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In Fed and Out, Many Now Think Inflation Helps

nytimes.com

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Re: In Fed and Out, Many Now Think Inflation Helps

#61

Post by mistermann »

tokenizer wrote: post #47
jswinghammer wrote: post #35

Earlier quoted context omitted.

So much to learn, you still have. A most basic study of the Federal Reserve would lead you to the exact opposite conclusion. They try to keep interest rates as loan as possible until price inflation gets out of control. I spend a lot of time caring about this issue and all the hype about what the Federal Reserve cares about is just that-hype. They want to inflate the monetary supply all day every day and that's why t…

I'd recommend Peter Schiff or Max Kaiser for an interesting look into the Fed's QE policy minus Mainstream Media hype/ The problem with the FED, and every Keynesian economist is that they think the US will indefinitely be the world currency reserve, and that 5,000 years of gold based monetary policy is less stable than the post war economics that have given us rising inequality, lowering employment, indefinite QE, Ch…

Recent history would seem to indicate the US can somehow simply buy their own debt. It seems impossible to me but its been working so far.

Re: In Fed and Out, Many Now Think Inflation Helps

#63

Post by ra »

jswinghammer wrote: post #8

Given that the entire point of the Federal Reserve is to promote inflation it's probably good that they think it's a good idea-otherwise why do they think that they exist? The whole problem is that inflation is theft. You are basically having your property taken out from under you without realizing it. It's historically been very popular as a means of taxing the public without them realizing that's what you're doing.…

"Given that the entire point of the Federal Reserve is to promote inflation"

No, that's not what they do. Too much inflation is bad, but you need a little bit. So they seek to maintain a "healthy" amount of inflation. Typically around the world this is something like 2-3%.

http://en.wikipedia.org/wiki/Inflation_targeting

Re: In Fed and Out, Many Now Think Inflation Helps

#64

Post by mistermann »

cotsuka wrote: post #60
enoch_r wrote: post #53

Absolutely no discussion of inflation is complete without recognition of the fact that inflation and inflation expectations are at historically low levels [1] right now. Economists aren't arguing that we should inflate our way out of debt--they are arguing that we should return to the historical norm. Of course, it's possible that these economists are secretly just pushing inflation as the "hidden tax" we're all up i…

Austrian school not holding much weight with academics is like wondering why creationism doesn't hold much weight with academics. Lots of things can be explained with creationism, but it doesn't mean it's right. Many Austrian economists rail against the use of quantitative models and such. But without them, how can you measure the efficacy of your policies? Faith that the policy works... But most academics like to be…

I don't see the similarity.

Re: In Fed and Out, Many Now Think Inflation Helps

#65

Post by cotsuka »

mistermann wrote: post #64
cotsuka wrote: post #60

Earlier quoted context omitted.

Austrian school not holding much weight with academics is like wondering why creationism doesn't hold much weight with academics. Lots of things can be explained with creationism, but it doesn't mean it's right. Many Austrian economists rail against the use of quantitative models and such. But without them, how can you measure the efficacy of your policies? Faith that the policy works... But most academics like to be…

I don't see the similarity.

Just edited my comment for clarity.

Re: In Fed and Out, Many Now Think Inflation Helps

#66

Post by jayfuerstenberg »

Mikeb85 wrote: post #43
jayfuerstenberg wrote: post #33

Earlier quoted context omitted.

You have a lot of learning to do my friend. Inflation steals purchasing power away from people who contributed their labor to the market in exchange for the money they received. The cash hoarding that inflation is supposed to solve continues because people want to hold on to their money in risky times. Smart people are moving away from cash assets and into precious metals and real estate. These are tangible things, u…

Really? Is this a joke or one of those terrible 'end-of-the-world' advertisements you hear on Bloomberg radio? Precious metals and real estate haven't done very well compared to equities in the last year or two... Yes, inflation reduces purchasing power if you assume that wages don't track inflation, but historically they do.

I would invite you to look at gold prices over the last 20 years.

