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Post by thelivyjr » Sun Jun 13, 2021 1:40 p


Paul Plante says:

And speaking of having a crackpot economist in charge of our United States Treasury, and thus, essentially in charge of our lives, which is not a comforting thought at all, unless you are into and an advocate of HOODOO economics, a swirl of smaller crackpot theories rolled up into one major-league crackpot theory employed by Janet “TOODLES” Yellen, Joe Biden’s own personal financial guru, let’s go to a CNBC story entitled “Higher interest rates would be good for the country, Treasury Secretary Yellen says” by Emma Newburger published June 6, 2021, where we have this ignorant codswallop (nonsense, as in “I think that’s a right load of old codswallop”) from “TOODLES” which demonstrates how thin her grasp on the reality most of us who are not rich like her live our lives in, outside of her guarded and gated community where only the rich and privileged can go, to wit:

U.S. Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending proposal would be positive for the country, even if it leads to a rise in interest rates.

“If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.

“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” she said.

She added that if the packages help at all to “alleviate things then that’s not a bad thing — that’s a good thing.”

end quotes

And that is from her perspective as someone who wants to protect her own net worth and has the political power to do so.

But historically speaking, what might be good for the fed is hardly good for society, since the federal reserve is a giant parasite that feeds off society and ultimately sucks the life out of it, to feed its bloated self, a process it is no longer in control of, which in turn takes us to The (Raleigh) News & Observer story “Lumber prices still sky-high amid COVID-19 shortage. What’s being done to get costs down?” by Bailey Aldridge on June 6, 2021, where we get further insight into “TOODLES's” statement “We’ve been fighting inflation that’s too low now for a decade,” to see where we are on that score, to wit:

RALEIGH — Lumber prices have continued surging in response to supply shortages spurred by the COVID-19 pandemic.

The lumber scarcity matched with increased demand during the pandemic drove costs sky-high, which in turn has increased construction and housing costs and left government officials and those within the industry grappling with how to rebound supply and bring costs down.

Between April 2020 and April 2021, the National Association of Home Builders said the “price per thousand board feet” increased by nearly 250% — from $350 to $1,200.

Prices then soared past $1,400 in early May and have continued increasing since.

The high lumber costs have increased the price of a single-family home by about $36,000, the NAHB says.

That’s priced “millions of middle-class households out of the market at a level they previously could afford.”

It’s also added nearly $13,000 to the cost of an “average new multifamily” home — meaning rent for a new apartment has gone up by about $119 each month.

end quotes

And you know what, people?

The fed loves that, because it to their benefit, not being of us, or a part of us, but a large blood-sucking parasite over us, which takes us back to that story, to wit:

What’s being done to bring lumber prices down?

The NAHB said it has called for “prompt action” from President Joe Biden’s administration and other officials and in late May discussed the soaring lumber prices with U.S. Secretary of Commerce Gina Raimondo.

“Raimondo and NAHB CEO Jerry Howard discussed working together on convening a summit that would include representatives from the U.S. government, the lumber supply chain and the home building industry,” it said.

end quotes

And Holy Cow, people, there is a solution alright – convene a summit, get all the right people in the room at the same time and have some palaver, and out of that will come something, else why have a summit in the first place?

Getting back to the story:

NAHB Chairman Chuck Fowke said in a news release that Raimondo acknowledged she and Biden are concerned about the effect of high lumber prices on the country’s economy.

“We take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,” Raimondo said, according to the NAHB.

end quotes

And hey, Gina, dude, no rush!

Don’t get yourself all stressed out about something you’re totally out of your league in, other than issuing empty platitudinal statements to the effect you “take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,”

Getting back to the story once again:

Some GOP lawmakers have criticized Biden for the high lumber costs, accusing him of “declaring war” on construction jobs and not taking enough action, Fox Business reported.

“Lumber prices are an issue that has many causes, from economic complications from the coronavirus pandemic to difficult trade issues with Canada.”

“Biden has shown he is either unwilling or incapable of tackling these obstacles,” Rep. Bob Gibbs of Ohio said in a statement to Fox News.

But Biden said during remarks in late May that rebooting the economy isn’t like “flipping on a light switch” and that there will be supply chain issues on the way to “steady growth.”

“In the coming weeks, my administration will take steps to combat these supply pressures, starting with the construction materials and transportation bottlenecks,” Biden said.

Some groups have urged Biden to remove lumber and steel tariffs imposed during President Donald Trump’s administration, CNN Business reports.

A White House spokesperson told CNN Business that the Biden administration is pursuing “every avenue that could help relieve bottlenecks and strengthen our economic recovery” and that it will continue to review Trump-era trade policies.

“Tariffs are one tool in the toolbox to support American workers and American industry,” the spokesperson said, according to CNN Business.

end quotes

Except tariffs, which benefit the treasury, are killing the home construction industry, and in the case of lumber, are doing doodly-squat to support American workers or American industry, but Joe needs those tariffs to support his massive and grandiose stimulation, so there we are and if we go back to the story once again, we will see that there is where we will remain, to wit:

What pushed prices so high?

