Just checking up on the decision to be made about Janet Yellen...The vote is happening next week..... Reading thru this article Yellen is very dovish and is going to keep rates at 0.00% until unemployement reaches 6-6-5%. So cheap money is still very available for years to come but it does also say she will prick and asset bubble like RE to save it from destroying the economy also. She seems to be actually very considerate/passionate about actually getting it all running smoothly again and not just raising taxes like they have in Europe. So, will this actually work and eventually turn the U.S economy around, or will it be a failed experiment. Personally I like the idea but I cannot see where all the jobs are miraculaously going to appear from??? http://www.thestar.com/business/201...ext_head_of_the_us_federal_reserve_board.html
She certainly is going to make sure there is more than enough liquidity for everyone, the more dollars that flow means the more our retirement savings and assets will be worth in the future? :/ "The difference between anemic growth and recession will increasingly be semantic. This is another "How many angels can dance on the head of a pin?" debate in which Ivory Tower/State economists parse juiced or manipulated data to conclude the economy is "growing slowly" or slipping into negative growth; i.e., recession. . . . . . Trumpeting what amounts to signal noise as "steady growth" is adept perception management (i.e., propaganda), but if it doesn't include increases in purchasing power and discretionary income for the bottom 90%, it's a propaganda embarrassment, like the Fed official hyping the declining cost of tablet computers while someone in the audience shouts, I can't eat an iPad!" http://www.peakprosperity.com/blog/84092/trends-watch-2014
If you believe a word a politician or banker says you want your head looked at. Their default mode is LIE and keep LYING
Well speaking of 'Propaganda' here is a fresh Daily Reckoning article on that very subject.....Governments overruling..... EVERYTHING! http://www.dailyreckoning.com.au/when-prices-are-propaganda/2014/01/03/
O.k what I am really is will she turn the U.S economy around? Or will it continue into a slowly deflating 'deflationary' environment? I suspect the latter because the U.S in no longer the manufacturing giant it once was.....China/Asia is the new giant.
She will turn the US around like a junkie's dealer turns her life around by giving her (the junkie) a weeks worth of free heroin.
One last shot and then she'll get straight. This is an academic, a theorist, who is just a figurehead.
Ye I am thinking they will try this low rate stuff for 1-2 years and then realise it is still not working.......After that, who knows whats next???
Does anybody know how they are going to keep rates low and taper the QE at the same time? My understanding was that the 85 billion per month was going in to the bond market to keep the price up, and the yeild down. I think they have tapered back to 75 billion or whatever it is, but they are doing something else to manipulate the overnight rate that nobody is talking about (yet). Any ideas?
Man you gotta keep up with the news........They have tapered 10B off.....They buy all the bad defaulted mortgages from the huge housing bubble they had.......So they're now trying 75B per month but some are saying it will only be temporary because nothing will really improve. 10B really is'nt that much in the big scheme, they probably only did it to raise confidence spending just before xmas???
But how are they going to keep the rate near their 'target rate' if they are not buying (as many) bonds?
Out of my league man....All I know is interest rates are staying 0.00 until things improve.....That could take 1-3yrs.....Time will tell!
Why is a certain rate a target? To make it State cheaper to pay off debt. So when do they allow a rate to increase? When State steals more. By any combination of frontrunning on markets, inflicting higher prices, increasing tax rates, increasing tax base, adding taxes, increasing speeding tickets prices, increasing amount speeding tickets, and so on, plenty choices/ways. So actually, whether or not they succeed in this, depends on what their targeted victims do. Whether or not they are able to evade the higher prices, the tax, the speed tickets, etc. A combination of this all, erases existing saving money on bank deposits, due to people paying more and that more going to their institutionals, that then happily spend it in their place. And of course, if the producing citizen will be able to produce 5% more every year from now on, over a decade it will be over 50% more, and this will then compensate for an over 50% increase of the circulating money. That's in short how central planning operates. Things like this 'target rate' fit in this bigger scheme, one can't judge them each on their own, it requires the whole in order to determine what they can and not can.
O.k the decision has been made.....Yellen is the new Chairman....Feb 1. http://www.businessspectator.com.au/news/2014/1/7/us-economy/janet-yellen-confirmed-us-fed-chair
