US added 288,000 jobs in June...Unemployment down to 6.1% (from 6.3%)

[fskimospy]

DSF, Shadowstats is not relevant to any discussion of economics. It is literally the 'unskewed polls' of the economics world.

Even a quick perusal of their claimed stats give results that are manifestly insane. (for an example, calculate how prices would have changed since 2000 using their inflation numbers and then do a sanity check)

 

[realibrad]

Insufficient aggregate demand, low inflation expectations, etc. This is in fact the definition of the Keynesian liquidity trap, which has sadly been precisely what Keynesians predicted.



Well first I would say "what Austrian model?" Be specific.

Secondly I would say that many Austrian economists dismiss the velocity of money.

Third, I would say, forget Peter Schiff. Everyone knows he was a hack. Give me someone who claims to be of the Austrian school who issued a prediction in 2008 that large increases in the money supply, large federal deficits, etc, would still end up as low inflation, bordering on deflation.

Seriously, ANYONE.

Ok, so then we are done with Schiff.

The Austrian idea about inflation, is that inflation is an increase in the money supply relative to goods. If you are looking for a mathematical model there is not one. There may be one some day, but there isint one now. The money supply has not increased in real terms, so no inflation. I honestly dont know of any economist Austrian or otherwise that said inflation would go up even though the real money supply wold not.

I think the belief of those who were saying inflation would go up, said so on the assumption that banks would start converting their reserves sooner than now. They thought that those reserves would enter into the real money supply and that would cause inflation. That idea is not supported by a model, but conjecture on the future. Unless you have someone else that I dont know about.

 

[fskimospy]

Ok, so then we are done with Schiff.

The Austrian idea about inflation, is that inflation is an increase in the money supply relative to goods. If you are looking for a mathematical model there is not one. There may be one some day, but there isint one now. The money supply has not increased in real terms, so no inflation. I honestly dont know of any economist Austrian or otherwise that said inflation would go up even though the real money supply wold not.

Here is a link to a chart of the "true money supply" as defined by the LVM Institute. Can you explain how this is compatible with what you're arguing?

http://globaleconomicanalysis.blogspot.com/2010/03/true-money-supply-tms-vs-austrian-money.html

I think the belief of those who were saying inflation would go up, said so on the assumption that banks would start converting their reserves sooner than now. They thought that those reserves would enter into the real money supply and that would cause inflation. That idea is not supported by a model, but conjecture on the future. Unless you have someone else that I dont know about.

So we are in agreement that literally not a single Austrian economist predicted this, and in fact every one I'm aware of predicted the opposite?

 

[Doc Savage Fan]

DSF, Shadowstats is not relevant to any discussion of economics. It is literally the 'unskewed polls' of the economics world.

Even a quick perusal of their claimed stats give results that are manifestly insane. (for an example, calculate how prices would have changed since 2000 using their inflation numbers and then do a sanity check)

Perhaps you'll like this chart better.

 

[First]

The argument I was making is that the high risk loans were a much higher risk than what was believed to be understood. The interest rates should have been higher, and that would have pushed out the buyers of the loans. This would mean fewer loans overall, and a net decrease in the profitability of that activity. That loss in profitability would mean the other sectors that had been dependent on that income would go away. I don't mean to say that high risk loans cant be profitable, so sorry if it came off that way. What I'm saying is that the way the industry was making money off of them was not productive, because in the long run, more money was lost then created from it. Once the prices collapsed, the whole thing collapsed.

Lower interest rates from the Fed might have been the case in the early 2000's but was a non-factor by 2004, which was the same time period (2004-2007) when interest rates naturally went much higher and when the vast majority of bad loans, bad actors and shenanigans took place WRT abandoned underwriting standards.

The reason the banks are holding onto their reserves at the levels they are, is because its not worth it for them to lead it out. If it turns out they must keep more liquid capital on hand, it could be a larger expense to get that capital. But, what I was saying is that its not cost effective, because of poor investment opportunities and unknown future. His argument was that you cannot lead excess reserves, and you most definitely can.

You cannot lend "excess reserves". See here.

The point of paying interest on the reserves is to stop inflation.

