patrick.net

smaulgld says

had yet to produce job and wage growth or even real GDP growth which has been less in total dollar terms than the amount the Fed printed

Interesting.

Any comment on Bush's tax cuts (in time of war), plus spending increases, which created no jobs over 8 years? Or is this to be dismissed as base partisan sniping, and a continuation of the false red-blue dichotomy which noble libertarians are trying to lead us out of?

P.S.: I think the Fed has been mostly toxic/useless since the 1980s, but I wish you'd stop using the term "printing", since that money was not actually printed, but was used to repurchase debt. Yes, it was injecting liquidity, but it was not literally printing cash.

Your terminology can easily deceive the weak-minded among the precious-metals crowd, some of whom are actually convinced we're in a period of hyperinflation.

Basically, what Yellen is saying that with a lack of vigorous buying/selling RE activity, economy is a toast. Make it affordable for the middle class as wages are not going anywhere. Yeah, that's the solution.

Iosef V HydroCabron says

Any comment on Bush's tax cuts (in time of war), plus spending increases, which created no jobs over 8 years?

Bush is the jackass that appointed Bernanke!Iosef V HydroCabron says

but I wish you'd stop using the term "printing",

Bernanke's own words in a 60 minute intereview. From 2009!
https://www.youtube.com/watch?v=odPfHY4ekHA&t=8m21s

Iosef V HydroCabron says

Your terminology can easily deceive the weak-minded among the precious-metals crowd, some of whom are actually convinced we're in a period of hyperinflation

I think the weak minded are more likely to believe what the Fed says than to be in the precious metals crowd

Bernanke on printing money
https://www.youtube.com/watch?v=odPfHY4ekHA&t=8m21s

The Federal Reserve has not and can not stimulate the economy or jobs.

GDP growth/wealth come from 1. production 2. innovation

Texas and N. Dakota have increased oil&gas production, and the wealth and jobs have grown in those areas. Austin and Silicon Valley/San Fran. Bay Area have innovation and these have caused some wealth creation.
Obviously interest rates have absolutely nothing to do with the above.Bernake was mostly worried about a repeat of the great depression. For review, after the stock market credit fueled bubble popped, many banks lost everything, and in a few years the remaining banks weren't really lending. So, there was no liquidity and banks "taking their ball home" messed up the economy.

The Federal Reserve has been very careful to say in public what is politically correct for them to talk about, "creating jobs", etc. but the REAL reason for low interest rates is to enable banks and as a secondary goal enable the tax and debt spenders in Washington.

clambo says

GDP growth/wealth come from 1. production 2. innovation

Correct their QE program was a bailout for the banks but they used as cover the "growth the economy and jobs" excuse as cover.

smaulgld says

They printed $4 trillion over five years most of which went to protect their shareholders the too big too fail banks and had yet to produce job and wage growth or even real GDP growth which has been less in total dollar terms than the amount the Fed printed

Had the Fed not acted the economy would have gone into a depression. Not a recession as it did. That's a fact. And sorry, but you need to at least crack open a newspaper: The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

clambo says

Texas and N. Dakota have increased oil&gas production, and the wealth and jobs have grown in those areas. Austin and Silicon Valley/San Fran. Bay Area have innovation and these have caused some wealth creation.

Obviously interest rates have absolutely nothing to do with the above

As someone who actually works in SV I can tell you that innovation alone didn't help us get out of the recession. As soon as the recession hit venture capital dried up. It took the severe lowering of interest rates in general to unleash that money. I can also call bullshit on interest rates not being a factor for economic growth: As soon as rates fell for loans home sales exploded all over Cali.

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

Yeah, but the wages have hardly gone up and many of those jobs that came back are offering less pay than it were before the recession.

"Let me continue to pour more money in places from where I know if won't flow into the economy while pretending to care about jobs and housing."

You are incorrect about how wealth is created, I stated it clearly enough.

It is also correct that capital was destroyed in 2008 but Venture capital is not sensitive to interest rates because it's VENTURE capital.

You are incorrectly correlating venture capitalists being cautious or fearful following the Lehman collapse in 2008 to interest rates being "high".
Interest rates were low already. You would also be clearer about the dates you mean when you say "when the recession hit".