I only wish I could go back in time and tell my 20 year old self to buy lots of it back when it was in the $300/toz range.

Right now it's sitting pretty at $1351/toz.

Re: In Fed and Out, Many Now Think Inflation Helps

#67

Post by BrandonMarc »

jswinghammer wrote: post #8

Given that the entire point of the Federal Reserve is to promote inflation it's probably good that they think it's a good idea-otherwise why do they think that they exist? The whole problem is that inflation is theft. You are basically having your property taken out from under you without realizing it. It's historically been very popular as a means of taxing the public without them realizing that's what you're doing.…

Exactly. Continuous inflation is frankly the only plan the government has to deal with the national debt. Borrow now, and in the future when your currency is weaker and less valuable, the amount borrowed will seem smaller (and in pragmatic terms will be by that point).

Of course it's destructive to the average person / taxpayer, but who cares about them? Nobody does who's in charge, that's for sure.

Re: In Fed and Out, Many Now Think Inflation Helps

#68

Post by lake99 »

Mikeb85 wrote: post #54
emperorhadrian wrote: post #46

Earlier quoted context omitted.

> Yes, inflation reduces purchasing power if you assume that wages don't track inflation, but historically they do. This is not only factually false, but if it were true it would invalidate the argument being made by the economists quoted in the NYTimes article. I strongly recommend that you read The Creature from Jekyll Island or other materials on the history of the Fed and its role in US monetary policy.

Come on, you only need to have been alive for the last 10 years to see wages go up. Minimum wage where I live is 80% higher today than 10 years ago. Average wages are much higher too, though by a lesser percentage. Here's an inflation adjusted chart of American wages, you'll see that wage increases have actually outpaced inflation slightly... http://en.wikipedia.org/wiki/File:Median_US_household_income... Edit - some…

> Minimum wage where I live is 80% higher today than 10 years ago. Average wages are much higher too, though by a lesser percentage.

The way they adjusted for inflation is suspect. [1]

This [2] is how the wages look if you measure in amounts of gold. Of course, gold is not the end-all of monetary policy. But it's way more stable than the USD.

[1] http://business.time.com/2013/03/12/if-theres-no-inflation-w...

[2] http://pricedingold.com/us-wages/

Re: In Fed and Out, Many Now Think Inflation Helps

#69

Post by Mikeb85 »

jayfuerstenberg wrote: post #66
Mikeb85 wrote: post #43

Earlier quoted context omitted.

Really? Is this a joke or one of those terrible 'end-of-the-world' advertisements you hear on Bloomberg radio? Precious metals and real estate haven't done very well compared to equities in the last year or two... Yes, inflation reduces purchasing power if you assume that wages don't track inflation, but historically they do.

I would invite you to look at gold prices over the last 20 years. I only wish I could go back in time and tell my 20 year old self to buy lots of it back when it was in the $300/toz range. Right now it's sitting pretty at $1351/toz.

And oil prices have gone up just as much. Once upon a time oil was a dollar a barrel...

Come on, inflation increases the value of all commodities, gold, silver, oil, corn, wheat, etc...

It's not like gold is special.

Re: In Fed and Out, Many Now Think Inflation Helps

#70

Post by tokenizer »

mistermann wrote: post #61
tokenizer wrote: post #47

Earlier quoted context omitted.

I'd recommend Peter Schiff or Max Kaiser for an interesting look into the Fed's QE policy minus Mainstream Media hype/ The problem with the FED, and every Keynesian economist is that they think the US will indefinitely be the world currency reserve, and that 5,000 years of gold based monetary policy is less stable than the post war economics that have given us rising inequality, lowering employment, indefinite QE, Ch…

Recent history would seem to indicate the US can somehow simply buy their own debt. It seems impossible to me but its been working so far.

You're right, however things can take a long time to run out of steam. Also, it's very interesting how much of economics relies on everyone believing in the system.

I'd recommend checking this video out: http://www.youtube.com/watch?v=BH9YPtk5VB4. This is what many people think. While some can definitely brush it off, many aren't.

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