Some sawmills were forced to shut down at the beginning of the pandemic, limiting lumber supplies.

At the same time, many American stuck at home due to COVID-19 restrictions stocked up on materials to complete do-it-yourself projects and demand for construction or home improvement projects increased.

Additionally, Fortune reports that many potential homebuyers opted for construction when record-low interest rates spurred a boom in the housing market, further driving up demand.

“It was the perfect storm,” Kari Doll, manager at a lumber yard in Montana, told the Bozeman Daily Chronicle.

The decrease in supply coupled with the increase in demand drove lumber prices sky-high.

Now, the backlogged supply hasn’t been able to catch up with the high demand and lumber prices have remained elevated.

Experts have offered varying projections on when prices could come down, with some saying they could ease in the summer and others saying it’s unclear when or if prices will return to where they were before the boom.

end quotes

Oh, well, should have built that new dog house last year, when it would still have been affordable!

Sorry, Fido, a tarp over the picnic table will have to suffice for now, and well, okay, quite a long time but thank God dogs are patient, or there might have been some leg-biting over that news.

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Post by thelivyjr » Fri Jun 18, 2021 1:40 p


Paul Plante says:

Getting back with the BIDEN MIRACLE ECONOMY, let’s go to a CNBC story entitled “Producer prices climb 6.6% in May on annual basis, largest 12-month increase on record” by Jeff Cox published June 15, 2021, to see what impact the federal reserve’s push for higher inflation is having on the REAL AMERICAN ECONOMY, which is the economy of MAIN STREET, where we all live and have to function, to wit:

Producer prices rose at their fastest annual clip in nearly 11 years in May as inflation continued to build in the U.S. economy, the Labor Department reported Tuesday.

end quotes

And the federal reserve, which is a quasi-private bank not responsible in any way to We, the American People, with interests of its own totally foreign to ours, and inimical (tending to obstruct or harm) to ours, given that inflation reduces the value of our money and is a tax the federal reserve collects despite our having no representation in the matter, is quite fine with that rapid rise in inflation, which takes us back to that story, to wit:

The 6.6% surge was the biggest 12-month rise in the final demand index since the Bureau of Labor Statistics began tracking the data in November 2010.

Those higher price pressures came amid a pronounced dip in retail sales, which fell 1.3% in May, worse than the 0.6% estimate, according to the Census Bureau.

end quotes

And big surprise there – the pronounced dip in retail sales, which is exactly what is predicted in The Library of Economics and Liberty paper titled “Democracy in Deficit: The Political Legacy of Lord Keynes” by James M. Buchanan and Richard E. Wagner.

As prices go up, people find alternatives, or they stop buying.

Except the federal reserve thinks it can push on a rope and do work that way, so they think people will simply accept the higher prices and pay them, which raises the amount on their credit card, and thus, the interest they are paying if they can’t wipe the balance on a monthly basis, which is great for the member banks of the federal reserve.

Getting back to CNBC:

Excluding food and energy, the 12-month final demand PPI rose 5.3%, which also was the biggest increase since that the BLS started tracking that number in August 2014.

Substantial price increases at the producer end came from nonferrous metals, which jumped 6.9% for the month.

Prices of grains also surged, rising 25.7%, while oilseeds increased 19.5% and beef and veal rose 10.5%.

Fresh fruits and melons fell 1.9%, while basic organic chemicals and asphalt also declined.

Though services continued to be a lower contributor to overall producer price pressures, the index rose for the fifth straight month.

The higher numbers likely will add to an ongoing debate over whether the inflation pressures over the past several months will last.

Federal Reserve officials believe the current increase will prove to be transitory as supply and demand issues balance out and low readings during the pandemic lockdown wash out of the system.

However, several notable Wall Street names, including Bank of America CEO Brian Moynihan and hedge fund billionaire Paul Tudor Jones, told CNBC on Monday that it’s time for the Fed to pull back on the easy-money policy it instituted during the pandemic.

end quotes

Except the fed can’t do that – pull back on the easy-money policy it instituted during the pandemic, because it will cause a TAPER TANTRUM, which again takes us back to the story, to wit:

While the inflation readings have been gathering the Street’s attention, consumers have been pulling back on their purchases as the effects from government stimulus checks have worn off.

end quotes

And there is what we were just taking about – the fact that if the government hands people money, there is a likelihood, not a certainty, that they will spend it, and then, they won’t spend while waiting for another handout, which takes us back to the reality we live in, which is far removed from the “reality” that only exists in the economic models of the federal reserve, to wit:

Excluding autos, retail sales were down 0.7% in May, well off the estimate for a 0.5% increase.

Excluding gas stations, sales fell 1.5%.

Building material and garden supply sales tumbled 5.9% for the month, while miscellaneous store sales were off 5% and general merchandise sales fell 3.3%.

end quotes

1929, anyone?

