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Goldman's Take On Today's FOMC Statement: There Will Be Inflation

Tyler Durden's picture


Yesterday we presented the view of JPM's Michael Feroli of what today's FOMC statement may say (one word: inflation). Here is what Goldman believes: "Today's FOMC statement should be relatively uneventful. The committee is likely to acknowledge the stronger labor market data and the upward pressure on headline inflation, which will undoubtedly be characterized as temporary. We also expect a softening of the phrase that “[s]trains in global financial markets continue to pose significant downside risks to the economic outlook,” although we do not expect it to disappear entirely. At the meeting, the staff is likely to give a presentation on additional easing options, followed by an extensive committee discussion. (This will not show up in the statement and will only become visible to the outside world when the FOMC minutes are released three weeks later.) We still think that the committee will announce further easing before the end of the second quarter, when Operation Twist concludes. However, our confidence in this view has fallen on net, partly because of the stronger labor market and slightly higher inflation data and partly because Chairman Bernanke chose not to repeat his very dovish comments from the January 25 FOMC press conference at the February 29 Monetary Policy Testimony."

Remember: admitting inflation means no QE any time soon (and also admission that all the other central banks have succeeded in staving off deflation for a few more months courtesy of $2.5 trillion in excess liquidity injections in under 2 quarters).


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Tue, 03/13/2012 - 09:15 | 2249983 Olympia
Olympia's picture

Imperialism and loansharking are perfectly identified ...identified, exactly as imperialism used to be identified with war conflicts. This is why we believe that the consequences of some “mistakes” easily reveal the “motives” of those who planned them.

In reality, there is a permanent “recycling” of the same tactics that lead to the mistake and then to disaster. The method used in the case of Greece is a version of the practice that started from the imperialistic centers to expand all over the world. Simply, in Greece, that is a “terminal”, banking illegal superprofits were produced so that loan sharks “spoil” the Greek public assets, while at the “center” of the planning banking superprofits were created so that loan sharks “spoil” the "Greeces”. Exactly the same illegal things were planned to bring profit to their loan sharking inspirators ...illegal profits.

More info about Global Debt Crisis here:


Tue, 03/13/2012 - 09:27 | 2250025 trav7777
trav7777's picture

so the FOMC will use bogus employment data along with bogus inflation data to justify a decision?  LOL

Tue, 03/13/2012 - 09:46 | 2250086 Cursive
Cursive's picture


They are prisoners of their own lies.

Tue, 03/13/2012 - 09:52 | 2250112 LongSoupLine
LongSoupLine's picture

I foresee today's statements as 100% "algo word targeting" by the Fed.  It's their backdoor version of QE.

Tue, 03/13/2012 - 09:55 | 2250124 DaveyJones
DaveyJones's picture

so they're masochists? or just assholes?

Tue, 03/13/2012 - 10:55 | 2250358 Jonas Parker
Jonas Parker's picture


Tue, 03/13/2012 - 09:49 | 2250106 HoofHearted
HoofHearted's picture

No no no...never. Not Uncle Benny and the Fedheads. OK, so maybe once they did it, but they were young and needed the money.

I'm hoping it leads to a chance to BTFD in gold and silver. Back up the truck...bitchez!

Tue, 03/13/2012 - 09:37 | 2250051 chubbar
chubbar's picture

OT and don't mean to beat this to death because folks have already staked out their positions. This is just frickin perfectly done. It's only 5 minutes long but dissects the NIST calculations and compares the assumptions with the actual joint construction and reveals how impossible the conclusion of NIST becomes (even if the assumptions were true).

It also details something I'd not ever seen before. Trade center 5 was a smaller steel building that was completely consumed with fire as opposed to the random and not very big fires of WTC 7. It is essentially just a standing steel frame that they show pictures of after the fire. Still standing with NO deformity in the beams!!!!

It totally destroys any NIST credibility with this short video. You math majors/engineer types will enjoy this.

Tue, 03/13/2012 - 09:18 | 2249990 Mercury
Mercury's picture

Ron Paul on CNBC this morning:

Tue, 03/13/2012 - 09:30 | 2250033 Yardfarmer
Yardfarmer's picture

Here's another clip you might be interested in. Ron Paul on the floor of the house, March 2001.“There's nothing to fear from globalism, free trade and a single worldwide currency." Who's your Daddy now? junk away, dupes.

Tue, 03/13/2012 - 09:38 | 2250053 Non Passaran
Non Passaran's picture

Don't have a problem with that as long as the currency is gold

Tue, 03/13/2012 - 09:38 | 2250054 Mercury
Mercury's picture

Yeah, it's called gold.

