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Friday Night Irony: According To The Fed, Just Over One More Year Of ZIRP Will Lead To 38.36% Annual Inflation
Everywhere you look these days, it seems that ZIRP, or the Fed's Zero Interest Rate Policy, is the panacea to all the world's problems. In fact, ask any tenured economy Ph.D. what inflation is and you will get a stare down, be told you are a moron, that banks need to print more, more, more and that we are really roiling in deflation, with some latent mumblings about buying their economics textbook for the inflationary price of $124.95. Everywhere, that is except the Fed itself. Because in an extremely ironic twist, it is none other than the San Francisco Fed, which operates the "Be Fed chairman for a day" simulation, where you try to keep both unemployment and inflation within the "price stabeeleetee" barriers, that reveals the reality of ZIRP. The laughter really begins when one recreates precisely what the Fed is doing: namely the policy of Zero Interest Rates, now well in its third year, that things take a turn for the surreal. We challenge any reader to play the Fed simulation game, and to do what Bernanke has done: namely lock the Fed Funds rate at the legal minimum: between 0.00% and 0.25%. In our personal experience, we were dismissed as Fed Chairman after annual inflation literally went off the charts and hit 38.36% following 4 years of ZIRP. And according to the Fed, inflation would now, 2.5 years into ZIRP, realistically be running at about 17%. Which incidentally is exactly where it is, at least for those who have not mutated sufficiently to be able to metabolize iPads and fly to and from work using their own pair of wings. Of course, every hyperinflation has a silver lining: US unemployment will be just 1.5%. Granted everyone will be making pitchforks and rope, but they would be employed.
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Looks like some random events popping up (oil, taxes, etc).
"whay you say?! Rommel getting 100 km too south!? With no Radio!?"
zirp is great
nope, but those tits are great.
http://www.google.com/search?q=corexit&hl=en&gl=us&tbm=nws
gets me angry.
We're still throwing darts at the board. No one wishes to tell the serfs to pony up.
Financial and real sector interactions: enter the sovereign "ex machina"
Translation: We must give more free slurpy's to public & tie fh'ree big carrots on short stick. Once we arrive to new publix wurks program site, all carrots be eaten up. No wurk foe yu.
I'd like to think that all our tries are logged and used to train a neural network. Like crowsourcing the economy. Probably not.
Or train the talking heads.
There's nothing really free on the internet. It's all there for a purpose.
The game is there so people will say: "Damn, this economy thang is hard! I'll stop complaining!"
Nope, just capturing ISP's
alternate 19% and 0% fed funds and your economy will love you!
Doom we can believe in :
http://www.prisonplanet.com/russian-warships-enter-syrian-waters-to-prev...
Russian Warships Enter Syrian Waters To Prevent NATO AttackRussian warships have entered Syrian territorial waters in an aggressive move designed to prevent any NATO-led attack on the country under the guise of a “humanitarian intervention”.
“Russian warships are due to arrive at Syrian territorial waters, a Syrian news agency said on Thursday, indicating that the move represented a clear message to the West that Moscow would resist any foreign intervention in the country’s civil unrest,” reports Haaretz.
This was all decided months ago. Putin and Obama had a kissy-face meeting. Nato gets to do Libya and Russians protect Syria.
Libya has oil, Syria has...........I don't know....Syrians?
Syria hosts a Russian military base and buys Russian weapons.
Thanks for the info lolmao500
RUSSIAN SHIPS ARE ENTERING SYRIAN WATERS! This is big. This is very very big. Please reference this article if you have any doubts as to what this really means: http://www.atimes.com/atimes/Middle_East/MF14Ak02.html
We have an official superpower naval standoff in the Balkans. This is fucking IMPORTANT! Maybe you've heard the phrase, 'Balkan Powder Keg'?
This is no longer about ideology. This is no longer about protestors, or the killing of said protestors. This is no longer about Bashar al-Assad. This is about the East standing up to the West, and everybody better fucking PAY ATTENTION!
In addition, there is this: http://www.reuters.com/article/2011/11/19/us-usa-myanmar-idUSN1E7AH1CP20...
The US is playing a dangerous game to be on so many fronts.
The US isnt playing a dangerous game so long as its the dominant world power not only in terms of the navy but also global combat.
Oh great - You're an expert on global combat too.
No danger so long as you can dominate the World.
Fucking brilliant.
