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Fed's Kocherlakota Explains Why He Wants Moar
The lone dissenting dove at this week's 'end-of-QE' FOMC meeting has taken digital pen to pixelated paper to explain why moar is better and the Fed should not stop printing..."Of course, there are costs and benefits to every monetary policy action and inaction, and assessing those costs and benefits is by no means straightforward. On this occasion, my assessment differed from that of my colleagues," as he believes the inflation outlook has worsened.

As a reminder, Kocherlakota was the 'gentleman' who fired dissenting economists at the Minneapolis Fed for disgreeing with his Neo-Keynesian philosophy.
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Statement on Dissenting Vote at October 29, 2014, Meeting of the Federal Open Market Committee
Earlier this week, I dissented from the Federal Open Market Committee (FOMC) decision. I felt that the FOMC needed to reduce possible downside risk to the credibility of its 2 percent inflation target by taking more purposeful steps to move inflation back up to 2 percent. In this statement, I will elaborate on the thinking behind my decision.
At the launch of the reduction in asset purchases in December 2013, the FOMC statement said that the Committee would be “monitoring inflation developments carefully for evidence that inflation will move back toward its objective over the medium term.” At this stage, I see no such evidence. In my assessment, the medium-term outlook for inflation has shown no overall improvement since last December and, indeed, is arguably worse. Failing to act in response to this subdued inflation outlook increases the downside risk to the credibility of our 2 percent inflation target. Market-based measures of longer-term inflation expectations have fallen recently to unusually low levels, a decline that I believe reflects that kind of increased downside risk.
As we have seen in Japan and may now be seeing in Europe, the credibility of central bank inflation targets cannot be taken for granted. Rather, central banks need to take actions on an ongoing basis to ensure that inflation stays at target. In light of the evolution of the data over the past few months, I believe we needed to take such actions on Wednesday.
There are a number of possible actions that I would have seen as responsive to the evolution of the data. Let me describe two in particular. First, the Committee could have continued to buy $15 billion of longer-term assets per month. Second, it could have committed to keeping the target range for the federal funds rate at its current level at least until the one- to two-year-ahead inflation outlook has risen back to 2 percent, as long as risks to financial stability remain well-contained. These actions would have put upward pressure on the demand for goods and services and on prices. Just as importantly, these actions would have communicated that the Committee is determined to do what it takes to push inflation back to 2 percent as rapidly as is possible.
Of course, there are costs and benefits to every monetary policy action and inaction, and assessing those costs and benefits is by no means straightforward. On this occasion, my assessment differed from that of my colleagues. Such occasional differences in perspectives are, I think, hardly surprising given the complicated nature of the decision problem that we face. But those differences should not obscure the collective commitment that my FOMC colleagues and I all share to the dual mandate objectives of price stability and maximum employment that Congress has established for the Committee. I look forward to working with my colleagues in future meetings, under Chair Yellen’s leadership, to achieve those objectives.
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Yeh why not print...its all FUBAR now.
You can just feel that everything starting to rattle apart now....
Thing that shits me...I just know China and all those with spare millions are gorging on cheap gold and sivler right now...
"Inflation outlook has worsened" only because .gov has made it so in preparation for more QE. Can't unveil more QE with gold at $1600, oil at $110, and the dollar at 76. Either this guy is an idiot or he's lying.
More QE is coming, always was planned, and will arrive. The "markets" are only being prepped so that the pop in response to the malfeasance isn't so great.
Who said this administration wasn't transparent? lol
He wants it right to the hilt, and then some moar.
Kocherlakota is a weird last name for a tribesman.
Thats because you dont know what hes trying to hide or signify
He has the type of face that screams PUNCH ME
His head goes on a pike alongside Bernanke's & Krugman's
after the revolution..
...not before drawing & quartering until he cries Mises, though.
"Kocherlakota is a weird last name for a tribesman."
Part of their newly implemented quota system...
So is Dimon. So in Pandit.
>Either this guy is an idiot or he's lying.<
I know! I know!! (Raising my hand in the air)
He's BOTH!!!
Would someone please ask him, "2% inflation in WHAT?"
Otherwise, they're just spinning infinity.
You can just feel that everything starting to rattle apart now....
When it does finally come apart how much do you want to bet this asshat will say:
"I told you we needed moar stimulus."
More and more printing until the US dollar collaspes as well. The US has about an $18 trillion dollar deficit about to accelerate upwards again after the election.
How about doubling QE this time to $170 billion/month? Make it an even $200billion/month.
No end until a currency crisis.
Moar circle-jerk!!!
Look at the photo. Look at his hands. Looks like he is preparing to fondle some banksters
Hat tip to "fuu" for the following regarding reverse repos this week;
Only $511,829,000,000 in the last five days. If they hit the limit today will bring it up to $811,829,000,000 in four days.
They changed the rate for 10/30 & 10/31 to 5 bp.
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE
http://www.newyorkfed.org/markets/opolicy/operating_policy_141029.html
and my thoughts on this;
TBTF banks need over 800 billion in five days?