Tue, 03/13/2012 - 09:40 | 2250059 Dr. Richard Head
Dr. Richard Head's picture

Tit would be helpful to supply the video you quoted.

Tue, 03/13/2012 - 09:49 | 2250103 LongSoupLine
LongSoupLine's picture



that would require some form of linear exectutive functioning in the frontal lobe.  Hence, no link.

Tue, 03/13/2012 - 09:41 | 2250065 fuu
fuu's picture

And where is the link?

Tue, 03/13/2012 - 10:03 | 2250145 i-dog
i-dog's picture

You negligently omitted this part of the sentence:

"....but where the single currency is fiat, fear is justified..."

That was a good speech, by the way. Thanks for highlighting it for us all here!

Tue, 03/13/2012 - 11:26 | 2250486 Yardfarmer
Yardfarmer's picture

thanks for the link, dog.

Tue, 03/13/2012 - 10:04 | 2250176 fuu
fuu's picture

After watching idog's link I just felt the need to call you a asshat.


Tue, 03/13/2012 - 10:25 | 2250257 trembo slice
trembo slice's picture

Yardfarmer, good try at dealing in half-truths.  The smack talk may have been a little over the top.  Since, obviously, Ron Paul meant there was nothing to fear so long as the worldwide currency was sound (gold or silver).

You're an idiot.  Ron Paul is your daddy.

Tue, 03/13/2012 - 11:20 | 2250450 Nation of Imbeciles
Nation of Imbeciles's picture

*You either ineptly misrepresented or deliberately took out of context the original words from Paul which are COMPLETELY cited below from his piece titled "The Beginning of the End of Fiat Money" at his CURRENT House webpage:

"There's nothing to fear from globalism, free trade and a single worldwide currency. But a globalism where free trade is competitively subsidized by each nation, a continuous trade war is dictated by the WTO, and the single currency is pure fiat, fear is justified. That type of globalism is destined to collapse into economic despair, inflationism and protectionism, and managed by resurgent militant nationalism."



Tue, 03/13/2012 - 12:27 | 2250656 Nobody For President
Nobody For President's picture

Thank you for putting the final nail in yard farmers' coffin - partial quotes and quotes out of context are classic tools of propaganda (and trolls).

Tue, 03/13/2012 - 09:19 | 2249991 francis_sawyer
francis_sawyer's picture

So do we use the term "Transitory" BEFORE we use "Re-hypothecate" & "Vaporize"?... I'm losing track...

Tue, 03/13/2012 - 12:30 | 2250679 Nobody For President
Nobody For President's picture

Perhaps an example will help:

"The transitory bonuses paid rehypothecated MF Global executives to retain their services during the bankruptcy will vaporize upon settlement."

Tue, 03/13/2012 - 09:21 | 2250006 unununium
unununium's picture

So, EITHER we have inflation now, or QE later.

Message received.  It's clear what spectral reflectivity and molecular weight our investing choices should display.

Tue, 03/13/2012 - 09:23 | 2250013 mantrid
mantrid's picture

it would be funny to witness plunge in gold on "no QE" headlines tomorrow. gold plunging on inflation news would nicely highlight algo-driven market schizophrenia

Tue, 03/13/2012 - 09:25 | 2250017 Shizzmoney
Shizzmoney's picture

How the fuck can inflation be "temporary" in a globalized economy? 

We aint talking tulips, motherfucker.  We're talking about shit people actually need, like oil and food, which have continued to shoot up and rise like Jerry Sandusky at a Child Care Center.

Tue, 03/13/2012 - 09:36 | 2250050 EscapeKey
EscapeKey's picture

Because progressively updated inflation calculations eventually will reflect a supposed lower inflation.

Tue, 03/13/2012 - 12:53 | 2250770 Nobody For President
Nobody For President's picture

Fortunately, shizzmoney, 'the volatile food and fuel components are left out of the CPI' - cause I guess the gubermnint figures we don't need to eat or put gas in our vehicles (or heat our homes).

Tue, 03/13/2012 - 09:27 | 2250021 Cognitive Dissonance
Cognitive Dissonance's picture

"Goldman's Take On Today's FOMC Statement: There Will Be Inflation"

Correction - "There Will Be Blood."

