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Federal Reserve raises rates by 0.75%

usatoday.com

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Re: Federal Reserve raises rates by 0.75%

#541

Post by wolframhempel »

afterburner wrote: post #136
wolframhempel wrote: post #99

The really worrying thing to me is our inability to accept that we (as in humankind) are rather rubbish at running complex systems. A good analogy is to think of the economy as a still lake. If you throw a rock into it, you know that it will create concentric circles of waves. You throw a second rock and you know that its waves will interfere with the first. But now the waves create oscillating patterns and now they…

> This sort of FED that we have now that tries to control the overall economy is - to me - at least as hopeless as centralized 5-year plans under communism. This is a CRAZY comparison. The Fed is barely doing anything, basically trying to keep things stable using two simple tools, and is doing so iteratively and carefully. It is the literal opposite of a Soviet communist 5 year plan that details everything to the n-t…

> The Fed is barely doing anything,

That is really not correct. The Fed has engaged in four phases of Quantitative Easing (https://en.wikipedia.org/wiki/Quantitative_easing#United_Sta...) since 2008 alone, with the last one in Mid-Summer 2020. This one resulted in an additional two billion of asset purchases with Money that didn't exist before, meaning that in 2020/2021 the Fed's money generation accounts for a total of 10% of US GDP. Having this much more money in a system with stable or declining supply (especially in conjunction to the Covid Relief Packages under Trump and Biden) is to me quite likely to have created the very problem the Fed is now trying to solve.

Re: Federal Reserve raises rates by 0.75%

#542

Post by iso1631 »

JoshuaDavid wrote: post #171
iso1631 wrote: post #23

Earlier quoted context omitted.

If you think the dollar is worth less then no doubt that's reflected in say gold prices, which were between 1600 and 1900 from July 2011 to April 2013. They are currently 1800. If all that extra money had devalued fiat currencies globally (at roughly the same value), why hasn't gold increased?

I think that in order to have any chance of actually measuring the value of money, whatever metric is used would have to be something that cannot be sold (because otherwise, when the value of money drops relative to the value of the inflation measure, people will sell the inflation measure to buy money, and vice versa, in order to keep their portfolios balanced). We see it with gold, and with bitcoin, and with stocks…

Asset prices aren't that important on a day to day basis, what matters more is the cost.

If I have a 300k mortgage over 25 years at 7% that's $2121 a month

If I have a 500k mortgage over 25 years at 2% that's $2120 a month

The "price" doesn't really matter at that scale, it's the monthly payment, which hasn't gone up despite house prices increasing 67%

(More importantly with things constrained by zoning/land availability, the monthly price will be set to take all my spare case, as there's more demand than supply, so prices rise until the demand drops, which means people choosing not to live in that area. In other words the higher the salaries in a given area with fixed supply, the higher the cost of housing - be it mortgage or rent)

On the other hand if my weekly shop goes from $150 to $200, that's a 30% increase, and does make a difference.

Re: Federal Reserve raises rates by 0.75%

#543

Post by lizmat »

atweiden wrote: post #443
imtringued wrote: post #372

Earlier quoted context omitted.

Inflation forces people to seek new jobs every few years. That is not necessarily a bad thing. The alternative is to have your boss decide for you when he wants to fire you.

> The alternative is to have your boss decide for you when he wants to fire you Just for fun, I thought I’d do the math on deflationary economics: #!/usr/bin/env raku use v6; multi sub deflate($n, $r, $y) { my $m = $n; loop (my $i = 0; $i Without inflation, your personal wealth would grow by the average inflation rate target plus GDP growth, compounding each year. Assuming an average inflation rate target of 2% per y…

Cool, but I couldn't resist rakufying your "deflate" subroutine:

    sub deflate($power is copy, $rate, $years) {
        $power *= 1 + $rate for ^$years;
        $power * 100
    }
    sub MAIN(:$rate = 0.0225, :$years = 10)
    {
        print qq:to/EOF/;
        After $years years of deflation at a rate of {$rate * 100}% per year,
        purchasing power is &deflate(1,$rate,$years)% of what it was initially.
        EOF
    }
Which I think reads quite a bit better :-)

Re: Federal Reserve raises rates by 0.75%

#544

Post by lizmat »

kamaal wrote: post #524
atweiden wrote: post #443

Earlier quoted context omitted.

> The alternative is to have your boss decide for you when he wants to fire you Just for fun, I thought I’d do the math on deflationary economics: #!/usr/bin/env raku use v6; multi sub deflate($n, $r, $y) { my $m = $n; loop (my $i = 0; $i Without inflation, your personal wealth would grow by the average inflation rate target plus GDP growth, compounding each year. Assuming an average inflation rate target of 2% per y…

Wow! Nice to see Perl 6 in use these days!

