Former Fed Official Poole Sees Risk Of "Astonishing Rise" In Inflation
Speaking at a Bloomberg inflation meeting this morning, former St. Louis Fed official William Poole was quite vociferous in his concerns over current Fed policy noting that Bernanke paid too much attention to equity prices. He also noted that there is a risk of an 'astonishing rise in inflation'.
*WILLIAM POOLE SEES RISK OF `ASTONISHING' RISE IN INFLATION
*POOLE SAYS BERNANKE `PAID TOO MUCH ATTENTION TO EQUITY PRICES'
But perhaps in antithesis of Trichet's 'You Can't Handle The Lies' moment this morning, this headline caught our eyes:
*POOLE: BERNANKE NEEDS TO SAY FED CAN'T HEAL ALL ECONOMY'S ILLS
This is on the heels of his comments during an August 26th interview with Tom Keene at Bloomberg where he was 'flabbergasted' at the Fed's August 9th decision to 'date' fed rates policy in such a 'calendar' manner as opposed to 'economy' centric manner.
POOLE: I would describe the [Fed] decision on August 9 as being simply unprincipled. I know of no article, paper - professional paper in the last 25 years, 35 years perhaps that would justify this approach to policy. All the academic research, including research within the Federal Reserve makes policy dependent on the state of the economy, not the state of the calendar. So I'm flabbergasted, makes no sense to me.
We leave it to our readers to contextualize the long-run chart of gold and the ever-more-vocal risk of an astonishing rise in inflation.
(8 votes)
»
- Login or register to post comments
- 14241 reads
- Printer-friendly version
- Send to friend
Yes - and in equity prices. What's the problem?
Forgetting for a moment, that the Fed's mandate has *nothing* to do with equity prices, and that manipulation of the stock market is actually against the law (A law which the Fed is not above) -- raising equity prices while allowing inflation is at it's root level, a transfer of wealth from poor to rich.
The poor do not own any equities, but are damaged by inflation. The rich see a growth of equity value which exceeds the rate of inflation and profit from the policy.
But back to the first part: The problem is that the Fed has gone rogue. There is zero mandate for propping up equity markets in the Fed charter.
Normally, I'd have to say, "No shit, William Poole." Recently I feel more like I have to say, "What stops a man who can laugh from telling the truth." Horace said the latter, a long time ago. The former is of my own making, though I think I stole it from some junior high friends.
Amazing that no one in the media has yet pointed out the overwhelmingly obvious truth that Bernanke has no authority to intentionally debase the currency and prop up a particular type of security -- which is disproportionately owned by 1% of the country.
The man is outright abusing his position of power to support a small, extra-national cartel -- while sacrificing the well-being of his country and his people. *And* he's lying about it.
There's a word for that: It begins with a "T" and the penalty involves a blindfold and a wall.
My local Costco just jacked up prices on an assortment of food items this week. Milk went up 5%, eggs went up 10% and a whole slew of other basic necessities. I was expecting this in June but it came a bit late ...and I am in Canada where at least the value of our currency aint getting destroyed. Bernanke dont see the hardship that normal middle income familes (and below) will endure, he only sees things the way of his rich banker buddies. Inflation is well contained my ass.
Our currency is indeed getting destroyed. It's mostly backed by the USD and only a ridicule ammount of gold. Which is ironic considering Canada is not gold-poor in terms of ressources.
The media? You mean the media owned by four rich white guys who all profit from the Ponzi? You'll be waiting for a long time for truth to come from them.
The very idea of the Fed is treasonous. Sovereign countries do not have to borrow money. National debt is the con, the interest is the grift, and debt-slavery of the people is the goal.
Ben is simply a pawn, a lackey. He's doing his 'job' ably and aptly. But he's not working for you or the people.
Trying to evaluate his performance on any other terms but the truth is just plain folly.
Www.bigeye.com/griffin.htm
four rich "white" guys...who?
They went rogue in 1987 and have been on a bender ever since.
Equity pricing will be damaged significantly under higher inflation. Not easy to pass on higher costs when the end user is suffering more. Actually rich can suffer more than low-middle income who have job security. A lot more.
