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It’s the ‘Bernank’ that done it!
Bernanke has made himself (and thereby the entire Federal Reserve) the lightening rod for domestic and international inflation. What a dumb PR move that was. There are any number speeches by Ben and his cohorts where they stuck there neck out and said, “inflation is our goal”. Ben & Co. are going to eat those words. If you ask ten people if INFLATION is ‘good’ or ‘bad’ nine of them would say it's BAD. It is the way we grew up. Ben is doing something bad.
A very small percentage of the population actually understands what the
Fed is doing. Far more people have watched the YouTube cartoon
explanation of QE than have listened to/read Bernanke. But a great
number are aware that the Fed is engineering some inflation. So when
they get hit in the head with some big price increase the first thing
they are going to say is, “It’s the ‘Bernank’ that done it!”
Consider me as a case in point. I already pay a ridiculous $1,629 a
month for health insurance. But today I get this nice letter from United Health telling me that the good folks at the NY State Insurance Commission have approved a 12.5% increase for just the next six months. I am looking at a 25% YoY increase in healthcare cost.
That NY State is granting 25% rate increases is a crime in my opinion.
That Obama Care created a three-year window of maximum gouge
opportunities for the likes of UNH is also a crime. The problems with
health care and the cost of insurance can’t really be blamed on Ben and
the Fed. But I suspect that many folks are going to blame him anyway.
After all, he’s the one who wants inflation, so when we get it, the
fingers of blame are going to be pointed in his direction.
There are millions of Americans who are getting letters like this. You will see stories in the MSM in the next week or so. "Insurance Companies Gouge Customers"
is a good Thanksgiving story. It’s even possible that the crooks in
Albany will be called on the carpet for allowing such an egregious
increase in a basic cost of living. The boys at UNH will defend what
they have done and just blame the increase on INFLATION in the cost of
health care at every level.
I (begrudgingly) accept that Bernanke and the rest of the merry folks at
the Fed don’t really want inflation that just eats up consumers. They
want to see inflation from the demand side as evidence that the economy
is in fact growing. But it is not going to go down like that.
Over the next few months we will see a number of big jumps in basic
costs. Food, health care, insurance, transportation, gas and electric
are all going up in price. We may not see the evidence so clearly in the
headline numbers. My 25% increase in health care will not show up. That
does not matter. Tens of millions of people will feel this pinch. There
will be no blaming of OPEC, or China this time. The blame is going to
be placed squarely on the shoulders of Bernanke and his vocal enthusiasm
for ‘the’ inflation.
I will tell you that I was damn mad to see my annualized insurance bill
go up by 25%. A lot of others will soon feel the same when they get a
similar letter. Or when they look at their next electric bill, the cost
of vegetables or even the price of a pair of jeans. A good number will
say in anger, “It’s the ‘Bernank’ that done it”.
Bernanke has tied his success to a rise in inflation. America is going to absolutely hate that.
Even greater public distrust of the Fed will inevitably follow.
Politicians will jump on the bandwagon (they always do). The end result
will be that QE will be a disgraced policy and the Fed will be weakened
for a long time. Ben will get his inflation, he is also going to lose
his job.
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+1
"Inflation is not the increase in prices". WOW!
The writer must be a Greek having IQ of at least 500.
In any case, most of people do not give a shit about "increase in available money and credit". The price they pay for goods and services is all what is really important.
I agree but the "increase in available money and credit" leads to the "the price they pay for goods and services" What is important is that inflation leads to price increases. It’s a simple concept but why do so many people not get it? I attacked the author for confusing two issues because if he had to use the actual definition of inflation it would leave a hole in his argument, but by calling inflation a general increase in prices he makes it sound mysterious, but the only way we have inflation is if the Fed increases the money supply. This also leads to stupid things like this, were two people are fighting over definitions of inflation instead of joining forces to attack the actual issues
Huh? "the only way we have inflation is if the Fed increases the money supply"
Or
The planet rejects the USD. That might caause a small price rise in some items.
Just sayin'
Valid point but the planet can not print the USD legally this is money that they "bought" IE if the Government did not issue it for circulation to begin with...but they did so you are correct. Thinking about it we are screwed. Which why I asked another poster to elaborate on why he thought that Bernanke would open a bottle of champagne if the Chinese cause inflation as I see that the Fed would have not benefit from or have control over the inflation generated.
Why ask rhetorical questions and then answer them with ignorant babble? ZH let you post, right?
Monetary inflation. Price inflation. Look them up.
