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'Is monetary policy even working?'

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Re: 'Is monetary policy even working?'

#31

Post by alephnerd »

bequanna wrote: post #27
alephnerd wrote: post #13

Earlier quoted context omitted.

Foreign Aid for Ukraine is overstated. It's just $5bil, which is a drop in the bucket for even state governments in the US. If that's the cost to fight a proxy war, it's fairly cheap. That's how much it costs to build a highway from Pittsburgh to Morgantown (Mon–Fayette Expressway). > managed to pass some corporate stimulus This is the key point, and a critical one at that. That corporate stimulus suddenly made swath…

Umm, you’re off by an order of magnitude. We could run several states for a year with what we’ve sent them. $75 billion: https://www.cfr.org/article/how-much-aid-has-us-sent-ukraine...

The current argument against US Aid to Ukraine is over the current foreign aid package of $5B, which has turned into a culture war issue. I never heard similar arguments in 2016, 2019, or 2021.

Re: 'Is monetary policy even working?'

#32

Post by smallmancontrov »

dragonwriter wrote: post #28
nradov wrote: post #21

Earlier quoted context omitted.

You probably wouldn't be happier in the long run if Russia succeeds in their goal of reconquering much of Eastern Europe. That will make the entire world poorer and more violent. A few billion dollars is a cheap price to contain Russian expansionism.

What would have been really cheaper is if when Russia told NATO not to offer MAPs to Ukraine and Georgia in 2008, claiming that doing so would lead to regional instability while refraining would support peace, NATO had thanked them for their input and done the opposite, rather than complying. Over a decade of unchecked Russian aggression before the 2022 Russian escalation in Ukraine made constraining that aggression…

Yeah, well, the best time to stop appeasing might have been 20 years ago but the next best time is today.

Re: 'Is monetary policy even working?'

#33

Post by smallmancontrov »

AnimalMuppet wrote: post #7
alephnerd wrote: post #3

The core point from the article (because no one will actually read it): "Higher interest rates have proved a lot less destructive than investors feared in 2022, when the world’s central banks embarked on one of the most aggressive episodes of monetary tightening in history. Nothing has “broken”, contrary to the prevailing view two years ago; and this has even sparked a lively debate about why mainstream macro exagger…

This wasn't "one of the most aggressive episodes". This was nothing compared to Volcker in 1979-1981. And the fact that nothing has broken indicates that they didn't go overly aggressive. They stopped inflation from getting worse without driving the country into a recession. That's a pretty decent balancing act.

The economy that Volcker hiked into wasn't nearly as leveraged (because the debt had been inflated away / soft defaulted upon). A small rate increase on a lot of debt vacuums up as much money as a large increase on a small amount of debt. However, the duration on most household/corporate debt at the moment is such that it hasn't felt the sting of rate increases yet. As usual, it's complicated.

Re: 'Is monetary policy even working?'

#34

Post by alephnerd »

nradov wrote: post #21
A4ET8a8uTh0 wrote: post #14

Earlier quoted context omitted.

You know.. if I could only get a small fraction of that $5b instead of contributing to it being send to everyone but me, I would be a happier man. edit: I will make a less convoluted statement. Ideally, the amount of that small 5b donation abroad would be zero.

You probably wouldn't be happier in the long run if Russia succeeds in their goal of reconquering much of Eastern Europe. That will make the entire world poorer and more violent. A few billion dollars is a cheap price to contain Russian expansionism.

I disagree with the guy you're replying to, but he brings up a fair point to a certain extent.

Here in the US, we view China as the bigger bad. In Europe, it's Russia. And it makes sense. Worst comes to worst, it's going to be Poles, Germans, Turks, etc dying on the battlefields in Eastern Europe, not that many Americans. We'll be dying in the Pacific or North Asia instead.

It'll be for the best if our European allies succeed at taking over continental responsibilities, allowing us to shore up a similar consensus in Asia.

Re: 'Is monetary policy even working?'

#35

Post by bequanna »

alephnerd wrote: post #31
bequanna wrote: post #27

Earlier quoted context omitted.

Umm, you’re off by an order of magnitude. We could run several states for a year with what we’ve sent them. $75 billion: https://www.cfr.org/article/how-much-aid-has-us-sent-ukraine...