Your assessment is accurate, with the exception of your side note "A law which the Fed is not above". Are you serious? They are above the law, just as all the Kleptocrats are. Name one time when "justice" has ever truly been served against the criminals that have looted this country----ONE TIME? Mob bosses like Jon Gotti and ponzi operators like Bernie Madoff did the EXACT SAME THING that the banks, the Fed, and our government do every day but they get locked up. Occasionally if the public is really outraged about something criminal the banks do they may have to pay a "fine" which nothing more than built into their business plans to begin with.
The bottom line is the banks and the fed that control our government are above the law---they make the law and they decide what is right and what is wrong. They can pretty much do whateve they want, and they do.
The only sad thing about all this is the majority of the sheeple do not understand this. It is not hard, all you have to do is read, but sadly, most people would rather watch what snookie is doing or the latest from the sheeple herders at "sports line".
Bottom line is when will people stop saying "they can't do this"? They do it every day and will continue to do so and there is nothing any of us can do about it. And please, don't give me the "our fore fathers did". Different time, different place. Militarism and technology, coupled with a dumbed down populace pretty much guarantee that the crimes will go on.
The fact is, even if you were given the forum to educate the public, they would not believe you because they are so dumbed down on their portable electronic devices and the latest stock quotes that they simply do not want to hear how rigged and corrupt the USSA has become.
actually unexpected increases in inflation are correlated with markedly lower equity prices.
of course, unexpected increases in inflation can always be met with expected changes in CPI calculation... wait for the resurrection of "chained CPI"..
http://blogs.wsj.com/washwire/2011/07/07/chained-cpi-a-link-to-a-budget-...
also see http://www.hussmanfunds.com/rsi/yieldsinflation.htm
In history, in "real terms" that is true, but in inflated terms not. Go back and look at how the Zimbabwee markets did during hyperinflation---they went balistic upwards, but in real terms of course they lost. Having said that, even if what you say is true, this time "is different" because in the past the Fed did not control the population the way they do now and could not get away with propping up the market and/or did not desire to do so. This time they do want to pump the market.
Bottom line is correlations are meaningless--the Fed and the banks will do what they want to do, plain and simple.
Someone help me real quick please - Inflation annualized is reportedly (roughly) 11% (source: shadowstats.com) and the DOW YTD is down -1.5%
That means that if you invested in the DOW on 1/1/2011, today, you're down 12.5% -- Gold (using GLD as benchmark) You'd be up 29.95% YTD or a net gain of 9% on your investment.
Why would anyone own stocks?
Because that's what the teacher said. And it's what everyone else is doing. Is there any other reason for doing anything?
Strike Back----you summed that up quite nicely. Class dismissed!
BUT, with that said, who is to say "people" are buying stocks. Oh sure, the sheeple donate their labor (via their money) to their 401k's each month for the benefit of the kleptocracy to loot, but in terms of volume, most sheeple have left the market. Problem is it doesn't matter anymore, because market participants (sheeple) have been replaced by computers now so the computers decide prices based on what the kleptocrats want.
Your just supposed to buy hold. Over the long-term you will do great!
LOLOLOLOL.
You bring up an excellent question, especially in the face of the argument that there's a big wealth transfer going on via equities.
Clearly, w/o the injections equities would have totally collapsed. Skewing things is the weighting of the financials- I wonder what equities would be like sans financials.
Pushing on a string, though. People are over-satiated with "consumer" crap, as well as being in debt.
One of my better "investments" over the last 20 years has been my mutual whole life policy.
When I first got it, as the market started to really take off, people told me I was stupid, it's a waste of money, blah, blah, blah. Today, it's outperforming everything but gold.
In 5 more years, I'll be making a significant amount on it, and not have to pay in at all if I choose not to (though I likely will). In fact, I've considered increasing my current monthly payments, but I know there is a limit to the amount I can add.
I have several mutual funds that are growing quite nicely, too. Commodity-based, mostly.
