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Deflation Is A Problem For The Fed

Tyler Durden's picture




 

Submitted by Lance Roberts via STA Wealth Management,

 

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Thu, 01/22/2015 - 18:44 | 5694077 Looney
Looney's picture

Another piece of Useless News ;-)

BAYDA, Libya — Fighters for one of the factions battling for control of Libya seized the Benghazi (what difference does it make?) branch of the country’s central bank on Thursday, threatening to set off an armed scramble for the bank’s vast stores of money and gold, and cripple one of the last functioning institutions in the country.

The central bank is the repository for Libya’s oil revenue and holds nearly $100 billion in foreign currency reserves.

Looney

Thu, 01/22/2015 - 18:46 | 5694087 Publicus
Publicus's picture

LOL, no it isn't. Deflation is not a problem for the Fed. If it was, they'd be printing money and giving it to us little people. Instead, they print to give it to the super rich.

Thu, 01/22/2015 - 18:48 | 5694103 Looney
Looney's picture

... they print to give it to the super rich

Hey, they just gave $100 Billion to the super-poor dudes in Bengazi! ;-)

Looney

Thu, 01/22/2015 - 18:53 | 5694117 kaiserhoff
kaiserhoff's picture

Housing in my neck of the woods has a loooong way to fall to get back to normal,

  and even further to get in line with the new mini-wages.

Thu, 01/22/2015 - 19:30 | 5694241 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

The deflation “problem” has always been BS. IF they really wanted to generate inflation, they would print and distribute the money directly to the people until X percent inflation was realized. That's NOT their goal.

Their goal is to squeeze the last ounce of blood from the dried up turnip. The conventional tool of squeezing (rates) is no longer available so they are forced to try more exotic methods. They will fail.

Thu, 01/22/2015 - 18:53 | 5694120 kliguy38
kliguy38's picture

Its the Owners of the Fed that create the bubbles for the simple purpose of POPPING them and buying the slaughtered assets for pennies. Simple formula that works every time. Don't complicate this.

Thu, 01/22/2015 - 18:55 | 5694123 disabledvet
disabledvet's picture

"Here come the airstrikes on Rome."

Thu, 01/22/2015 - 19:12 | 5694175 new game
new game's picture

40 year morts at 2 percent will keep er on the tracks...\

OR

life mortages with a kidney down and a pint of blood per month for insuRance premium plus p and i

Thu, 01/22/2015 - 18:54 | 5694091 nope-1004
nope-1004's picture

We have deflation manipulation creation to mask the massive bailout of the insolvent banking sector.  PM's falling, oil smashed, interest rates goosed downward are all the free market barometers of inflation.  Since overall money supply doesn't seem to matter, or is presently and conveniently ignored, we have "deflation".

 

I don't think we do, but let's assume we do.  So WTF is wrong with my purchasing power increasing?  WTF is wrong with the money I earn allowing me to buy more?  Isnt' that like a raise?  The questions were rhetorical, because I know the Fed can't have deflation, which means an admission by them that they are at war pick-pocketing every citizen they claim to represent.

These asshats need to be shot.  F'n parasites.  Spreading lies that "inflation is good".

Such a backwards and absurd reality we live in because it's controlled by money changers.

Thu, 01/22/2015 - 19:08 | 5694161 new game
new game's picture

next video game???? gotta start somewhere. "blood money"

Thu, 01/22/2015 - 19:34 | 5694264 spinone
spinone's picture

You're thinking like a person (debtor) think like a bank (lender).  Deflation increases defaults, which vapoize your assets (debts)

Thu, 01/22/2015 - 19:44 | 5694311 JR
JR's picture

Financial “news’ and “analysis” for the most part has become self-serving financial sector propaganda.

The nominal* median household income for 2012 was $50,099; in 2000 it was $41,262. The Inflation Adjusted median household income for 2012 was $51,017; the Inflation Adjusted median household income for 2000 was $55,987.

That’s inflation.

For a retired person living on his 2000 fixed pension or his ZIRP savings, he’s stuck with a 2000 income while paying 2015 prices.

That’s devastation.

In 1973, nominal median income was $9,226, or $48,557 inflation adjusted.

http://www.davemanuel.com/median-household-income.php

*Nominal income is what your paycheck shows, income that has not been adjusted for BLS under-reported “inflation.”

