Where is the inflation?

[boedicca]

Still too much slack in the economy, we're still not growing fast enough to worry about inflation.

The 10-year Treasury is back up to 2.40%, but it's not very stable.

The trick will be whether the Fed can effectively suck the massive liquidity back out of the system. Too fast and we stall again. Too slowly and we get rapid inflation.

Any bets?

.

My bet: The Fed will continue with ZIRP as long as Obama is in office in order to kick the can to his successor.

 

[boedicca]

Shopped for groceries lately?

No, shelf prices haven't gone up.

But half-gallon cartons of ice cream now contain 1.5 quarts.

Quart jars of mayonnaise now hold 28 ounces.

On the brighter side your shopping bags aren't nearly as heavy as they used to be and you get to see your friendly robo-cashier more often.

It's part of Obama's plan to combat Obesity in America. Stupid American Voters won't notice the shrinkage.

 

[Mac1958]

Still too much slack in the economy, we're still not growing fast enough to worry about inflation.

The 10-year Treasury is back up to 2.40%, but it's not very stable.

The trick will be whether the Fed can effectively suck the massive liquidity back out of the system. Too fast and we stall again. Too slowly and we get rapid inflation.

Any bets?

.

My bet: The Fed will continue with ZIRP as long as Obama is in office in order to kick the can to his successor.

Yellen's now hinting that she'll move in late 2015, but of course she's hinted that before.

Surreal.

.

 

[Contumacious]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record

Wrong. They created much, much more to buy trillions in Treasuries and MBS.
The $98.7 billion is the difference between their interest expense, 0.25% paid on reserve balances, and their interest income on their bond holdings. After all other Fed expenses are taken out.

BE THAT AS IT MAY,


THE POINT IS THAT 98.7 BILLIONS - OR WHATEVER THE EXACT AMOUNT - IS HIGHLY INFLATIONARY.

THE CONGRESSCRITTERS USE THE FRB TO LEVY AN INDIRECT TAX ON TAXPAYERS AND PRODUCERS.


.

 

[bendog]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

An increase in bond prices is not inflation.
DEFINITION of 'Inflation'
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.

INVESTOPEDIA EXPLAINS 'Inflation'
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.



Read more: http://www.investopedia.com/terms/i/inflation.asp#ixzz3fn2sy7mG
Follow us: @Investopedia on Twitter

There is no "general" rise in prices. There are increasing prices for various categories of goods ... and decreasing prices in others.

The Fed's purpose in buying bonds was to stabilize the bond market, in which the bottom literally fell out.

The question was whether the Fed can sell the bonds before inflation sets in. If, as G5000 may have hypothesized, the Fed sells at a loss, I think it's really irrelevant, because, as the Forbes linked article in the prior posts noted, the profit turned over to the Treasury is "basically an intergovernmental transfer." That is, when all is said and done, and the Fed exists the bond market, the "profits" plus "amt of sale of bonds" may be roughly a wash compared to what the Fed dumped into the bond market.

And besides, it's not "real money." Under Greenspan it was verboten for the Fed to act within a market. That appears no longer the case. But, there's not really an effect to money supply or the amount we are borrowing to finance govt spending. THAT's real money. Or at least as "real" as money gets these days.

 

[Contumacious]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

An increase in bond prices is not inflation.
DEFINITION of 'Inflation'
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.

INVESTOPEDIA EXPLAINS 'Inflation'
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.



Read more: http://www.investopedia.com/terms/i/inflation.asp#ixzz3fn2sy7mG
Follow us: @Investopedia on Twitter

There is no "general" rise in prices. There are increasing prices for various categories of goods ... and decreasing prices in others.

The Fed's purpose in buying bonds was to stabilize the bond market, in which the bottom literally fell out.

The question was whether the Fed can sell the bonds before inflation sets in. If, as G5000 may have hypothesized, the Fed sells at a loss, I think it's really irrelevant, because, as the Forbes linked article in the prior posts noted, the profit turned over to the Treasury is "basically an intergovernmental transfer." That is, when all is said and done, and the Fed exists the bond market, the "profits" plus "amt of sale of bonds" may be roughly a wash compared to what the Fed dumped into the bond market.

