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Schiff on Federal Reserve Report that more inflation is needed

Discussion in 'Economics and Financials' started by padre31, Sep 22, 2010.

  1. padre31

    padre31 Premium Member Luxury Box

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    http://www.minyanville.com/business...fee-gold-inflation-grocery/9/22/2010/id/30207


    YouTube - FOMC statement, Pres. Obama's CNBC town hall

    That is the first time that the Federal Reserve has stated that it intends to inflate the currency further.

    Basically, prices will rise on the goods you purchase on a weekly basis, and that is by design of the Fed, which of course creates a market for other currencies and commodities.
     
    my 2 cents and gafinfan like this.
  2. my 2 cents

    my 2 cents Well-Known Member

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    Crazy as this may be ..... 2 cents agrees with this ... the reason aside from those stated...is the FACT that lending and credit lines are non existent. The bank lending (FED fund rate) rate is SOOOOO low that the banks can park money in treasuries and make 4 %....... with zero short term risk....so why in the world would they risk lending to small businesses when their (small business) revenues are shrinking and their risk of insolvency is higher.......the differential rates/return paradigm has to change............containing inflation though is like controlling a teenager on HGH at the Bunny Ranch with a pocket full of condoms........................it might happen, but somebody is going to get screwed.
     
    texasPHINSfan and gafinfan like this.
  3. anditsgood

    anditsgood Active Member

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    but the down side of low rates is that a bank margins get sliced, and the margin for defaults are lowered, its a double edged sword

    what the feds are worried about is deflation or stagflation, hopefully the idiots in charge will realize too much inflation will cause a double dip in the economy (one i believe is coming), but the second dip may be deeper than the first
     
  4. padre31

    padre31 Premium Member Luxury Box

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    The malinvestment will be cleaned out of the system sooner or later as the Zombies just cannot shamble around forever, they run out of inertia.

    And of course such a policy will also cause investment to flee to other markets.

    Eh, keep the party going I guess.
     
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  5. anditsgood

    anditsgood Active Member

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    at all costs , if i may add
     
  6. texasPHINSfan

    texasPHINSfan New Member

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    I don't think it will be that bad (I'm still expecting our commercial real estate to pop any time now), but I highly doubt it will be as bad as 2008 was.

    The comments about the banks are dead-on, though. I really don't have any sympathy for them, getting capital at near zero and then NOT lending it out to us but instead playing it safe. Granted, there's something to be said for not lending money out to people that shouldn't be getting loans, but even people that should be getting loans aren't getting them right now.

    I'd like to see the fed fund rate be raised to something reasonable. The entire point of lowering it to near zero was to stimulate lending. Now we see that all this is doing is giving the banks more room for profit whilst not accomplishing what the gov't intended, that courtesy should be removed. If a bank can't stay solvent in this environment, they have no business operating.
     
  7. jdang307

    jdang307 Season Ticket Holder Club Member

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    I know I'm hella late but ...

    did you just refer to yourself in the 3rd person? :pointlol:
     

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