Quote notes (#38)

Peter Schiff (@ ZH):

Unlike her predecessors, Janet Yellen has never had a youthful dalliance with hawkish monetary ideas. Before taking charge of the Fed both Alan Greenspan, and to a lesser extent Ben Bernanke, had advocated for the benefits of a strong currency and low inflation and had warned of the dangers of overly accommodative policy and unnecessary stimulus. (Both largely abandoned these ideals once they took the reins of power, but their urge to stimulate may have been restrained by a vestigial bias against the excesses of Keynesianism). Janet Yellen, who has been on the liberal/dovish end of the monetary spectrum for her entire professional career, has no such baggage. As a result, we can expect her to never waver in her belief that stimulus is the answer to every economic question.

ADDED: More Schiff: “The more we borrow and spend today, the more we will suffer tomorrow when the bills come due. Ironically, cutting government spending now helps the economy by allowing the economic adjustment to happen sooner rather than later. But this type of long-term thinking is very difficult for politicians to consider.”

October 10, 2013admin 25 Comments »
FILED UNDER :Commerce

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25 Responses to this entry

  • Kgaard Says:

    Yellen’s fine. Last thing we need now is a hawk. Look how that worked out for Europe. Schiff has been wrong on gold, by the way. Extremely wrong.

    [Reply]

    Posted on October 10th, 2013 at 3:04 am Reply | Quote
  • VXXC Says:

    There is no limit to God’s benevolence.

    quadrillion quintillion hexillion septillion octillion………

    Right now our velocity of money is constrained largely by the racist barrier of the speed of light. No, that’s it’s actual speed . For now.

    A wise Latina woman like Yellen can bring the technology of CERN to accelerate past this barrier. Once the light speed barrier is broken, the velocity of money can reach..

    Quarktrillion. The unit of money when the velocity of money exceeds the speed of light.

    Previous sexist Quantum economics had taught that as the velocity of money neared the speed of light it would gather mass and hence value. As this was proved false, it’s clearly a racist sexist hate crime concept. It must be Emmanuel Krugtron and his wreckers causing the model not to work. Or somethun.

    Wise Quantum economics will create infinite growth and will absolutely bring equality.

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    admin Reply:

    You seem to have got the NYT narrative pretty well sorted out.

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    Posted on October 10th, 2013 at 11:04 am Reply | Quote
  • Thales Says:

    Related, the Fed released a new $100 bill to make counterfeiting harder, yet I’m having a difficult time rationalizing how such “counterfeiting” is in any way immoral anymore. It’s just private stimulation of the economy, and any and all private actors would be dwarfed by the Fed’s Eighty Biiillion Dollar (/pinkie-kiss) monthly helicopter drop…

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    admin Reply:

    Why would the Fed compromise its counterfeiting monopoly?

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    Thales Reply:

    Hey, I get it — trips to the “beauty shop” ain’t cheap…

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    Posted on October 10th, 2013 at 1:28 pm Reply | Quote
  • Psykonomist Says:

    @Kgaard

    There are hawks in Europe? Gold isn’t still superior to the dollar?

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    Kgaard Reply:

    Sure … The ECB has been too tight for several years. They should have done a lot more QE a lot earlier and the PIIGS might not have gone off the rails. One COULD argue that the rise of nationalist parties in Greece, Norway and France is a function of too-tight monetary policy as much as anything. (I’m a fan of Marine Le Pen, but do think the argument has some merit regardless.) Youth unemployment in southern Europe is in the stratosphere …

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    Psykonomist Reply:

    That’s all pretty standard Keynesianism. And wrong. Easy money policies got the world here. They can’t and won’t get it back out.

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    Posted on October 10th, 2013 at 5:21 pm Reply | Quote
  • VXXC Says:

    Fear camps on the Potomac.

    http://www.salon.com/2013/10/09/right_wing_coup_deluded_secessionists_have_already_won/

    [Reply]

    admin Reply:

    That article is a bit too slippery to easily categorize, but as a general point the strand of “It’s time for a divorce” leftism needs to be encouraged.

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    Posted on October 10th, 2013 at 9:14 pm Reply | Quote
  • Kgaard Says:

    @Nah … not Keynesianism exactly … it’s better referred to as nominal GDP targeting. Yes, overly-easy policy got us here. But two wrongs don’t make a right. If you go from super-easy to super-tight all you get is a spectacular depression. You have to acknowledge the problem and keep policy easy through the slump. Besides, there’s not much choice: If the Fed stopped QE and started jacking up rates, what do you think would happen to 10-year Treasury yields? They would implode. They would go below 1%, just as occurred in Japan. The stock market would tank, the economy would revert to recession, unemployment would soar, and budget deficits would go through the roof. No … there’s no choice but to do what is now being done.

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    Psykonomist Reply:

    No choice from a political standpoint. But it ends badly either way for everyone except the extremely connected. When a bubble bursts, you can either pay the piper now, or pay infinitely more later. The political solution is always to let someone else pay later. Later comes eventually.

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    Posted on October 10th, 2013 at 10:19 pm Reply | Quote
  • VXXC Says:

    There’s a host of choices.

    The economy remains in a cold depression, allieviated by the safety net. Which includes the stock market, the true target of QE.

    I don’t care about the fortunes of criminals great or small. Burn it down.

    We’re way past two wrongs, and it’s all about what’s right for ME. Just as in Weimar, the beneficiaries are a small number of speculators while the gut volk see their bunds earned over decades vanish in a twinkling.

    This ends badly except for the corrupt few.

