April 10, 2009

Boom - check. Bust - check. Boom - check. Bust - check. Boom - ??? Welcome to the Yo Yo Economy


Inflation - check.

Deflation - check.

Inflation - ???

Up - Down - Up - Down - Up - ???

Make it stop. Seriously, make it stop.

The Fed, through it's laughable dual charter, is supposedly responsible for price stability and full employment. And if it wasn't so funny, it would make you mad.

With all this free money sloshing around from The Fed, plus the $10 trillion plus being thrown into the fire from the Treasury, this epic crash could turn right around on its head into yet another inflationary speculative mania and boom.

And after that one is over, and the next bust starts a few years down the road, then you'll want to take up gardening and learn to live without electricity or running water. Because after three strikes, we'll be out.

Fed says plan now to avert inflation

The president of the Kansas City Federal Reserve Bank, Thomas Hoenig, said that hard as it was to predict when the winding-down process must be initiated, it will happen.

"We know it has to happen, but the timing I can't tell you. Nobody knows. We will watch every indicator of data that suggests a recovery is on the way," Hoenig said in response to audience questions after a speech in Tulsa, Oklahoma.

"Failure to do that at the right time means you risk a much higher inflation environment," he added.

Summers said there was little choice now but to do everything possible to stimulate economic activity. But he said the Fed must be ready to act decisively in the medium term to restrain spending so that inflation is contained.

"The thing about an inflation is that ... the moment it's absolutely clear you have the problem is a moment when you may have been too late in addressing it," Summers said. "So I think it's a very difficult balance the policy is going to have to walk."

14 comments:

vanilla ice said...

I've come to the conclusion the Federal Reserve is not just the cause of inflation. They are inflation. Their business is inflation. They take advantage of this manipulation and make themselves, the owners of the Fed, wealthier.

Anonymous said...

Keith,

Given your uncanny track record here over the last 3 years, I am convinced you are just a G-S hire messing with the sheeple.

k.w. - Southern Ca. said...

I think you mean "Kaboom" ... the economy as we once knew it is never coming back.

Once the rest of the world comes to admit the grim realization that we cannot resolve these issues, they'll drop us like a hot potato.

Anonymous said...

The nitwits running our schools never suggested that accounting be mandatory for EVERYBODY.

The economist don't talk about what has been lost on the depreciation of so called durable consumer goods, like cars.

Consumers must be dumber than economists.

Anonymous said...

Just to remind you, the symbol of the G-20 meeting (The London Summit 2009) is the sun rising. That's the same symbol used by the New World Order (aka Illuminati). You know, the same sun rising that's behind the pyramid on your dollar bills, the same one from BO's campaign logo, the same one used in major corporations, etc.

Now I let you go back to putting your head in the sand.

Anonymous said...

Debt-Con 4 or 5?

Stock Gamblers Beware!! Banks are pricing the "toxic" assets at much higher prices than the real market value. Maybe even 100% of it's "original value"

Advantage to Los Banksters is that it creates "Profits" on paper and a happy days for them and for winners.

Are we realy STUPID? or do we just enjoy the "Grand Wall street Casino Royal"

Brought to you by the jolly taxpayers---ho,ho,ho american idol is a good show...

Mike Hunt said...

I often use the analogy the value of a person taking a crap. See, if a person makes minimum wage (say $6 per hour) and has to take a dump on company time, and this takes 10 minutes- well you have a $1 crap individual. Someone working in a VP job for a big company, pulling in $240K per year (or $120 per hour if they only work 2000 hours per year- usually it's much more but for the sake of argument let's say 2000) will be taking a $20 dump. Now a CEO earning $2.4 M per year is taking a $200 grundy on company time. Pretty sweet if you ask me.
Anyway, I digress. Just a thought on the value of time vs. money.

So you S&A'ers go on and take your one dolla shit and move along now.

-Mike

Anonymous said...