Touché you’re the only one that got me at least so far. I did ask a rhetorical question, but in my defense I was just venting. I simply do not like it when someone posts something under the assumption that I’m too stupid to understand the concepts, and I need to be enlightened.
"I simply do not like it when someone posts something under the assumption that I’m too stupid to understand the concepts, and I need to be enlightened."
So you are posting to show us how bright you are? Which is it now?
Breathe deep and expand your mind. You may just enjoy it out here in there perimeter, where there are no stars.
Valid point taken, but I notice you ignored my points and attacked my comment. Is this an attack on the messenger rather than the message? I still say I'm venting (Have you ever watched a sporting event and called a player a bonehead for example some people would call Buckner one for ignoring fundamentals, it does not mean the person calling him a bonehead thinks he is a genius), and if I came across as "arrogant" then I must apologize but I assumed I was preaching to the choir. I believe the article in question has fundamental errors, if you are right then I must assume the author's intention was to confuse or deceive. Based on your argument I must now change my position and state that the author was purposely intending to deceive his audience. But then my original argument stands, why would Zero Hedge allow a post that is intentionally meant to deceive? Now if you want you can argue my points on why I think this article is deceptive or you can call me names and bring on the tmosley guy you mention. Anyway at least we can agree on something, I like The Doors. Now expressing my ignorance (or it may be a generational thing) I know some of the other symbolism\meanings from The Doors but maybe you can enlighten me with the one your using.
How is the author attempting to deceive?
His basic thesis is this:
i) the Bernank has told all and sundry that he wants inflation (or, at least, to reverse deflation, which, to most people's way of thinking is the same thing).
ii) there is inflation showing up everywhere in everyday, consumer purchases - "Food, health care, insurance, transportation, gas and electric" are increasing in price.
ergo, the Bernank will get the blame for the inflation - whether or not it's actually a result of his overly loose monetary policies.
You also comment elsewhere that the author has criticised the youtube video. Wrong; he merely pointed out that more people have seen it than have read/heard/watched the Bernank's speeches.
I'm not talkin bout revolution.
I'm not talkin bout demonstration.
I'm not talkin bout gettin out on the streets.
I'm talkin bout dancin.
I'm talkin bout love your neighbor til it hurts.
I'm talkin bout love love love...
-morrison
Orly, we need to intro this cat to tmosley; it's obvious that, as a CFO (probably a mid-size corp) he has overwhelming intellectual prowess. Needs a guy like tmosley to provide proper stimulus.....
I do not know about intellectual prowess but I will stick to my guns. I have no idea who tmosley is but to use a quote from our late President "bring em on". Just curious Why would you assume I'm a CFO? I have not demonstrated any particular mathematical genius.
The first three letters of your handle are cfo. I thought your name was C. F. Osnock. It seems like a Czech or Macedonian name but your "accent" is from somewhere else.
Last name is Fosnock its German but it is not the correct spelling as my great grandfather Americanized it...but I'm Puerto Rican. You figure that one out.
Karma may have them meet in time.
This is pretty cool I actually never had anyone ever read any of my posts before. But you know what they say "don't argue with an idiot. They will drag you down to their level and beat you with experience." I'm pretty good at doing that, and I would advise quitting while everything is even...besides I will need to log out in a bit
HUH?
I'm calling myself an idiot...ROTFL
Oh, my. Well, perhaps you should stand back a bit and observe; see how this site operates before sticking your foot in it. It may serve you well to be quiet for now.
:D
If you’re addressing me then at least I can post comments like the person who posted the article. Maybe I will post an article about how The Fed is great because QEI worked and created 1 million jobs. I just assumed propaganda would not be allowed sorry for expressing my opinion that the author was biased and does not even know the definition of inflation.
Your textbook definition of inflation is correct. However, I would like to see you explain that there is no inflation to a family of four making $85,000/year in the NYC metro area, or the DC metro area, when their health coverage goes up by 25% or more, their property taxes go up by 10%, their food costs go up by 30% (possibly temporary), and their revenue remains flat. Good luck with that.
I've seen this movie before. It didn't end well, despite the euphoria of the Reagan and early Clinton years. The mofos in Congress kept spending like drunken sailors on shore leave to get re-elected--both damned so-called parties--and wasted any surplus generated. This time, it's going to be geometrically more horrible.
We not only need to end the Fed; we need to make it illegal to elect Santa Claus.