And besides, it's not "real money." Under Greenspan it was verboten for the Fed to act within a market. That appears no longer the case. But, there's not really an effect to money supply or the amount we are borrowing to finance govt spending. THAT's real money. Or at least as "real" as money gets these days.

BULLSHIT VERNON.


IT IS INFLATIONARY IF BONDS INCREASED IN PRICE DUE TO THE FEDS INTERVENING IN THE MARKET.


.

 

[bendog]

Inflation is ''General" increase. The Fed may create a balloon market. I'm sorry if economic definitions are not to your liking.

Mankiw't text is more "pithy." Inflation - "an increase in the overall level of prices in an economy."

 

[Toddsterpatriot]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record

Wrong. They created much, much more to buy trillions in Treasuries and MBS.
The $98.7 billion is the difference between their interest expense, 0.25% paid on reserve balances, and their interest income on their bond holdings. After all other Fed expenses are taken out.

BE THAT AS IT MAY,


THE POINT IS THAT 98.7 BILLIONS - OR WHATEVER THE EXACT AMOUNT - IS HIGHLY INFLATIONARY.

THE CONGRESSCRITTERS USE THE FRB TO LEVY AN INDIRECT TAX ON TAXPAYERS AND PRODUCERS.


.

THE POINT IS THAT 98.7 BILLIONS - OR WHATEVER THE EXACT AMOUNT - IS HIGHLY INFLATIONARY.

The Fed has expanded their balance sheet by about $3.5 trillion over the last 7 years.
Hasn't been very inflationary at all.

 

[g5000]

The Fed has expanded their balance sheet by about $3.5 trillion over the last 7 years.
Hasn't been very inflationary at all.

Yet. For the reasons I stated at the beginning.

 

[g5000]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

An increase in bond prices is not inflation.
DEFINITION of 'Inflation'
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.

INVESTOPEDIA EXPLAINS 'Inflation'
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.



Read more: http://www.investopedia.com/terms/i/inflation.asp#ixzz3fn2sy7mG
Follow us: @Investopedia on Twitter

There is no "general" rise in prices. There are increasing prices for various categories of goods ... and decreasing prices in others.

The Fed's purpose in buying bonds was to stabilize the bond market, in which the bottom literally fell out.

The question was whether the Fed can sell the bonds before inflation sets in. If, as G5000 may have hypothesized, the Fed sells at a loss, I think it's really irrelevant, because, as the Forbes linked article in the prior posts noted, the profit turned over to the Treasury is "basically an intergovernmental transfer." That is, when all is said and done, and the Fed exists the bond market, the "profits" plus "amt of sale of bonds" may be roughly a wash compared to what the Fed dumped into the bond market.

And besides, it's not "real money." Under Greenspan it was verboten for the Fed to act within a market. That appears no longer the case. But, there's not really an effect to money supply or the amount we are borrowing to finance govt spending. THAT's real money. Or at least as "real" as money gets these days.

BULLSHIT VERNON.


IT IS INFLATIONARY IF BONDS INCREASED IN PRICE DUE TO THE FEDS INTERVENING IN THE MARKET.


.

The price of bonds rose significantly due to the Fed's intervention. Are you not paying attention!?!

 

[blackhawk]

Check the grocery store you can find it there.

 

[g5000]

Daily Treasury Yield Curve Rates

The prices for Treasuries have all been significantly increased by the Fed's intervention.

We are in a bubble, kids. Just like the housing bubble. Only bigger. Much bigger.

 

[bendog]

Check the grocery store you can find it there.

Food has increased in price, but that rise has no connection to the fed.

Why Are Food Prices Rising

And, with the Calif droubt, we better be planning gardens.

 

[g5000]

Check the grocery store you can find it there.

Nope. That's anecdotal.

I provided a link earlier showing the prices for various foods and energy over time.

People make shit up about how much food has gone up. In short, they lie.

 

[bendog]

Daily Treasury Yield Curve Rates

The prices for Treasuries have all been significantly increased by the Fed's intervention.

We are in a bubble, kids. Just like the housing bubble.

I was going to ask that about JPMorgan Chase. Profits took a big hit around 2012. They settled a case with the feds then. But Treasury's also took a hit.