Go back to your trading desk, and STFU
Syria has Christians. Syria is a sanctuary in the Middle East for Christians. "We" or TJTB will shut that down yesterday.
""The lingering malaise in the economy has triggered a new wave of defaults and foreclosures. After five straight quarterly drops, foreclosures nationwide shot up 14 percent from the second to third quarter this year, according to data released by Realtytrac, the foreclosure information service, in October.""
http://finance.yahoo.com/news/real-estate--why-home-prices-won-t-bottom-...
It's pretty simple. Lower the price, and the inventory will dry up.
Everyone wants a quick fix with maximum profit for the people who made the bad decisions. The longer that paradigm continues, the longer housing will take to "recover" (hate that term since it's hard to recover when it hasn't even bottomed yet. It also implies housing returns back to bubble valuations...).
Stupid game. I played it 3 times. In the end I finished with unemployment below 4% and inflation at -1%, 0% and 1.4%. In getting there, I raised interest rates precipitously at first, drove up unemployment, lowered inflation (sometimes instigating deflation, albeit mild), until I was confident I could lower it precipitously, reaching my final goals.
In each case, I was "dismissed". To be honest, I think this nation would be happy with a few months of 9% unemployment and -3% price changes, until we lowered rates and kick started the economy.
The big problem, of course, is that interest and credit are NOT the problem today. The problem is debt, and finding ways to reduce it. One way, of course, is to jack rates up precipitously and kill massive amounts of bad debt quickly and painfully while promoting savings. This will never take place, of course, because it's considered politically untenable.
Debt, Deficits, and Modern Monetary Theory
I've read stuff like this before. It's just stuff.
I've got an economics degree, and while he's great at papering over the flaws in his theory, it's just a stupid theory. I see him as one of those "gold is a barbaric relic" types. Sure, that's why everyone wants it right now.
Fact is, fiat currency does not and can not last. If he is correct, and the amount the government borrows is meaningless because it can so easily monetize it, then why doesn't the government spend with impunity and then monetize it? Because it's a gamble, and a bad one at that. Too many instances exist where this has failed monumentally.
His belief that the government should focus on full employment and eradicating poverty (both highly improbable goals), pretty much told me when to stop reading this drivel.
it doesn't matter since once it fails they'll just conjure up another fiat.. boil the frogs slowly - once you run outta water you go get some more and repeat.
Sure a few will figure out their freedom in between, but they don't need to control 100% of the people..
If MMT were true nobody would have to work. The government could just print money and hand it out for free. Something sorely missing from MMT is the human element: people lose faith in a currency that is not backed by something (i.e. representation of their labor, gold/silver, coffee beans, etc), and it is this loss of confidence that leads to hyperinflation, or, a worthless dollar.
The rest of the article is simply justification of the status quo and academic posturing.
What is scary is the comment area: Harvard students saying "great job" etc, anxious to practice this paradigm in the real world.
Inspector Bird, would you mind telling Inspector Morse who is killing the theory of 1913? Would you kindly explain the cui bono parties and their counterpart motives? Inspector Bird, your plausible denial will land you a trip down to the station. Your cooperation is greatly appreciated, tell us what you have.
Inspector Morse
I'm assuming your request for the cui bono parties is "who has something to gain" from avoiding the attempt to try this outlandish theory? I know a bit about ridiculous conspiracy theories, so I'm assuming you're going to claim it's never been tried because so many people have so much to gain by NOT trying it. This, of course, is the problem YOU face, not me.
I have plenty of history on my side. The concept of fiat currency has more than enough history to support my view, and not that of your wonderful theorist.
You see, money has value in a fiat environment ONLY as long as the government says it has value. So, for it to retain full value and worth, the government must be 100% honest in its approach to management. We know this impossible by the nature of government.
In addition, it only has value to those in the nation which manages the currency. It's essentially worthless outside the nation, except if others accept it in exchange. If a nation treats its currency poorly (as has happened in the past), others will cease to accept it. This will, essentially, make it worthless, and those in the nation managing the fiat will seek a "better" currency (usually gold).
History is funny because it completely guts this theory. But those who believe it choose to ignore history and human nature.
You pass my litmus test. Sorry I didn't get back to you, yesterday was quite busy for me.
Have a look..
Saturday Quiz – November 19, 2011 – answers and discussion
Food for thought. Just an exercise to look at the problem in various ways. :>)
You are so confused. The credit/debt bubble(s) were created to force demand. After 30 years of open borders labor sweatshopping and free trade job outsourcing, THERE IS NO ECONOMY to recover. So the Ponzi will continue. Until it crumbles.