Um, what? No. Paying

"In principle, the interest rate the Fed pays on bank reserves should set a floor on the overnight interest rate, as banks should be unwilling to lend reserves at a rate lower than they can receive from the Fed."

That is from Ben Bernanke.

http://www.newyorkfed.org/research/current_issues/ci15-8.pdf

Do you have any idea what the overnight rate is? Like nothing. It does not stifle business activity by keeping banks from lending. Banks lend for all sorts of reasons far beyond borrowing through the discount window, because the yield is vastly superior. You're confusing discount rate and fed funds rate maybe.

That link also explains how inflation is held down by incentivising the banks to keep the money. The reason it keeps down inflation is because it does not increase the real money supply. If interest on the reserves did not mean anything, they why did the Fed do it with the explicit intent to stop the banks from lending it.

The Fed did no such thing, and Ben Bernanke's quote does nothing to support your claim the Fed is trying to keep banks from lending. Banks keeping reserves, which they're statutorily obligated to, has nothing to do with the Fed.

Also, Peter is wrong about a lot of things. Having said that, inflation not running rampant is explained by the actions of the Fed.

No it is not. Literally not one publicly known Austrian economic that I'm aware of predicted inflation would be so low that deflation would be a bigger concern. Meanwhile plenty of Keynesians did explicitly because they understood that directly injecting the economy with bond buying doesn't actually mean the money gets into people's hands directly, and therefore the money supply doesn't increase nearly as much you think.

 

[werepossum]

SNIP

No it is not. Literally not one publicly known Austrian economic that I'm aware of predicted inflation would be so low that deflation would be a bigger concern. Meanwhile plenty of Keynesians did explicitly because they understood that directly injecting the economy with bond buying doesn't actually mean the money gets into people's hands directly, and therefore the money supply doesn't increase nearly as much you think.

Now you're back to his original point, that we haven't see inflation because the real money supply has not significantly increased. Instead, we've created new money to replace foreign investment - a helluva trick, really, make up money and loan it to the government. Only problem is that you're making a lot of really rich people a lot richer in the name of helping the little guy.

 

[Attic]

We have wealth inequality unseen since the great depression, 35 year lows in labor force participation rate, Q1 GDP of -2.9%, concentration of wealth exacerbated by Fed actions.... And anyone is to believe the discussion should be dominated by numbers espousing a recovery?

I'm sure the recovery will "trickle down" any day now, and then the joke will be complete when both D and R clowns in power enjoy the privilege of pissing down everyone's back while claiming it's raining and laughing with the knowledge that roughly half the people at any given time know it's actually piss while the rest shampoo their hair and celebrate with each other. Of course it's not really Obama or Reagan (both apparently selected for their ability to be easily manipulated and controlled) who are doing the pissing, it's been the 0.1% the whole time.

Watching folks follow party lines makes more sense when you realize the political has nothing to do with the moral. The harm caused to so many isn't quite as hard to watch when so many have given into the political.

 

[Engineer]

We have wealth inequality unseen since the great depression, 35 year lows in labor force participation rate, Q1 GDP of -2.9%, concentration of wealth exacerbated by Fed actions.... And anyone is to believe the discussion should be dominated by numbers espousing a recovery?

I'm sure the recovery will "trickle down" any day now, and then the joke will be complete when both D and R clowns in power enjoy the privilege of pissing down everyone's back while claiming it's raining and laughing with the knowledge that roughly half the people at any given time know it's actually piss while the rest shampoo their hair and celebrate with each other. Of course it's not really Obama or Reagan (both apparently selected for their ability to be easily manipulated and controlled) who are doing the pissing, it's been the 0.1% the whole time.

Watching folks follow party lines makes more sense when you realize the political has nothing to do with the moral. The harm caused to so many isn't quite as hard to watch when so many have given into the political.

:thumbsup:

 

[WhipperSnapper]

Virtual Economy's Phantom Job Gains Are Based On Statistical Fraud

Washington can’t stop lying. Don’t be convinced by last Thursday’s job report that it is your fault if you don’t have a job. Those 288,000 jobs and 6.1% unemployment rate are more fiction than reality.

In his analysis of the June Labor Data from the Bureau of Labor Statistics, John Williams (www.ShadowStats.com) wrote that the 288,000 June jobs and 6.1% unemployment rate are “far removed from common experience and underlying reality.” Payrolls were overstated by “massive, hidden shifts in seasonal adjustments,” and the Birth-Death model added the usual phantom jobs.