My 401(k) could go bust, but I've shifted it so I doubt it will. I'm hedging against a stock collapse, and increased my commodity interest - both against my adviser's wishes. So even if the market goes down this time, I won't get killed. Can't put all your egss in the gold basket. There's still a case (small one, admittedly) for intelligent diversification.
your whole life poicy still has counter-party risk. Insurers and reinsurers may start to fail just like the banks. Keep an eye on your insurance company's health...
silver...bitchez.
Meme planting at it's finest.
Hyper-deflation followed by super duper hyperiinflation.
V
Because we've had no inflation so far....D'OHHH!!!
Seriously.. what gave it away.. *face palm*
Come to Europe. Food prices up 40% this year and climbing.
My view is that only gold is money, (everything else, including silver, is an intermediary) and that what we are experiencing is gold-denominated deflation.
Of course, gold-denominated hyperdeflation is what many people on this forum call hyperinflation. But it's not inflationary in the classic sense, because it is actually the economy losing heat.
http://azizonomics.com/2011/09/08/how-to-crash-the-price-of-gold/
Does the tail wag the dog? or does the dog wag the tail?
Your view is wrong. Commodities have always been money. Gold, without question, is at the helm. But there's plenty of room below that peak of the pyramid.
Don't forget, even tobacco was a medium of exchange for some time.
What the fuck are you talking about?
spiral_eyes,
Out of all the PROPOSED scenarios, ALIENS landing is the most plausible.
which means that debt must be paid back, which means a contraction in the total amount of money (debt is extinguished).
MUST BE PAID BACK?.
There is Z_E_R_O chance this will ever happen, ever.
Dos, I completely disagree. There is a near 1_0_0% chance the all the debt will be paid. Every single penny of it. And why not? The government/Fed can simply print the money to pay the debt.
Everyone will get paid off! SSI, Medicare, Mdicaid too. Those coffers will be refilled and all those benefits paid to allthose old people.
Only one problem though. The paper money will be worthless. Unlike the last depression when there were plenty of goods and no one had money to buy things, this one will be exactly the opposite. Everyone will have plenty of money but you won't be bale to buy anything with it.
I agree, but... What it's really about is the "books." The books can be managed, or they can be burned... I suspect, however, that due to the severity (of corruption/imbalance of the books), that any "management" of the books will result, in the end, the books looking and acting just as if they had been burned outright.
Game Over, simple as that.
Government may cause money to be printed to pay off the debt of those who profit off creating debt, the banks, but how can it simultaneously extinguish consumer debt with that printing? It cannot, and will not as that kills the income from those collecting the interest. Tackling consumer debt takes working people actually having work to pay down their debts. I sincerely doubt that even using the programs you mentioned as pass-throughs for printed money that the debtor nation will have the income it did (or claimed to have) when we racked up our debts initially. Forget having enough income to both de-leverage AND increase consumption.
The best government can hope to accomplish is to assist in debt service and assist institutional solvency to stave off mass default and ultimately deflation, all for the benifit of banks. I don't see hyperinflation coming, only temporary inflation from fresh money chasing commodities and equities. Hyperinflation requires a drastic drop in production, while rising commodity prices lead to increased commodity production, regardless of the end consumer's ability to support those prices. It seems to me that deflation is the best long-term guess, since the chances of our increasing indebtedness to keep the illusion of growth alive actually preventing, instead of accelerating, mass default is about zero.
I used to be concerned about the fabled repatriation of Dollars to the US ushering in inflation, brought about through a dumping of foreign-held reserves due to lack of confidence in the dollar in exchange for anything of value here, notably our resources, land and means of production. However, what I actually see is our spending money with, say, China, then borrowing it back and issuing China an IOU in exchange for their production. Then, we spend that same money back and they lend it back to us to keep inflation in check, accumulating fresh IOU's each time. Even though we add to the money supply it's not enough to satisfy the multiple claims on the same dollars that keep cycling through the world economy. Defaulting on the trillions of dollars in debt will make Treasuries worthless but send the value of an actual FRN skyward, just as a comex default would render paper PM worthless as the physical price goes to the moon. So when the music stops, regardless of who is actually holding the physical dollar, those debts will remain unpaid and the FRN will be hoarded, not dumped.
You are right. All debts are paid, either by the debtor or the creditor, in case of a default. The debasement of the USD is a slow-mo default, so all creditors are taking the hit.
