Anti-government bias:

iVillage Member
Registered: 02-15-2007
Anti-government bias:
12
Fri, 01-13-2012 - 5:46pm

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iVillage Member
Registered: 02-15-2007
Mon, 01-30-2012 - 10:50am

iVillage Member
Registered: 02-05-2011
Sun, 01-29-2012 - 12:23pm
The Federal Reserve is buying debt at far below market rates. As the Federal Reserve creates money out of nothing to achieve this, it seems the rates are artificially low.

Inflation numbers used by the Federal Reserve and Treasury greatly understate the problem. The cure for high inflation is very tight monetary policy. I lived through the Nixon and Carter inflation spikes, and though the Reagan and Volker cure. Inflation is very bad, and the cure is painful. No current candidate has the gravitas of Reagan to put us through the cure for the Obama / Bernanke inflation we are experiencing imo.

Yes, Bernanke is fighting the depression of 1930 and plans to keep cash flowing to prevent 1933 from happening. Unfortunately, this isn't 1929, and we aren't facing 1933 again. The tools used by the government for public consumption are weak and erroneous imo.

Have you checked prices at your local super market lately? It's prices for everything, that are causing anti-government hostility. Government controls our currency, most know that. The value of our currency is in decline, our best help of late has been Europe crashing faster than the U.S. As Obama wants the U.S. to be more like Europe, we'll soon be following. :(
iVillage Member
Registered: 02-15-2007
Sun, 01-29-2012 - 11:19am

iVillage Member
Registered: 02-05-2011
Fri, 01-27-2012 - 7:53am
Tom,
We probably agree on more than we disagree. The Federal Reserve has been buying trillions in U.S. Treasury bonds the past few years. Formally under Quantitative Easing and Quantitative easing II, less formally as just "monetary easing". However you slice it, the Federal Reserve is artificially keeping U.S. interest rates very low.

A story about this appeared just a few hours ago, I read it just before visiting this site - http://news.businessweek.com/article.asp?documentKey=1376-LYFAPD0UQVI901-74EH79H0P6FNR00EDAJ9JF474I

The former policy maker said he's not “terribly comfortable with the idea of pushing consumers into riskier assets,” which is the impression left by the Fed's decision yesterday to keep the benchmark U.S. interest rate near zero through at least late 2014. He also criticized the Fed for unveiling policy makers' projections for the path of interest rates, and voiced doubt about the central bank's new inflation target.

New Policy?

“It's difficult for me to understand whether or not the Federal Reserve over the last couple of days instituted a new policy,” by possibly allowing inflation to rise above 2 percent to bring down unemployment, he said at the Stanford Institute for Economic Policy Research.

Nine of the 17 officials who participate in FOMC meetings predict borrowing costs will remain below 1 percent at the end of 2014, with six officials expecting zero rates to last into 2015, according to forecasts released yesterday.
iVillage Member
Registered: 02-15-2007
Wed, 01-25-2012 - 9:30am

iVillage Member
Registered: 02-05-2011
Tue, 01-24-2012 - 8:02pm

Tom,

We have a complex economic system, and predicting the time of it's failure isn't possible. However, the Federal Reserve is keeping interest rates low and buying a lot of Treasury notes. Interest rates are low in large part due to the Federal Reserve creating money to cover the needs of the Treasury. The Federal Reserve is determined to keep interest rates low.

iVillage Member
Registered: 02-15-2007
Fri, 01-20-2012 - 10:20am

iVillage Member
Registered: 02-05-2011
Wed, 01-18-2012 - 10:53am

Tom,
The problem of debt, is it's an economic self destruct device. When a country has too much debt, it's currency collapses or massive cuts are imposed with little thougt to their consequence.

The riots in Greece are over 50% cuts to promised pension payments. If Medicare cut payments by 50% and Social Security cut benefits by 50% along with VA and other government pensions, we'd have riots here too.

Both parties are guilty, but the current administration is in a class by itself. I agreed with Nancy Pelosi years ago when she stated the Bush 440 billion dollar deficits weren't acceptable. Unfortunately 1.3 trillion dollar deficits ARE acceptable to Pelosi under Obama. IMO $440 billion was acceptable, multi trillion dollar deficits into the indefinite future will crash our currency.

Ever see a trillion Deutsch mark note? I have, it was printed on one side to save ink. It didn't buy anything, people took them to market and even with thousands of trillion mark notes couldn't purchase anything. The economy had broken catastrophically due to hyper inflation.

We should be wary of dismissing debt as an issue. Politicians love debt, because it allows them to spend money they don't have without directly taxing anyone. The resultant inflation happens later, after elections.

I can't find a trillion mark note online, but here is a link to an image of a 500 billion mark note - http://snyderstreasures.com/images/paper/currency/500MillionRMDR1Feb24F.jpg as with the trillion printing was on one side only.

iVillage Member
Registered: 02-15-2007
Wed, 01-18-2012 - 10:40am

iVillage Member
Registered: 02-05-2011
Tue, 01-17-2012 - 10:25am

Tom the reason the authors call unfunded government entitlements obligations instead of liabilities is due to the fact that there is no contractual reqirement to pay. Our government could vote to repeal all entitlement programs tomorrow. As such, they aren't liabilities, but obligations under current law. There exists no legally enforceable contract to maintain entitlement funding beyond current law. What entitlements we have, and what they provide, can be reformed or repealed at any time by any Congress. No company has this power.

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