Williams reports that “the seasonal factors are changed each and every month as part of the concurrent seasonal-adjustment process, which is tantamount to a fraud,” as the changes in the seasonal factors can inflate the jobs number. While the headline numbers always are on a new basis, the prior reporting is not revised so as to be consistent.

The monthly unemployment rates are not comparable, so one doesn’t know whether the official U.3 rate (the headline rate that the financial press reports) went up or down

 

[Spungo]

I love these threads. Even after polls show Obama is the worst president since WW2, people will fight to defend his incompetence and claim anyone attacking him is racist.
-Interest rates are manipulated down via QE, which steals money from retired people who rely on interest income.
-Labor participation among people 55 and older is rising because they can't retire.
-Overall labor participation is at a 38 year low.
-Labor participation among men is at an all time low.
-The June jobs report showed a loss of half a million full time jobs, indicating the success of Obama's plan to make the work week 29.5 hours instead of 40.
-Home ownership is at a 19 year low.
-Q1 GDP contracted at the fastest pace since the last financial crisis.

No it is not. Literally not one publicly known Austrian economic that I'm aware of predicted inflation would be so low that deflation would be a bigger concern

The people fearing deflation are retarded. How are food prices doing? They're up. Oil? Up. Healthcare? Up. Education? Up. Every damn thing imaginable is getting expensive while our wages remain flat. There's a word for that - stagflation. Average people are being crushed by inflation while Yellen is busy attacking windmills.

 

[realibrad]

Lower interest rates from the Fed might have been the case in the early 2000's but was a non-factor by 2004, which was the same time period (2004-2007) when interest rates naturally went much higher and when the vast majority of bad loans, bad actors and shenanigans took place WRT abandoned underwriting standards.



You cannot lend "excess reserves". See here.



Um, what? No. Paying



Do you have any idea what the overnight rate is? Like nothing. It does not stifle business activity by keeping banks from lending. Banks lend for all sorts of reasons far beyond borrowing through the discount window, because the yield is vastly superior. You're confusing discount rate and fed funds rate maybe.



The Fed did no such thing, and Ben Bernanke's quote does nothing to support your claim the Fed is trying to keep banks from lending. Banks keeping reserves, which they're statutorily obligated to, has nothing to do with the Fed.



No it is not. Literally not one publicly known Austrian economic that I'm aware of predicted inflation would be so low that deflation would be a bigger concern. Meanwhile plenty of Keynesians did explicitly because they understood that directly injecting the economy with bond buying doesn't actually mean the money gets into people's hands directly, and therefore the money supply doesn't increase nearly as much you think.

I feel like you have me going in circles. The FED set the floor above the overnight rate to stop banks from lending. It does not force banks to stop lending, but it does take away a huge incentive. There are massive excess reserves right now. It used to be that banks would then lend out those excess reserves to other banks, so those banks could make loans, thus introducing money into the market. Those excess reserves pre 2008 did not make interest, so why hold them. Post 2008, reserves not collect interest, and not an arbitrary amount either. So, banks would rather make a stable amount of interest vs loaning out money that could be put into a risky investment.

If money does not make it into the market, its not really there in real terms.

Pre 2008
Bank has X excess reserves that does not make money, so it loans it or converts it into capital to make interest. This puts the excess reserves into the real money supply.

Post 2008
Bank has X excess reserves that does make money. A risky market does not seem like a sure investment, so they keep the money in reserves to make interest. Reserves never make it into the money supply.

I linked a paper from the NYFED which said this...

If inflationary pressures begin to appear while
the crisis-related programs are still in place, the central bank
can use its interest-on-reserves policy to raise interest rates
without necessarily removing all of the newly created reserves.

http://www.newyorkfed.org/research/current_issues/ci15-8.pdf

I dont know how much more explicit that has to be.

 

[realibrad]

Here is a link to a chart of the "true money supply" as defined by the LVM Institute. Can you explain how this is compatible with what you're arguing?

http://globaleconomicanalysis.blogspot.com/2010/03/true-money-supply-tms-vs-austrian-money.html



So we are in agreement that literally not a single Austrian economist predicted this, and in fact every one I'm aware of predicted the opposite?