The logic of this type of debt-repayment made sense to Germany in 1922-23 until it was too late.
Readers should ask why those US silver quarters dated 1964 and older are worth 4 bucks now.
Readers should ask why those US silver quarters dated 1964 and older are worth 4 bucks now.
You're right... Why are they $4 when $7.67 is the handle I see?
http://www.coinflation.com/
And I see an even more astonishing rise in PMs :)))!
Going Long Carrot Futures!
Unfortunately, printing money is the only employment growth industry...
So printing money out of thin air does create inflation? No shit!
productivity kept gold down.. baby boomers, computers, globalization was a boom in productivity... a gift to fractional reserve banking. that gift ended in around 2000.
And what hollow productivity it was, all of Greenspan's bubbles were blown full of it.
V
Jason T,
baby boomers, computers, globalization was a boom in productivity
Thank you,for realizing Boomers actually were a positive for the country,instead of the usual view here of them being nothing but POND SCUM.(and most of your parents)
It actually peaked earlier than that. Mid-40's is peak spending. Allowing leverage to increase and regulation to pull back preceeded the bigger bubbles we saw from 2000 on. 2000 was for sure the first major gasket to blow. The writing was on the wall then. Now we have a college bubble... anyone with kids knows how the sheeple have been whipped into a frenzy (conditioned to take on this new, excessive debt).
*WILLIAM POOLE SEES RISK OF `ASTONISHING' RISE IN INFLATION
*I CAN FIX IT IN 15 MINUTES - The Bernank & Beard
I've come to the conclusion that Bernenke's beard is an Alien species that has attached it's self to his head and is controlling him. Krugmans Space Aliens may in fact be real. The economy is saved!
lol
Risk of?
Hmm, all the things I need to live on have soared in price! all the things I don't need to buy... well... I haven't bought them ...cos of the cost of the things I need!
Bernanke already admitted that the Fed can't heal the economy without 'fiscal help'... Benny made this comment a week or so ago...
Trouble is, fiscal policy isn't going to fix the economy either...
Nothing is going to help till the bad soverign debt is written off or down, the banks are allowed to fail and be restructured, and the criminals that caused this debacle are jailed... reinstitute moral hazard, iows.
We need nothing short of a debt jubilee to fix what is wrong... and that will cut the bond holders off at the waist.
Be careful what you wish for. Jubilee shall only come after a big fucking war where most of TPTB die or are dispossessed. You can bank on it.
I'm not 'wishing' for anything... Just saying what I believe to be unavoidable.
Actually, Snidley, I think a "debt jubilee" is the only option out of this mess we've created.
It would have been nice if we would have done such a thing in 2008, but I'll take 2012.
It's got to be done. And it doesn't need to take war and mass murder to pull it off.
Just do it. Like Nike!
I think that it would be interesting to delve into a discussion of how any debt jubilee would play out. I kind of wonder whether it would really do what people think it would (of course, one would have to specify what the expectations were!). Would TPTB escape from prosecution in lieu of "forgiveness?" What's the likelihood that TPTB wouldn't still continue to hold a proportionally higher level of wealth (from ill-gotten gains)?
Seems we've tried this kind of thing in the past: American Indians (=FUCKED, violations of treaties), blacks (=FUCKED, reparations, NOT).
Today's Fiscal policy depends entirely on supportive Monetary Policy. They are not mutually exclusive.
And speaking of not mutually exclusive... Criminal, Arrogant, and Stupid are not mutually exclusive. Announcing ZIRP for another 2 years is not only criminal and arrogant, it is also stupid. Poole is right.
Bernanke has been bouncing around like a chicken with his head cut off and suddenly, after a little bit of market manipulation by his masters, the 15 minute man can see 2 years in to the future.
NOTHING is going to help...PERIOD.
Cuz you CAN'T print oil! There is necessarily going to be LESS economic activity going forward.
JFC, people like me have been telling you exactly what was gonna happen after the world peaked...at what point are you going to accept the truth?
<trav7777 >
Lack of OIL is not the issue, lack of the WILLINGNESS to grow a set, and go look for,and tap what we know exists is the issue.
