BrentGolf wrote:So the Fed is screwing up and there are clueless people out there who agree with them. We're supposed to be surprised by this?
Not cheer-leading the FED anymore? A couple of years ago on the gold thread you said the FED did a damn fine job, but their only fault was they didn't do enough
stimulus. I suppose if their balance sheet was double what it is now then everything would be awesome
Obviously the Fed should be raising rates.
Obviously the FED lost its window to raise rates years ago. Corporate earnings peaked 3Q 2014 and have gone down ever since, and are now negative. Ex-Dallas FED governor Richard Fisher even admitted on CNBC the FED front-loaded the stock market to create a wealth effect. It obviously created a wealth effect for wealthy shareholders. The bottom 80% have lower net real wealth than before the recession, according to the FED's own data. I pointed this out in a previous post on this thread, something you refused to accept because it ran against your own conscience. Talk about clueless
Other signs the FED missed the window to raise rates:
1. Industrial production has now declined for nine months in a row. We have never seen this happen outside of a recession in all of U.S. history.
2. U.S. commercial bankruptcies have risen on a year over year basis for seven months in a row and are now up 51 percent since September.
3. The delinquency rate on commercial and industrial loans has been rising since January 2015.
4. Total business sales in the United States have been steadily dropping since the middle of 2014. No, I did not say 2015. Total business sales have been in decline for nearly two years now, and we just found out that they dropped again…
Total business sales in the US did in April what they’ve been doing since July 2014: they dropped: -2.9% from a year ago, to $1.28 trillion (not adjusted for seasonal differences and price changes), the Censuses Bureau reported on Tuesday. That’s where sales had been in April 2013!
5. U.S. factory orders have been dropping for 18 months in a row.
6. The Cass Shipping Index has been falling on a year over year basis for 14 consecutive months.
7. Goldman Sachs has its own internal tracker of the U.S. economy, and it has fallen to the lowest level since the last recession.
8. JPMorgan’s “recession indicators” have risen to the highest level that we have seen since the last recession.
9. Federal tax receipts and state tax receipts usually both start to fall as we enter a new recession, and that is precisely what is taking place right now.
10. The Federal Reserve’s Labor Market Conditions Index has been falling for five months in a row.
11. The employment numbers that the government released for last month were the worst that we have seen in six years.
12. According to Challenger, Gray & Christmas, layoff announcements at major firms are running 24 percent higher this year than they were at this time last year.
13. Online job postings on the business networking site LinkedIn have been declining steadily since February after 73 months in a row of growth.
14. The number of temporary workers in the United States peaked and started falling precipitously before the recession of 2001 even started. The exact same thing happened just prior to the beginning of the 2008 recession. So would it surprise you to learn that the number of temporary workers in the United States peaked in December and has fallen dramatically since then?
How about a simple chart to put things in perspective?
The truth is the FED never had a window to raise rates without crashing the economy, and that's why you're so confused Brent. Think about it, during the peak of the "recovery" the US had 1/4 the interest rate it had during the depths of the recession post- .com bubble crash and 911. All the FED did post-2008 was intercept market-force price discovery while inflating asset prices, something they've already admitted. The business cycle has already turned and we'll be entering a recession with less than half of a percent FED rate. There is no historical precedent for this.
You were wrong about the FED because you've been wrong about the economy the whole time. You've been parroting the FED's conclusions for years as if they were your own, believing all their statements and analysis. They scammed you Brent
If you were just half right the FED would have started raising rates a long time ago. But it can't and it won't because it knows it created its own trap, yet up until now you've been singing its praises. Anyone with a hint of economic sense could have seen this coming.
The best thing the FED could have done is let the banks go under in 2008 and restructure. The US already has the mechanisms in place to protect depositors in the event of mass banking failure, as I've pointed out in a previous post on the "TWD going down" thread. Yes, it would have been a horrible few years, but we would have taken our medicine and reinvigorated the economy in the process. That's what market-driven deleveraging is all about. The FED interfered with this important component of the business cycle, but in doing so has only postponed a much higher price to pay later on. They've taken short-term pain for long-term gain and replaced it with short-term gain for long-term pain.
So what happens next?
The real question is what will the FED do as the economy continues to decline? Will it standby and allow a market correction even if that means a worse crash than 2008? I'm guessing the FED will do something, and that will be the beginning of a much larger crisis in the near future.
The USD is in big trouble if nothing changes. Inflation is starting to tick up and the FED is powerless to raise rates. Much of USD strength has come from expectations of rate normalization and the whole "cleanest shirt in the laundry" meme. How much of that strength will continue if the FED not only doesn't raise rates, but has to lower rates and do more QE to keep the economy afloat? The US already has the lowest real interest rates of any major economy (interest rates minus inflation). Several billionaire investors have recently sounded the alarm (Drunkenmiller, Icahn, Soros) and are moving into gold.
I think we'll be lucky to make it to the next election before things really start to unravel. Regardless of who the next president is, the FED will begin taking drastic measures either 2H 2016 or next year.
Oh, I forgot , hundreds of years of economic history says otherwise
I'm still hopeful
That's Keynesianism in a nutshell.... doing more of what already doesn't work hoping it will work this time.... hopeful and clueless