Inflation at 53-year low as QE money printing rages unabated!

[piezoe]

We have already seen inflation, that's the first point. No, the CPI has maintained an even keel, but many food stuffs are far more expensive in the last 5 years. Some of this, as Ricter likes to point out, is due to things like drought, famine, etc., and he's right. But others are due to cost-push inflation. The reserves at the Fed may, or may not cause inflation. On this we agree.

As for QE being reversible, it's only reversible in theory. The Fed won't be able to reverse it any time soon (again, in the next decade) without a systemic shock. They may get this shock anyway, regardless.

And double bottom in the S+P, where? This last correction?

yes. this last correction we went down approximately 10%. Thank goodness it recovered in time for the election. My experience tells me that it is rare for the market to drop immediately before an election. (It is not unusual for gas at the pump to drop however.) Now that the election is out of the way, perhaps the market will drop a little and establish a nice double bottom. Or will we all be so overjoyed at the election results that it will be "to the moon, Alice!" ? (You must be old enough to remember Jackie Gleason and the Honeymooners.)

I agree with your comments other than I think it is unwise to predict how long it will be before the Fed can begin unwinding. If you go back and review the posts immediately following TARP and the onset of QE, including all of the foolish and dire predictions -- Deflation! ; Hyperinflation , Bla, Bla Bla -- you will see that none of it has come to pass, so far. And that's in large part due to the masterful job done by Bernanke and company. Had the Congress been willing to meet the President and his counsel of Economic advisers halfway, we might have done even better. We can now look forward to another two years of roadblocks and half way measures.

 

[Tsing Tao]

yes. this last correction we went down approximately 10%. Thank goodness it recovered in time for the election. My experience tells me that it is rare for the market to drop immediately before an election. (It is not unusual for gas at the pump to drop however.) Now that the election is out of the way, perhaps the market will drop a little and establish a nice double bottom. Or will we all be so overjoyed at the election results that it will be "to the moon, Alice!" ? (You must be old enough to remember Jackie Gleason and the Honeymooners.)

I agree with your comments other than I think it is unwise to predict how long it will be before the Fed can begin unwinding. If you go back and review the posts immediately following TARP and the onset of QE, including all of the foolish and dire predictions -- Deflation! ; Hyperinflation , Bla, Bla Bla -- you will see that none of it has come to pass, so far. And that's in large part due to the masterful job done by Bernanke and company. Had the Congress been willing to meet the President and his counsel of Economic advisers halfway, we might have done even better. We can now look forward to another two years of roadblocks and half way measures.

Just because "none of it has come to pass yet" doesn't mean really anything. No one (myself included) ever believed policy makers would go to such extraordinary lengths to prolong what we will inevitably experience when the system rights itself. And it will right itself, with or without our blessing.

The Japanese have been postponing their reckoning for well over two decades now. If you look at their metrics, no one would have ever thought that elected and appointed bureaucrats would ever stoop to such levels of insanity just to kick the can. But they have.

You can't practice crazy finance forever and get away with it.

 

[fhl]

 

[Tsing Tao]

http://online.wsj.com/articles/cow-prices-jump-over-the-moon-1415302201

Cow Prices Jump Over the Moon

Ok, I'll admit it. I posted this because I loved the title.

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CHICAGO—U.S. cattle prices are surging again, a fresh blow to consumers already stung by record costs for steaks and ground beef.

 

[Ricter]

Markets surging after QE ends, and spendthrift republicans take the senate!

http://online.wsj.com/articles/cow-prices-jump-over-the-moon-1415302201

Cow Prices Jump Over the Moon

Ok, I'll admit it. I posted this because I loved the title.

----

CHICAGO—U.S. cattle prices are surging again, a fresh blow to consumers already stung by record costs for steaks and ground beef.

One of my neighbors has over 1000 head, and he tells me he's set this year to make 180% on his investment, a first.

 

[Tsing Tao]

Markets surging after QE ends, and spendthrift republicans take the senate!

We shall see how long this lasts. Care to wager?

One of my neighbors has over 1000 head, and he tells me he's set this year to make 180% on his investment, a first.

I've no doubt. He's probably making money hand over fist as the California drought rages on.

 

[Ricter]

We shall see how long this lasts. Care to wager?

I've no doubt. He's probably making money hand over fist as the California drought rages on.

You're asking me to wager that there will not be another dip in the stock market??

 

[Tsing Tao]

You're asking me to wager that there will not be another dip in the stock market??

I'm saying by YE we see a medium to long term top made. Only 45 more days.

 

[piezoe]

Just because "none of it has come to pass yet" doesn't mean really anything. No one (myself included) ever believed policy makers would go to such extraordinary lengths to prolong what we will inevitably experience when the system rights itself. And it will right itself, with or without our blessing.

The Japanese have been postponing their reckoning for well over two decades now. If you look at their metrics, no one would have ever thought that elected and appointed bureaucrats would ever stoop to such levels of insanity just to kick the can. But they have.

You can't practice crazy finance forever and get away with it.

I can't disagree, yet I recognize how wrong we can be when predicting long term outcomes. We can also be right! But it is wise to acknowledge our human fallibility, don't you think. I am encouraged when I note that the Fed is not repeating history, but blazing new ground. I belief it will work, but sadly I'm fallible.

I'm far more concerned with the decisions Congress isn't making -- business as usual -- and the decisions the Court is making, which is also business as usual. I'm bothered far less by public debt than by our spending priorities. If we were to change those priorities, the debt would be no problem.

 

[Tsing Tao]

I can't disagree, yet I recognize how wrong we can be when predicting long term outcomes. We can also be right! But it is wise to acknowledge our human fallibility, don't you think. I am encouraged when I note that the Fed is not repeating history, but blazing new ground. I belief it will work, but sadly I'm fallible.

I'm far more concerned with the decisions Congress isn't making -- business as usual -- and the decisions the Court is making, which is also business as usual. I'm bothered far less by public debt than by our spending priorities. If we were to change those priorities, the debt would be no problem.

How is the Fed breaking new ground? Japan did this stuff over a decade ago.