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Nice find
Nice find
Inflation due to price-push or demand-pull?
"make it really hard for the Fed to live up to its promise to keep interest rates low until 2013."
Raising interest rates can dampen demand-pull (see Volcker early 1980s), but not so effective against price-push.
Meh. Not sure I entirely agree with the premise. The correlation he points to in his graph is a good fit but not a perfect one.
The grind of foreclosures, and the fact that so many people are underwater in their mortages does not signal to me any real strength in the housing market that would cause any housing inflation. Seems like the guy is a bit too focused on his ability to make fancy technical graphs at the expense of a more comprehensive view of a complex system.
I also tend to view proclomations about the "real rate of inflation" with some amusement, because there are so many people saying that their real rate of inflation is so much better...
Whats the point of having an official inflation rate that excludes food and energy?
There's a point to it although it might not be an overall incredibly useful tool. That still doesn't mean the OP has a good case for what he's saying.
Housing prices are still too high, but they are hiding the real inflation?
Get real. It's a correction. Inflation was too high then as housing prices were being overpriced.
No, they aren't. The bubble is fully deflated.
Prices have fallen to the 40-year trend line.
http://www.jparsons.net/housingbubble/
Hmm, not sure what the conclusion needs to be after reading that.
4% isn't an exorbitant inflation rate, and it's well within what it's been in the last decade or so.
The Fed's "definition for full employment is an unemployment rate in a 5% to 6% range over the medium-term."
Of course, the politicians have been ing around with the rate calculation to make the rate lower than "real" unemployment, so one can't compare rates decade to decade,
http://www.gecodia.com/Fed-Funds--US...ate_a1266.html
Obviously, the Fed has cared much more about financial sector health (and salvation) than about Human-Americans' well-being.
Fed's target inflation rate:
http://www.usinflationcalculator.com...y-fed/1000388/
Last edited by boutons_deux; 09-06-2011 at 01:57 PM.
The rates went really low as the lenders suckered in millions, then the bubble popped, and the lenders (most of them bankrupt technically) jacked up the mortgage rates and began applying federal borrow qualification requirements, rather than ignoring them.
4 1/2% inflation means interest rates need to rise to the 8-10% range for our financial system to work. And yeah, that's bad when you are already in a recession.
Not really. We've been with near zero interest rates for a long time, and inflation has still being going on at about those rates.
The whole point of keeping interest rates low is so people invest that money in the economy in order to beat inflation, without parking that money in the bank/bonds.
Do you realize how hard it is in this current environment to earn 5% on your money with minimal risk just to STAY EVEN with inflation?
Yes. THAT is the point. Create an incentive to take risks.
Assuming it's true, I say it's about time.
Still seem high in my area, but I did see some good looking deals a few days ago. I figure they are in bad shape or something.
But Carter Jr. can do it! He may have interest rates and inflation into double digits!
Jimmy Cartah didn't cause stagflation.
What do you claim he did to cause stagflation?
"Assuming it's true, I say it's about time."
you quoted the link, did you check it? no need to assume anything. the median house price is a little below the 40-year trend line.
And interest rates on a 15-year (or even a 30-year) fixed mortgage are at rock bottom. It's truly a buyer's market right now.
Already done by Reagan in '81.
Oh bull . People shouldn't have to put their savings at risk just to try to stay even with inflation.
+1
Except lenders don't want to lend at such low rates (they can put their funds elsewhere for higher returns), so they apply federal borrower qualification regs to the max (which is the opposite from their bubble crimes), and then some.
When unemployment is so high and the economy is slow why on earth should there be any type of incentives for people just to sit on the money? I don't understand that logic one bit.
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