I cant explain what someone said, when I dont know anyone who said what you are saying.

So, tell me of an economist who is from the Austrian school that said inflation would go up because of a nominal increase in the money supply, and not the real money supply.

 

[dmcowen674]

McCain and Romney were not on the same ticket.

Link?

Obama got what done? Republicans haven't dominated congress at any point during Obama's presidency. They got the house in 2010 but before that Dems had enough of a majority in the house and senate they could pass anything they wanted without a single Republican vote. I am not sure what anti-people Corporations are.

What?

Join date of 2007.

You seem to have no knowledge of anything prior to 2008, what are you 12?

 

[fskimospy]

I cant explain what someone said, when I dont know anyone who said what you are saying.

Come on. You yourself previously admitted the Austrians were wrong on inflation, why are you backtracking now?

So, tell me of an economist who is from the Austrian school that said inflation would go up because of a nominal increase in the money supply, and not the real money supply.

Austrians seem to be claiming the real money supply has increased:

Regardless, you know as well as I do that tons of people predicted massive inflation, even hyperinflation. Either they didn't understand how inflation works or they didn't understand how the financial system works. Either way, it caused them to predict the exact opposite of what happened. Had we followed their advice and instead tightened monetary policy to fight the presumed inflation it would have been catastrophic.

This is the kind of thing where it helps to use math and have models. It helps you understand where your thinking might be flawed. Until Austrian economics takes a long look at itself they are never going to get away from this kind of nonsense.

 

[realibrad]

Come on. You yourself previously admitted the Austrians were wrong on inflation, why are you backtracking now?



Austrians seem to be claiming the real money supply has increased:

Regardless, you know as well as I do that tons of people predicted massive inflation, even hyperinflation. Either they didn't understand how inflation works or they didn't understand how the financial system works. Either way, it caused them to predict the exact opposite of what happened. Had we followed their advice and instead tightened monetary policy to fight the presumed inflation it would have been catastrophic.

This is the kind of thing where it helps to use math and have models. It helps you understand where your thinking might be flawed. Until Austrian economics takes a long look at itself they are never going to get away from this kind of nonsense.

Not trying to argue semantics, but Austrian's who argued that there would be inflation outside of real money growth would be wrong, but not because of Austrian economics. If they made that accusation from conjecture and not back by Austrian explanations then its not a problem of the economics, but the person.

I'm not saying there isint an Austrian reason, I'm just saying I dont know of one. I'm also not an economist so schools of thinking dont limit me. If I were to choose a side, it would be closer to Milton's. I just honestly dont know enough yet to really pick a side. Everything I know comes from personal research, so I admit that there are huge gaps in my knowledge.

Back to the money supply.
So if inflation is a function of MV = PT, and M is money in circulation, the it fits perfectly. The money is held in reserves, and not in circulation, this would cause what we see now, which is that the nominal rate went up, but the money in circulation did not, so prices stayed the same.

 

[werepossum]

I love these threads. Even after polls show Obama is the worst president since WW2, people will fight to defend his incompetence and claim anyone attacking him is racist.
-Interest rates are manipulated down via QE, which steals money from retired people who rely on interest income.
-Labor participation among people 55 and older is rising because they can't retire.
-Overall labor participation is at a 38 year low.
-Labor participation among men is at an all time low.
-The June jobs report showed a loss of half a million full time jobs, indicating the success of Obama's plan to make the work week 29.5 hours instead of 40.
-Home ownership is at a 19 year low.
-Q1 GDP contracted at the fastest pace since the last financial crisis.

The people fearing deflation are retarded. How are food prices doing? They're up. Oil? Up. Healthcare? Up. Education? Up. Every damn thing imaginable is getting expensive while our wages remain flat. There's a word for that - stagflation. Average people are being crushed by inflation while Yellen is busy attacking windmills.

I mostly agree, but one small correction: polls show <that people currently think (feel?) that> Obama is the worst president since WW2. Certainly Obama is part of the problem, but Obama is not THE problem. As long as we insist that THE problem is one leader or one party, we too are part of the problem.