That's one hell of a habit motherfucker, seek some real help or my guillotine will provide a permanent cure.
Who let Kocherlakota out of Jonestown? That whacko obviously hasn't had enough of the Koolaid®.
the Tribe never stops
between kochelatkota's comments, bullard setting the groundwork for QE4, and japan going full-blown ape-shit, they better close these SPYs north of 202.00-203.00 otherwise next week gets real interesting
His hand gestures says it all...
Tylers put it up there, with that headline, for a reason :)
I thought it looked more like: "So, this is the proper way to shoot monetary heroin."
Good one....
Or, the fist represents the tax payers collective asses.
'Inflation outlook worsened' used to mean that prices were going UP too fast...
If the masses understood what these fuckers were doing by intentionally inflating away their buying power they would string all these bankers up. The central bankers should be thanking mammon every day for public education and iCrap.
This is the reason why central bankers control economics deparments in universities across the globe. They need the masses to stay dumb.
QE won't end. The Fed is going to be keeping it's balance sheet stable which means they will be buying plenty of gov. paper to replace the maturing debt. If avg maturity is 75 months, and the balance sheet is 4500 billion, they are going to have to buy 60 billion/month to stay even. Current annual gov. defecit is 500 billion, so things look almost like Japan to me.
Just look at his face, he's a complete dope.
The Flat Earth Society has more credibility.
Kocherlakota has that same starchy potato brain look as Krugman, the bearded potato.
I dub Kocherlakota the bespectacled potato.
lol Good one Ebby.
The "prickly spud" also comes to mind.
Yup...just look at his bio...nothing but an arrogant acawonk pencil neck his whole "career". Not a day of work in his life.
What I would like to know, just for starters, WHAT DOES HE GET PAID BY THE FED?
Can we audit the Minn Fed, ASS HOLE?
dup
"First, the Committee could have continued to buy $15 billion of longer-term assets per month. Second, it could have committed to keeping the target range for the federal funds rate at its current level at least until the one- to two-year-ahead inflation outlook has risen back to 2 percent,"
Kocherlakota is such a tool
said complete OPPOSITE four years ago (he was right THEN)
august 2010:
Here’s what I mean. It is conventional for central banks to attribute deflationary outcomes to temporary shortfalls in aggregate demand. Given that interpretation, central banks then respond to deflation by easing monetary policy in order to generate extra demand. Unfortunately, this conventional response leads to problems if followed for too long. The fed funds rate is roughly the sum of two components: the real, net-of-inflation, return on safe short-term investments and anticipated inflation. Monetary policy does affect the real return on safe investments over short periods of time. But over the long run, money is, as we economists like to say, neutral. This means that no matter what the inflation rate is and no matter what the FOMC does, the real return on safe short-term investments averages about 1-2 percent over the long run.
Long-run monetary neutrality is an uncontroversial, simple, but nonetheless profound proposition. In particular, it implies that if the FOMC maintains the fed funds rate at its current level of 0-25 basis points for too long, both anticipated and actual inflation have to become negative. Why? It’s simple arithmetic. Let’s say that the real rate of return on safe investments is 1 percent and we need to add an amount of anticipated inflation that will result in a fed funds rate of 0.25 percent. The only way to get that is to add a negative number—in this case, –0.75 percent.
To sum up, over the long run, a low fed funds rate must lead to consistent—but low—levels of deflation.
http://www.minneapolisfed.org/news_events/pres/speech_display.cfm?id=452...
So... you're saying he's a valuable tool, since, like a bellows, he both sucks AND blows (unlike Bernanke, with his fatal lip-quiver)
means he's just like Greenspan, he actually knows right from wrong and isn't deluded about what they are actually doing, but will happily dance to the tune knowing full well it's a scam as long as it means more tenure for him.
closet psychpaths
Why would a Wookiee, an 8-foot-tall Wookiee, want to live on Endor, with a bunch of 2-foot-tall Ewoks? That does not make sense! But more important, you have to ask yourself: What does this have to do with this case? Nothing. Ladies and gentlemen, it has nothing to do with this case! It does not make sense! Look at me. I'm a lawyer defending a major record company, and I'm talkin' about Chewbacca! Does that make sense? Ladies and gentlemen, I am not making any sense! None of this makes sense! And so you have to remember, when you're in that jury room deliberatin' and conjugatin' the Emancipation Proclamation, does it make sense? No! Ladies and gentlemen of this supposed jury, it does not make sense! If Chewbacca lives on Endor, you must acquit! The defense rests. [/Chewbacca Defense]
I'm with Kina, the fisrt poster here.
You CAN feel things starting to rattle in the markets. The end of this year and first 1/4 of next, maybe all of 2015, are going to be amazing for traders. be patient, use stops, hold on for big profits (they'll come i you're patient and try not to give a fuck). Don't think, nothing too high to buy, nothing too low to sell.
And do yourself a favour, at the end of the month, whynot convert some of that paper you've got into physical Gold. I'm a buyer EVERY month at whatever the current price is, view the potential move down to $975 as a gift, forget about where Gold might be next year, focus on the next 2-10.
