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The Fed does create inflation, it is just not clandestine it is obvious.
Mr. Glibert
You can take this chart, it's very popular among a set of economic friends I have
BTW that peak at 1980 in your graph was caused by Chairman Martin forced to print money by LBJ who held his job over his head.
Since the US has seen globalization which has mitigated the effects of money printing.
Yes that is a very good graph, you should consider the effects it has had
"Many women, especially those in the booming textile industry, earned between $5 and $7 a week for working more than 50 hours"
http://www.historynet.com/the-first-minimum-wage.htm
Call it $7 for 50hrs, that's 14c/hr. in 1912
So by the resident kook's numbers, mill workers in Boston were making $2.80/hr. (2015 dollars) back then
But at least it was 'honest money', LOL.
The bottom line is that money -- spending power -- creates demand.
In economies with excess, idle capacity to create wealth to satisfy this demand, fiat money distributed to the masses just results in a rising standard of living and increased employment. In economies like Zimbabwe and Weimar Germany, it results in hyper-inflation (though the Wiemar inflation was such a brief event something else was going on).
As for the 1800s, so much opportunity was going idle due to an artificial scarcity of capital. People, towns, and governments had to beg the Captains of Industry to build rails, bribing them with immense gifts of the unclaimed commons to get them to invest in capital improvements that would make them billions anyway.
The 2000s is a different dynamic than then, or the 1900s for that matter. Fiat is also allowing us to float on a colossal negative investment position:
http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm
This is ~$25,000 per capita right now. I don't feel good about this, not at all.
I guess buybacks are up 11%?
I read where small business lending is trending lower. Because of Dudd Frany
Commercial and industrial loans at banks rise by $11.9 billion in a week to $2.043 trillion
chart even way into 2008,
That was the Housing Bubble, the mother of all over investment thesis on the most toxic debt build up and packaging economic cycle we have ever seen. :-)
It takes a village to raise a child, it takes a entire country to work together to mess things up that bad
it takes a entire country to work together to mess things up that bad
You underestimate the Fed.
How so?
Way to much velocity power....It's like when people think Presidents can really change economic cycles,
If the Fed moved against inflation up or down, that would be a valid thesis but that hasn't been the case.
The recessions pre 1900 were longer and harder on the American people only 2 Recession post 1900 were dramatic in terms of length ...
A lot my Gold Bug Anti Fed friends always say
The Fed allows speculation to happen
However, if underwriting standards today were placed back in 1996, a lot of the excess speculation would have been taken out of line
Way to much velocity power
? velocity is beyond the reach of the Fed as we see today.Logan Mohtashami says
If the Fed moved against inflation up or down, that would be a valid thesis but that hasn't been the case.
That is not the case with Volcker.
The recessions pre 1900 were longer and harder on the American people only 2 Recession post 1900 were dramatic in terms of length ...
But there were "stimulated" with inflated/printed out of thin air money.
However, if underwriting standards today were placed back in 1996, a lot of the excess speculation would have been taken out of line
So you are saying that banks knowingly wrote bad loans?
So you are saying that banks knowingly wrote bad loans?
The loan that were created I termed them back then as Band Aid Loans
These loans had no capacity to work long term, they were only needed to bridge until the next refinance happened.
Those lenders are all gone, none exist because they created Non Capacity Owning debt .... Which allowed home ownership to be a speculation and then from 2004-2006 the cash out craze happened which made things even worse
A lot debt on debt leverage
That is not the case with Volcker.
The economy that Paul V. had to deal with is much different now. That time frame was the birth of globalization and the start of the export/import side of the U.S. where we began to import deflationary factors, hence our trade surplus now.
Technology , Globalization, Demographics killed inflation ... while creating pocket inflation
Technology , Globalization, Demographics killed inflation ... while creating pocket inflation
Seems like a stretch, as Volcker's actions correlated with the lower inflation.
These banks knowingly committed suicide?
Greed is a sickness that all men can't see when $$$$$$$$$ are around...
I call it Gold's disease
We export inflation $
We import Deflationary $
For a consumption based economy, it's not a bad deal
Greed is a sickness that all men can't see when $$$$$$$$$ are around...
Behind all bubbles are policies that create them.
Let me ask you guys this
Is the Fed 100% responsible for the oil production of all oil nations?
;-)
The same as always.... too many $ cashing too few goods...
And who controls M2?
Behind all bubbles are policies that create them.
Yep--repealing Glass Steagall is a big part of the last one.
Yep--repealing Glass Steagall is a big part of the last one.
Cept Glass Steagall had nothing to do with derivatives.
So what?
The banks you think were involved in derivatives would not have been affected by Glass Steagall.
With Glass-Steagall, there would not, could not, have been a Citi/Travelers merger, and competitors would not, could not have bulked up the way they did. Major money center banks most likely would have been smaller, more manageable, more easily wound down
The S.E.C. 2004 Leverage Act .... allowing 40-1 from 10-1
EWOMD
Economic
Weapon
Of
Mass
Destruction
So what is the deal on commercial lending? I read where the lending is tight to small business.
So what is the deal on commercial lending? I read where the lending is tight to small business.
The one big commercial lending conference I went to back in 2014... a lot projects that are in play from 2011-2017 time frame
The buildings are amazing ... state of the art ...
IIRC Dodd Frank has lowered the level of lending to small business. The big companies are unaffected, which has contributed to the slow recovery
Yea that is the story i.e. collecting interest on excess reserve fund and all, not sure how true that is or was?
Which is another question, what is the reserve ratio. I have read where it was infinity to one.
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