Monday, March 23, 2009
Shocker: Government Plan to Fix Economy With Inflation Not Working
This CNBC article explains:
And I liked this part:
I have been saying this more and more in the last couple of weeks: Everyone says, "Bernanke will have to suck those reserves out of the system once the recovery begins." But what happens when unemployment is in double digits and CPI is rising at more than one point per month? People are acting as if that's impossible. We're back at the pre-1970s Phillips Curve consensus.
The Fed's bid to lower long-term interest rates on home mortgages and corporate debt is already running into trouble.
In the aftermath of last Wednesday's announcement that it would buy back $300 billion of 2-10 year Treasury securities, yields on benchmark 10-year notes were cut 51 basis points, from 3.02 percent to 2.51 percent in a matter of minutes.
But rates have since crawled up on Thursday and Friday, and show no sign of falling today, leaving the market just 36 basis points lower than before.
And I liked this part:
The Fed is trapped. The current buy back program is too small to have more than a symbolic effect. Expanding it, though, would trigger fears about inflationary financing and risks bringing on the rise in bond yields and collapse in confidence and the currency the Fed is desperate to avoid.
I have been saying this more and more in the last couple of weeks: Everyone says, "Bernanke will have to suck those reserves out of the system once the recovery begins." But what happens when unemployment is in double digits and CPI is rising at more than one point per month? People are acting as if that's impossible. We're back at the pre-1970s Phillips Curve consensus.
Comments:
Dear Dr. Murphy,
This comment does not address the issue of the Fed, but I would like your opinion about the AIG bonus furor. If the administration is concerned with the fiscal decisions being made at AIG, and since the Treasury Department owns 80% of AIG (I believe), then why doesn't it simply elect a new Board of Directors that will manage the company in accordance with its outlook? Wouldn't that be the conventional (not to mention legal) way of controlling the actions of the company?
Regards,
Nick Curcio
This comment does not address the issue of the Fed, but I would like your opinion about the AIG bonus furor. If the administration is concerned with the fiscal decisions being made at AIG, and since the Treasury Department owns 80% of AIG (I believe), then why doesn't it simply elect a new Board of Directors that will manage the company in accordance with its outlook? Wouldn't that be the conventional (not to mention legal) way of controlling the actions of the company?
Regards,
Nick Curcio
I grew up reading scary novels & watching scary movies. As a result not much scares me anymore. I dont read or watch those types of shows anymore, I just read economics. This stuff is getting scary. Economics is scary HAHAHA can you believe it?
Ok, I see what you are talking about with reguards to making legal stuff illegal. With my state requiring all cigarettes to be coated with the asbestoes type fire retardent (they burn your lungs and sicken a person) many people are going out of the state to get the old normal cigarettes. Today I noticed a huge billboard proclaiming $45 per pack fines for smuggling cigarettes as if people are doing so to avoid taxes. And another billboard advertising the new e-cigarettes as indoor safe, whatever that means. Are they smarties?
It seems very wrong to me that every stoplight post in the city is being replaced by giant monster poles with multiple cameras on them. I imagine the really tall towers scattered about have long range cameras mounted at the top of them. I would not be suprised to find they are those new x-ray cameras able to see into peoples homes as there seems to be no restrictions or controls to the use of these cameras.
There are islands off the coast of Venezualea said to be more "free". Would a white midwesterner be unwelcome there? My city is using the stimulus money to build more bike paths, parks and buildings to keep and attract young people. Do young people today not mind being under the constant watchful eye of a camera? By placing the cameras in the public schools first for a few years, were the pre-conditioning methods so successful the young now accept this as normal? Much like the adults who simply cannot imagine the economy getting any worse?
If they mop up excess cash from other areas of the world would it be enough to offset what you are talking about here?
Ok, I see what you are talking about with reguards to making legal stuff illegal. With my state requiring all cigarettes to be coated with the asbestoes type fire retardent (they burn your lungs and sicken a person) many people are going out of the state to get the old normal cigarettes. Today I noticed a huge billboard proclaiming $45 per pack fines for smuggling cigarettes as if people are doing so to avoid taxes. And another billboard advertising the new e-cigarettes as indoor safe, whatever that means. Are they smarties?
It seems very wrong to me that every stoplight post in the city is being replaced by giant monster poles with multiple cameras on them. I imagine the really tall towers scattered about have long range cameras mounted at the top of them. I would not be suprised to find they are those new x-ray cameras able to see into peoples homes as there seems to be no restrictions or controls to the use of these cameras.
There are islands off the coast of Venezualea said to be more "free". Would a white midwesterner be unwelcome there? My city is using the stimulus money to build more bike paths, parks and buildings to keep and attract young people. Do young people today not mind being under the constant watchful eye of a camera? By placing the cameras in the public schools first for a few years, were the pre-conditioning methods so successful the young now accept this as normal? Much like the adults who simply cannot imagine the economy getting any worse?
If they mop up excess cash from other areas of the world would it be enough to offset what you are talking about here?
# posted by 
: March 23, 2009 at 3:01 PM
: March 23, 2009 at 3:01 PM
Don't even sweat it, the stupider the public and the mainstream economists become, the richer we libertarians become.
Buy gold, buy lots of it. And don't keep it in a bank, but in your own secure safe.
When you die, will most of it to the Mises Institute.
Buy gold, buy lots of it. And don't keep it in a bank, but in your own secure safe.
When you die, will most of it to the Mises Institute.
# posted by : March 23, 2009 at 6:06 PM
: March 23, 2009 at 6:06 PM
To the Mises Institute yeah, very funny, if I was single I would.
Thanks for the laugh.
The second one today after the Robert Higgs article:
"...Even after I had earned my Ph.D., he used to look at me with a gleam in his eye and say, “The trouble with you is that you don’t know nothin’.” And I knew he was right."
Thanks for the laugh.
The second one today after the Robert Higgs article:
"...Even after I had earned my Ph.D., he used to look at me with a gleam in his eye and say, “The trouble with you is that you don’t know nothin’.” And I knew he was right."
# posted by : March 23, 2009 at 11:39 PM
: March 23, 2009 at 11:39 PM
Oops, I just re-read that, I didn't mean to imply anything towards Sukrit.
Now back to, dont sweat it... That is hard for me to do. No measure of control.
O.k., where do I get off thinking I had any measure of control or expectations in the first place, right? Loosen up, relax, jump out & freefall. As long as nobody says this is a no brainer, I think I can do that.
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Now back to, dont sweat it... That is hard for me to do. No measure of control.
O.k., where do I get off thinking I had any measure of control or expectations in the first place, right? Loosen up, relax, jump out & freefall. As long as nobody says this is a no brainer, I think I can do that.
# posted by : March 23, 2009 at 11:48 PM
: March 23, 2009 at 11:48 PM Subscribe to Post Comments [Atom]
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