Tue, 03/13/2012 - 09:43 | 2250074 DaveyJones
DaveyJones's picture

I was thinking they could just drop the will part

Tue, 03/13/2012 - 10:27 | 2250101 Dr. Richard Head
Dr. Richard Head's picture

"Beyond here there be inflation.....Arrrrrrrrrr" - Benny "Gray Beard" Bernanke

Tue, 03/13/2012 - 09:28 | 2250028 Sutton
Sutton's picture

Admitting inflation means no QE which makes market tank which makes Ben lie about inflation and call it transitory and then install a QE program.

We will never escape the Loop until we are hurled into uttermost poverty.

Then Fedheads will say "Sorry, we didn't see it coming."

Tue, 03/13/2012 - 09:50 | 2250110 j0nx
j0nx's picture

They only say that because nobody ever calls them on it and throws it in their face. Americans only interested in Snooki's new mouth breather and which NFL player is going where.

Tue, 03/13/2012 - 09:30 | 2250030 Chuck Walla
Chuck Walla's picture

My daddy was a smart lawyer. One of the great lessons he taught me went thus:


"Always admit the obvious, then lie, lie, lie about everything else."


If it helped get you clear, of course.

Tue, 03/13/2012 - 09:40 | 2250058 EscapeKey
EscapeKey's picture

Effectively, lawyer tactics is to leave out information you know will hurt you, and focus on what helps your case - even if it means knowingly misrepresenting facts blatantly.

No doubt the above is sound advice, but it's rather sickening that that's how it works.

Tue, 03/13/2012 - 09:59 | 2250149 DaveyJones
DaveyJones's picture

so let's see, many congressmen are lawyers - so the philosophy has worked out well I guess

Tue, 03/13/2012 - 11:06 | 2250413 kridkrid
kridkrid's picture

Sociopathic characteristics.  Sadly, in many professions, and certainly in politics and the law, success can be driven by sociopathic tendencies, as the quote details.  It's crazy to think, though not hyperbolic, in my opinion, that many/most of the leading figures in many of our more cherished instituions are sociopaths.  Take that in.

Tue, 03/13/2012 - 09:32 | 2250039 BandGap
BandGap's picture

Verb tense is wrong in the title.

If there is inflation and no one talks about it, does it make a sound?

Crazy train, gonna get me some of those Greek bonds.

Tue, 03/13/2012 - 09:47 | 2250092 Burr's 2nd Shot
Burr's 2nd Shot's picture

Quantum inflation.  It doesn't exist until it is observed.  Translation, no inflation if you don't buy anything.

Tue, 03/13/2012 - 10:00 | 2250157 DaveyJones
DaveyJones's picture

so...the poorer we are, the better the economy 

Tue, 03/13/2012 - 10:13 | 2250208 kridkrid
kridkrid's picture

Which is why hyper-inflation and a deflationary death spiral creates the same end result... commerce screeches to a halt and confidence in the currency is destroyed.  It doesn't really matter which of the two paths we take.

Tue, 03/13/2012 - 09:34 | 2250043 q99x2
q99x2's picture

The Euro is not happy with inflation.

Tue, 03/13/2012 - 09:35 | 2250045 asteroids
asteroids's picture

The FED can't help itself. Instead of doing nothing and taking away all the crutches, it insists doing the plate-spinning act. Running from plate to plate and spinning it up lest if crash to the floor. Retail is now wise to this.

Tue, 03/13/2012 - 09:56 | 2250135 espirit
espirit's picture

More like a juggler taking a shot of swill on every rotation.

Timing goes awry catching those falling knives.

Tue, 03/13/2012 - 09:36 | 2250047 j0nx
j0nx's picture

There WILL be inflation? How about there already IS inflation and lots of it but only in the commodity sector where it hurts the most. Deflation everywhere else. Welcome to hyperbiflation bitches.

Tue, 03/13/2012 - 09:43 | 2250070 SheepDog-One
SheepDog-One's picture

Man if theyre talking about 'There WILL be inflation now' theyre admitting to $7 gas and $10 a pound for pink slime!

Tue, 03/13/2012 - 09:43 | 2250072 riphowardkatz
riphowardkatz's picture

margin compression and operating cost reductions are not deflation. still waiting for some jackass to declare hypertriflation

Tue, 03/13/2012 - 09:54 | 2250120 j0nx
j0nx's picture

Tell that to the value of my house and anything else I try to sell on craig's list where people lowball me. Trust me there is plenty of deflation out there as well.