No, I'm not confused. I understand that is exactly what was going on. I'm also aware that these are huge problems. But just because they are problems does not mean they cannot be solved. It just means there is pain which goes along with solving them.
This economy may be doomed, I don't make predictions. But I do know that if it is doomed, the economy which follows will not be substantially different in nature.
Krugman says its DEFLATION!
libertarian86.blogspot.com
This game obviously doesn't take into account all the deleveraging going on due to the housing bubble. That would be the opposing force that is keeping inflation down during ZIRP.
when does Blythe ride her derivatives unicorn up your butt for trying to play fair?
Current action in CRB index
And gold and silver stocks
Suggest that there is no inflation.
Zero.
Nada.
Zip.
John Williams might as well retire.
a 100% increase in the price of a gallon of gas from December 2008 to today would pretty well dispute that.
http://gasbuddy.com/gb_retail_price_chart.aspx
Current drivel in ZeroHedge comments
Suggests that there is no MomoTraitor brain activity
Zero
Nada
Zip
The zoo handler of this poo-throwing monkey might as well retire.
Yes, both this and knowing they caught the teenager pumpkin bashers puts me at ease.
RobotTrader, still long NFLX and GMCR?
fuu already answered that question today
It's Like 2009 Again:
http://www.youtube.com/watch?v=TT9VXxuc0LE&NR=1
Just because NFLX and GMCR stock is not inflating anymore doesn't mean there is no inflation.
got 40.25%
The presidents of Russia, Belarus and Kazakhstan signed an accord in Moscow to integrate their economies’ $2 trillion in combined output and form the basis of the Eurasian Union.
“We will create a lasting, efficient and well-developed economic union,” Russian President Dmitry Medvedev told reporters today at a briefing with Belarus’s Alexander Lukashenko and Kazakhstan’s Nursultan Nazarbayev in the Kremlin.
criminals. god damn criminals. the elderly are going to be wiped out & probably end up destitude. these are genocidal decisions & they don't give a damn .
If inflation does not get grandmom & granddad their jew doctor sure as shit will. He's got a kibbutz back in Israel that he needs to support and that ain't cheap.
Just think of them as 2 new kids that you adopted and are going to raise for the next 30 years.
Better get to work!
Before TARP and QE and AIG and GM gasoline had fallen to $1.60's because all the margin pyramids had been crushed.
Three years later gasoline is at $3.37 so roughly 28% annual. rate of fiat dilution.
The taxes are born by the little guy, the inflation is born by the little guy, and the debt is born by the little guy.
Oh the calamity that would have befallen the little guy if those TBTF institutions had been "allowed" to fail. What none of the pundits discussed is the calamity that DID befall the little guy if they were bailed out!
End ZIRP. End QE. End the Fed. End the subsidized reflation of the margin pyramids.
"A strange game. The only winning move is not to play. How about a nice game of chess?"
Richie: We played chess, Fonz.
Fonzie: You played with her chest?
Keeping ZIRP for years and years is only half the fun. I wanna be able to buy up treasuries and toxic assets, maybe some bad mortgages. After all, with unlimited resources, I can do anything. Right? And look what happened to unemployment. It's all good, right?
http://www.globaltimes.cn/NEWS/tabid/99/ID/682998/Tycoon-sentenced-to-de...
Tycoon sentenced to death in real estate funding scam
A real estate tycoon in Lishui, Zhejiang Province, has received a death sentence for illegally raising 5.5 billion yuan ($800 million) from the public, reported the Procuratorial Daily on Monday.
Ji Wenhua, the president and legal representative of Lishui Yintai Real Estate Investment Company, was found guilty of fraudulent fund raising and embezzlement.
Five other shareholders and senior managers from the Lishui Yintai group received death sentences with reprieves and imprisonment.
From 2003 to 2008, Lishui Yintai real estate group concealed its continual losses while using advertising to convince the public it was profiting.
China wins.
HELL YES!!! The only modifications I'd make would be using the guillotine instead of shooting them. I'd also like to see it done in sequence. First chop off their hands, then their arms and then the head. Suffer bitch!
A Titan of Finance, to be sure. Hope Maria Bartiromo gets a chance to interview him before he becomes an organ donor.