LOW interest rates do not create wealth nor economic growth.
High interest rates have been used to slow the economy to combat inflation, e.g. Paul Volker.

Innovation at places like Intel, Apple etc. create wealth. Do you recall what the interest rates were when Apple was founded for example?

Where is "Cali"? Should I go ask a "dude"?

bubblesitter says

Yeah, but the wages have hardly gone up and many of those jobs that came back are offering less pay than it were before the recession.

That's not a result of the Fed. As reported many times wages for both the middle and lower classes has either actually gone down or remained stagnate for over 30 years. That's a whole nother' ball of wax.

clambo says

It is also correct that capital was destroyed in 2008 but Venture capital is not sensitive to interest rates because it's VENTURE capital.

I'll pretend I didn't just read that... Seriously?

Either way, Let's have all of the conspiracy theories come flooding forth. I'm sure that will come along with plugs to buy gold and stuffed animals as well as emergency potato seeds or whatever.

The Federal Reserve was in fact worried about a depression. There is debate whether it in fact would have happened if the large stupid banks went out of business.
I also doubt the USA economy would have collapsed if we had not bailed out foreign banks.

Be that as it may, unemployment is high. Wages are falling because the USA has imported foreign labor, which drives down wages.

The 92 million out of the workforce plus the "official" 9 million unemployed is a lot of people not working.

Interestingly, all of the illegal aliens I know are working.

Strategist says

Call it Crazy says

Hmmm...

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday the U.S. economy was still in need of lots of support from the central bank given the "considerable slack" in the labour market, and she cited weakness in the housing sector as a fresh risk.

Maybe she finally found Patnet and is reading the threads here???

No doubt we are having a slowdown in housing, I concede that to the bears. Any further slowdown will trigger a stimulus from the feds. Either way the slowdown will be short lived.

Remember the Fed is not able to stimulate housing, they can only create a cerebral illusion.

smaulgld says

clambo says

GDP growth/wealth come from 1. production 2. innovation

Correct their QE program was a bailout for the banks but they used as cover the "growth the economy and jobs" excuse as cover.

Liars...............................

clambo says

The Federal Reserve was in fact worried about a depression. There is debate whether it in fact would have happened if the large stupid banks went out of business.

I also doubt the USA economy would have collapsed if we had not bailed out foreign banks.

There was a debate and a decision and hence why the decision to bail out the banks was made. While distasteful and unpleasant the reality was that had they not done so the banks would have failed and the economy would have sunken to much, much worse levels than it did. Its a tricke-down effect. Another and perhaps more easy to understand example was GM. GM has several million employees and millions more who make money from their business ranging from suppliers, dealers and so on. GM was bailed out because not doing so would have instantly caused the loss of millions of jobs and potentially trillions in future income over time as a net result of that failure.

Then again if some of you think you're so smart and know all about economics, maybe you should go get jobs and actually work for the government and suggest your ideas.

edvard2 says

GM has several million employees

Are you sure about this??

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market.

Heraclitusstudent says

"Let me continue to pour more money in places from where I know if won't flow into the economy while pretending to care about jobs and housing."

That is an accurate summary and they can always point to "saving" the economy when they created the excessive debt housing bubble crisis as an excuse to keep printing money and sending it to the banks

smaulgld says

edvard2 says

The total unemployment rate has fallen by almost half of what it was during the worst of the recession.

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market.

You would expect a possibility of more stimulus in this scenario, and higher gold prices too. Does anyone know why gold dropped $20 today?

edvard2 says

There was a debate and a decision and hence why the decision to bail out the banks was made. While distasteful and unpleasant the reality was that had they not done so the banks would have failed and the economy would have sunken to much, much worse levels than it did.

Even if one accepts the necessity of the original bailout- was QE1, 2, 3, 4 + necessary?

Strategist says

You would expect a possibility of more stimulus in this scenario, and higher gold prices too. Does anyone know why gold dropped $20 today?

yep more stimulus probably on the way as low rates themselves as not doing their trick

Strategist says

Does anyone know why gold dropped $20 today?