Tue, 03/13/2012 - 10:23 | 2250245 riphowardkatz
riphowardkatz's picture

so every change up and down in various prices is deflation or inflation? no, deflation and inflation used properly are caused by increasing or decreasing money supply. when you misuse the terms you allow the central bank off the hook for the negative effects on the economy. more money in the system cannot simutaneously cause prices to rise and fall. it is one or the other. 

Tue, 03/13/2012 - 10:58 | 2250373 Vince Clortho
Vince Clortho's picture

Yes.  Deflation in the housing market due to the extrordinary situation resulting from the  burst bubble.  Surplus aging houses on the market and not enough buyers. There is no end in sight on that.

But Most Consumer stuff (food, gas, cars, electronic gadgets, phone bills, cable bills, etc) are inflating, have been inflating for a while.  We are approaching the steeply rising area of the curve.

Tue, 03/13/2012 - 09:40 | 2250057 Everybodys All ...
Everybodys All American's picture

Carny Network BS is on full speed today.

Tue, 03/13/2012 - 09:40 | 2250060 Dr. Engali
Dr. Engali's picture

The only way this market will sell off is if the Bernank shocks the shit out of it. The Bernank needs to come out with a play fake so that the market sell off will give him cover to print.

Tue, 03/13/2012 - 09:45 | 2250084 SheepDog-One
SheepDog-One's picture

You'd think if he really wanted that, he would have thought about letting a sell off go like last week, but no they had to run out and pump QE to recover the small loss.

I dont think they can let equities slide down because it would turn into a major crash quick, I think theyve lost control and can only pump the open, then put the brakes on all day.

Tue, 03/13/2012 - 10:14 | 2250211 i-dog
i-dog's picture

They can't let equities slide because they need to pump the "value" of assets on their balance sheets.

Tue, 03/13/2012 - 10:20 | 2250234 SheepDog-One
SheepDog-One's picture

Yea, but for what? No ones going to buy it higher either, so they can 'value' it however they want. Theyll never cash it is, so all theyre doing is jerking off.

Tue, 03/13/2012 - 10:45 | 2250324 i-dog
i-dog's picture

Agreed. For what? ... Pensions, IRAs and corp stockholders feel (and report) that they are holding appreciating assets/collateral ... until, of course, as you say, they need to sell into thin volume against a bottom-feeding HFT.

It ain't going to be pretty, but the can will be kicked for a while longer yet. IMO, 3Q12 is likely to be the bloodbath...the Borg will be ready by then.

Tue, 03/13/2012 - 11:35 | 2250516 viahj
viahj's picture

those fucking Mayans again, is it a self-fullfilling prophecy?

Tue, 03/13/2012 - 11:47 | 2250559 i-dog
i-dog's picture

I believe the Mayans are going for 4Q12. I'm getting in early (between the Olympics closing ceremony and the to-be-cancelled election) beat the rush.

Tue, 03/13/2012 - 09:45 | 2250082 kurzdump
kurzdump's picture

Fear mongering about (hyper)inflation is good for the economy. It keeps people spending. Im not so sure if the US will suffer from (widely spread) inflation any time soon - deflation seems to be the threat. It might be different for Europe.

Tue, 03/13/2012 - 09:47 | 2250093 SheepDog-One
SheepDog-One's picture

Its called biflation and we're already in it big time. What you need to buy is going up, what you need to sell going down.

Tue, 03/13/2012 - 09:53 | 2250119 kurzdump
kurzdump's picture

Robert Kurz wrote an article about the possibility of inflation and deflation happening at the same time - for the first time ever. However, this would mean total collapse in the long run.

Tue, 03/13/2012 - 10:21 | 2250238 SheepDog-One
SheepDog-One's picture

'First time 'inflation' and 'deflation' happened at the same time ever' its happened lots of times. I wouldnt read that author he sounds like a moron.

Tue, 03/13/2012 - 09:55 | 2250125 riphowardkatz
riphowardkatz's picture

nope, gold, oil, stocks, good real estate all going up. just plain old inflation. or maybe by your logic it's triinflation? or quintflation.

Tue, 03/13/2012 - 10:04 | 2250170 kurzdump
kurzdump's picture

Yeh, thats just inflation. If inflation + deflation happens at the same time it would mean inflation of the price of goods and deflation in terms of the financial assets.

Tue, 03/13/2012 - 09:53 | 2250118 SheepDog-One
SheepDog-One's picture

'Widely spread'...oh, thats coming real soon buddy no matter where you live. Bankers gettin out their KY right now.