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Post by thelivyjr » Fri Jun 18, 2021 1:40 p


Paul Plante says:

And yes, people, the BIDEN MIRACLE ECONOMY coming to a town or village near you real soon, which takes us to a CNBC story entitled “The Fed could be facing a jobs headache in its inflation fight” by Jeff Cox on June 11, 2021, where we get another glimpse as to what is out ahead of us as THE CULT OF JOE institutes Weimar Republic fiscal and monetary policy in this country, to wit:

If the Federal Reserve’s view on inflation prevails, a few key things have to go right, particularly when it comes to getting people back to work.

Solving the jobs puzzle has been the most vexing task for policymakers in the coronavirus pandemic era, with nearly 10 million potential workers still considered unemployed even though the number of open positions available hit a record of 9.3 million in April, according to the latest data from the U.S. Labor Department.

There’s a fairly simple inflation dynamic at play: The longer it takes to get people back to work, the more employers will have to pay.

Those higher salaries in turn will trigger higher prices and could lead to the kinds of longer-term inflationary above-normal pressures that the Fed is trying to avoid.

“Unfortunately, we see good reasons to think that labor participation might not return quickly to its pre-Covid level,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note.

“Whatever is happening here, the Fed needs large numbers of these people to return to the labor force in the fall.”

end quotes

Yes, people, when pushing on the rope fails to lift the load, why, you just double down and push harder.

And that is yet another example of the social engineering the federal reserve under THE CULT OF JOE is engaged in, as they use monetary policy to try and force social behavior, which takes us back to the story, as follows:

Consumer prices increased at a 5% pace year over year in May, the fastest since the financial crisis.

Economists, though, generally agreed that much of what is driving the rapid inflation surge is due to temporary factors that will ease up as the recovery continues and the economy returns to normal following the unprecedented pandemic shock.

end quotes

Has anyone out there ever followed the projections of economists on a daily basis with regard to economic trends?

They make weathermen look dead on the money by comparison with their misses, so that anyone who trusts the predictions of an economist is a fool, which takes us back to CNBC, to wit:

That’s far from certain, though.

The Atlanta Fed’s gauge of “sticky” inflation, or price of goods that tend not to fluctuate greatly over time, rose 2.7% year over year in May for the strongest growth since April 2009.

A separate measure of “flexible” CPI, or prices that do tend to move frequently, increased a stunning 12.4%, the fastest since December 1980.

end quotes

So, price inflation, people – great for the federal reserve and the ONE PERCENT who form the core of Joe Biden’s inner circle, but not for the American people themselves, for whom inflation is a tax that reduces their buying power, which again takes us back to the story of our developing future, to wit:

In their most recent forecast, Fed officials put core inflation at 2.2% for all of 2021; Shepherdson said the current numbers suggest something closer to 3.5%.

“That’s a huge miss, and it potentially poses a serious threat to the Fed’s benign view of medium-term inflation because of its potential impact of the labor market,” Shepherdson said.

end quotes

Not only is the federal reserve not always right, more seriously, it is dead wrong, as it was during the housing market meltdown, believing implicitly, and wrongly, that housing prices do not come down, which again takes us back to the story of the reality we common folks are confronted as the federal reserve bungles its way along here, to wit:

Managing its way through the various dynamics could prove difficult for the Fed.

Previous attempts to normalize policy over the years have largely failed, with the central bank having to revert back to the zero-interest money-printing world that arose during the financial crisis.

“The Fed is trapped,” wrote Joseph LaVorgna, chief economist for the Americas at Natixis and former chief economist for the National Economic Council.

end quotes

And yes, indeed, they are, a trap they created that is known as MORAL HAZARD, where you have to keep handing out free money tomarrow, because you handed it out today and yesterday and the day before and the day before that – the now-famous BERNANKE PUT, which instilled a belief in the ONE PERCENT that the federal reserve would always have their back and never let them fail, which again takes us back to the story, to wit:

While LaVorgna sees inflation as staying relatively under control, he thinks the Fed could face problems from deflationary pressures.

The central bank doesn’t like inflation that’s too low, as it creates a low-expectation cycle that constricts monetary policy during downturns.

“The political pressure to do nothing will be intense” as government debt increases, LaVorgna said.

“If the Fed cannot (or will not) remove excessive policy accommodation when the economy is booming, how can policymakers do it when growth invariably slows?”

end quotes

An existential question for our times, alright, which takes us back to CNBC for more federal reserve social engineering, to wit:

Regardless of the inflation pressures, the Fed last year changed its mission statement to keep policy accommodative until the economy sees inclusive labor gains, meaning across gender, income and race.

end quotes

So, because of the social policies the Biden administration is imposing on us with this “equity” horse**** the CULT OF JOE is imposing on us, the federal reserve, which has no experience in social engineering, and no expertise in social engineering, and no mandate to engage in social engineering is going to engage in social engineering nonetheless to our detriment by letting inflation “run hot” until every L, every G, every B, every Q, and every T and every Black person and persons of all other colors than white have the high-paying job that they want for themselves, which is straight out of the WEIMAR REPUBLIC MONETARY AND FISCAL POLICY HANDBOOK.

