Jackson Jambalaya

Hello, Bernanke?! Is anyone home? We do not have deflation because commodity prices are NOT dropping. Of course, I believe it was on this site that a video of Bernanke saying we would not have a housing market bubble burst was posted. Friedman must be rolling over in his grave.

This has been the most exasperating decision by the Fed. Even some of the other members have expressed concern about this decision. The world markets are furious.

QE2 = disastrous decision

QE2 = Obama's ONLY hope for re-election.

Actually commodities dropped today.

QE2 has to do with the currency war going on

Problem is we no longer have the clout to play but wimping out isn't much of an option either

Glad she referred to the job loss effect of cutting government even though she minimized the possible consequences.

God save us from the ideologues on both sides of the aisle who would willy nilly try to impose their simplistic view of the reality.

God save us from the ideologues on both sides of the aisle who would willy nilly try to impose their simplistic view of the reality.

Oh yes, as opposed to your nuanced, complex and oh so insightful views. God save us all.

Those arguing for QE2 based on potential "disastrous" consequences if we don't are missing the point. What's done can't be undone -- those disastrous consequences are coming eventually no matter what we do -- the only question is whether we keep trying to delay the inevitable and, in doing so, make the eventual market correction so much worse.

Oh, to see how "cyclical" the market would actually be if we could stop our government from artificially boosting growth and desperately trying to avoid the consequences. Hint: when you stop pushing the pendulum in one direction all the time, pretty soon it stops swinging back and forth.

I've never been a fan of Money Supply manipulation. Simple macro-economics would dictate that we are lowering the overall value of good/services by increasing the amount of dollars available.

9:09

yeah, QE2 is partially aimed at trading "partners," esp china, and it's hedge against deflation which is why it makes things "more expensive" even when housing prices likely will decline. And I understand Bernanke is following Friedman's pricipal of guarding against a 1930s deflation. But I don't follow how wages can keep pace with groceries and gas when we have chronic employment problems.

11:07

See my money supply post.

Don't you get it 11:07? You are supposed to know that 11:11 is also 11:04.

11:21, is 11:07, 11:21 or some other 11: or 10: or 9: am or pm???

And actually 11:11 is also 9:09 and now for your listening pleasure, Marley Mooose.

I am 9:09 and assuming 11:04 and 11:07 are the same person or in agreement. If we had a 1930s deflation, producers would stop making things because if they made it on Nov12 for tenbucks but could only sell it on Nov13 for ninebucks, they go out of biz. And, as the original story above briefly discussed, real estate values have probably not bottomed out.


Meanwhile, wages since the recession are down, and besides employers paying more for benefits, wages weren't up much during the previous decade, and beyond any doubt were up less than productivity. Additionally, banks really don't know what new regs are coming despite the financial reform law actually being enacted, and employers really don't know how much obamacare will cost them. And simultaneously we are coming out of a recession into positive growth, and that should actually mean wages temporarily fall and there are fewer regulation/financial costs to business start ups.

Friedman asserted that cutting spending and decreasing money supply actually made the Great Depression worse by fueling deflation. Bernanke agrees. If there are 200 dollars in an economy in one year, then 300 dollars the next year will cause higher prices UNLESS there are 50% more goods to buy OR demand falls in year 2 to below what it was in year 1.

Unless wages rise, demand will fall as prices increase ... and if demand falls, the fed won't succeed in propping up prices with more dollars.

At one time there was some bipartisan talk about progressive taxes funding tax credits for workers to buy health insurance, and aiming at ending employer paid insurance (they'd get taxed instead of getting tax benefits for providing insurance). I can see a benefit for employers and a potential for increased wages in that, but bipartisanship is a bad word these days.

Actually, I am 9:09

And after reading your post 4:37 I have to assume that you are drunk.

While your attempt to simplify the macro-economic effect of increasing money supply is noble, I do not think that the Fed is thinking anything you are comparing it to. In fact, I think they have no other choice. I'm not a cynic in my comments, I'm a realist; what else does the Fed have to influence the macro environment? Nothing is the answer.

Commodities are dropping despite the rise in the MS (not Mississippi), markets are reacting to a new "China growth slowing". This is a macro game. It will be interesting to watch because, unlike history, we have never had so many other nations own our government as we do today - READ DEBT!

4:37 , I'm 9:09 but not any 11

I agree with what you have written.

9:48 Republican campaigning leads people to believe we can cut spending and government immediately and not raise taxes to address the deficit.

The Democrats have indicated that no cuts in Social Security can't be considered and have been ineffective, even in passing a healthcare reform,in controlling costs.

Neither party talks of tax reform, they are limited to keeping Bush taxes cuts or letting them expire for some or all.

Neither party indicates they have any sense of or given any thought for the probable economic consequences of the positions they have taken. Neither party indicates that controls on spending includes controls and oversight on approved federal contracts.

If they know, I consider it lying by omission to the American public. Both are selling snake oil and saying it will cure everything that ails you.

Politicians are telling people what they want to hear, not what they need to know and profiting in the process. There is no philosophical consistency with either party in deed, just in words and that's NOT because of sensible compromise. It's because BOTH repay their deep pocket contributors.

What is it about spending $17 million dollars to get a job that pays $174000 a year don't you understand????

Marley, I don't understand why you think 4:37 is " drunk".

Your observations are not in conflict.

Isn't 4:37 just trying to explain part of the reason there are no choices by referring to an economists any thoughtful conservative would have read?

If there is a conflict I'm missing, please enlighten.

Marley, I'm not drunk and you're an asshole. Try googling Milton Friedman and Great Depression.

I'm not a great fan of Bernanke, but I don't see many options here. He's been upfront that what he'd like to see is a bipartisan approach to temporary budget stimulus and longer term serious reform on everything from payroll taxes to defense spending, but you post about 13 trillion deficits when the Fed doesn't create the dificits and would be doing QE2 regardless.

It's been ten years since this country did anything about reducing the amount of govt debt held by private investors and for nations. Up until two years ago, I'd have suggesting the the dims were actually the more fiscally conservative, but now it may just be the tea party and most of them think we can balance the budget by cutting "discretionary spending," and they don't even define what they consider that to be.

Lastly, I really don't follow your take on commodity prices dropping. Oil will top 90 bucks and gold and silver are not decling and the economist did a piece on how food prices are expected to rise globally

9:09

Look I was the one that posted 9:09AM comment about commodities. 11:34 is not 9:09. And for the record, I stand by this person was inebriated when they wrote their post.

Marley

11:02 I agree with you, I was just commenting on the blabbering that seemed to pervade the post. I also found that the macro discussion delved a bit too deep in to micro issues that only weakened the argument.

CLZ10.NYM Crude Oil Dec 10 DOWN(3.51%)

HOZ10.NYM Heating Oil Dec 10 DOWN (2.62%)

NGZ10.NYM Natural Gas Dec 10 DOWN (3.03%)

RBZ10.NYM RBOB Gasoline Dec 10 DOWN (1.03%)

http://www.thestreet.com/_yahoo/story/10920412/1/gold-prices-take-wild-ride-lower.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

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