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  • Bostic says `no' when asked if Fed worries about stock market

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"#USA #FED'S #BOSTIC: COMFORTABLE RUNNING #ECONOMY HOT, #INFLATION ABOVE 2%"

This is how bubbles are made.
It seems in this case however, the Fed is happy to produce a bubble within a bubble
Compulsions can be hard to resist
You can't get that genie back in the bottle once released, thats the problem with their plan
#doyourownanalysisordietryin
good for traders. we trail the bubble, short the burst.
Quoting trumps
"#USA #FED'S #BOSTIC: COMFORTABLE RUNNING #ECONOMY HOT, #INFLATION ABOVE 2%" This is how bubbles are made. It seems in this case however, the Fed is happy to produce a bubble within a bubble
there is no bubble here. US economy is on a roll. CBs collectively spent over $50 trillions over the decade to get to 2% inflation. It would be dumb to push panic button because there is transient cost increase due to supply bottlenecks. Markets will eventually realize good news isn't bad after all and next leg up will be due to genuine economic growth.

Don't listen to the dumb armageddon stories because markets will not crash any time soon. Volatility will be there creating plenty opportunities to buy the dips.
Quoting ilhaner
{quote} there is no bubble here. US economy is on a roll. CBs collectively spent over $50 trillions over the decade to get to 2% inflation. It would be dumb to push panic button because there is transient cost increase due to supply bottlenecks. Markets will eventually realize good news isn't bad after all and next leg up will be due to genuine economic growth. Don't listen to the dumb armageddon stories because markets will not crash any time soon. Volatility will be there creating plenty opportunities to buy the dips.
"Is quantitative easing printing money?
Critics have argued that quantitative easing is effectively a form of money printing. These critics often point to examples in history where money printing has led to hyperinflation, such as in the case of Zimbabwe in the early 2000s, or Germany in the 1920s. However, proponents of quantitative easing will point out that, because it uses banks as intermediaries rather than placing cash directly in the hands of individuals and businesses, quantitative easing carries less risk of producing runaway inflation."
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Quoting Bones
{quote} "Is quantitative easing printing money? Critics have argued that quantitative easing is effectively a form of money printing. These critics often point to examples in history where money printing has led to hyperinflation, such as in the case of Zimbabwe in the early 2000s, or Germany in the 1920s. However, proponents of quantitative easing will point out that, because it uses banks as intermediaries rather than placing cash directly in the hands of individuals and businesses, quantitative easing carries less risk of producing runaway...
And I my opinion (who cares about that anyway) is why you get an inflation in assets instead of more traditional inflation.
That said I still think inflation is going to hit hard in years to come.
Quoting Banditten
{quote} And I my opinion (who cares about that anyway) is why you get an inflation in assets instead of more traditional inflation.
well interest is set above inflation rates
last time I checked US debt has gone parabolic
so the FED cares for sure
#doyourownanalysisordietryin
Japan is the perfect example of how you get stuck ,theres no way they can pay that debt down.Japan would go bust if interest rates touched 4%

Japan owns the Japanese stock market and the debt.{90% of Japanese Government debt is owned by its citizens. The Japanese population is aging and prefers stability over interest yield,}


"the Japanese Economy has not come close to hitting its inflation targets of 2%, which allows the BOJ to print money with almost no impact on the economy, creating an almost unlimited account of funds to buy bonds. "
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#doyourownanalysisordietryin
Quoting Banditten
That said I still think inflation is going to hit hard in years to come.
Aging, shrinking populations around the world makes it impossible to get inflation.
lol thats your reasoning why they can't hit 2%
#doyourownanalysisordietryin
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Quoting Bones
{image}
do you really think population increase in some 3rd world islamic country create inflation in the US or EU? US and EU combined account for half of world GDP but merely 10% of population. Bigger EU countries have already have the highest median age in the world and share of 65+ year olds is already high and its rising.

https://www.bruegel.org/2015/02/demographic-changes-and-structural-deflation/
Quoting ilhaner
{quote} Aging, shrinking populations around the world makes it impossible to get inflation.
You said shrinking population which is wrong
populations are another pet project of mine and yes ageing is true .
The thing with populations is they don't change fast since people live a long time
If you want the proof here's the US pop pyramid which is one of the best looking of the west
Of course to be shrinking it would look like an upside down pyramid
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#doyourownanalysisordietryin
population in the England has risen very fast ,then inflation should be out of control ,according to you
via immigration ,
Heres US population up to 2020 ,in a line
it will turn for sure in coming years but like I say it will be slow

the Uk chart I already had on another matter

Population has nothing to do with it ,I suggest spending a bit of time figuring out where the money has gone so far
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#doyourownanalysisordietryin
  • Comment #16
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  • Edited Mar 8, 2021 5:52am Mar 7, 2021 9:49pm | Edited Mar 8, 2021 5:52am
Quoting ilhaner
{quote} do you really think population increase in some 3rd world islamic country create inflation in the US or EU? US and EU combined account for half of world GDP but merely 10% of population. Bigger EU countries have already have the highest median age in the world and share of 65+ year olds is already high and its rising. https://www.bruegel.org/2015/02/demo...ral-deflation/
In QE there is an asset swap ,new money for financial asset.
The money is required because theres a deficit in Government spending .The target was initially pristine debt- treasury- but as time goes on they buy all sort of junk under the covid panic.
This all happens in the financial economy .
*The cost of borrowing is not the interest rate of the day but actually the delta between the interest rate and inflation over time .Unless you're willing to hold down interest rates forever the true cost is likely higher to borrow longer term.Point is, you can't say you know the cost of money today by the interest rate ,why not ramp up the long term debt on the cheap,
which you often hear as a solution.

Then theres helicopter money...

"Helicopter money is a proposed unconventional monetary policy, sometimes suggested as an alternative to quantitative easing (QE) when the economy is in a liquidity trap (when interest rates near zero and the economy remains in recession)."

This happens in the real economy.

https://en.wikipedia.org/wiki/Helicopter_money

Inflation is very difficult to man handle or micro manage which has to be the FED's plan by stepping up to this stimulus.When they already hold interest rates down close to 0% at the short end of the curve.
Which takes me back to my original comment in this thread, you can lose all control of the free market very quickly.
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Your never force inflation from QE if you haven't seen it already ,a vicious trap awaits.
But you will get inflation from dropping cash to almost everyone.
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  • Posted: Mar 5, 2021 4:00pm
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    Category: Low Impact Breaking News
    Comments: 17  /  Views: 3,192