Is chaos coming?

Stay tuned!

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Post by thelivyjr » Sat Jun 19, 2021 1:40 p


Paul Plante says:

And to get a feel for the evolution of this history that leads us up to this moment where in the CNBC story entitled “The Fed could be facing a jobs headache in its inflation fight” by Jeff Cox on June 11, 2021, we have Joseph LaVorgna, chief economist for the Americas at Natixis and former chief economist for the National Economic Council saying quite truthfully, “The Fed is trapped,” let’s go back in time to a story in the New Yorker entitled “The Bernanke Put: Can the Markets and the Economy Live Without It?” by John Cassidy eight years ago on June 21, 2013, where we were treated to the following background history, to wit:

In finance, a “put” is a contract that gives its owner the right to sell something — a stock, a bond, a tanker of crude oil — at certain price, regardless of the price in the market.

A put is a guarantee, basically, and when the markets are falling it can be invaluable.

But the word is sometimes used in a more general sense.

Back in the old days, when Mark Zuckerberg was in high school and Alan Greenspan was in Foggy Bottom, there was something called “the Greenspan put.”

It was a commitment on the part of the Fed to cut interest rates and print money whenever the markets or the economy stumbled.

end quotes

And there, people, we see the first weavings by the federal reserve of the trap it now has fenced itself in with, which has it pouring gobs of money into the system, while keeping interest rates near zero, because to raise them will screw the be-jaysus out of the high-flying tech stocks which require low interest rates to maintain their lofty evaluations.

As to money sloshing around in the system, let us go to a Reuters article entitled “TREASURIES-Yields rise as Fed eyes earlier start to rate hikes” by Karen Pierog on June 16, 2021, where we have as follows:

“The IOER hike is really about relieving some of the strains in the front-end of the curve related to a tsunami of cash in the financial system,” said Guy LeBas, chief fixed income strategist at Janney Capital Management.

“Banks are overreserved, money market funds are finding it hard to get positive yield anywhere – and so it addresses some of those problems.”

The amount of money pouring into the reverse repurchase agreement facility, which offers approved money managers the option to lend money to the Fed overnight in return for Treasury collateral, has ballooned, hitting a record $584 billion on Monday.

end quotes


And the more the federal reserve pours out, the less our money is worth, which is why there is inflation, which takes is back to 2013 and the BERNANKE PUT, to wit:

Although its existence was officially denied, many investors believed it was in place, and this belief helped sustain the great stock market bubble of the late nineteen-nineties.

For the past few years, the Fed has been issuing another type of official guarantee, this time in the bond market.

Call it “the Bernanke put.”

In reducing the short-term interest rate it controls practically to zero, and committing to purchase trillions of dollars of Treasury bonds and high-grade mortgage bonds — a tactic known as quantitative easing — the Fed has managed to bring mortgage rates, and other lending rates, down to levels not seen since the nineteen-fifties.

end quotes

And lo and behold, people, the CNBC story “Mortgage rates shoot higher after Fed Chairman Powell’s comments” by Diana Olick on June 17, 2021, where we have the other end of that policy in our times today, to wit:

The average rate on the popular 30-year fixed mortgage moved decidedly higher Thursday, hitting 3.25%, according to Mortgage News Daily.

That is the highest rate since mid-April.

The move was a reaction to comments made Wednesday by Federal Reserve Chairman Jerome Powell following the central bank’s meeting this week.

Fed officials indicated that rate hikes could come in 2023, although they didn’t mention when they would start scaling back their massive bond-buying program.

“You can think of this meeting that we had as the ‘talking about talking about’ meeting,” Powell said, recalling a statement he made in 2020 that the bank wasn’t “thinking about thinking about raising rates.”

Mortgage rates even moved higher Tuesday in anticipation of the Fed meeting.

Mortgage rates do not follow the federal funds rate, which was unchanged Wednesday, but generally track the yield on the 10-year Treasury, which moved higher.

Mortgage rates are also affected greatly by the amount of mortgage-backed bonds the Fed purchases.

That’s what caught some investors off guard and caused bond yields and mortgage rates to move higher than expected.

“Markets were somewhat surprised by the Fed’s rate hike outlook.”

“Granted, the Fed Funds Rate doesn’t control mortgage rates, but the outlook speaks to how quickly the Fed would need to dial back its bond buying programs (aka ‘tapering’).”

“Those programs definitely help keep rates low,” noted Matthew Graham, chief operating officer of Mortgage News Daily.

The sooner the Fed starts to taper, the sooner mortgage rates move higher, as happened in the last so-called taper tantrum in June 2013.

Mortgage rates are now nearly a quarter of a percentage point higher than they were last Friday and about a quarter of a percentage point higher than they were a year ago.

Now, applications to refinance a home loan are 22% lower than they were a year ago, according to the Mortgage Bankers Association.

There are now far fewer borrowers who can benefit from a refinance.

