FED and Inflation

Quote from denner:

I find it interesting that you are not so naive as to believe the "official" inflation figures and will continually make reference to the Shadow Stats inflation figures. On the other hand, you make constant reference to what a swell job you think Bernanke is doing and that he should continue on the current path "so as not to let the economy return to recession". Essentially, you are talking out of both sides of your mouth. You acknowledge that inflation is running hot (7% inflation with essentially zero percent interest rates)...it doesn't take a genius to figure out if rates are running this negative to inflation, in a very short while the standard of living goes straight to hell...

Of course, there are a few smart asses around here that tell people to run into whatever the hot asset class is to make up the shortfall (in returns relative to inflation)...to which it should be reiterated that stocks have had 2 bubble and bursts in just the past 10-12 years.
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Yes, I'm convinced that the inflation that a typical citizen experiences is greater than the official government headline inflation, And it seems to me the Shadowstats figure is pretty close to reality. So in my mind there is more inflation than what the government says there is. But then, I don't assume the government is lying to us. My take is that their methods of computing inflation produce a lower number than what we experience. And that in the minds of the Fed economists, they must have well justified reasons for using the measures they do. If I want to know the inflation rate i'm experiencing, all I have to do is go to shadowstats.com.

When it comes to running the Fed or any outfit like that, I'd always want to defer to the people with expert training and experience. I guess you could say that I'm impressed with Bernanke's resume. He seems well suited to the job. My main criticisms have been reserved for congress where the resumes are not as impressive.

These are fairly complex issues once you delve into them, wouldn't you agree denner? My assumption, of course, is that reasonable people will always outnumber those on the fringes, left and right. It isn't possible for me to accurately summarize my personal position in a few paragraphs.

I'm particularly disgruntled with the Republicans. (I myself am not anything political, but those that don't agree with me have called me a "communist", and I think they were serious!:D) It seems as though there are enough of the conspiracy types combined with the fundamentalists that they have been able to take over the GOP. Their goal seems to be to just shut down the government. Essentially the same thing Gingrich tried, but using obstructionism. When one of the conspiracy people reads a statement like that from me, they will just assume that therefore I am a supporter of Obama and the Democrats. But I'm NOT necessarily. What I am, is an apolitical person very strongly against "obstructionism" as a tool in majority rule government. I'd like to see the Senate go back to the old filibuster rules that worked rather well.
 
Quote from piezoe:

I know you are not necessarily advocating a commodity backed currency.
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Nor advocating the scenario, only proposing it - something like it as likely, nearly inevitable. The peg is simply window dressing. The sorts of people that dream up stuff like this don't need no stinkin' peg - it impinges too much on their need for control.
 
Quote from oldtime:

ok, you win, crude goes up, everything goes up, it you want to call it inflation, fine. Now, what do you want the fed to do about it?

throw a drought in there, what more do you want them to do?
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Oldtime, I am so glad you asked that question. Thought no one would ever ask. :D

What do I want the Fed to do? Answer: Raise the margin requirement by at least 5%. Then higher still in stages if that fails to reduce market volatility. Traders will hate this, but it is the right policy if you want to head off extreme market bubbles and reduce risk. This will help restore confidence in the market, and ultimately increase the number of market participants -- a healthier way of increasing market liquidity than is a low margin requirement.
 
Just wanted to interject here and say this thread is awesome. The Fed’s actions are really beginning to have a significant impact on the markets and people so it’s good to see discussion about it. I just wish there was more discussion amongst Americans in general about it.
 
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