What caused that?

 

[blackhawk]

Check the grocery store you can find it there.

Nope. That's anecdotal.

I provided a link earlier showing the prices for various foods and energy over time.

People make shit up about how much food has gone up. In short, they lie.

In short they don't you can argue over why food prices have gone up but they have gone up.

 

[HenryBHough]

When too much money chases too few goods it's good for those with goods to sell so long as they constrain the supply.

 

[bendog]

Check the grocery store you can find it there.

Nope. That's anecdotal.

I provided a link earlier showing the prices for various foods and energy over time.

People make shit up about how much food has gone up. In short, they lie.

In short they don't you can argue over why food prices have gone up but they have gone up.

Your sentence is not a sentence, but as to food prices .... the price rise was forecast BEFORE the fed's actions.

http://www.economist.com/node/10252015

 

[Delta4Embassy]

Inflation's hidden under taxes. When I started smoking they were $1.35/pack. When I quit over $7/pack.

 

[Toddsterpatriot]

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds. And neither is anyone else. To make a decent profit on safe investments these days, you need TRILLIONS in a massive carry trade. And that forces even billion dollar investors to take risky investments in order to make any decent returns, such as lending money to Greece.

That's what I mean about paying top dollar. The Fed is paying pretty damned close to the theoretical limit of bond prices. Under ZIRP, there is nowhere for interest rates to go but up, which means there is nowhere for bond prices to go but down. Which means all those bonds the Fed bought will be like those $500,000 houses bought during the bubble being worth only $300,000 now.

Underwater.

So when it comes time to sell bonds to soak up inflationary cash, they won't be able to soak up as much as they put in.

By the way, Todd. Thank to their ZIRP bank bailout program, the Fed isn't making much profit on its bonds.

The Federal Reserve released its annual income report Friday and the central bank says it will transfer approximately $98.7 billion to the U.S. Treasury, a record.

Fed Sending 98.7 Billion Of 2014 Profits To U.S. Treasury

EXACTLY.

THE FRB CREATED OUT OF THIN AIR - 98.7 BBBBBBBBBBBBBBBBBBBBBBBBBBBBBillions - a record - yet the dingle berry is asking where is the inflation.


The narcotized never cease to amaze me.


.


.

An increase in bond prices is not inflation.
DEFINITION of 'Inflation'
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. Central banks attempt to stop severe inflation, along with severe deflation, in an attempt to keep the excessive growth of prices to a minimum.

INVESTOPEDIA EXPLAINS 'Inflation'
As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of gum will cost $1.02 in a year.



Read more: http://www.investopedia.com/terms/i/inflation.asp#ixzz3fn2sy7mG
Follow us: @Investopedia on Twitter

There is no "general" rise in prices. There are increasing prices for various categories of goods ... and decreasing prices in others.

The Fed's purpose in buying bonds was to stabilize the bond market, in which the bottom literally fell out.

The question was whether the Fed can sell the bonds before inflation sets in. If, as G5000 may have hypothesized, the Fed sells at a loss, I think it's really irrelevant, because, as the Forbes linked article in the prior posts noted, the profit turned over to the Treasury is "basically an intergovernmental transfer." That is, when all is said and done, and the Fed exists the bond market, the "profits" plus "amt of sale of bonds" may be roughly a wash compared to what the Fed dumped into the bond market.

And besides, it's not "real money." Under Greenspan it was verboten for the Fed to act within a market. That appears no longer the case. But, there's not really an effect to money supply or the amount we are borrowing to finance govt spending. THAT's real money. Or at least as "real" as money gets these days.

BULLSHIT VERNON.


IT IS INFLATIONARY IF BONDS INCREASED IN PRICE DUE TO THE FEDS INTERVENING IN THE MARKET.


.

The price of bonds rose significantly due to the Fed's intervention. Are you not paying attention!?!

The price of bonds rose significantly due to the Fed's intervention.

Well, they do have $225 billion in unrealized gains on their bond holdings, as of March 31, 2015.

http://www.federalreserve.gov/monetarypolicy/files/quarterly-report-20150331.pdf

Page 14 of the above PDF file.