 

[Spungo]

I mostly agree, but one small correction: polls show <that people currently think (feel?) that> Obama is the worst president since WW2. Certainly Obama is part of the problem, but Obama is not THE problem. As long as we insist that THE problem is one leader or one party, we too are part of the problem.

I say he's THE problem because he has the power to influence change. He should be telling the American people what is really going on. Why were we giving weapons to Al Qaeda rebels in Syria? Why are we still enemies with Iran and Cuba? Is he not aware the cold war ended more than 20 years ago? Why is he encouraging Russia to abandon the dollar and sell oil in euros, yuan, and rubles? Why is he pushing France to abandon the dollar? Why did we sponsor a coup in Kiev? Why is it so important that Ukraine become part of NATO? Why did nobody go to jail for giving guns to Mexican drug cartels to "track" them? Why have zero bankers gone to jail for fraud?

Obama could do a lot just by talking. Go on stage and give an unscripted rant about the system being horribly broken when guys like Jon Corzine are not thrown in jail for life. He would win tremendous public support just by saying that, and his popularity would rise even more when Corzine is found guilty.

The approval ratings of the president and congress are at all time lows, so we start seeing groups like Occupy Wall Street and the Tea Party pop up and demand change. Rather than address this issue by talking to the American people and explaining what is going on, he declares America the enemy and viciously goes after people who disagree with him. He has invoked the Espionage Act to go after more political enemies than any other president.

Source: http://www.politifact.com/punditfac...apper-obama-has-used-espionage-act-more-all-/

 

[First]

I feel like you have me going in circles. The FED set the floor above the overnight rate to stop banks from lending. It does not force banks to stop lending, but it does take away a huge incentive. There are massive excess reserves right now. It used to be that banks would then lend out those excess reserves to other banks, so those banks could make loans, thus introducing money into the market. Those excess reserves pre 2008 did not make interest, so why hold them. Post 2008, reserves not collect interest, and not an arbitrary amount either. So, banks would rather make a stable amount of interest vs loaning out money that could be put into a risky investment.

If money does not make it into the market, its not really there in real terms.

Pre 2008
Bank has X excess reserves that does not make money, so it loans it or converts it into capital to make interest. This puts the excess reserves into the real money supply.

Post 2008
Bank has X excess reserves that does make money. A risky market does not seem like a sure investment, so they keep the money in reserves to make interest. Reserves never make it into the money supply.

I linked a paper from the NYFED which said this...



http://www.newyorkfed.org/research/current_issues/ci15-8.pdf

I dont know how much more explicit that has to be

I'm curious if you're even reading the article you're citing, as you are sorely misinformed. I've already linked to an article about why you are misinformed, about why you cannot lend "excess reserves" the way you understand it. Your New York Fed article spells it out quite clearly for you here:

"In this edition of Current Issues, we argue that the concerns about high levels of reserves are largely unwarranted. Using a series of simple examples, we show how central bank liquidity facilities and other credit programs create&#8212;essentially as a by-product&#8212;a large quantity of reserves. While the level of required reserves may change modestly with changes in bank lending behavior, the vast majority of the newly created reserves will end up being held as excess reserves regardless of how banks react to the new programs. In other words, the substantial buildup of reserves depicted in the chart reflects the large scale of the Federal Reserve&#8217;s policy initiatives, but says little or nothing about the programs&#8217; effects on bank lending or on the economy more broadly. A large increase in the quantity of reserves in the banking system need not be inflationary, since the central bank can adjust short-term interest rates independently of the level of reserves.

And the most important part of the Accounting 101 example given in the New York Fed article:

The banks&#8217; balance sheets after these actions have taken place are shown in Exhibit 2, where the changes from the earlier figure appear in red. For Bank B, the loan from the central bank has replaced the interbank loan. Bank A now holds as reserves the funds that it previously lent to Bank B. Note that as a consequence of the central bank&#8217;s intervention, reserve holdings have increased markedly: while deposits are unchanged, total reserves for the two banks have risen from $20 to $60 and excess reserves now equal $40. This simple example illustrates how a central bank&#8217;s extension of credit to banks during a financial crisis creates, as a by-product, a large quantity of excess reserves. Merely looking at the aggregate data on bank reserves might lead one to conclude that the central bank&#8217;s policy did nothing to promote bank lending, since all of the $40 lent by the central bank ended up being held as excess reserves. The example shows that this conclusion would be unwarranted. In fact, the central bank&#8217;s action was highly effective: it prevented Bank B from having to reduce its lending to firms and households by $40.

