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(Yahoo)   Dr. Doom blasts Powell. Reed, Sue, Johnny and Ben on high alert   (finance.yahoo.com) divider line
    More: Obvious, Monetary policy, Inflation, Federal Reserve System, Henry Kaufman, Chairman of the Federal Reserve, Paul Volcker, Fed Chairman Paul Volcker, Central bank  
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685 clicks; posted to Business » on 14 Jan 2022 at 11:41 PM (1 day ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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1 day ago  
Conveniently not mentioned: the number of times this dope incorrectly predicted wild inflation.

Savings have returned to typical levels now that stimulus cash has been spent down. Omicron will be *crosses fingers* the last big wave of covid so supply line kinks will work themselves out. We have 4-6 months more of inflation above 3%. That's not too shabby, and our economy has recovered much better than the rest of the industrialize world.

What *is not* good are the lack of pay raises. Sure, wages are "up" but those gains are completely eaten away by inflation. Precisely because the rentier class is looting everything they see and exclaiming, "Inflation!"
 
1 day ago  
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1 day ago  
Kaufman is a hero of mine not because he is right. He has often been wrong. I like him because he is consistent and appears to be sincere and honest. I have read more than half of his books, and not so much recently. I have a hard time believing he is still alive to tell you the truth.

He saw a lot of suffering from the German hyperinflation and the Hitler era, and inflation is his bugaboo. By the mid to late 80s, he was arguing very convincingly that derivatives and derivatives of derivatives, along with loan securitization, were taking risk away from the people who need to be paying attention to it. He was right. It took until 2007 until all that crazy came home to roost, but fundamentally, he was right.

It is so quaint now to think that he was creeped out by loan securitization, but you know, it DOES amount to money creation to just print out loans to whomever wants them, and then bundle them up and treat them like an asset rather than a risky liability. Hedge it, apply your magic formulas, and try to pass off the risk to others, but you can't ever get rid of the risk. When people don't pay their mortgages, it is all just paper.

And now? Well. He is right again, in saying that once the inflation cat gets out of the bag, you can't get it back in without a lot of pain. He is looking around and seeing a lot of tinder, and the US government holding a match. He is advising that a recession sooner is better than one later. The Fed has zero commitment and zero credibility, so if it does not get ahead of the game, it will not be able to catch up. Volcker had balls. Today's Fed leaders are caught up in the hubris and assuming they can do something if they need to.

I never thought of him as an ideologue. At his age, he is pretty well doing what he has always done: he is warning people that all the funny money eventually becomes worthless if nobody takes the punch bowl away from the partiers. Personally and fondly, I extend my hope that he does not live to see himself proven right this time.
 
1 day ago  
Our national debt means the federal government must keep treasuries below 4% or so coupon rate or the debt service will exceed what we are able to pay as a country.  We can't do what Volker and Carter did in the 70s.
On the other side, our elected officials are fine with nationalizing key institutions to prevent inflation like the bank swap loan markets.  They may soon have to go further than that.
Given that our Congress is run by the wealthy, expect them to protect their wealth whatever that ends up as, and it depends on whether Q-anon is in power or not.  Then expect a crypto gold standard or states leaving the union.
 
1 day ago  

Northern: Our national debt means the federal government must keep treasuries below 4% or so coupon rate or the debt service will exceed what we are able to pay as a country.  We can't do what Volker and Carter did in the 70s.
On the other side, our elected officials are fine with nationalizing key institutions to prevent inflation like the bank swap loan markets.  They may soon have to go further than that.
Given that our Congress is run by the wealthy, expect them to protect their wealth whatever that ends up as, and it depends on whether Q-anon is in power or not.  Then expect a crypto gold standard or states leaving the union.


Mind you too that when inflation was calculated out during Volkers time, they used actual home price increases not owners equivalent rent. If they did that now we would have  double digit CPI. We can't even compare now to then without that adjustment.

They are farked. You'll really see the nation btc shiat hit the fan when energy starts to be priced in it. That'll be the trigger event but it'll start with small nation states.

In order to fight double digit CPI, Volcker had to go to 18%. Again, if we use the same CPI gauge then, we are talking about getting to 1-2% in.....2 farking years. To fight 7% even calculated in today's methodologies is a joke. 1% is the max they'll allow Fed Funds rate to go until QE forever.

Game set over.
 
1 day ago  
FORGET the FF!

The guy you want here is *Luke Cage*!

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1 day ago  
Benzie Box
Youtube 0T9wolelY1Q


R.I.P. MF DOOM
 
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