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Originally Posted by oldreliable67  It is true that monetary policy has sometimes in the past, keyed on the "too big to fail" doctrine (Chrysler, the S&Ls). But over the long run, other situations have motivated Fed easing and or tightening episodes as well. Take a look at the history of Fed policy over the long-term and you'll see that the Fed's mandates of promoting sustainable economic growth, full employment and stable prices have come into play at various points in the business cycle which have had nothing to do with the "big banks" being in trouble. For example, while they haven't been in evidence for a number of years due to advances in management techniques, the classic "inventory cycle" was a frequent fixture of the cycle in the early post-war years. In fact, you might not be old enough to remember those, so you may have to look it up. There is an abundant amount of data available via the internet, so I'll let you find it yourself. |
Inventory cycle is in many cases a thing of the past. In 13 short years, the entire economy the the world, and the ability to obtain knowledge have completely transformed the way people do business, and the very concept of which knowledge is presented.
The way people invest, and spend money is nothing like it was even 6 1/2 years ago. Soon enough, the 2nd wave economy in which current economic, financial, and polical ideology are based upon, will concede to the 3rd wave, known as the Knowledge Based Economy...
A single government entity making the most important economic decisions is counter productive to a free trading society. You seem to favor it, it is what it is...
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Well, if your Congressionally-mandated objectives are, as I stated above, to promote sustainable economic growth, full employment, and stable prices, what else would you be doing?
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We just have different beliefs. I believe it is up to the free market to dictate economic growth, employment, and prices. Again; it is what it is...
[quote]Whether there is "already a recession" remains to be seen. The NBER is the official arbiter of recession start and end dates. No doubt, a recession could have started one or two or three months ago. But we won't know that for sure until we see it in the aggregate data coming from the DC number mills. We may have a feeling or may have heard enough anecdotes to convince us of that the economy is slowing, but we typically don't get a broad enough picture to be accurate--although sometimes that intuition is exactly right![quote]
Here is a very good indicator for this, foreclosure rates... Although i could be wrong, it just might have nothing to do with it
[quote]And as for "who depend on the very dollar at a fixed income, they buy less and less with their dollar," you're mixing your metaphors quite a bit here. Those who depend on fixed income for their income typically would prefer higher interest rates, not lower. But lower interest rates are typically accompanied by lower dollar exchange rates (at least in the immediate neighborhood of declining rates). Maybe I simply don't understand the point you're trying to make?[quote]
The key is, try not to be so biased.
As for a definition of inflation, ill just go by:
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"Inflation, as this term was always used everywhere and especially in this country, means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term `inflation' to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. . . . As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil. They try to keep prices low while firmly committed to a policy of increasing the quantity of money that must necessarily make them soar. As long as this terminological confusion is not entirely wiped out, there cannot be any question of stopping inflation."
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But thanks for the offer...
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As a student of the markets, the economy, and the business cycle, but most especially, after 25+ years on Wall St, trading everything from bonds to commodities, I can tell you unequivocally that you simply do not know what you are talking about. Over the years, I have seen investment fads come and investment fads go. I have seen people enjoy their 15 minutes of fame, then flame out. I have seen really talented traders take horrendous losses. I have seen really bad traders, total idiots, make stupid trades and make millions. Sad to say, but I admit to having been in both camps at various times. People don't generally spend 25+ years in the street and survive by being "set in their ways."
First and foremost, one should always let the market teach you; you should always be a student of the market.
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I am very proud of you. And if you happened to ride the tech wave the last 20 years, i am happy for you. Just dont expect me to be a Friedman bitch boy like yourself.