I went with 19% for the entire time. the goal was to make things so cheap via deflation that you didn't NEED to work therefore unemployment would have not been a problem...alas...the game would not cooperate with my thesis. At the end I had 19% unemployment but deflation was only 3%. I'm gonna have to call bullshit on that game.
ZIRP backwards leads to PRIZ (AND im pronouncing it PRIS)
i knew it. ronnus paulonius is going to run 3rd party ticket. here we go again. how about 1992, all over again. same game , different names...........
http://www.realclearpolitics.com/video/2011/11/18/ron_paul_warns_gop_not_to_capitulate_on_taxes_wont_rule_out_indy_bid.html
this is all the plan of course. hegelian if i have ever seen it ...............
iif this happens, don't vote. forgettaboutit............
It makes no difference whether Obama or Romney wins the office so who cares if it's 1992 again?
BULLSHIT. If this happens get your ass out there and fight. Hit the streets. Ron Paul likely would not survive 6 weeks in office but if we can get him there and they take him out? What needs to happen would happen either way.
Ron Paul or just get on the train and step in the shower.
Interesting. How long now before they remove that game?
I'm expecting a phone call any minute now. i created a virtual nirvana and was reappointed. In fact, my headline at the end reads "FED Guru Reappointed".
My stats were quite brilliant:
Final interest Rate: 3.75%
Unemployment Rate: 4.54%
Inflation Rate: 1.49%
No applause please...just throw money.
PS: this was my second attempt.
fun, yes, but there's so many things wrong with trying to compare the fed game with current situations. Although, outcome will probably mimic the FED game
The national puzzlement continues into its 3rd year: is it inflation or deflation?
One authority says this, the next one says the opposite. None seem to agree. All are confused.
WHy hasn't ZIRP caused inflation to go double digits? Why hasn't money printing produced runaway prices? And why, counterintuitively, do even 10 year yields keep dropping?
Biflation, as I've been saying and warning for 2 years here. It's a new beast that none anticipated, and none have encountered in their careers. But it's scary and a threat to their careers so they'd rather stick their heads in the sand rather than tackle the problem.
We are witnessing a phenomenon unique to the peculiarities of this situation today, here and now with all of its intricacies. The net result can be simplified in the statement "deflation for everything you own, inflation for everything you need".
The net result is ever decreasing buying power and reduced margins.
I've expounded on the details, but you know it in your gut and from what you observe every day.
The reason we don't have 18% inflation? Incomes, real assets and anticipated retirement assets are dropping. There can be no classical inflationary spiral without a wage spiral. In this economy there can't be and there won;t be for structural reasons, of which offshoring jobs and industries is one. But there are many.
But real interest rates are negative. And that goes to the everything you need part of the equation. In this economy, the price of all critical personal and business inputs will rise. For structural reasons again.
Biflation is the ultimate expression of economic and political policies that were set in motion 30 years ago. But the published numbers will never look terribly impressive because they are pulling in opposite directions yet have an additive effect. A little bit of each goes a very long way toward killing the economy and especially the middle class.
Biflation is basically the same as stagflation. I agree with you; that's what's happening. I do think we'll have higher inflation now that China isn't buying our bonds. We've 'exported' a lot of our inflation, but it's coming back down the line as those bonds mature.
I disagree that it's the same as stagflation. Because one part of the economy is not stagnating at all, but contracting and in a downward spiral.
The term stagflation was coined during the 1970s to describe the stuation that existed back then, when I studied at Wharton. Here are some of the key differences between then and now: incomes were spiraling higher. In fact, the Fed and Reagan administrationwaged a war against wage inflation as a key feature of what they called "supply-side economics". In the 1970s GDP was booming compared with now. Now our GDP is barely above 0, mostly due to inflation. In the 1970s unemployment was never this high and was still cyclical, now we have structural unemployment that's not coming back.
In this economy going forward we are not going to stagnate. Rather we're going to have a series of cascading legs down with small bounces in between as multiple bubbles deflate, offshoring of industries and jobs continues, capital flees, and government implements austerity. But we'll still have inflation along side
Good explanation, thanks.
I think of stagflation as lower wages + high inflation and unemployment. But, I am definitely not an economist, so I'll defer to your Wharton education.
What you're saying seems correct. Now that the government has artificially propped housing again (via inflation), we'll have to have it "pop" a second time (i.e. people buying now will eventually be "under water")...bounces will come in between as the fed injects liquidity, but the law of diminishing returns will eventually render that moot.