....

The general idea here should be clear: while an individual bank may reduce the level of reserves it holds by lending to firms and/or households, the same is not true of the banking system as a whole. No matter how many times the funds are lent out by the banks or used to make purchases, total reserves in the banking system do not change. In particular, one cannot infer from the high level of aggregate reserves in Exhibit 4 that banks are &#8220;hoarding&#8221; funds rather than lending them out. The total quantity of reserves is determined almost entirely by the central bank&#8217;s actions, and in no way reflects the lending behavior of banks.

So again, for one, there are new reserve requirements in Dodd-Frank, which banks are statutorily obligated to keep; by law they cannot lend those reserves. The "excess reserves" argument is a misnomer; it's a consequence of direct lending by the Fed. Two, the interest on reserves doesn't explain "cash hoarding" by banks at all, and is so low as to not make any difference except as a floor for safe low-yield products AFAIK. They don't yield anything remotely near what banks charge on 10 or 15 year notes let alone 30-year. This is simple math. Third, banks increase the money supply naturally, with literally no connection to the Fed or the government if they so choose. Banks don't really lend out their customer's deposits as you may be confused into thinking either, they are literally creating new money out of thin air. They could do this themselves or with the government's help by churning out new loans and reselling them to secondary market participants like the gov't (Fannie/Freddie). This is the way it has been for a century and has worked very well.

 

[schmuckley]

*snip

 

[realibrad]

I'm curious if you're even reading the article you're citing, as you are sorely misinformed. I've already linked to an article about why you are misinformed, about why you cannot lend "excess reserves" the way you understand it. Your New York Fed article spells it out quite clearly for you here:



And the most important part of the Accounting 101 example given in the New York Fed article:



So again, for one, there are new reserve requirements in Dodd-Frank, which banks are statutorily obligated to keep; by law they cannot lend those reserves. The "excess reserves" argument is a misnomer; it's a consequence of direct lending by the Fed. Two, the interest on reserves doesn't explain "cash hoarding" by banks at all, and is so low as to not make any difference except as a floor for safe low-yield products AFAIK. They don't yield anything remotely near what banks charge on 10 or 15 year notes let alone 30-year. This is simple math. Third, banks increase the money supply naturally, with literally no connection to the Fed or the government if they so choose. Banks don't really lend out their customer's deposits as you may be confused into thinking either, they are literally creating new money out of thin air. They could do this themselves or with the government's help by churning out new loans and reselling them to secondary market participants like the gov't (Fannie/Freddie). This is the way it has been for a century and has worked very well.

Ah I see what you are saying now. The Reserves held by the Fed, and not by the bank are the only thing collecting reserves. So the issue is what are reserves held by the Fed vs what is held as liquid capital by the banks. The reason you are saying the reserves cannot be loaned out, is because the reserves you are talking about are reserves created when the Fed put the assets on their books and gave a credit.

I think that still goes with the idea that the reserves held by the fed are not in circulation, and thus wont do anything for or against inflation. Its really just a way to take some of the risk away from the banks and give a small amount of capital through interest right?

 

[BoberFett]

Regardless, you know as well as I do that tons of people predicted massive inflation, even hyperinflation. Either they didn't understand how inflation works or they didn't understand how the financial system works. Either way, it caused them to predict the exact opposite of what happened. Had we followed their advice and instead tightened monetary policy to fight the presumed inflation it would have been catastrophic.

How are asset values doing? Recovered and increasing nicely?

Just because inflation hasn't made to consumer goods doesn't mean there isn't inflation. It's reinflating the asset bubble, which quite conveniently makes the wealthy even wealthier, something I thought Democrats hated.

Of course there's no consumer inflation when the money just ends up in the pockets of few. Warren Buffett hasn't personally started eating as much food as a small city. The effect is similar though, devaluation of the dollar. How many gallons of gasoline can $100 buy? Not too much less than a few years ago. How many shares of a company can it buy? Not even close to what it could pre-QE.