As for homebuyers, given today’s sky-high home prices, any move higher in rates is not only going to hit the monthly payment but may make it harder to qualify for the loan.

“For home buyers, this means it’s a good idea to take a fresh look at your home shopping budget.”

“Run the numbers and know what it means for your search price if rates tick up a quarter point, but keep these worries in context,” said Danielle Hale, chief economist for realtor.com.

end quotes

Kind of put a screwing to the working man it does, which takes us back to 2013 and the Bernanke Put, to wit:

Just as it was designed to do, this policy has given a significant boost to the housing market, and to other parts of the economy, but its flip side has been a bubble, or something closely resembling a bubble, in the global bond markets.

With investors chasing anything with a decent yield, they’ve piled into lower quality bonds — such as “junk bonds” issued by companies with poor credit ratings, and debts issued by governments in emerging markets — greatly narrowing the interest-rate premiums that such securities normally carry.

As long as the Fed remained committed to quantitative easing, the risks that investors faced in buying these types of bonds, or any other risky financial asset, was greatly attenuated.

Whilst much of the action was in the bond markets, quantitative easing also gave a boost to stock prices, which have more than doubled in the past four years.

Over all, the Fed’s policy has been reasonably successful.

As I’ve been saying for months, and as Bernanke confirmed earlier this week, the economic recovery is gradually strengthening.

That’s why the Fed chairman decided this was the right time to prepare the markets for a change in policy.

In theory, Bernanke’s gambit was a perfectly reasonable one.

Quantitative easing was always meant to be an emergency measure, not a permanent fixture.

But the market’s panicked reaction illustrates just how difficult it is for the Fed to remove a put it has previously issued, or is widely perceived to have issued.

Expressed bluntly, a Fed chairman intent on forcing the economy to stand on its own two feet has to be willing to accept some turmoil in the markets, and some collateral damage to the economy itself.

A modest fall in stock prices, which is what we’ve seen in the past few days, is the least of it.

Mortgage rates have already started to rise toward more normal levels, and the wave of cheap refinancings may be coming to an end.

That will put a crimp on the housing market and on consumer spending.

Combined with the impact of the sequester, which is still to be fully felt, these things could put a damper on G.D.P. growth in the second half of this year, when the Fed is expecting it to accelerate.

And, meanwhile, as the bond-market bubble starts to deflate, there’s a danger of some big financial institution that has been overexposed getting into trouble.

Bernanke, his colleagues, and his successor — his term is up next January — will have to withstand all of this.

In addition, they will come under attack from commentators and politicians who believe that, with the unemployment rate still very high and the rate of inflation still very low, they shouldn’t be doing anything to tighten policy.

Even some Fed insiders take this view.

In a statement released on Friday, James Bullard, the head of the Federal Reserve Bank of St. Louis and a colleague of Bernanke on the Federal Open Market Committee, said the announcement of the plan to draw down quantitative easing was “inappropriately timed,” and should have been delayed until there was more confirmed evidence of a pickup in economic growth.

I have some sympathy for Bullard’s argument, but also for the predicament in which Bernanke finds himself.

When Greenspan was the Fed chairman, one of the major criticisms about his policies was that they encouraged investors to believe that the central bank would always be there to protect them, and thereby contributed to excessive risk-taking — a phenomenon known as “moral hazard.”

(I made this argument myself, at book length.)

By issuing a warning now that quantitative easing may be coming to an end, Bernanke is seeking to forestall this problem before it generates another boom-bust cycle.

But being a tough cop is never easy.

end quotes

Which is why we still have Quantitative Easing today.

Stay tuned.

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Post by thelivyjr » Sun Jun 20, 2021 1:40 p


Paul Plante says:

Which brings us back to the present moment and the Reuters story “Fed signals higher rates in 2023, bond-buying taper talks as virus fades” by Howard Schneider, Ann Saphir and Jonnelle Marte on June 16, 2021, to wit:

WASHINGTON (Reuters) – The Federal Reserve on Wednesday began closing the door on its pandemic-driven monetary policy as officials projected an accelerated timetable for interest rate increases, opened talks on how to end crisis-era bond-buying, and said the 15-month-old health emergency was no longer a core constraint on U.S. commerce.

U.S. stocks fell after the release of the statement and the economic projections before paring losses, with the S&P 500 index closing down about 0.5%.

end quotes

A whiff of a coming taper tantrum?

Let’s go back for more to see what might be up here:

The Fed reiterated it wanted to see “substantial further progress” in employment before making any policy shift.

end quotes

And since the federal reserve has no real clue what that stupid statement “substantial further progress” means in actuality, given it is a made-up gibberish term, who can really say what the fed is going to do, starting with them, which again takes us back to Reuters, as follows:

Alongside higher growth, prices are also rising.

