"From Recession to Expansion: A Policymaker’s Perspective" - More Hawkishness From Philly Fed's Plosser

Tyler Durden's picture

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cossack55's picture

I thought we agreed that no one would send anymore fantasy magazines to the Fed branches. OK, who is still shipping?

goldfish1's picture

US economy growing 3.5% annually this year and next

"While real gross domestic product (GDP) grew at a fairly strong pace of 3¾ percent in the first quarter of 2010, the economy slowed to growth of 1¾ percent in the second quarter."


oh_bama's picture

The data msut be wrong.

  • Unempoloyement is dropping like a rock.
  • Stock market goes way up everyday--with or without POMO
  • Housing prices are stable. New car sales very strong!!


The Economy must be growing at 3.5%!!!


Harlequin001's picture

It's all wrong.

Let’s assume that our economy produces 100 widgets each year which we price at one dollar. If we increase our production to 102 widgets at the same price our GDP now works out at 102 widgets at $1 = $102, an increase in GDP of 2%. This is, as most people perceive, a good thing because we now have more widgets available to the wider economy at stable prices.

In scenario 2 we maintain existing production but increase the price of widgets to $1.02. Our GDP now works out at 100 widgets priced at $1.02 = $102, again an increase in GDP of 2%. This is not good, it is pure inflation since we can no longer afford to buy the same number of widgets with the same quantity of money but the GDP figure would not differentiate or highlight that issue to investors.

In scenario 3 a reduced production of 97 widgets priced at $1 would produce an income of only $97 or a economic contraction in GDP terms of 3%. This we would expect to see in a recession. The problem is that increasing the price of our widgets to $1.05 by simply printing more money would result in a similar increase in GDP of the same 2%. This is where the similarities to a sound or even sustainable economic policy end. QE, TARP and every other government bailout can at best result in scenario 2, high inflation and historically in scenario 3, economic collapse.

There is no possibility that we can end with what we've been led to believe is the most likely outcome by the media, a scenario 1.

alexwest's picture

not a fucking word about 'BUDGET DEFICIT'.. strange
so, deficit equals 10% of GDP is forever..


oh_bama's picture




Snidley Whipsnae's picture

Plosser = blah, blah, blah, blee, blee, blee

His talk is an April Fool joke... Or is he stealing material from the Onion?

Harlequin001's picture

I don't think the markets really care about the data quality, they just want to hear some good news.

It strikes me as pretty bad that the markets seem incapable of deriving any financial information from anywhere other than official sources, which leads me to believe that we could well be entering the final lip before the plunge...

This, in my view is not reliable data.

eddiebe's picture

I just wonder who the people are that still believe a thing the fed 'workers' say. Amazing!

 They have all these massaged 'facts' and 'figures' that they use to confuse and obfuscate. They are true bullshit artists. Is there as university for that?

Harlequin001's picture

yes, just pick any of 'em...

Twindrives's picture

Fucking liars..... just like Obama and his federal goons.

gall batter's picture

Of course, the Fed Orwellians lie.  Just like the govt. we've "elected" and those  appointed. Look at the Tea Party, supposedly representing people who believe that govt. is too big, too controlled by big corporations. But who finances this party?  The Koch brothers.    

Bastiat's picture

Reign in this runaway economy, Tosser!

William Wallace's picture

I believe it was Nietzsche who said about government:  "Everything they have is stolen and everything they say is a lie."

ivana's picture

Chairsatans proved that they rule and fully control global situation. Tuning liquidity up & down. Congratulations. That would not be possible without 1st, 2nd etc order of fully obedient utilities which implement their plans and scenarios. There you can find a reason why so big bonuses, TBTF, bailouts etc and why nobody can prosecute any bankster.

Soon starts next very painful leg of Great Game where some of the utilities will be sacrificed for "greater good".
That will be highly corellated with local area or sovereign debt crisis and expropriation in those countries.

But Chairsatans and pretorian utilities must allways stay liquid and on top of situation.

bania's picture

if i were a betting man (and i guess i am as an investor) i'm going to assume the following will happen: 1. there will be no more QE announcements, because 2. the Fed's massive balance sheet will do "stealth" QE in perpetuity (Rickard's latest position) and therefore the Fed will 3. throw in a few token interest rate raises here and there to keep trying to take down the PM complex and give the illusion of recovery.  Of course 2 will dominate 3, kind of like having your foot fully on the accelerator while tapping the break, and therefore long-term monetary debasement will be the norm.  I expect the PM shake-out attempts to be severe and deep.

tarsubil's picture

I finally have decided to buy PMs. It was after receiving ARM offers and WF trying to screw me with a zero percent interest deal. I'm going to screw WF and I'm screwing them all by checking out. I'll buy today and if PMs go to 1 penny/lb and I'm the only one buying, I'll buy tomorrow. I am checking out. F all of 'em.

Harlequin001's picture

tarsubil it is you who sets interest rates old stick, not the Fed.

It is you who decides what return you demand to allow others to use your money. What you just did was to take control of your own financial future because it is now up to you to decide when the yield is high enough. It doesn't now matter if the whole world now falls apart you will still own what you now buy.

That alone is worth more than money...


dieyoung's picture

...this is hawkish? how embarrassing.

kaiserhoff's picture

There is no recovery, and there won't be until the Fed allows the market to set interest rates.

Hephasteus's picture

I copied 40 percent of my dollars to achieve 3.5 percent growth last year.

Who needs taxpayers when you can just counterfiet the money they are forced to use.