaranteed ones. How does that bailout Wall Street?
 

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Which ones should have defaulted but didn't and are still a problem?
If they sold for pennies, so what? If they didn't, so what?
Bailouts, bailouts, shotgun mergers, and more bailouts...Were you in a fucking coma in the fall of '08?
Investing in MBSs was a horrible idea and the Fed shouldn't have made the problem worse by bailing out Wall Street and buying them up.

The Fed only bought guaranteed ones. How does that bailout Wall Street?
Guaranteed by whom?
 

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The easy choices are far in the rear view mirror.....The bad debt was never allowed to be liquidated after the '08 crash....We're going on $8 trillion in Fed funny money printed up and doled out since then.


Better grab your ass....Things aren't going to get better anytime soon.
Our debt good or bad has nothing to do with the current inflation nor what the fed is doing.
 

Toddsterpatriot

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Bailouts, bailouts, shotgun mergers, and more bailouts...Were you in a fucking coma in the fall of '08?

Guaranteed by whom?

Mergers were paid for by the buyers. TARP was repaid at a huge profit to the US Treasury

So what bad debt still exists from then that is a risk to the system? You got nothing.

Guaranteed by whom?

The US government. So it was never at risk of defaulting, so the Fed wasn't saving anyone by buying garbage. Because it wasn't and isn't.
 

Oddball

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The US government. So it was never at risk of defaulting, so the Fed wasn't saving anyone by buying garbage. Because it wasn't and isn't.
Guaranteed by the gubmint.

"We'll make certain that this 'investment' pays off, if we have to tax you into a cardboard box to make it so!"
 

Toddsterpatriot

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Guaranteed by the gubmint.

"We'll make certain that this 'investment' pays off, if we have to tax you into a cardboard box to make it so!"

Yup. They bought the best MBS, not the worst.
 

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