I'll say this: they're doing a decent job of engineering the illusion of recovery...average citizens and mainstream media believe we actually have real GDP growth.
Agree. Fed is a one-trick pony and blowing bubbles is all they know. Over the decades they got so overly involved in the economy that they engineered away capitalism. It's really corporate welfare now where everything is done to keep big players alive in an anti-competitive way.
But yes, the propadanda machine is on 24/7 spinning the tale that we're in a 'recovery'. But most of America doesn't feel it in their gut and wallets, think we get more OWS-type unrest
no. no one believes there is a recovery. the jobs are gone away and they are not coming back. being a citizen of the realm is now a huge liability.
rare to see such truth in words and ideas.
I truly love this site and the geniuses who agree to disagree.
I'd say we are living in the end stage of a very well thought out and brilliantly conducted hostile takeover of western democracy. For simplicities sake and to allow for brevity, it goes something like this:
Globalist H.W Bush becomes President of the United States. His prime directive is to serve as a 'placeholder' while various arrangements are sorted out in preperation for the installation of a promising operative who will oversee the implementation of the next set of 'achievements' essential in realizing the ultimate objective.
Uber globalist, opportunist, and sociopath extraordinaire, William Jefferson Clinton assumes his assigned role and performs brilliantly. Fucking the nation in the ass and yet somehow leaving the stage a hero.
Next up is George the little. Little george gets a big role. His mission is to insure that a police state is established as to allow for the protection of the regime during the final act.
Mission accomplished!
And so today we are in the final act. An individual with seething contempt for the concept of individual liberty, an individual seeped and stewed in the religion of hate and anger against 'the man' has been assigned his role.
Corrupt to the core, a perfect operative. Nurtured from a young age to destroy the system. A human devoid of empathy, ethics, morality. An absolute imperial narcissist eager to mark history with his stain.
The 2012 Presidential election will likely be our last.
IMHO
funny stuff. the turning point for me was an exercise one of the new environmental economists threw at the class. it was simple enough. determine the maximum value of a tree. the paper industry had a very simple model. 20 cords of pulp per acre divided into cost of the land, taxes until harvest, the cost of a contractor to harvest the wood and bring it to the mill, the cost of turning it into paper. i forget the exact average figure but it was only a coupla hundred dollars. being an enviromental economics class all sorts of environmental inputs were added to the model and the prof showed us how he could "legitimately" build a model that showed the true value of a tree at over 100000 dolloars.
the point of the exercise was to show us how easy it was,especially with the advent of computers to build huge, beautiful (to a math head) models of pure bs just because it could be done and could be legitimately defended as reality.
derivatives are one result of this detachment from reality. well, reality trumps all fantasies in the end. this godzilla has been created and there is no mothra to save us all. the only ways out are an orderly retreat to reality, maintaining the staus quo and letting the whole thing blow up on it's own unknown timetanble or blowing the whole thing up on purpose and starting over. an orderly retreat is just not reality even if they claim that's what they want so the real choices are the latter two choices.
both choices will have the same result so maintaining the status quo is the obvious choice even as tptb will claim to have the key to an orderly retreat. in the end, the model is simple. and leaves no alternative. print, baby, print and hope you are dead before the waste matter comes in contact with an object having several offset surfaces attached in balance on the same plane on a cylinder rotating at a high rate of speed.
You guys are really good!
When I played it went to DEFCON 5 Immediately.
Game is broken. Doesn't have a giant PRINT button.
Interesting how in the real world we got 9% unemployment and not the 1.5% predicted.
Perhaps there's something wrong with the model? /sarc
Nancy Pelosi: Foodstamps and Unemployment Insurance
Great, a game based on imaginary parameters generates crazy results. May as well ask how much damage your Sword of Extreme Fireballs will do against Unicorn Cavalry with the + 2x WTF enchantment.
It's not going to end well. Either we print, and gold goes to the moon, or no printing, and cash is king. The inflation/deflation cycles will continue to accelerate until the plane crashes into the mountain.
Yes, cuz hyperbole is so much more constructive.
Unicorn Cavalry do not ever get the +2x WTF Enchantment...+1x WTF is thier max in V4 rules. Unless you mean Skittle Shitting Winged Unicorn Beserkers, in which case, carry on.
I don't get it. Why would the Fed create publicly available simulation that shows we're screwed?
Because the only people who are going to access it are the people who already know we are screwed. So in their eyes,what's the harm?