Tue, 03/13/2012 - 09:49 | 2250104 SheepDog-One
SheepDog-One's picture

'Staving off 'deflation' a few more months' actually means 'We saved our own phony imaginary 'bank asset' valuations a bit longer. Thats all.

Tue, 03/13/2012 - 10:06 | 2250181 espirit
espirit's picture

I need to be fed the same rainbow skittles and koolade as those holding public pensions. 

What faith! What glorious equity markets! Life is good!

...what bullshit.

Tue, 03/13/2012 - 10:16 | 2250215 JohnKozac
JohnKozac's picture

It's Bonus Time!


"Janet Robinson didn't have a particularly distinguished tenure as CEO of the New York Times Co. The stock lost about 80 percent of its value in her seven-year reign, which ended in December 2011. (Here's a five-year chart of the company's stock.) And many long-time employees were angered at the size of the 28-year company veteran's exit package, widely reported to be worth more than $20 million. The entire company has a market capitalization of about $1 billion."

"In late February, the company released details of Robinson's consulting agreement with the Times, which is sure to raise more hackles. The one-year deal, worth $4.5 million, notes that she "shall not be required to provide more than 15 hours of such services or assistance in any month." In other words, she has to provide a maximum of 180 hours of advice per year, which comes out to $25,000 per hour. All the compensation that's fit to print!"

Hey, that's some "performance" bonus!

Tue, 03/13/2012 - 10:18 | 2250225 ZeroPoint
ZeroPoint's picture

There will be inflation? There will be blood.

Tue, 03/13/2012 - 10:22 | 2250242 Downtoolong
Downtoolong's picture

There will be inflation, and there will be ZIRP. In other words to all you savers out there, "YES, we are robbing you."


Tue, 03/13/2012 - 10:55 | 2250357 SmoothCoolSmoke
SmoothCoolSmoke's picture

Hmmmmm.  I bet Buck Fernankie is sitting there looking at the Dow at 13K+ and thinking.  "Looks like if I say nothing today, the Dow can put 13k in it's rear-view mirror"  Given inflating assets is his game, why would he let this opportunity pass?



Tue, 03/13/2012 - 10:59 | 2250382 Bansters-in-my-...
Bansters-in-my- feces's picture

Fucking dog and pony show.

End the UNCONSTITUTIONAL Fed,which is a private for profit corporation.

Tue, 03/13/2012 - 11:15 | 2250448 EuroSovietSerf
EuroSovietSerf's picture

What do they mean 'there will be', THERE ALREADY IS massive inflation... just because the government criminals took foodstuff, gas, fuel, energy, insurance fees and local taxes out of the consumer price index, doesn't mean the inflation isn't there already. Double digits, easily.

Tue, 03/13/2012 - 11:26 | 2250485 Ted Baker
Ted Baker's picture



Tue, 03/13/2012 - 11:26 | 2250487 daxtonbrown
daxtonbrown's picture

What Fed money printing causes is actually biflation, simulataneous pockets of inflation and deflation. The Fed is always pushing on a string because they can onlyadd uncertainty, not positive information to thesystem.

GDP = M * V When the central banks pump, not only does M go up, but Velocity can plummet as people figure out the game is rigged. What we are in is a biflationary depression.

Tue, 03/13/2012 - 12:15 | 2250628 Questan1913
Questan1913's picture

Inflation tells us that QE is taking place now.  Prices have been rising in most consumer categories at a clip of approximsately 11 percent, on average for the last three years.  How else could prices be rising when a large fraction of American consumers have literally no money to spend nor access to credit?  New money is coming into this economy in a deluge, but only flowing to those undeserving few , mainly in the top one percent of income receivers, many of whom are the very individuals who crashed the economy in 2007-08  with some trickle down to another 19 percent or so below them.  Establishment deception is continual and never ending.  The current line is there will be no QE 3.  The principle in this instance is like trying to perceive something which is itself invisible, like the wind.  We never actually see it.  We know it's there because we see dust being stirred up or the movement of tree leaves.  Rising prices are the same, and tell us that massive "printing" is occurring. 

We have been conditioned to accept pervasive lying in all things, large and small, important and unimportant.  Constant, unwavering lying, meant to condition and dull the sense of right and wrong, and the distinction between reality and illusion. 


Tue, 03/13/2012 - 12:17 | 2250631 Snakeeyes
Snakeeyes's picture

Housing still sucks and Bernanke will likely roll the dice on inflation. Taylor Rule calls for 2.05% Fed Funds rate!!!!!!!!  Fat chance. Bernanke likes the Cheap Money Parade.

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