The current argument against US Aid to Ukraine is over the current foreign aid package of $5B, which has turned into a culture war issue. I never heard similar arguments in 2016, 2019, or 2021.

The total amount that we’ve already gifted Ukraine is absolutely relevant when we discuss sending even more.

Since we are running historic Federal deficits, every dollar we agree to send them comes at the expense of decreasing the purchasing power of Americans.

Government spending at these levels contributes to inflation and makes Americans worse off. Enough is enough.

Re: 'Is monetary policy even working?'

#36

Post by nostromo »

alephnerd wrote: post #3

The core point from the article (because no one will actually read it): "Higher interest rates have proved a lot less destructive than investors feared in 2022, when the world’s central banks embarked on one of the most aggressive episodes of monetary tightening in history. Nothing has “broken”, contrary to the prevailing view two years ago; and this has even sparked a lively debate about why mainstream macro exagger…

They can't stay this high for long without a federal debt crisis, which is a key reason the Fed is hoping to get interest rates back down.

If we weren't so indebted, interest rates could indeed stay high for a long time without much concern. But there's a point in the not-so-distant future where our government will need to print even more money to pay the debt (which will spark more inflation) or we'll need to cut all spending that isn't interest on the debt.

Re: 'Is monetary policy even working?'

#37

Post by alienicecream »

dragonwriter wrote: post #28
nradov wrote: post #21

Earlier quoted context omitted.

You probably wouldn't be happier in the long run if Russia succeeds in their goal of reconquering much of Eastern Europe. That will make the entire world poorer and more violent. A few billion dollars is a cheap price to contain Russian expansionism.

What would have been really cheaper is if when Russia told NATO not to offer MAPs to Ukraine and Georgia in 2008, claiming that doing so would lead to regional instability while refraining would support peace, NATO had thanked them for their input and done the opposite, rather than complying. Over a decade of unchecked Russian aggression before the 2022 Russian escalation in Ukraine made constraining that aggression…

Why would Ukraine and Georgia belong in NATO for any reason other than to piss off the Russians? Should we put Uganda and Congo in NATO? I hear Rwanda has territorial ambitions. Why don't we just stick to places we belong instead of trying to control every part of the world. Would you like to fight in Ukraine? Because I hear they take volunteers.

Guaranteeing the security of volatile third rate countries you don't really care about is a sure fire way of avoiding war, as we saw in WW1.

Re: 'Is monetary policy even working?'

#38

Post by naniwaduni »

unyttigfjelltol wrote: post #9

Isn't effective tightening for global multinationals a function of tightening the lowest global interest rate? Which refers to Japan, and Japan only just a few weeks ago exited negative territory and has not tightened meaningfully at all.

Well, it's affected by the marginal interest rate available to them. The supply of liquidity for global multinationals isn't unlimited.

Re: 'Is monetary policy even working?'

#39

Post by vundercind »

alecsm wrote: post #5

What bothers me is that in Europe it was expected to affect the real estate prices. The higher the interest, the lower the prices, which sounds logical but...the prices kept increasing. So what's going to happen when Lagarde decides to lower them? The demand is way to high and the offer is almost non existent. And it seems that it didn't affect the inflation either. Bad years for everybody who's not getting a 10% rai…

People with very low mortgage rates are trying really hard to avoid moving. Constrains supply.

Re: 'Is monetary policy even working?'

#40

Post by bryanlarsen »

bequanna wrote: post #27
alephnerd wrote: post #13

Earlier quoted context omitted.

Foreign Aid for Ukraine is overstated. It's just $5bil, which is a drop in the bucket for even state governments in the US. If that's the cost to fight a proxy war, it's fairly cheap. That's how much it costs to build a highway from Pittsburgh to Morgantown (Mon–Fayette Expressway). > managed to pass some corporate stimulus This is the key point, and a critical one at that. That corporate stimulus suddenly made swath…

Umm, you’re off by an order of magnitude. We could run several states for a year with what we’ve sent them. $75 billion: https://www.cfr.org/article/how-much-aid-has-us-sent-ukraine...

We didn't send $75B to Ukraine. Sending an almost expired 155mm artillery shell is counted as sending $8000 to Ukraine, but in reality we're saving ourselves the cost of destroying the shell once it expires. Yes, we'll have to spend $8000 to replace the shell, but we would have to replace it anyways since it has a limited shelf life.
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