Issuing a challenge to conservative's

a reply to: Dfairlite

The value of the dollar is totally defendant on interest rates and the Feds monetary policy. They have different ways of creating inflation

Last i checked they made a statement about increasing balance sheets and raising rates

That will result in very high inflation. The problem is our entire market corporate and consumer is relying on debt because of QE. No one has savings so when the Fed raises rates guess what

No one spends money

So they are going to create inflation by buying up bad debt so lenders can lend and at the same time make it harder to serve that debt

We are in a bad situation right now

a reply to: toysforadults

That's not how it works. Raising rates does nothing to increase inflation, in theory it should lower inflation. The reason for QE and low interest rates was to increase inflation. This is the stated reason yellen refused to raise rates during the final obama years. Inflation was around 1-1.5% and the fed targets 2-3%. She feared that raising rates would lead to deflation. Deflation leads to death spiral (if everything will be cheaper in a year, why buy now?)

The theory goes that the more money flying around the economy (per capita) the higher inflation gets as people spend more because they have more, which means higher demand and thus rising prices. The fed lowering rates allows money to stay in the economy and not be eaten up by banks collecting interest and the fed collecting their dollars back. People have greater incentive to borrow and spend as it is cheaper. Raising rates takes money that would be spent elsewhere and allocates it to the banks and the fed, thus removing those dollars from economic circulation. People then have less money (and are more hesitant to borrow due to the increased cost of it) so demand drops and supplies are slow to react, leading to price drops (AKA deflation).

QE did not work. Well to be fair, QE1 did work, QE2 and QE infinity got less effective with each go. There are a lot of very learned and intelligent people studying this right now and trying to figure out why the prescribed mechanisms that make sense 100% on paper did not work as intended. You could say they had a logarithmic effect rather than the expected linear effect.

a reply to: Dfairlite

Actually raising rates makes money less available and debt less serviceable which was my point. It's officially called QT.

a reply to: toysforadults

That's exactly what I said and the opposite of what you implied. So how does that lead to inflation?

Here's what has me quite confused:

Last i checked they made a statement about increasing balance sheets and raising rates

That will result in very high inflation.

a reply to: Dfairlite

Increasing the balance sheets.

am.jpmorgan.com...

a reply to: toysforadults

Increasing the balance sheet is known as open market operations and that results in inflation. The fed is decreasing balance sheets and has been for a couple years. They are also raising rates. Both of these tools being used in this way are meant to fight inflation, not cause it.

a reply to: Dfairlite

better brush up on your Jerome Powell statements on the balance sheets and the end of the year

www.bankrate.com...

oh inflation... here we go again...

a reply to: toysforadults

Here's what he most recently said

"We don’t have a precise notion, but we believe that the public estimates that are out there of around a trillion dollars, plus a buffer — as you mention in your remarks — is a reasonable starting point and estimate of where we might wind up."

He's talking about stopping the wind down not increasing the balance sheets. If they can make it that far they will have pulled off one of the most brilliant fed bank moves in history with qe and this.

The result of this won't be inflation, it will be an economy that really starts to grow.

a reply to: Dfairlite

why did they suddenly reverse their stance on interest rates and change their stance on end of year balance sheets at the end of 2018?

you think you are getting the whole or accurate story from Jerome Powell or the Fed?

a reply to: toysforadults

Because they feared a recession, not inflation.

a reply to: Dfairlite

Yes and what happens during recession?

Our economy is almost entirely built on debt. What does the Fed have to do to increase the ability of consumers to have easier access to credit?

Also, auto sector down, housing sector down, construction down, consumer spending down

So where is this growth coming from?

I forgot to mention GOLD up.

So where is the growth coming from?

youtu.be...

a reply to: toysforadults

Deflation is what happens during a recession. If they feared inflation they'd increase rates further.

Nothing is down, not sure where you get your crazy ideas but the economy grew at greater than 3% for the year for the first time in 13 years in 2018.

Look it's obvious you are getting your economic understanding and numbers from hard left sources, that's why you're so confused. Go out and learn about how the fed controls the economy and what seasonality is from an actual source, then respond.

a reply to: toysforadults

Yeah, you're getting your information from videos like that. Thank you for proving my point.

a reply to: Dfairlite

Nah. Good try though. You attacked the video not what his point was on the Fed.

But go ahead.. tell me where the economic growth is coming from

Show me some links to the sectors of the economy that are growing driving the DOW up.

Go ahead..

a reply to: Dfairlite

Sureeee.. actual economic data is liberal. Whatever dude. Show me where the economy grew up in 2018.

How about some earnings reports?

Where is it growing show me the data

DO IT SHOW ME THE THE DATA

a reply to: Dfairlite

See your problem is that you dont have a full grasp on what's happening

The Fed cant let the market deflate so it's going to create inflation to prevent the DOW from sinking to save the pensions

If the pensions go belly up the market will be f**** it's one of the most under reported problems in our economy and that's why you have no idea what the hell I'm talking about and that's not it either

You dont get it that's not a problem with me

a reply to: toysforadults

I literally laughed out loud when I read your "economic data is liberal" line. You guys are caricatures. 10 of 13 sectors showed year over year growth in the last quarter. The overall market grew at 8.63% compared to the year prior.

The obvious reality here is that you're an economic dunce. If you weren't, you wouldn't have demanded I show you the picture below and you would have just looked it up yourself, saving some face in the process. I mean how can you know that gdp grew at 3%+ and somehow believe there was no growth in the economy? By being an ignoramus, of course.

This is the problem with lefties. They're so sure they're right they don't do any research. Which leads them to look like ignorant morons, because they are. Especially on economic matters. Here's a fun exercise, do some research on how many congressmen have economic degrees or finance degrees then compare how many are republican and how many are Democrat. I've done this research and it makes plain that overwhelmingly Republicans are far more economically literate.

But go ahead.. tell me where the economic growth is coming from 

Go ahead..

Where is it growing show me the data 

DO IT SHOW ME THE THE DATA 

Here's the 4th quarter growth by sector. Enjoy the pile of feces on your face.

Welp. With your insults I'm not going to continue this conversation.

I'm just going to sit back and wait.