"On this occasion, my assessment differed from that of my colleagues," as he believes the inflation outlook has worsened."
Now, remind me again, by worsened, does he mean inflation has increased or decreased, since they have stated that their goal is more inflation?
it depends. fed gangsters want low wages and high prices. high inflation in wages = bad. high inflation in consumer prices = good. in this case i believe he is saying that low inflation in prices paid is bad. of course that too is just a bullshit excuse for moar.
The FRED inflation charts are a recession joke. Keep printing money to hit the 2+ GDP growth forecast. When milk hits $6.00/gallon. You'll probably be shot in the head at a strip club. Keep up the spin as assult rifles peg your children and families first. You die next for lying about the QE Federal Reserve gig.
Not a threat, promise under the Constitutional powers of America. Do you feel your ass puckering?
"But those differences should not obscure the collective commitment that my FOMC colleagues and I all share to the dual mandate objectives of price stability and maximum employment that Congress has established for the Committee."
Hey Kocherlakota, are you still seriously pretending that price stability and maximum employment are your objectives? Then go ahead and quit your job because you are a miserable failure. Just another douchebag PHD moron. Unforntuately (for now anyway) the jokes on us as they laugh all the way to the bank.
Forget taking his job... Forget throwing him in jail never to return to the outside World...
The only thing that will save us is if guys like Kocherlakota are either tortured "without end" or their heads carried around as presentation on plates!
Halloween! Not just for kids!!!
As a native to Minneapolis, he is unfortunately fairly typical for neo-Keynesian liberals around here. As much as I love living here, it is a liberal hotspot and conservatives/libertarians find themselves greatly outnumbered.
Wait till all those 12-children Somali families in Minneapolis 'mature' and your "liberals" will disappear like snow in a heatwave.
Moar! What is it good for? The 1%.
KosherLakota? What is this, some Jew/Indian hybrid? He doesn't look Lakota...
WHY THE HELL ARE PRODUCTIVE PEOPLE STILL HAVING THEIR LABOR TAXED IF YOU CENTRAL-BANKSTER-ASSHOLES ARE JUST GONNA MONETIZE EVERY FUCKING THING THAT THESE OUT-OF-CONTROL CAPTURED GOVERNMENTS DO??
According to Natixis FICC Research:
http://personal.crocodoc.com/SU8Hy8u
In reality, central banks control only the prices of the assets they buy directly
When a central bank buys an asset directly (often government bonds), it drives up the price of this asset, the demand for which increases.
But the prices of the other asset classes increase only if the economic agents that have sold the first assets to the central bank use the money received to buy these other asset classes.
This transmission of increases in asset prices to all asset classes is therefore unstable, since it depends on the behaviour of investors and savers. Since 2012, we have seen that central banks’ purchases first led asset sellers to buy risky assets (equities, corporate bonds), whose prices rose. But in the recent period, the rise in risk aversion has turned them away from risky assets, whose prices have fallen, and they have invested the money received from the central bank in risk-free assets.
There is therefore no stable monetary policy "risk channel"; the only asset prices that are controlled by central banks in the longer run are those of the assets that central banks buy directly. This could in the future push central banks to buy riskier assets if they want to change their prices in a stable manner.
Central banks’ asset purchases have a direct impact on the prices of these assets
When a central bank buys financial assets, it increases demand for these assets, which directly drives up their prices.
This occurred with purchases of Treasuries and ABS in the United States (Charts 1A and B) and with government bonds in the United Kingdom and Japan (Charts 2A and B), and with the announcement of covered bond purchases in the euro zone (Chart 3).
But the impact of the central bank’s asset purchases on other asset classes is uncertain
- The central bank buys assets (especially government bonds, Charts 1A, 2A and B above).
- It pays by creating money (Chart 4).
- The economic agents that sell assets to the central bank use this money to buy other assets. But they have a free choice: a quantitative easing policy will drive up the prices of the assets that economic agents choose to buy, not the prices of the others.
- We also saw from 2011-2012 until the spring of 2014:
• A tightening of credit spreads (Charts 5A and B, 6A and B);
• A rise in the stock market (Charts 7A and B, 8A and B).
- But investors’ risk aversion has risen since the spring of 2014, (Charts 9A and B): they no longer buy risky assets and the prices of these assets have corrected downwards, whereas long-term interest rates on risk-free government bonds have fallen sharply (Chart 3 above, Charts 10A and B).
Conclusion: The risk channel is not robust
The transmission of the rise in the prices of the assets the central bank buys directly to a rise in the prices of other assets is therefore unstable, since it depends on investors’ attitude and their risk aversion.
The "risk channel" is the mechanism through which the central bank’s monetary creation drives down risk premia.
We have seen that this mechanism is unstable: it functions only if economic agents use the money created by the central bank, in exchange for purchases of risk-free assets, to buy risky assets.
If their risk aversion rises, this mechanism disappears - and so does the risk channel. In that case, the only remaining possibility for the central bank is to buy risky assets directly if it wants to drive down their prices.