Thu, 01/22/2015 - 18:50 | 5694100 dimwitted economist
dimwitted economist's picture

what is Deflation and Why are they so Fucking SCARED of it? print enough $ and BAM! everything is Wonderful just like the president just said the other night..

Thu, 01/22/2015 - 18:49 | 5694109 Yen Cross
Yen Cross's picture

 The Hindenburg has been retired... It's time for the Led Zeppelin.

Thu, 01/22/2015 - 18:56 | 5694134 stant
stant's picture

They have the Hindy tetherd over DC looking for terrorist

Thu, 01/22/2015 - 18:49 | 5694110 gorillaonyourback
gorillaonyourback's picture

The fact they loan money into existence, impedes hyperinflation.  Lolololol dumbfuckin central bankers.

Thu, 01/22/2015 - 19:52 | 5694341 Herodotus
Herodotus's picture

Why doesn't the Treasury just bypass the Fed and print dollars directly?

Thu, 01/22/2015 - 19:55 | 5694361 gorillaonyourback
gorillaonyourback's picture

Cuz that would be good for the 99%ers.  

Thu, 01/22/2015 - 23:11 | 5694999 litemine
litemine's picture

+1..............

Thats the problem.  There isn't enough cash in circulation to pay off much of the Debts that are outstanding.......The Bankers will control Moar and Moar assets........the 99% are too broke to invest in the markets.

Thu, 01/22/2015 - 23:07 | 5694995 litemine
litemine's picture

The Fed also controls Income Taxes.  They have lobbiests that have bribed away control and threaten to kill the system if these powers are removed.

Thu, 01/22/2015 - 20:51 | 5694535 Threeggg
Threeggg's picture

Not if that original loan (reserve) was created/funded through a job. The fractional lending system originally had rules, limits and oversight by the BIS. If those dollars were reinvested instead of leveraged, with all the rules being enforced.? Read the Basel accords as the BIS is trying to stomp out the leveraging, through Basel 3. Guess who wants to delay the rules, LOL. The BIS has lost control of it's subjects, the central banks. The Swiss Just did a huge Yuan/Franc deal (a few hours ago). The BIS is in Switzerland.

 

Leverage everything

 

 

Thu, 01/22/2015 - 19:02 | 5694139 new game
new game's picture

one sentence: japan with a twist. article complete.

i do like the word velocity!

stopping power,ha

how about torque?

we will see how much velocity the euro has. another same story way more twisted.

race is on

to 

 

the 

 

 

 

bottom, ha again...

Thu, 01/22/2015 - 19:19 | 5694142 surfvin
surfvin's picture

Maybe they should try applying Nirp to bank reserves.

Thu, 01/22/2015 - 19:26 | 5694146 surfvin
surfvin's picture

Risk free bond speculation is inherently deflationary.

Thu, 01/22/2015 - 19:19 | 5694196 orangegeek
orangegeek's picture

Deflation has been here for years - but the gowbamant keeps recalculating macros to hide this

 

and the MSM happily ignores this.

Thu, 01/22/2015 - 19:20 | 5694209 andrewp111
andrewp111's picture

You want inflation? Then you need full employment, and the only way to get that is world war. Only an existential struggle for survival can put everyone to work.

Thu, 01/22/2015 - 21:19 | 5694647 Threeggg
Threeggg's picture

When you can print without permission, instantaniously and direct it with pinpoint accuracy, through the internet in a millisecond, to shore some kind of debt: anywhere in the world. Well, you get the idea. When they are able to print as referred too, why do they need your production/job to support their system? They don't need your inflation/job anymore sturring things up, you could raise prices or create more jobs for christs sake.

There are 2 kinds of inflation creation.

One being the one that used to somewhat govern and control an expanding economy, specifically for the middle class. It's called fractional lending, right. The 1 to 9 ratio of dollar creation/reserve to loan to the next guy. The rules have softened and the orgy began.

The second is outright printing electronically for any use or duty they see fit,  to shore and maintain the/their systems' integrity.

The Third is outright printing without permission.

The first one, traditional fractional reserve lending could be used to buy anything, the money changers can't control where that money flows in the economy as prices and wages would fluctuate.

The second, 'is' directable with pinpoint accuracy, of where they need that electronically created inflation to go. They deem it necessary to the stability of their system. There is somewhat foggy accounting and balance sheet reflection.