There is far more crude yet to be found, than has ever been found.
WHY are we not allowing people to do so?.
Ask yourself that question, and you may have the answer.
Take a look at historical population charts. Consider basic demographics versus the design of an economic scheme that is basically a ponzi (i.e. ever wonder why "economic growth" is the mantra?). Then contemplate that a good deal of the remaining oil is more costly to extract. Even with new finds, and untapped fields, the net average cost is going up in an environment that cannot handle higher incremental costs as a result of basic demographics pressuring a failing economic system design.
I do wonder if maybe TPTB have a grander scheme in mind to ensure the dominance of the US. That is, dont tap those fields until absolutely necessary (after everyone else has been sucked dry). But, evidence points towards the contrary... that this is not about US interests... this is about the interests of very wealthy individuals.
"I do wonder if maybe TPTB have a grander scheme in mind to ensure the dominance of the US. That is, dont tap those fields until absolutely necessary (after everyone else has been sucked dry)."
I have often thought the same thing. It may not be about US interests but TPTB may want to settle in the US protected against radical Islamists by a large body of water on the east and west sides. Even saving our oil to the end, it still only buys a little more time. We use oil for EVERYTHING.
"but TPTB may want to settle in the US protected against radical Islamists by a large body of water on the east and west sides."
And here we go, again, hobgobblins stirred up...
People don't think that "'radical' Americans" wouldn't exist in the US, that millions of people that live in the US and KNOW the terrain AND possess LOTS of weapons would be BETTER than a handful of supposed "radical Islamists" (who really only want the US out of Their countries)?
Sorry, China will be the destination, just like the US was in the past for varied war criminals: welcome "defectors" so that you can show your populace that their country is in fact a desirable place to be, and the other place not so... and, of course, the defectors (just like those who tell whatever lies to shore up TPTB's story line) will be bathed in special treatment (which is really why the end up going)- perhaps special social standing, added wealth and or protection of "imported" wealth.
I can't believe that people don't understand history's lessons!
There are radicals everywhere. I didn't mean to point out any particular radical, it's just that they are the ones you here about the most here. France has areas where the french don't dare to go because of Islamists. The state of all countries will change though, you are correct. I think the more dire things become the more you will see the true colors of nations and their people. The US will be a scary place when TSHTF. China is already the destination of choice for America's elite, at least where they choose to run their businesses.
The ChairSatan was only interested in elevating equity prices and directly lining the pockets of his bankster buddies who don't proportionally spend much of their money on things they need to live on
take the iPad and cut it up into thin slices. heat some oil in a deep pan, and add some garlic and spring onions. now squeeze some lemons and add peppers. when these turn a good color brown add the iPad. Stir on a medium fire for 10-15 minutes (depending on if it's a 1st or fresh 2nd gen), then serve with mudpie and some tasty rocks.
bon appetit!
Reptil: Food Network's Newest Host staring in "Cooking your Electronic Devices." Series begins Monday at 9pm
I see China is flying a trial balloon about de-pegging the Renminbi in 2014. I guess they figure they will have bled America dry by then.
Yeah, it was someone else bleeding "America" (not "America" itself)...
The problem with the idiot ecpnomists of academe is that they can't see that you can have inflation and deflation at the same time. If you drain all the money out of area A and dump it in area B then A experiences deflation and B experiences inflation. Duh. The government is draining all the money out of the middle class and showering it on the rich guess who gets inflation and who gets deflation?
.........so the cost of buying and maintaining a yacht has gone up?
Stuck on Zero
Precisely. I can tell you industrial parts are up 20 to 50% over the past 3 years. At the same time plant and equipment have fallen in value to the price of scrap.
These ivory tower boys are entirely clueless. No experience on the ground whatsoever.
The govt is a middle-man. It's a supply and demand thing- Banksters are the ones on the demand side, the public is on the supply side.