Inflation is now on track to exceed the Fed’s 2% target by a wide margin of 3.5% this year and remain slightly elevated for the next two years, the projections showed.

end quotes

That doesn’t faze the federal reserve in the least, since they live in LA-LA LAND, but that inflation will have a big impact, as intended, on the “working class” people in America who are the ones who will be paying that tax to the federal reserve, which takes us back to Reuters, as follows:

But he (Powell of the federal reserve) also acknowledged the rising risk that higher inflation may persist, a possibility apparent in the relative rush, by Fed standards at least, of policymakers toward an earlier rate increase.

end quotes

TRANSLATION: he has not a clue!

Getting back to Reuters:

“This change in stance jars a little with the Fed’s recent claims that the recent spike in inflation is temporary,” said James McCann, deputy chief economist at Aberdeen Standard Investments.

“The pressure is on to explain the change in stance without setting hares running.”

end quotes

Anyone who believes a word the federal reserve says is a fool, which takes us to another Reuters article entitled “Dow, S&P post worst week in months after hawkish Fed spooks investors” by David French on June 18, 2021, for some taper tantrum, to wit:

(Reuters) – U.S. stocks ended sharply lower on Friday, with the Dow and S&P 500 posting their worst weekly performances in months, after comments from Federal Reserve official James Bullard that the U.S. central bank might raise interest rates sooner than previously expected spooked investors.

end quotes

OMG, the punch bowl is going to be taken away!


The end of the world is coming, people, which takes us back to Reuters, to wit:

The blue-chip Dow and the benchmark S&P 500 started the week at record closing levels, but ultimately fell by their most in any week since late October and late February, respectively.

The tech-heavy Nasdaq index also closed lower despite posting its two highest ever finishes in the last five days.

Investor confidence in their existing positions was initially dinged by the Fed’s policy meeting, where it projected interest rate hikes would happen sooner than anticipated, and signaled it was reaching the point where it could begin talking about tapering its massive stimulus – as opposed to just thinking about it.

This was compounded by Bullard, president of the St. Louis Federal Reserve, saying Friday he was among the seven officials who saw rate increases beginning next year to contain inflation.

Inflation, and how the U.S. central bank will tackle it as the country comes out of the pandemic, had been front-and-center of investors’ minds in the run-up to the policy meeting, which ended on Wednesday.

The CBOE volatility index, Wall Street’s fear gauge, closed Friday at a four-week high.

“Next week, you will have various Fed governors give speeches, and we’ll have the same thing: some governors will be more hawkish, and some will be more dovish, so you’ll see some back-and-forth,” Ghriskey added.

end quotes

Which thought takes us to yet another Reuters article entitled “TREASURIES-Yield curve flattens as Fed seen more proactive on inflation” by Karen Brettell on June 18, 2021, to wit:

NEW YORK, June 18 (Reuters) – Long-dated U.S. Treasury yields fell on Friday and the yield curve continued to flatten as market participants bet that the Federal Reserve will act sooner to clamp down on inflation pressures if they persist.

“It does seem as though the market has now shifted its view that the Fed’s going to let inflation run wild, to the Fed’s basically going to kill inflation in the cradle,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York, adding that “the truth is probably somewhere in the middle.”

“They are trying to reinforce their control of the narrative.”

“I don’t think they want the narrative to be that the Fed is behind the curve on inflation,” Goldberg said.

end quotes

The fed is behind the eight-ball and asleep at the switch, just as they were back in 2008.

But stay tuned, for this is just the beginning of all of what is yet to come!

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Post by thelivyjr » Tue Jun 22, 2021 1:40 p


Paul Plante says:

And here, for some more essential background on this subject of price inflation, let us go back to an article in the ECONOMIC REVIEW, JANUARY/FEBRUARY 1981, entitled “KEYNES ON INFLATION” by Thomas M. Humphrey, Federal Reserve Bank of Richmond, where we have as follows on the subject of the inflation the federal reserve is pursuing on behalf of the CULT OF JOE, to wit:

Early Writings

Keynes’ strong aversion to inflation is evident in even his earliest work.

It appears, for example, in his Indian Currency and Finance (1913).

There he emphatically rejects the argument that “a depreciating currency is advantageous . . . to trade,” contending that any advantages derived from inflation are “only temporary” and that they “occur largely at the expense of other members of the community” and therefore do “not profit the country as a whole.”

He takes an even tougher attitude in his Economic Consequences of the Peace (1919), condemning inflation in the harshest possible terms.

He says:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency.

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.

He agrees with Lenin that inflation has the potentiality of destroying the basis of capitalist society.

Lenin was certainly right.

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.

The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

He then proceeds to specify at least four ways that rapid inflation works to weaken the social fabric and to undermine the foundations of the capitalist free-market system.

First, unforeseen inflation, he says, results in a capricious and totally “arbitrary rearrangement of riches” that violates the principles of distributive justice.

Besides its inequities, inflation also renders business undertakings riskier and thereby turns “the process of wealth-getting . . . into a gamble and a lottery.”

In generating risk and injustice, inflation “strikes not only at security, but at confidence in the equity of the existing distribution of wealth.”