Buh buh buh we thought that Americans were lazy, that the rest of the world didn't need our money, that everyone hated us, that we were materialistic, how come you're doing so bad now that we decided to stop supporting your arses? What happened to your Kaizen and Sun Tzu crap?

Isn't China the big d!ck on the block now, that would carry all of you on the back like we, Americans, have been doing forever? Uhum, got it...good luck with your cardboard boxes then (that goes to you too "oh-so sophisticated and intellectual" Europeans):

(Bloomberg) -- Within two months of losing his job packing shelves at a cold-storage company in Osaka, Toshiyuki Miki says, he was homeless. “Lehman Shock” turned his life upside down, he says.

Lacking the 60,000 yen ($600) a month he needs to pay rent, Miki, 40, sleeps in cardboard boxes under the elevated Hanshin expressway in Umeda, Osaka’s central business district.

“We’re seeing a crisis situation here,” said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. “The spike in unemployment is much faster, and younger people have much less of a buffer.”

(Bloomberg) -- China’s exports fell for a fifth month in March, adding urgency to government efforts to stimulate domestic demand to revive growth in the world’s third- biggest economy.

Overseas sales declined 17.1 percent to $90.29 billion from a year earlier, the customs bureau said on its Web site. Imports dropped 25.1 percent, leaving a trade surplus of $18.56 billion.

vanilla ice said...

"So you S&A'ers go on and take your one dolla shit and move along now."

What makes people so often want to use excrement as a way to explain something? Are you trying to gross me out?

Mitesh Damania said...

The yo yo only bounces back up to half height, and soon enough stops bouncing.

Mike Oxlong said...

Mike Hunt -

My God, man! 10 minutes to take a crap? They don't really have to go then. 2 minutes tops. 'Course I've been like clockwork ever since my barium enema in the late 70s so I might be the exception. Mrs. Oxlong dawdles in there doing I don't know what.

One of the most disgusting things I ever heard was from a friend of mine. His dad was an auto parts store manager and alone in the shop one day. Business was brisk so he ended up crapping in his pants while ringing up customers. My friend's dad used that story to illustrate that a man does his job no matter what it takes. Ironically my friend decided it was better just not working so he could crap when he wanted.

patrat said...

Pay Option Arms, coming soon.

From a Business Week Sept 2006 article:

"Because banks don't have to report how many option ARMs they underwrite, few choose to do so. But the best available estimates show that option ARMs have soared in popularity. They accounted for as little as 0.5% of all mortgages written in 2003, but that shot up to at least 12.3% through the first five months of this year, according to FirstAmerican LoanPerformance, an industry tracker. And while they made up at least 40% of mortgages in Salinas, Calif., and 26% in Naples, Fla., they're not just found in overheated coastal markets: Through Mar. 31 of this year, at least 51% of mortgages in West Virginia and 26% in Wyoming were option ARMs. Stock and bond analysts estimate that as many as 1.3 million borrowers took out as much as $389 billion in option ARMs in 2004 and 2005. And it's not letting up. Despite the housing slump, option ARMs totaling $77.2 billion were written in the second quarter of this year, according to investment bank Keefe, Bruyette & Woods Inc."

A few this year but skyrocketing in 2010 according to the Credit Suisse graph.

Also Alt-A's way up at the same time. Not sure what they are.

Mike Hunt said...

Mike O,

No need to mock my name. You can blame my parents for that.

I think 10 minutes is about right. I mean, I like to wash my hands thoroughly and that's included in the time. Plus I like to relax and do a bit of thinking on the throne.

-Mike

Mike Oxlong said...

Mike Hunt -

Mocking? Not so, my man. I don't know if my parents wanted me to be able to handle teasing or just wanted me to be teased.

Hand washing was included in my time too. 2 minutes from door closed to door open.

I don't like to sit and think in there. To each his own. I go camping a lot and maybe that has something to do with it. Pants down on a 40 degree morning is not relaxing.