 

[bradley]

-Interest rates are manipulated down via QE, which steals money from retired people who rely on interest income.
-Labor participation among people 55 and older is rising because they can't retire.
-Overall labor participation is at a 38 year low.
-Labor participation among men is at an all time low.
-The June jobs report showed a loss of half a million full time jobs, indicating the success of Obama's plan to make the work week 29.5 hours instead of 40.
-Home ownership is at a 19 year low.
-Q1 GDP contracted at the fastest pace since the last financial crisis.

And to this excellent post that saved me typing time about this illusory economy, I just have to say....

Oh, would you like fries with that?

 

[fskimospy]

How are asset values doing? Recovered and increasing nicely?

Just because inflation hasn't made to consumer goods doesn't mean there isn't inflation. It's reinflating the asset bubble, which quite conveniently makes the wealthy even wealthier, something I thought Democrats hated.

Of course there's no consumer inflation when the money just ends up in the pockets of few. Warren Buffett hasn't personally started eating as much food as a small city. The effect is similar though, devaluation of the dollar. How many gallons of gasoline can $100 buy? Not too much less than a few years ago. How many shares of a company can it buy? Not even close to what it could pre-QE.

I'm aware of no definition of inflation that would label it as an increase in stock prices.

Regardless, it actually appears to be people chased out of bond markets who are chasing yield. Needless to say, sending the economy into a catastrophic depression hardly seems like a good tradeoff for decreasing stock prices.

http://www.nytimes.com/2014/07/08/u...e-the-everything-bubble.html?rref=upshot&_r=0

 

[fskimospy]

And to this excellent post that saved me typing time about this illusory economy, I just have to say....

Oh, would you like fries with that?

You weren't actually duped by that cherry picked nonsense, were you?

 

[werepossum]

I say he's THE problem because he has the power to influence change. He should be telling the American people what is really going on. Why were we giving weapons to Al Qaeda rebels in Syria? Why are we still enemies with Iran and Cuba? Is he not aware the cold war ended more than 20 years ago? Why is he encouraging Russia to abandon the dollar and sell oil in euros, yuan, and rubles? Why is he pushing France to abandon the dollar? Why did we sponsor a coup in Kiev? Why is it so important that Ukraine become part of NATO? Why did nobody go to jail for giving guns to Mexican drug cartels to "track" them? Why have zero bankers gone to jail for fraud?

Obama could do a lot just by talking. Go on stage and give an unscripted rant about the system being horribly broken when guys like Jon Corzine are not thrown in jail for life. He would win tremendous public support just by saying that, and his popularity would rise even more when Corzine is found guilty.

The approval ratings of the president and congress are at all time lows, so we start seeing groups like Occupy Wall Street and the Tea Party pop up and demand change. Rather than address this issue by talking to the American people and explaining what is going on, he declares America the enemy and viciously goes after people who disagree with him. He has invoked the Espionage Act to go after more political enemies than any other president.

Source: http://www.politifact.com/punditfac...apper-obama-has-used-espionage-act-more-all-/

But that's my point. If we had President Romney (for whom I voted in 2012 as in years past) we would still be giving weapons to Al Qaeda rebels in Syria, we would still be enemies with Iran and Cuba, we'd still be sponsoring Western-aligned parties in Ukraine, and we'd still be imprisoning exactly no one for giving guns to Mexican drug cartels or for bank fraud as it pertains to the crash of 2007. Maybe some things would be better - Romney certainly has a better grip on and appreciation for capitalism, Romney would not be pushing for countries to move away from the dollar - but the vast majority of our problems are not going to change with one letter. And while there are places the right is undeniably better, there are also issues where the right is undeniably worse - gay marriage and environmental protections come to mind. It was Bush I after all that proposed clear-cutting 60% of our National Forests over five years - it doesn't get much worse than that.

Our problems stem partially from the aligned interests of the two parties, but also from our own demands. We demand cheap consumer goods - the price of cheap consumer goods includes loss of good jobs and a horrible trade deficit draining capital from our nation. We demand government entitlements - the price of government entitlements includes a bigger, more powerful government, the inevitable loss of freedom, higher taxes, and drowning in national debt.

It's not just Obama and it's not just politicians in general. It's also us.