I can easily explain why ‘there is no inflation to a family of four making $85,000/year in the NYC metro area. The CPI choose to ignore food, and energy prices, and gives greater weight to non-everyday purchases like cars, and if that does not work the CPI will change the criteria it bases it prices on. Hey I'm on your side. I hate the Fed. I think you confused me with someone else who posted. One of my issues with the article is that it is confusing matters, but I never said there was no inflation. I just said it was used to confuse the issue.
Calling Bruce a fool was your undoing. You should apologize.
And he does often comment on his work.
I apologized
Good man! You took the high road.
You know, your straight-up, dead-pan, terse, yet accurate to the bone comments, and the avatar, make me proud to say, "Doc, you see this Racoon on the interwebs tubes said...."
I know this was covered earlier...I just now can enjoy...
:)
I think it's all about reading what is presented. My thoughts are far from original and it has become much easier in my old age to accept frailty and error. The exuberance of youth engenders a bullet-proof ego and builds walls in young minds. Give it up young-uns -- now or later, you pick.
Okay, so since it's your first day in Fight Club, you are required to fight...
Fight Club!
Your comment was an ad hominem attack and served no useful purpose other than to tell people how bright you are. Wrong! Peruse this site for a few weeks and you'll come to understand that you don't know a damned thing. I know I don't. It would also serve you well to show a little humility and respect!
<Slap!>
To say that Bruce Krasting doesn't understand the definition of inflation is absurd on its face. In fact, I believe what he was alluding to was the fact that the thing that scares the Fed the most is inflation expectations. United Healthcare expects inflation, so they raise their cost of coverage 25%...only because now there is a window where they can get away with it. Criminals! How dare they?! Sound like a corporatist shill to you?
<Hoo-ah!>
To say that "this author" holds no one in the Federal Reserve or in the large banks accountable and is indeed on their side, or somehow is in cahoots with their criminality is beyond laughable. If you really read the piece, instead of skimming over it and looking for "keywords," then you'd understand what he is talking about.
<D'oh-t>
Now, my hands are tired. I am going to be over here while others on this board give you the what-what.
Have a nice day.
:D
+1
Did you watch the Utube video the author attacked? And no I do not post to show how bright I’m I generally post when I get upset. First watch the video then if you would bother reading the article what you might get out of it is the author is implying the fact the United Healthcare jacked him up not because they expect inflation but because Obamacare let them do so. He then says that this increase will be blamed on the Fed as the Fed has mentioned that it wants inflation. IE my healthcare went up so it must be The Fed. United Healthcare’s actions at least from what I gathered from the author had nothing to do with inflation but inflation will be blamed. Once again the issue is simple he is defending the Feds creation of inflation, and us poor ignorant people just do not understand the concept, (how dare we watch that Utube video) and any increase in prices above The Feds targeted rate was not the Feds fault, but us poor simpletons will blame the Fed, which of course is blameless for any price increase above their targeted inflation rate.
How did I attack the video? I loved the video. I think it will prove to be one of the most effective tools against the Fed. Millions watched it. Now they are suspicious. They should be!
Not sure if anyone still reads these as its been a day, but you have my sincerest apology. No excuse but I pulled a all-nighter, and I had been reading other negative comments about the video. Once again I apologize.
I belive he meant that it is just nuts when more people have seen the video than have watched the speeches. Jay Leno may show them a picture of Bernanke or a screen-shot of the cartoon. Which one would they recognise? Who cares, as long as the message is getting out?
Instead of assuming that he was putting down the cartoon, maybe you should ask him: Bruce, are you putting down the cartoon? Maybe he will respond.
:D
But that was the purpose of the video...and quite honestly as I stated earlier I did not expect to get a response from anyone much less from the author. I assume they actually respond here In the past I have attempted to contact people to have them explain their points on articles but all I got was a few responses but with no answers. Thinking about it now maybe its because I come across as a %$#@, but all I asked was for was for them to elaborate. I had a small discussion once on Market Ticker, because someone did not know the difference between the proof and bullion ASE, and how the mint was allocating them but that was it. Anyway another poster explained what he inferred from the article, and it was not what I inferred from it but it did force me to admit that it does change the paradigm. How do you contact the authors?
Make a simple comment, as you did. But don't expect a response while you're being shrill and crass, even if you are venting.
Many times, though not always, the authors at least read what is being said. They may come in under another screen-name to your comment, or they may do as Bruce frequently does and answer you himself.
If you have a valid point to make or a well-reasoned argument for the other side, there is a very good chance of having direct dialogue with some of the brightest people in the business. The asset in ZeroHedge is well worth the price, don't you agree?