The third is off balance sheet transactions and they serve as a defense against bright idea number two failing.

 

 

Thu, 01/22/2015 - 23:04 | 5694980 litemine
litemine's picture

Are you wanting to fight and maybe Die?   Is that what you want for your Children? The Fed and it's policies have given the wealth to the 1% and they can only spend so much money........By the time it filters down the purchasing power is gone along with the savers savings.   This is a system that needs inflation to remove savings, baby boomers and their inheritance is what the FED is after. The Elite want returns on their investments. They just want MOAR.

Thu, 01/22/2015 - 19:34 | 5694262 surfvin
surfvin's picture

Last time we had full employment was during the classical gold standard Pryor to ww1. Fully equipped with gold trade notes.

Thu, 01/22/2015 - 19:51 | 5694337 bugs_
bugs_'s picture

Here in the Deflationists Lounge we are starting to worry about all this main stream deflation hate speech.  We are starting to think about changing the name of the lounge in order to avoid any unpleasantness.  Otherwise it is a very exciting time to be a deflationist - unless you want to buy property someplace snooty.

Thu, 01/22/2015 - 20:01 | 5694377 Pareto
Pareto's picture

The threat of a deflation, more than six years after the last recession, remains an imminent threat. It is not just a domestic issue, but a global one. The Eurozone, Japan, and even China are all wrestling with slowing economic expansion despite success rounds of interventions. 

FUCK OFF Lance!  there is no ISSUE, though you are working real hard to make it one.  Your entire piece smacks that if we don't have inflation that we are somehow buggered.  Seriously man - we crossed that fucking rubicon forever ago.

Just another 10 minutes of my life I don't get back.  "Deflation is bad Mmmkay!"  Sick of hearing this.  If prices everywhere are trending down - if velocity of money is declining to nothingness - if everything points to a deceleration.....WHY IS THIS A BAD THING!!  Fuck sakes.  I'm sick of hearing about this!  Then getting a 6 pt. lecture on it to boot.  Debt.  Debt.  Debt. and total malinvestment from the dislocating effects of ZIRP and various other monetary trickery is why we have hit a wall - where carnage is the only solution - that is economics!  And it can't be fixed by ass clowns continuing the mantra that deflation is bad.  ITS NOT BAD.  It just is.  Prices will fall, physical markets will clear - some will get laid off while others will be hired.  Assets will exchange hands. Bad debt liquidated. And so it will go - just as it had always gone - until central banks started fucking around changing money.  Unless I am missing something here, you're yelling fire in a theatre where everybody has already left.

 

When you change money you change everything.  Stop fucking with money - things will start to make a lot more sense and then we can stop wasting time reading shit synopses like this one.

JFC!

Thu, 01/22/2015 - 21:12 | 5694617 budgetman
budgetman's picture

All these charts seem as big as can be but they're more important things to worry about like under inflated footballs. Come on, please focus on the important things.

Fri, 01/23/2015 - 00:09 | 5695138 flyingcaveman
flyingcaveman's picture

disinflated balls ...could use some more stimulus    Not too much though, don't want to hyperinflate yer balls you know.  That wouldn't be good.

Thu, 01/22/2015 - 21:57 | 5694771 Duc888
Duc888's picture

 

 

 

...at the risk of sounding trite, "Fuck the Fed".

What have they done for us lately (or ever)?

Fri, 01/23/2015 - 11:18 | 5696592 gregga777
gregga777's picture

Nothing!! The Unconstitutional Fed was never designed to do anything FOR us. The Fed was designed by its owners, what are now known as the TBTF banks, to do things TO us. Like transferring all of the nations wealth to the, including our wealth, to the TBTF banks.

When will Americans wake up to the fact that a coup led by the elites, TBTF banks, Democrat/Republican Party and MSM have shredded the American Constitutional Republic and replaced it with an Unconstitutional police state?

Fri, 01/23/2015 - 03:45 | 5695528 Muppet
Muppet's picture

Classic liquidity trap

Fri, 01/23/2015 - 10:20 | 5696310 SilverMoneyBags
SilverMoneyBags's picture

Deflation isn't bad. If workers aren't going to get nominal increases in wages, price deflation can at least give them a raise in real terms. Inflation is a carrot on a stick that 99.9% of the world cannot keep pace with.

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