Says Yellen's Upbeat assessment of the economy and Putin blinks
http://www.kitco.com/news/2014-05-07/Gold-Sells-Off-on-Yellen-s-Upbeat-Assessment-of-US-Economy-and-as-Putin-Blinks.html

smaulgld says

check the internet 92 million people are not working, the laboar participation rate is at a 34 year low. The Fed admits the unemployment rate no longer is an accurate reflection of the state of the labor market

Perhaps you failed to read my initial response. Are there people unemployed? Yes. How many are unemployed now? A LOT less than at the peak of the recession. Would there be more or less people unemployed had nothing been done- which was essentially what the government did immediately after the crash of 29'- to shore things up on account of the fed? Take a wild guess.smaulgld says

Even if one accepts the necessity of the original bailout- was QE1, 2, 3, 4 + necessary?

Like I said... if some of you think you're these informed geniuses then I'm sure there are future careers working within the inner circle of the Fed and US government in which you could show all those people just how smart you really are.

Strategist says

Does anyone know why gold dropped $20 today?

ah ha! there we go! I knew it was a matter of time before gold was mentioned...

edvard2 says

Like I said... if some of you think you're these informed geniuses then I'm
sure there are future careers working within the inner circle of the Fed and US
government in which you could show all those people just how smart you really
are.

Are you implying the majority of people working in the Fed and US government are informed geniuses?

Analyzer says

Are you implying the majority of people working in the Fed and US government are informed geniuses?

I implied nothing. Simply put its really easy to play armchair economist and claim that doing such and such or not doing such and such would solve major problems.

I just find it funny that some people I've talked to over the years who on one hand claim they know alllllll about running the US economy are also the ones who also sometimes push weird conspiracies, gold, or whatnot. Somehow these two are not exactly parallel.

But anyway, I gather that from what I hear from a few people it would have been better if everyone had simply sat back and done jack shit and let the cards fall where they lay, right? OK... so I can buy a differing opinion, that's fair. So if that's the case well let's hear why such a plan is so amazing and what the economic reasoning would be...

Analyzer says

edvard2 says

Like I said... if some of you think you're these informed geniuses then I'm

sure there are future careers working within the inner circle of the Fed and US

government in which you could show all those people just how smart you really

are.

Are you implying the majority of people working in the Fed and US government are informed geniuses?

Here is what passes for government genius from Meterologist Janet Yellen today

Case in point: Yellen today

The economy paused in Q1 but clearer skies ahead!

http://www.forbes.com/sites/samanthasharf/2014/05/07/yellen-economy-paused-in-q1-but-clearer-skies-ahead/

“I see that pause as mostly reflecting transitory factors, including the effects of the unusually cold and snowy winter weather,”

“With the harsh winter behind us, many recent indicators suggest that a rebound in spending and production is already under way, putting the overall economy on track for solid growth in the current quarter.”

smaulgld says

Here is what passes for government genius from Meterologist Janet Yellen today

Case in point: Yellen today

Are you trying to make a point? You simply posted the comments of the Fed chair. If your point is that you disagree then you don't have a point to begin with...

edvard2 says

smaulgld says

Here is what passes for government genius from Meterologist Janet Yellen today

Case in point: Yellen today

Are you trying to make a point? You simply posted the comments of the Fed chair. If your point is that you disagree then you don't have a point to begin with...

the point is for all her supposed economic knowledge she blames the weather for the fed's failed policies and predicts with no basis that things will get better

smaulgld says

Here is what passes for government genius from Meterologist Janet Yellen
today

Case in point: Yellen today

The economy paused in Q1 but clearer skies ahead!

http://www.forbes.com/sites/samanthasharf/2014/05/07/yellen-economy-paused-in-q1-but-clearer-skies-ahead/

“I see that pause as mostly reflecting transitory factors, including the
effects of the unusually cold and snowy winter weather,”

“With the harsh winter behind us, many recent indicators suggest that a
rebound in spending and production is already under way, putting the overall
economy on track for solid growth in the current quarter.”

What do you suppose Obama's level of economic intellect is?

Analyzer says

What do you suppose Obama's level of economic intellect is?

none, his only concern re the economy is wealth inequality and his solution is simple redistribution.

his area of supposed study was the constitution.

If you study FDR you'll realize he had no interest in economics. Indeed he really had no interest in public policy either -he was not an ideologue. He was simply using the Presidency and exerting his authority to try and fix things using the government.
It didn't work as the depression lasted 10 years but he was always trying! an amazing man but not suited to formulating economic policy- he himself would set the gold price!