Well, that's be Raku nowadays! #rakulang https://raku.org :-)

Re: Federal Reserve raises rates by 0.75%

#545

Post by alephnan »

lovecg wrote: post #440
alephnan wrote: post #335

Earlier quoted context omitted.

Thanks to serfdom, we have IPhones and Gadgets. Which consumer products do you own come from Norway?

I like my reMarkable tablet, thank you very much

Designed in Norway, made with low margin electronics and components from Asian supply chains. Either ways, 10 times more IPhones are sold in a quarter than ReMarkable tablets have ever sold in the entire history. This is not a knock against ReMarkeable, but the aggregate value-add of Norway is abysmally small compared to America.

Are you wearing Norwegian made clothes ? Is your house filled Norwegian made appliances ?

Re: Federal Reserve raises rates by 0.75%

#546

Post by ernirulez »

millimeterman wrote: post #474
ericns wrote: post #445

Earlier quoted context omitted.

Hmmm, Moody's where do I remember that name from? Oh ya here it is - https://www.theguardian.com/business/2017/jan/14/moodys-864m... Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes.

> Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes. Why does nonsense like this get parroted so much? Economics is as much a science as any other social science. Which is to say that it's certainly imperfect and is subject to social problems surrounding science (e.g. the replication crisis), but it's sti…

I totally agree with this comment. You put my thoughts into words. Unfortunately that kind of cheap comments (Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes.) are quite common over the internet and mainstream media. Just enough to keep people not thinking about it and everything is a lie by the elite and we can do nothing about it.

Re: Federal Reserve raises rates by 0.75%

#547

Post by Valakas_ »

brandall10 wrote: post #441
TheBlight wrote: post #369

Earlier quoted context omitted.

I don't view housing as an investment. I look at it as I need a place to live. If I make money on it after I'm done living there then that's great.

If that's the case, why not just rent?

Because after 30 years of paying rent... you own nothing. After 30 years of paying a mortgage... you own land and a building.

Re: Federal Reserve raises rates by 0.75%

#548

Post by adammarples »

randomdata wrote: post #408
adammarples wrote: post #244

Earlier quoted context omitted.

No, it should either be 0.75% or 75 basis points

You are half right. Per the article body, contradicting the headline, the rates increased by 0.75pp, which is equivalent to 75bp. The previous rates ranged from 0.75% to 1% making the 0.75pp hike a 75-100% increase, not the 0.75% increase you and the incorrect headline claim.

Nobody ever talks about rate increases in terms of their ratio to the previous rate (ie. talking about a 75-100% rate increase), this would be insanely confusing and irrelevant. To avoid confusion, people always discuss the absolute additive change in the base rate itself. ie., 75bp or 0.75%, which are equivalent.

Re: Federal Reserve raises rates by 0.75%

#549

Post by leereeves »

mike00632 wrote: post #494
copenja wrote: post #420

Earlier quoted context omitted.

I don't think the stimulus being one of the drivers of inflation is an 'extremist fringe theory' at all. I thought the consensus was it was one of many factors, and the exact contribution of the different factors (stimulus, supply issues, etc) was up for debate. US inflation is higher than other wealthy nations and the US also did a larger stimulus. So there is evidence that the additional stimulus may have created g…

The UK didn't provide stimulus checks yet is experiencing higher inflation than the US. Canada gave a lot more in stimulus checks (with respect to GDP) than the US but is experiencing less inflation than the US.

> The UK government has borrowed vast sums of money to fund over £400 billion ($558 billion) in stimulus during the crisis. Total government debt has soared to £2 trillion ($2.8 trillion), or close to 100% of GDP, a level not seen since the 1960s, according to the Office for National Statistics.

https://www.cnn.com/2021/03/03/economy/budget-2021-uk-stimul...

Re: Federal Reserve raises rates by 0.75%

#550

Post by atweiden »

lizmat wrote: post #543
atweiden wrote: post #443

Earlier quoted context omitted.

> The alternative is to have your boss decide for you when he wants to fire you Just for fun, I thought I’d do the math on deflationary economics: #!/usr/bin/env raku use v6; multi sub deflate($n, $r, $y) { my $m = $n; loop (my $i = 0; $i Without inflation, your personal wealth would grow by the average inflation rate target plus GDP growth, compounding each year. Assuming an average inflation rate target of 2% per y…

Cool, but I couldn't resist rakufying your "deflate" subroutine: sub deflate($power is copy, $rate, $years) { $power *= 1 + $rate for ^$years; $power * 100 } sub MAIN(:$rate = 0.0225, :$years = 10) { print qq:to/EOF/; After $years years of deflation at a rate of {$rate * 100}% per year, purchasing power is &deflate(1,$rate,$years)% of what it was initially. EOF } Which I think reads quite a bit better :-)

lizmat++

The innumerable dark-seeming corners of the language is part of what makes Raku so very, distinctly “Perl”. Little traits and single character sigils that change everything. I find the black magic of Perl моѕt all∪ring ∮.

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