Second, inflation violates long-term arrangements based on the assumed stability of the value of money.

In so doing, inflation disturbs contracts and upsets “all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism.”

Third, inflation generates social discontent and directs it against businessmen whose windfall profits are wrongly perceived to be the cause rather than the consequence of inflation.

This discontent is exploited by governments which “being many of them . . . reckless . . . as well as weak, seek to direct on to a class known as ‘profiteers’ the popular indignation against the more obvious consequences of their vicious methods.”

In other words, governments actually responsible for causing inflation seek to shift the blame onto businessmen who consequently lose “confidence in their place in society” and become “the easy victims of intimidation” by “governments of their own making, and a Press of which they are the proprietors.”

By making business a scapegoat and target of vilification and control, inflation reinforces anti-business attitudes and weakens support for what Keynes called “the active and constructive element in the whole capitalist society.”

Finally, inflation tends to breed such misguided remedies as “price regulation” and “profiteer-hunting” that may do more damage than the inflation itself.

end quotes

So why is the federal reserve actively pursuing inflation today?

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Post by thelivyjr » Sun Jul 18, 2021 1:40 p


Paul Plante says:

So, yes, people, price inflation!

And that thought takes us to a Daily Caller article entitled “Yellen Predicts ‘Rapid Inflation’ After Downplaying Risk For Months” by Thomas Catenacci on 16 July 2021, where we have the latest on that subject, to wit, keeping in mind that yesterday, a 4′ x 8′ sheet of 3/4″ inch plywood sheathing was still selling for $84.08, which is patently ridiculous:

Treasury Secretary Janet Yellen acknowledged “rapid inflation” will persist for several more months after she repeatedly downplayed the risk of consumer price increases.

Americans can expect consumer prices to continue their rapid rise until returning to normal in the “medium term,” Yellen said Thursday in an interview with CNBC.

But Yellen, along with top Federal Reserve officials, predicted inflation wouldn’t be a concern.

“We will have several more months of rapid inflation,” Yellen told CNBC.

“So I’m not saying that this is a one-month phenomenon.”

“But I think over the medium term, we’ll see inflation decline back toward normal levels,” she said.

“But, of course, we have to keep a careful eye on it.”

end quotes

And “TOODLES” Yellen can keep her eye on it all day long, every day, and so what because there is absolutely nothing she can do about it, given the treasury secretary has no control over inflation or price stability, which by law is the responsibility of the federal reserve.

Getting back to the story, it continues thusly:

Yet in February, Yellen downplayed the risks of inflation, saying the Treasury Department had the tools to deal with the risk “if it materializes.”

end quotes

Except that is pure hog****, because the treasury department has no “tools” to deal with inflation.

It is the federal reserve that supposedly has the “tools” to deal with inflation, and one would think “TOODLES” would be aware of that fact, given that we were previously informed in a Marketwatch article on Oct. 9, 2013 that Hussein Obama had nominated “TOODLES” to be Fed chief, replacing Ben Bernanke and further cementing the administration’s commitment to loose monetary policy, but perhaps she is just confused and isn’t sure which position she is really occupying.

Getting back to that story:

She also pushed back on former Treasury Secretary Larry Summers’ warning that President Joe Biden’s $1.9 trillion coronavirus relief package would trigger massive, once-in-a-generation inflation.

Yellen added that the Biden administration was more worried about jobs than rising prices.

end quotes

Which is to say the Biden administration is not at all worried about inflation, nor is “TOODLES.”

Staying with the story, we have:

One month later, the Treasury secretary downplayed inflation again when asked if the $1,400 stimulus checks included in the relief package could boost prices, according to the Associated Press.

She again pushed the legislation, saying it was key for a full economic recovery.

“I really don’t think that is going to happen,” she said in the March 8 interview, the AP reported.

Then, one week later, Yellen doubled down, arguing again that there wouldn’t be significant inflation.

“Is there a risk of inflation?”

“I think there’s a small risk and I think it’s manageable,” Yellen told ABC News.

“I don’t think it’s a significant risk,” she continued.

“And if it materializes, we’ll certainly monitor for it but we have tools to address it.”

end quotes

And there we are back to that bull****, because Janet “TOODLES” Yellen, who has no credibility, also has no “tools” to manage inflation, and we are a nation of fools if we believe a word she says on that subject, which takes us back to the article to see just how wrong she has been, to wit:

However, consumer prices have surged faster than they have in decades, according to government data.

Economists also expect inflation to rise higher and for longer than previously expected.

In addition, several major U.S. corporations have recently announced price increases while the highest number of small businesses have reported price hikes since 1981.

end quotes

And there is the latest, people.

The moral?

Buy that loaf of bread while you can still afford it!

