Fed Confused Reality Doesn't Conform To Its Economic Models, Shocked Its Models Predi

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
Fed Confused Reality Doesn't Conform To Its Economic Models, Shocked Its Models Predict "Explosive Inflation"


There are two facts that should shock the fed. Yes hyperinflation is on the radar, and these two simultaneous rounds of QE will speed it up. One fact is the over printing of dollars, that is bad enough but alas it gets worse. The free money from these rounds of QE and zero rate goes to the money junkies. They, in order to continue their dollar lust will drive the living hell out of commodities. It is all they can do because demand from you and I is hitting new lows.

The lying scum media will be happy to tell you that corporations are making record profits. Gee no shit, they come from free money, and that is all the profits come from.

This wont last long, I have some good news. Well sorta good but for most it might be pretty bad. Seems the rats are getting ready to eat their own.....Exclusive: Banks Fire Warning Over Fines ....They will point fingers at each other for a while then blow out the economy if government persist in prosecuting these criminals.

The banks have for years been over selling the MBS and more importantly in this case the CDS. CDS are relatively cheap on the asset, but each has to be covered when the asset tanks. Look at the sovereign bonds, you place a CDS to insure them. When that bond tanks off, say like in Greece, then the CDS is triggered. Now the holder loses the cost of the CDS and the bonds that were insured. Let's see what happens when you sell say 10 CDSwaps on say $1,000 worth of bonds. Well the initial cost will be almost pocket change, but you then must come up with $10,000 for the bond itself. Now do that on a massive scale.

That people is one reason why the TBTJail banks are insolvent, and this is what the federal reserve is trying to buy up. Major problem with that.

TARP was foremost a federal reserve bailout. That was the initial $700 billion. Well that didn't work out well, and the damn thing cost about $23 trillion dollars. Now imagine the same federal reserve full of the MBS garbage along with Currency/Bond swaps guaranteed with the CDS that they are accumulating.

Are we getting the picture here people?

Why isn't anyone talking about this? Why didn't Romney slam Obama over it, I sure as hell would have.
 
  • Like
Reactions: nonsqtr
Jan 2008
32,903
9,709
Vertiform City
Ha ha - let's see what [MENTION=15221]Shanty[/MENTION] has to say about this.

Last I heard he doesn't much like DSGE, but maybe things have changed.
 
  • Like
Reactions: michaelr
Oct 2010
22,674
5,689
In the empty heads of the right wingers I own
Ha ha - let's see what [MENTION=15221]Shanty[/MENTION] has to say about this.

Last I heard he doesn't much like DSGE, but maybe things have changed.
Why would you say that? Is this another statement like michaelr makes about me, like his fantasies about my line of work, education, background, etc. that I've never said?

Really, you guys should know your facts before you post.
 
Jan 2008
32,903
9,709
Vertiform City
Why would you say that? Is this another statement like michaelr makes about me, like his fantasies about my line of work, education, background, etc. that I've never said?

Really, you guys should know your facts before you post.
Nah, we were talking about stochastic models and you were specifically denigrating this one, weren't you? Or did I misread?
 

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
The Microfoundation Thing (Wonkish) - NYTimes.com

mainly macro: Microfounded and other Useful Models

It depends on what models you use, and how they are used. And there are limitations to any model.

No biggie, really. The Fed may be too reliant on one model. From a historic perspective, high inflation isn't something we have to worry about now.
He says as food costs and fuel are soring out of sight. The dollars that the fed give to the banks for the zero rate policy are hitting the streets. Inflation and rates are going to become a huge factor. If CA fuel prices don't come under control, you might see wide spread civil unrest damn soon. I am paying $4.15 a gallon, but that hikes again today. You have been consistently wrong, and yet you have the audacity to insult others and attempt to drag my good name through the mud.
 

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
The fiscal cliff, well a part of it, there is plenty more.

- World food prices rose 1.4% in Sept.
- IMF lowers economic outlook for Germany
- Leading institutes cut euro-zone growth forecast
- Euro-zone manufacturing PMI confirms contraction
- Euro-zone jobless rate hit record highs
- Spain jobless claims rise
- US jobless claims rise
- US Sept. planned layoffs up 5%
- High California gas prices start to take a toll
- US Factory orders slump 5.2% in August
- Japan big manufacturers’ sentiment worsens
- South Korea factory slump deepens
WORLD ECONOMY - EUROPE - GREECE - U.S. - ONLY FOR WEALTHY HOME BUYERS - FRAUD - OIL - GOVERNMENT PACTS - QEIII - TACO BELL - ZYNGA - FACEBOOK - HP - PIMCO - INDIA FREAK ORDERS - CHINA - JAPAN - SOUTH KOREA - AUSTRALIA - GOLD - PLATINUM - IRON - MONSA