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    admin Reply:

    “Burn it down.” — I’m bringing as much kerosene to this party as I can manage to carry.

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    Thales Reply:

    Expedited “tapering”…

    http://www.youtube.com/watch?v=qMkkfuSizc4

    [Reply]

    Posted on October 11th, 2013 at 12:41 am Reply | Quote
  • Kgaard Says:

    Sorry VXXC … that’s just reallly a bad analysis. Remember that Weimar turned into a hyperinflation because the Germans had to pay all those reparations denominated in gold-backed foreign currency. That’s what kills you. When you are borrowing in your own currency (as the US is) and you have a willing market for the bonds, you don’t have a problem. Check out the 30-year chart of US 10-year bond yields. Down, down, down. If we were on the cusp of an inflation problem the bond market would smell it and Treasury yields would be 10% today rather than 2.6%. Your approach would put a lot of regular folks in destitution. It’s really immoral.

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    VXXC Reply:

    “Your approach would put a lot of regular folks in destitution.” — beggars wandering the earth, with every door shut to them.

    “It’s really immoral.” – actually it’s amoral and just.

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    Posted on October 11th, 2013 at 12:53 am Reply | Quote
  • fake_username Says:

    Religions will obviously elevate their [most gifted] true believers. After all, could they risk the faint possibility that the other candidates might in a fit of sanity revert to the wrongheadedness of their youth?

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    Posted on October 11th, 2013 at 2:11 am Reply | Quote
  • pseudo-chrysostom Says:

    see, we wouldent even be having these conversations if we formalized the sovereignty banks have over society. then instead of having to gather taxes for both sovereign ventures *and* paying the interest on rented money, the interest from debt money can be put to official use directly, largely obviating the necessity of taxation, beyond possible vestigial use as an accounting/law enforcement metric, or pigouvian taxes where the market distortion is the feature, (and concordantly, reduce the necessity of economic hitmen and the petrodollar system for supporting this whole parasitical edifice [not that we might want to give it up anyways though, but if we did, ‘free trade’ would have to go too]).

    such an entity could of course also reserve the right to issue its money debt free ala the modern monetary theory guys to get people doing something with their lives (workfare is by most any metric far superior to naked welfare for providing a meaningful existence [let alone for acomplishing social objectives], but the current system is hardly optimized for it), or to subvert/undercut private banks/financiers/fund managers who are ‘defecting’ in the social game whenever appropriate (i don’t think a ban on fractional lending [and hence, endogenous (debt) money creation] is possible in practice [par example, the goldsmiths of old], which is why i think debt free money by itself is only a half measure to the crisis of rothschildian social organization).

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    Posted on October 12th, 2013 at 4:32 am Reply | Quote
  • pseudo-chrysostom Says:

    that crisis of course being, if you arnt in control of the dynamic, someone else will be, and it is they who will be the natural sovereign, and will inevitably attract power and influence in fact, in spite of anything trying to say otherwise. (par example 2, the rise of international finance filled a gaping power vacuum, and it is they who were ultimately the chief influence in the toppling of the old formal elite, and guiding geopolitics today).

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    Posted on October 12th, 2013 at 5:01 am Reply | Quote
  • Grotto Says:

    I wonder if this isn’t a good development for neoreaction. A heighten-the-contradictions, hasten-the-collapse event that allows the whatever final reckoning we expect to occur on more favorable demographic grounds.

    As to Yellen, I have no expectations for her, as she is most likely a affirmative-action, group-consensus-follower who will be tasked with keeping the money taps flowing, and going down with the ship while Geithner and the rest wash their hands of the impending disaster.

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    Jack Crassus Reply:

    @Grotto

    How does hasten-the-collapse help neoreaction? When I enumerate movements creating strong communities and alternative power structures, neoreaction isn’t among them. The Mormons are about 5 orders of magnitude ahead, and hell, even the aspies at less wrong are wiping the floor with us. They got meetups and funding and a (big!) camp at Burning Man and everything.

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    Posted on October 12th, 2013 at 7:57 pm Reply | Quote
  • Kgaard Says:

    @KgaardNope … later never comes. You’re assuming every QE episode leads to hyperinflation but that’s just wrong. In fact, it’s probably more accurate to say the opposite: If you are in a deflationary recession and don’t DO anything about it, you are very likely to end up with a war. One could argue that WWII was partly a result of the various deflations around the world in the 1930s.

    The 1930s also offer a good example of QEs that didn’t lead to hyperinflation. Pretty much every country devalued and nobody had a hyperinflation. They just did it to right the ship, so to speak. The current world environment is evolving somewhat similarly.

    In Southern Europe the risk is clearly that DE-flation will lead to political instability, not inflation. The ECB should print more.

    [Reply]

    Posted on October 13th, 2013 at 3:28 pm Reply | Quote
  • VXXC Says:

    @VXXC

    @ admin,

    The velocity of our money is sexist – the speed of electricity [1,0]. 180,000 miles per second.

    This implies thought.
    Thought is sexist crimethink.

    The velocity of our money – and it’s all our money – is then velocitized our monetized at the speed of light over fiber optic channels. You can see light, it’s speed is 186,000 miles per second.

    This implies seeing [light].
    Lights-peed is racist.

    And concepts like speed, second, mile are of course Euro-Centric Slavemaster culture.

    Triple Crimethink. Arrest Krugton and the wreckers now.

    It’s not the NYT narrative. Those are indictments, Admin.

    [Reply]

    Posted on October 14th, 2013 at 9:58 am Reply | Quote

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