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Post by thelivyjr » Tue Jul 20, 2021 1:40 p


Paul Plante says:

And keeping up with this background in here, as federal reserve chairman Jerry Powell is coming up for reappointment as fed chief early next year, a reappointment not yet confirmed or even hinted at by the Biden-istas and the CULT OF JOE, all of whom are staying silent on the subject of will Jerry be reappointed, or will Joe put “TOODLES” Yellen back in as an “easy money” fed chief to replace Jerry Powell, a Trump era holdover, the way Hussein Obama replaced Ben Bernanke with “TOODLES” back in 2013, which thought takes us back to a Marketwatch article entitled “Obama nominates Yellen to succeed Bernanke” by Greg Robb published Oct. 9, 2013, where we have this background to consider as to Joe putting “TOODLES” back into the fed chief chair as opposed to Jerry Powell, to wit:

WASHINGTON (MarketWatch) — President Barack Obama on Wednesday nominated Janet Yellen to succeed Ben Bernanke as chairwoman of the Federal Reserve, elevating a woman to the top post for the first time in the central bank’s 100-year history.

In a brief statement at the White House, Obama, flanked by Yellen and Bernanke, urged the Senate to act swiftly to confirm her “given the urgent economic challenges facing our nation.”

Yellen, 67, is currently vice chair of the U.S. central bank.

She said that “more needs to be done to strengthen the recovery,” even though progress has been made.

end quotes

And my goodness, people, guess what – that was 2013 and this is 2021, and she is still saying the exact same thing as she advocates for Joe Biden’s multi-TRILLION dollar spending plans as we see in the CNBC story “Yellen sees ‘several more months of rapid inflation’ before easing, worries about housing impact” by Jeff Cox on July 15, 2021, to wit:

Treasury Secretary Janet Yellen cautioned Thursday that prices could continue to rise for several more months, though she expects the recent startling inflation run to ease over time.

Yellen spoke as Federal Reserve Chairman Jerome Powell faced grilling this week from House and Senate lawmakers over whether historically easy Fed policy and aggressive congressional spending risked runaway inflation.

The Fed, which Yellen once chaired, has run its balance sheet above $8 trillion during the pandemic, while Congress is staring down its second consecutive year of a $3 trillion budget deficit.

For her part, Yellen said spending associated with the White House-backed American Rescue Plan is helping the recovery.

“I think we’re seeing it having the desired effect as well as – preventing scarring and harm to families and their finances,” she said.

end quotes

Or the CNBC story “Inflation looks bad now, but it’s pretty much sticking to the script” by Jeff Cox on June 26, 2021, as follows:

In the near term, at least, that notion that inflation is going to fade at some point is of cold comfort to those who’ve gotten socked with higher costs.

Everything from airline tickets to hotel stays to the cost of buying a home has been on the rise and showing only occasional signs of letting up.

A separate inflation indicator, the consumer price index, moved up 5% in May from a year ago, while the producer price index surged 6.6%, the fastest rise on record.

Consumers are paying higher costs for just about everything.

The stakes on inflation couldn’t be higher.

If the current trend does not follow script, the stunning economic growth of the past year could get sidetracked quickly.

At the same time, the Biden administration is counting on inflation staying low, with Treasury Secretary Janet Yellen repeatedly saying that the current heavy deficit spending is being made affordable through the low-rate environment.

end quotes

So we can see how Joe Biden could very well prefer “TOODLES” back as fed chief, because she is for easy money and is quite supportive of Joe’s economic policies as we see in the CNBC story “Higher interest rates would be good for the country, Treasury Secretary Yellen says” by Emma Newburger on June 6, 2021, to wit:

U.S. Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending proposal would be positive for the country, even if it leads to a rise in interest rates.

“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” she said.

She added that if the packages help at all to “alleviate things then that’s not a bad thing — that’s a good thing.”

end quotes

Or the Reuters article entitled “Yellen says Biden budget raises U.S. debt-to-GDP ratio but is responsible” by Reuters Staff on May 27, 2021, to wit:

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Thursday that President Joe Biden’s fiscal 2022 budget request will increase the U.S. federal debt-to-GDP ratio above its current level of about 100% over the next decade.

“I believe it is a fiscally responsible program,” Yellen said.

end quotes

And back we go to 2013, for more, to wit:

“Too many Americans still cannot find a job and worry how they will pay their bills and provide for their families,” Yellen said.

The Fed can help by ensuring that everyone has the opportunity to work hard and build a better life, she added.

At the same time, the central bank must make sure that inflation remains “in check,” she said.

Yellen has a reputation as a “dove” though some observers feel that is a bit overstated.

Obama called Yellen “tough” and joked that it was not just because she was born in Brooklyn.

“She has a keen understanding about how markets and the economy, not just in theory, but also in the real world,” Obama said.

The president said that Yellen told him she understands the human costs of a high unemployment rate.

“America’s workers and their families will have a champion in Janet Yellen,” Obama said.

Economists portray Yellen as a continuation of Bernanke’s aggressive easing stance developed in reaction to the financial crisis.

end quotes

So, will we soon enough have “TOODLES” Yellen and her easy money policies back in charge of the federal reserve to run its balance sheet up even higher to keep Joe Biden’s economic policies funded with borrowed money that we owe?

Stay tuned.

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