The Myth of Janet Yellen Exposed

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Classic Peter Schiff:

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Rand Paul on Yellen:

[CA renter]

The problem with Janet Yellen is her belief that the Fed can fix the unemployment problem with monetary policy — by reducing the purchasing power of workers and others on fixed incomes so that wages can appear to remain the same while they are really really going down after taking inflation into consideration. She believes that this will make American workers more “competitive” with Third World workers, so more people will end up being employed.

Of course, this additional employment is only good if one can actually afford a decent living with those wages. If you can only afford to buy a bowl of rice and share a mud hut with 20 others, it’s not the panacea Janet Yellen seems to think it is…at least not for the average American workers.

Like her predecessors, she’s focused on asset price inflation, which does more damage than good where Joe Sixpack is concerned.

[FlyerInHi]

CAr, please explain why you believe the dollar should retain its purchasing power over time.

That scenario would actually be be a capitalist’s dream because money itself would be an investment. You would avoid the need to put your money to work.

[all]

[quote=FlyerInHi]CAr, please explain why you believe the dollar should retain its purchasing power over time.

That scenario would actually be be a capitalist’s dream because money itself would be an investment. You would avoid the need to put your money to work.[/quote]

I hire you to milk my cow for 10% of the yield and at the end of the day I give you a piece of paper that says ‘good for 1 gallon of milk’. You come back after a year and I give you 3 quarts and a speech on declining value of paper notes.

[spdrun]

Why would a scenario with a roughly constant dollar be a capitalist’s dream? Unless the dollar goes UP in value, holding money wouldn’t be an investment, but rather a cushion. You’d still need to invest it to actually MAKE more money as opposed to spending what you’ve got and running out.

Americans already have too small of a cushion to fall back upon under bad times (and a piss-poor public safety net as well), so encouraging more savings would be beneficial to the average American.

[FlyerInHi]

What is roughly constant?
The Fed’s inflation target is now 2% ( below the 3% average)

So, in context, I don’t see all the animus towards monetary accommodation, especially in light of self indicted fiscal injuries.

[FlyerInHi]

[quote=all]
I hire you to milk my cow for 10% of the yield and at the end of the day I give you a piece of paper that says ‘good for 1 gallon of milk’. You come back after a year and I give you 3 quarts and a speech on declining value of paper notes.[/quote]

I think of money as a instrument to facilitate production and trade (as opposed to the friction involved in barter) and less as a store of value.

So the goal would be to encourage productivity and trade which result in higher standards of living.

[spdrun]

What is roughly constant?
The Fed’s inflation target is now 2% ( below the 3% average)

I’d go for the 2% (or even 5%) target iff food, (pre-tax) energy, and housing purchase prices were included. Basically returning to the saner pre-1980-or-so inflation metric.

Basically discourage speculative investment in necessities and maintain a feedback mechanism to prevent bubbles in same. Make energy adjustment pre-tax to allow for taxation of fossil fuels to fund investment in cleaner sources.

If you want to be a landlord, OK. If you want to horde real-estate and flip it, screw you. If you want to be a farmer, chef, or grocer, OK. If you want to trade in food futures, screw you. Same goes for energy.

It’s bizarre to exclude things that are CRITICAL from inflation metrics while leaving the fluff in there. If you want to create bubbles, create them in areas where the US is actually LACKING, like clean energy, infrastructure investment, etc.

Not in areas where we’re glutted, like housing or social network stocks 🙂

[FlyerInHi]

It it occur to anyone that inflation forces people to work and hustle and be creative to make a a living?

People who want money to retain value year over year are the lazy ones. They want to coast.

[FlyerInHi]

Spd, the federal reserve is just the central bank. They dump money onto banks hoping that money is lent out.

We need the federal government to act in building infrastructure and setting policy.

[spdrun]

And what’s wrong with coasting? The average American is overworked as it is — it would do us some good to step back, smell the flowers, and slow down. Why the FUCK is having as many people as possible working a 40+ hour week inherently a noble goal?

If anything, financial stress is an impediment to creativity, since it uses up mental “cycles.” Who has time to think about founding the next tech company if they’re working ridiculous hours to get the rent paid and to cover food costs?

http://blog.southeastpsych.com/2013/09/03/financial-stress-leads-to-decreased-mental-functioning/

[FlyerInHi]

Nothing wrong with coasting. But you need to invest your money into income producing assets first.

I’m pretty darn lazy myself. I’ve worked less than the average person. I’ve been more lucky than hard working.

I think a modest of amount of inflation is good. It’s like creative destruction.

[spdrun]

And my point is that we already have TOO MUCH “creative destruction” in the US. It results in wasted potential — like it or not, most tech founders and artists come from upper-middle-class (at least) backgrounds.

The next Steve Jobs might be working in a call center in Dubuque Iowa, trying to make ends meet. Good Will Hunting was just a movie 🙂

You still had brilliant people doing their creative things in the 1960s when inflation was low, educational opportunity was accessible and cheap, and income disparity was much lower than in 2013.

[CA renter]

[quote=spdrun]

What is roughly constant?
The Fed’s inflation target is now 2% ( below the 3% average)

I’d go for the 2% (or even 5%) target iff food, (pre-tax) energy, and housing purchase prices were included. Basically returning to the saner pre-1980-or-so inflation metric.

Basically discourage speculative investment in necessities and maintain a feedback mechanism to prevent bubbles in same. Make energy adjustment pre-tax to allow for taxation of fossil fuels to fund investment in cleaner sources.

If you want to be a landlord, OK. If you want to horde real-estate and flip it, screw you. If you want to be a farmer, chef, or grocer, OK. If you want to trade in food futures, screw you. Same goes for energy.

It’s bizarre to exclude things that are CRITICAL from inflation metrics while leaving the fluff in there. If you want to create bubbles, create them in areas where the US is actually LACKING, like clean energy, infrastructure investment, etc.

Not in areas where we’re glutted, like housing or social network stocks :)[/quote]

Bingo. I’d even argue that there should be no inflation target. The Fed should be more concerned about maintaining a stable dollar/stable purchasing power.

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FIH,

A falling dollar is a capitalist’s dream. They benefit from the asset price speculation that results from massive money printing. It’s the people on fixed incomes, including workers, who suffer from a declining dollar. The raises they get (if any) have not been keeping up with real inflation — the kind of inflation that spdrun is talking about.

Money printing encourages speculation, not necessarily productive investing. Needs and markets (the desire for profits) will ensure that people are investing in new productive investments.

[Author]

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