These fuckers have a curious trait. They LOVE to make it obvious. They are very much exhibitionist in that sense. I believe that they may generally have such a deep contempt for normal poeple as to nearly require that they flaunt their sickness because for them it is sincerely confusing that any opposition whatsoever even exist.
Wow! Not too difficult, I should apply for the job!
All you gotta do is understand there is a time lag.. and if you get inflation up to maybe 8%, then near end of the alloted time, just goose the interest rates up and crash the "inflation" towards the 2% range.
Ya, this game is kinda one dimensional. Too simplistic. Someone commented that... why trust a game made by an egghead. How true.
Goal is now to maximize unemployment. Wonder if a newspaper flash will say rioting mobs on the street. Then blackness and final newspaper article: fed burned to ground.
Hammurabi's code in DOS 2.0 Now there was a game! When you lost people starved, and it was so easy to cheat !
"Hitler Was Right"........now where have I heard that before?
http://www.memri.org/report/en/0/0/0/0/0/0/5665.htm
Eat a bowl of foreskinz.
Actually, just after one year and a few days, the Progressive Think Tanks have another Epic Failure on their hands.
Notice many items where they have increase in price by 30%. Liked the comment by one of the political members saying Bernanke was treasonous. And Dudley with his I-pod comment.
The Fed enabled the economic bubbles which caused problems.
Isn't it funny, how all the so called "experts" who went through all kinds of "sophisticated" and "really advanced" education, still fail to grasp that any kind of rating is relative - that is, if you say that "something" has a value of X, it is SOMETHING that has a value of X.... rather than EVERYTHING?
Granted, there may be some confusion, after some moron who is called a genius created a "theory of relativity", that has nothing to do with relativity, and everything to do with absolutism (there is a reason, why "C is a constant" IS the whole point of it!)... still does neither justify the stupidity of so called experts, nor the braindead asskissing of the previously mentioned "genius".
See, economy is in shit state (deflation), while prices of everything go up (inflation). That is, things are shit, yet the price of all that shit goes up.
There, was that so hard to understand??? And i didn't even need a PhD for it!
everything you "own" is worthless. everything you "need" costs more everyday.
http://www.memri.org/report/en/0/0/0/0/0/0/5665.htm
" at least for those who have not mutated sufficiently to be able to metabolize iPads and fly to and from work using their own pair of wings"
Or work at home like Bernanke.
Not surprisingly, this desperate regime will start another war to attempt collecting 'Win the Future' votes. Obama's administration is struggling to pinpoint a new union threat zone.
Unemployment Views
"Shut up", Spanky explained.
Fun game. It took several simulations, but I achieved a 39.46% inflation. The lowest simulation (with ZIRP) came to just over 20% inflation. On a couple other simulations, though, I got reappointed!
"Be Fed Chairman for a Day" will probably disappear soon from the San Francisco's Fed website soon. Keep an eye on it.
The US Fed's quasi-app is, of course, primitive. Teh ECB's incluces seasons..
http://www.ecb.europa.eu/ecb/educational/html/index.en.html
Kind of hilarious how the default Fed funds rate (in the game) is still 4.5%. Ah, the heady days of +ve real interest rates...
I think it's an "educational" game....
....i ended up with 6% unemployment, and 0% inflation. I was fired..... because of lack of inflation.... which they call deflation.
The media also was very realistic.... was talking about job losses caused by "deflation", while unemployment was actually going DOWN, despite of me doing a softlanding at near 0%.
How to do it in the game? Has to do with how the game is programmed. Here is what i suspect from observation:
- The unemployment calculations react more to shortterm rate CHANGES, than to the actual absolute rate.
- The inflation calcs almost certainly are NOT centered at 0%, but actually at 2%.... i.e., if you start going below 2%, the decline will accelerate on its own, without you doing anything... similarily, once it goes above 2%, the rise will accelerate on its own.
The different mechanics of how the game calculates unemployment, and inflation behaviour, allows one to make this not a zero sum game.... and thus keep inflation down without unemployment exploding.
Phrased less diplomatically: The game mechanics were designed to drive a point home to the player - yet, precisely the mechanics of how the game cheats the player, can be used against the game, to utterly destroy "the point", lol.
During the hyperinflation, I plan to get involved in the stake and torch making trade. What about you?