Perhaps Obama has talents too but his understanding of the economy, like FDR's is next to zero.

smaulgld says

the point is for all her supposed economic knowledge she blames the weather for the fed's failed policies and predicts with no basis that things will get better

Ahhh... so it finally come out. Now it gets finally interesting. So let's think about this for one minute. So let's assume that you're wanting to buy a car. Its Snowing like mad outside. Either that or 13 feet of rain falls. Or there's a tornado or whatever. How many people would choose to go buy a car that day or wait until its not doing those said things? Point made.

Secondly, you mentioned the term: "Predict". Duh. Economics is ALL about predictions. Its about big data, crunching numbers, managing risks and making a calculated decision based on those. So are you saying that whatever you would suggest would not be predictions but would literally happen cuz' you said so?

smaulgld says

none, his only concern re the economy is wealth inequality and his solution is simple redistribution.

And with a statement like that now it allllll makes sense. Tinfoil hat sale!

edvard2 says

http://www.forbes.com/sites/samanthasharf/2014/05/07/yellen-economy-paused-in-q1-but-clearer-skies-ahead/

“I see that pause as mostly reflecting transitory factors, including the effects of the unusually cold and snowy winter weather,”

“With the harsh winter behind us, many recent indicators suggest that a rebound in spending and production is already under way, putting the overall economy on track for solid growth in the current quarter.”

How do you get tinfoil hat from mentioning what Obama himself says is his economic policy. Direct from the source: https://www.youtube.com/watch?v=ge3aGJfDSg4
http://www.telegraph.co.uk/news/worldnews/barackobama/9868843/Barack-Obama-calls-for-more-redistribution-of-wealth-to-Americas-working-poor.html

Most of government is involving in redistributing the wealth of its citizens-nothing tin foil about that. Taxes are collected and the revenues redistributed across society and overseas!

smaulgld says

Most of government is involving in redistributing the wealth of its citizens-nothing tin foil about that. Taxes are collected and the revenues redistributed across society and overseas!

Ohhh nooo! Its Wealth redistribution!

Yeah.. I've heard that who BS argument for years now. It was John McCain's last battle cry before he lost in 2008.

You want to know what's ironic? Its that those who tend to make those arguments are totally not even realizing that "redistribution" has been happening for over 30 years starting with Reagan and his ingenius "trickle-down" economics which over time has totally lop-sided the US in that now almost all of the wealth was in fact "redistributed" to the extreme upper top.

So... is that what you're trying to say? If so, I agree!

edvard2 says

smaulgld says

Most of government is involving in redistributing the wealth of its citizens-nothing tin foil about that. Taxes are collected and the revenues redistributed across society and overseas!

Ohhh nooo! Its Wealth- re-distri-butin'! ( using my Southern accent- and BTW, I am Southern anyway).

Yeah.. I've heard that who BS argument for years now. You want to know what's ironic? Its that those who tend to make those arguments are totally not even realizing that "redistribution" has been happening for over 30 years starting with Reagan and his ingenius "trickle-down" economics which over time has totally lop-sided the US in that now almost all of the wealth was in fact "redistributed" to the extreme upper top.

So... is that what you're trying to say? If so, I agree!

So, what's your opinion of Obama's economic intellect?

edvard2 says

Yeah.. I've heard that who BS argument for years now. You want to know what's ironic? Its that those who tend to make those arguments are totally not even realizing that "redistribution" has been happening for over 30 years starting with Reagan and his ingenius "trickle-down" economics which over time has totally lop-sided the US in that now almost all of the wealth was in fact "redistributed" to the extreme upper top.

So... is that what you're trying to say? If so, I agree!

Correct, ALL government does is redistribute wealth. Depending on who is in power determines who gets their "fair share"

The Fed redistributes it to the banks and pretends to rely on trickle down.
Rep and Dems redistribute it to their special interests.

An economy should not be based on how government can move money from one segment of the economy or from one group to the other. If you believe that is what government should do than you hire economists to justify your actions.
witness Reagan and Laffer and Obama and his merry troupe of Keynesians

Analyzer says

So, what's your opinion of Obama's economic intellect?

That it is sound and given that the GOP decided to sit on their hands and obstruct everything. Yet the economy improved.