FED and Inflation
- Thread starter HeSaidSheSaid
- Start date
I don't know if you know corn plays a major role in the US economy.
Corn is everywhere. Everything is produced with corn or corn-based products. just when weather turns sour for a season.... then you'd see a lot of FED money chasing the shrinking resources. then inflation would jump to another plateau.
it's still mystery to me for how the FED comes up with the inflation number at the whole sale level, and while the inflation at retail level is sky-rocketing. probably, somebody has been cooking the book.
Corn is everywhere. Everything is produced with corn or corn-based products. just when weather turns sour for a season.... then you'd see a lot of FED money chasing the shrinking resources. then inflation would jump to another plateau.
it's still mystery to me for how the FED comes up with the inflation number at the whole sale level, and while the inflation at retail level is sky-rocketing. probably, somebody has been cooking the book.
inflation = too many dollars chasing too few goods. i.e. the housing market yoy, average 10% increase in prices. doesn't matter if it is measured from the bottom of the market, plain and simple it is inflationary. i guess just because the feds are the feds everyone believes them that inflation is under control. all smoke and mirrors imo but i am just an average joe so what do i know.
all i can say is this: i got back into a job i did 6 years ago making 10% more then i did then and guess what, it does not go as far as it did back then. feds are creating the largest asset bubble in history and scary thing is, they are becoming the largest holders of those assets. i ask myself the question when it pops, who will bail them out? bernanke will be in the history books that is for sure: the leader of the fed that rolled the dice and finally rolled 7.
all i can say is this: i got back into a job i did 6 years ago making 10% more then i did then and guess what, it does not go as far as it did back then. feds are creating the largest asset bubble in history and scary thing is, they are becoming the largest holders of those assets. i ask myself the question when it pops, who will bail them out? bernanke will be in the history books that is for sure: the leader of the fed that rolled the dice and finally rolled 7.
oh and when obamacare hits companies in 2014, another $285 / month out of my paycheck but that is not inflationary, water off a ducks back, lol.
Too many dollars, Too few goods, TOO QUICKLY! That's why they're concerned about deflation right now. The QUICKLY part is missing.
http://www.economicshelp.org/blog/111/inflation/money-supply-inflation/
3. Velocity of Circulation
MV=PY
The quantity theory of money equation assumes that an increase in M causes an increase in P. However, this assumes that V is constant and Y is constant.
V (velocity of circulation)
However, in practices it is not as simple as this equation assumes. In practice there are variations in velocity of circulation e.t.c.
oldtime, just my opinion. for starters they could start by scaling back bond purchases and let the market digest that. if people are truly afraid that lack of money printing will derail the market then we got bigger problems.
and my point is dumbass, feds should not create another asset bubble but i think it is a bit late for that. what do you think the feds should be doing right now since you seem to be so sharp?
not necessarily "taper" is a word game thing, but they have said pretty plainly that its QE infinity until evans rule is met
we are getting a true lesson in the power of MP at the ZLB in Japan, Romer (future chairwoman) is looking on this experiment with itnerest