_____
Welcome to ZeroHedge. Hope we didn't rough you up too bad!
:D
Not sure if anyone still reads these as its been a day..I agree and still find it amazing that the authors would actually condescend to debate\talk with us. I got roughed up but I deserved it and I did I enjoyed the back and forth. I just need to get my head on straight. P.S. Your comments about China were brilliant
Orly, the more your involved at ZH the more I like your stuff. I think you just Bitch-slapped cfo pretty hard. Nice.
Just a thought, so the more United charges, the more profit they make, the more their CEOs, CFOs, Ds, and VP's wages hyper inflate. Dam, I knew their is a reason the price of yachts keep going up.
US ubiquitous export product to the world for the next 12 months is then what ??
I N F L A T I O N!
It will crush the poorest nations ...
If you don't consider debt as wealth, the US is the poorest nation on earth.
If it crushes the Chinese and slaps the Russians, then all is fair in love and economic warfare. (Updated for the twenty-first century...)
Oh, come on Bruce.
Things are actually looking up. Just cast your mind back to the 70's oil embargoes and price hikes. The way their impact on the economy was offset was through comparable percentage increases in the monetary base, thereby ensuring that the increased price of oil did not act as a singular tax on the American consumer.
Just think!
With material, confidential, inside information, knowing that UnitedHealthcare was gonna fuck you bad, the Board of Governors of the Federal Reserve System is ensuring that you, yes you Bruce Krasting, do not truly feel the pinch from the preposterous price increase, the unappealable legalized gouging of your health insurance since everyfuckingthing else under the sun's price is gonna go up right along with it!
Don't worry, you'll forget about that price increase until the next one, six months from now.
And everybody'else'll be in the same boat, so you don't have to figure yourself as a victim of society. No clinical depression or homicidal rage for you!
See, all's well that's really fucked beyond all repair.
Should've pushed for single-payer, Bruce.
should have pushed for consumer transparency snowball. as in, let me know the fucking price before i go into your office, dr. dick. and no, i don't give a shit whether my insurance "takes care of it", let me know the fucking price.
Paying out 20K a year for health insurance??? Holy Fuck! Why not just put that money in a savings account? Then if you get sick you can buy really good treatment without worrying about your claim being rejected. Also you cut out the overhead of the insurance company. No matter what happens Bruce at that exorbitant rate you will be able to pay for extremely good care somewhere in the world with all of the money you will have put away for your care. This is just a Canadians point of view however.
I can confirm the NY insurance increase. saw the same number on our policy. If you do not have insurance the medical providers charge you two to three times what they charge the insurance companies. 20k will buy you very little in the US for health care.
Not having heath care is not an option, especially if you have children or assets that the health providers can tap into.
Or learn how to stay healthy and avoid illness. Use that 20k for something far more useful.
Printing money is what creates generally rising prices. Inflation (which under the original definition is an increase in the supply of money/credit) doesn't create an even increase in all prices, or some arbitrarily deemed "price level" but it does increase prices. It doesn't take a genius to realize this. If the supply of money increases while the supply of goods decreases or remains the same then their prices will rise, ceteris paribus. I don't really think the output of goods is increasing in the US, but maybe if I drink some Kool Aid I can come to believe it. Sure, certain idiotic government policies increase prices in certain things like health care which has been and will continue to rise in price because of the circus in Washington. However, for the prices of everyday things I buy rising I'm going to blame the Fed; rightfully so.
I am sure we are all familiar with the helicopter analogy by now.
But what if, instead of a helicopter showering the masses, you back up a dump truck and empty it in lower Manhattan?
Nowadays when money is printed, it gets distributed rather...un-uniformly.
Fed money-printing isn't what's behind consumer inflation. The Fed's programs are certainly inflating investment assets and luxury goods purchased by the Masters of the Universe. But food is getting more expensive because oil is getting more expensive because there isn't very much of it left, and the 3B people in the poor developing world are consuming it more and more.
If you keep the supply of dollars the same though they can't bid up the prices of everything simultaneously. Newly created money has just about always entered the economy through the financial system but it pushes up the prices of everything eventually; just toe varying degrees at different times. Secondly, costs don't determine prices, prices determine costs. I could labor day and night to produce a car, I can be grossly inefficient and spend $500,000 to produce one. This has no bearing on what the price this will receive on the market will be. The price of the final product will instead impute value to the factors of production that are used to make it. Saying that food is getting more expensive due to oil prices is a demonstration of not understanding price theory.