M1 money supply is now about 2100 billion dollars and it was about 1000 billion dollars mid 2000's. That is the money most people use to cover daily expenses. So any further money printing surely will increase the inflation rate even more because most of the new money would go directly into M1.
i clocked that game, if you alternate every quarter, 0% interest and then crank it right up to 20%, then the next turn back down to 0%, next turn back to 20% etc etc
this gives you stable inflation under 3%, but eventually ramps up unemployment to about 7%.. still pretty good stats better then the fed is doing in reality... :)
Yo Draghi, here's how it's done...
http://www.youtube.com/watch?v=IDDy02cny70
Oh this is fun! Go ZIRP for 2.5 years (where we are now), and then **OH SHIT** jack it up to 19%. Guess what...too late. You're already fucked!
The problem is it's unrealistic. The employment rate stays art 1.5% with zirp. That's not where we are now. Even with inflation off the charts employment doesn't go above 1.5%. That's just unrealistic. I'd love to see a model that factors in reality when it comes to employment.
"price stabeeleetee"
that's not a real word! You're just taking the piss out of Jean Claude Trichets accent ..fine by me
...keep up the good work (rediculing the retards included)
Of course, inflation will only get serious when banks start lending for real. That is not happening yet, so inflation in tame.
But look at REAL personal income and real disposable income at these relatively small inflation rates. THEY ARE GOING DOWN!!!!
Positive Economic News, But Troubling Income and Debt Trends Persist – Mixed Signals for Housing Recovery
http://confoundedinterest.wordpress.com
This is a fucking stupid game, and not bacuase even though I kept inflation and unemployment within the limits, i still got fired...
No, it's a fucking stupid game because it's not real. C'mon, you stupid SF Fed dumbfucks, think, THINK! Why is there incipient annd creeping deflationary doom hanging Sword of Damocles stryle, over our heads as a planet DESPITE ZIRP? C'mon, you guys, WTF?
Yeah, how come we got 25% unemployment and wimpy inflation with ZIRP? Debt contagin in Europe, and the inevitable destruction of 600 T of derivatives is a DEFLATION BOMB about to explode. They should just print money and throw it out of a fucking helicopter! How come no-one has ever thought about THAT idea? Huh? Huh?
Not enough oil folks. Oil will go up, up, up, because there isn't any left! Oil goes up in a deflationary environment, and everyone thinks it's inflation when it's just a scarce commodity everyone wants- that sort of dynamic will destroy a global economy based on lies annd fraud and circular webs of cross-infected and insolvent counterparty exposure to everyone else's unreported financial STD's.
Games should be real, but maybe that would just be depressing.
By "control" he means inforcing the rules.
Damn you iPad
Funny thing is try going from 0% and high inflation to 19% Fed Funds Rate and see what happens to inflation. It keeps going! Hilarious.
great comments, especially about smarty pants people telling us how its going to work out. Thats funny, no precedent for this situation, ever, and they dismiss two obvious issues.......1) old yardsticks to measure new situations. 2) Never has there been so much money moving around the plant so quickly, never been so much debt, never this degree of concentrated govt involvement directly/indirectly (owning stock in companies to allowing major Accounting Holidays from Reality).
Another overlooked problem is speed. Why we have not seen the mother of all flash crashes, several limit-like moves and a proper re-pricing of everything is absolutely beyond me. The genius of QE is that despite all the headlines, the sky has not fallen, and people just get used to totally unreal headlines week after week. How can the Fed turn it around without major rule changes or destroying value as we know it by printing?
THe ony way I ever got reappointed (in about 20 tries) was with a 7% Fed Funds. I dont even know where to start....
finally nailed it, once i figured out you had to move fed funds rate in decisive manner whenever the crisis happens. after that you depend on your action to do its work, then and just follow it back down (or up) . got fired mostly though.
sorry am late to get on the bandwagon here, but apparently 0.98% inflation and 3.5% unemployment is enough to get you fired as head of the fed.
maybe it was the 4 quartes of 20% interest rates at the start that shook out the vampire squids from their ivory towers.
Wow. The Fed has a totally wrong concept of inflation. If there was a rise in oil prices due to a restriction in supply, that is deflationary and means the Fed would cut rates. Instead, cutting rates leads to runaway inflation in the game......I find the game works best if you pull a Crazy Ivan. Jack rates up to 19% to scare the shit out of the debtors and spook Wall Street, then cut after two quarters to zero, then work back to around 5%. I can win the game like that. What the hell is the Fed telling us, besides that they are retards? Or is that the only message?
I think I just had a mild stroke from reading this headline. fuck, we're all really, really fucked.