The Feds impending blunder

[Mega]

http://blogs.telegraph.co.uk/finance...nding-blunder/

Seems just waffe to me, it may do this or that....

[Mega]

Re: The Feds impending blunder

Feeling very low today, am having a bad day...........perhaps the fed should print & start to lift rates?
Mike

[Kcim67]

Re: The Feds impending blunder

Feeling very low today, am having a bad day...........perhaps the fed should print & start to lift rates?
Mike

http://www.bbc.co.uk/science/humanbo...eingbelieving/

You see what you want to see or what the bankers want you to see even!

[Starving Steve]

Re: The Feds impending blunder

http://blogs.telegraph.co.uk/finance...nding-blunder/

Seems just waffe to me, it may do this or that....

First, NO-ONE can measure the velocity of money. (M x V) is fuzzy-math.

Second, from what I see in and around Silicon Valley in California, there is next to zero (or zero) new money in circulation. Prices are falling because credit is unavailable. Asset prices, especially house prices, are de-flating. The bigger the house, the faster it de-flates because its carrying-costs are still inflating. McMansions are taking a huge hit.

Third, this may be like your analogy of a campfire with gasoline vapour in the air, but who has money to burn? Only Bill Gates and a comparative handful of corporate geeks in Silicon Valley have money. So how can there be inflation if there is no new money in the air to explode into an inflation? Just the reverse: asset prices in the US, and particularly in California, are de-flating. Also incomes are de-flating. (Who has a good and secure job?)

If the Repukes get in--- and they are horrid--- they will chop government spending to pieces. Halelujah! So, much more likely, a major de-flation in US asset prices is still ahead. That asset de-flation will create de-flation in everything else..... This is going to be a wild ride with a mad and determined Keynesian nut at the Fed, so fasten your seat-belts. No-one really knows how this experiment is going to turn-out.

MV may be zero because V is zero. The Putz from Princeton can print new money to his heart's content, but V appears to be zero. Cut-off credit, and there can be no explosion in inflation: MV=0.