Don't forget where this all started- NOT from the public sector (but, yes, all aided and abetted by the "representatives" of the public sector).
bac going to 11 bucks!!!! hurry and buy buy buy!!!!!! load up!!!!
http://www.forbes.com/sites/greatspeculations/2011/09/08/moynihan-shakes-up-bofa-stock-could-head-to-11/?partner=yahootix
BAC = too big to prosecute
NOT FOR LONG! ;=))
Hyperstagflation; you know like when a buck meets a lot of does in heat
....the buck being on viagra...
Considering the freight train of liquidity waiting to be released at the switching station who could say they didn't see massive inflation coming? It's been planned all along.
Inflation is the only way they can possibly kick the can down the road and they know it.
Three to four years of double-digit inflation will fix the Chinese via he US debt they are holding...
Send Roubini the memo about inflation, he keeps losing the others. And Bernanke's policy of lower rates for two years should not be a shock o Poole. Chairsatan entered politics a long time ago and it requires no data or facts.
All the academic research, including research within the Federal Reserve makes policy dependent on the state of the economy, not the state of the calendar. So I'm flabbergasted, makes no sense to me.
Central planning tends to be calender-driven. Get used to it.
Heh, I don't see any inflation. Subway running $5 sandwich deals again this month. I can still get McDoubles for 99 cents and Double Cheeseburgers for $1.25 and Wendy's Jr. Cheesburger Deluxes for 99 cents.
Ralph's Grocery sells my 32 oz. Gatoraid or Poweraid for 88 cents, and I can still find Monster Energy for 99 cents.
I paid $32k for my truck back in 2006, brand new 2012 model today goes for about $26k.
Housing prices have been cut in half in many areas of the L.A. basin.
And gasoline is nowhere near the $4.75/gal. I paid back in the summer of 2008. Still can get it for about $3.85.
Great, you can drive around a crappy area in LA eating junk food without denting your wallet too much - is this a great country or what?
But if you aspire to a standard of living much beyond that you'll notice that just about every tax, fee, premium, fine and service charge in your life is going UP.
You didn't mention a single edible item. What about food prices? Have you tried to buy apples or tomatoes recently? My side of beef that I buy from a local organic farmer went up 50 cents per pound from $4 to 4.50...in ONE year. Orange juice was up nearly a dollar per gallon. And look at the commodity markets...what a tool you are.
Robo lives off of lips and asshole burgers and Monster energy drink poison....no wonder his brain is such a piece of shit.
RoboTard,
Come back here in a year after living in your truck, stuffing your piehole with McDoubles, and guzzling Gatoraid.
Just don't think about buying milk, eggs, flour, eggs, fresh fruit, fresh veggies, pork, beef, etc if these prices continue to increase like they have over the last year.
"Heh, I don't see any inflation. Subway running $5 sandwich deals again this month. I can still get McDoubles for 99 cents and Double Cheeseburgers for $1.25 and Wendy's Jr. Cheesburger Deluxes for 99 cents."
If you continue to eat that crap you might not live long enough to see any sort of flation...except your waistline.
Pretty scary when you realize the double cheese burger youre eating only cost about .05 cents to make.
Research cattle liquefaction and realize youre even eating the cows crap in that burger.
Robo's inside man- Ronald McDonald.
Anyway, ground up lips and arseholes (a by-product that must be moved) is hardly is an indicator of the price of meat.
http://www.guzer.com/pictures/ronald-beat-down.php
Just for Robo.
the double cheeseburger was recently raised from $.99 to $1.25, idiot
Soylent Green is people.
Over the last 10 years...
My power bill has gone from $250/mo to $500/mo. My cell phone bill has doubled. My cable bill has gone up at least 30%. My homeowners insurance has quadrupled (yeah, 4x)! My healthcare costs have at least doubled while benefits have been reduced. Car prices are up at least 20% over that timeframe. Gas needs no mention. Neither does the cost of "real" food.
Meanwhile, my income is basically flat.
Yeah. No problems at all.
stay on that health kick. (what's the truck compensating for though?)
What was that saying, "exception IS the rule?" I'm confused...
BTW - If you can "still get it [gas] for about $3.85" then I'd figure that you are one of the few who still is employed, one of the few who are paying more out in taxes in order to help support those who are not (thanks to the dysfunction[?] that is the Great Unwind). If/when you become unemployed let me know how agreeable gas prices are then, OK?