WASHINGTON (Dow Jones)--A senior economist at the Federal Reserve Bank of Richmond Tuesday said the U.S. central bank should be wary about injecting more stimulus into the economy because it could spark inflation.
"The provision of further monetary stimulus at this point in the business cycle is not without risks," the head of research at the regional Fed bank, John Weinberg, said in a speech in Frederick, Md.
Richmond Fed President Jeffrey Lacker, who was unable to give the speech for personal reasons, is part of a minority of officials at the central bank who are skeptical of the Fed's latest attempt to boost the economy by buying government bonds. The $600 billion program, which started in mid-November of 2010 and is set to run until June, is meant to aid the economy and boost jobs.
Weinberg argued this may no longer be necessary--and could even be dangerous. The U.S. economy's soft patch is over, with consumer spending set to grow at a solid pace this year, helped by an improvement in the jobs market, he said. Using monetary policy to encourage job creation, moreover, can be risky.
"Historical experience, including the inception of the Great Inflation of the 1970s, suggests that central banks should be careful not to steer monetary policy off course by targeting the unemployment rate," he said.
Despite the opposition, Fed Chairman Ben Bernanke looks set to have the necessary support to continue the bond buying this year. Fed Vice Chair Janet Yellen said Saturday that, together with some $1.7 trillion in purchases of mortgage and government bonds in 2009 and the start of 2010, the central bank has helped create around three million jobs.
<< <i>Inflation is good. Our entire economic system is built upon it
I don't understand. Please explain. >>
Controlled inflation is wonderful, everything works smoothly with such - deflation is the devil, it messes things up. Without real inflation of 5-6% per year being reported as 2-3% per year, how do you expect us to be able to pay our social security obligations in 30 years?
The peak oil price before the crash was $145. The current oil price is apprx 40% less. Which is more important to the health of our economy - sugar or copper a few percent higher than before the crash or oil one third less?
<< <i>If this is how you explain how inflation is good...
"Controlled inflation is wonderful, everything works smoothly with such - deflation is the devil"
then that explains why you listen to Laura. >>
Listening to Laura has made me millions of dollars. I could have listened to you instead, but I'm not sure I could get my mind around your train of thought sometimes.
Rising commodity prices driven by growing international demand from countries that do not produce those commodities (China, India etc) would weaken the currencies of all importers (China and India included) not just the US.
Arguably rising commodity prices should negatively impact the price of rare coins as Americans would have fewer dollars left to indulge a hobby if they have to spend more of their income on gasoline, bread, clothing etc. At the highest tiers of US incomes, the super rich would be able to continue to spend as they please.
Controlled inflation is wonderful, everything works smoothly with such
I've witnessed inflation for most of my life, but I don't remember ever seeing "everything working smoothly". Not even close.
deflation is the devil, it messes things up.
I'm not convinced that deflation messes things up any worse than inflation.
Without real inflation of 5-6% per year being reported as 2-3% per year, how do you expect us to be able to pay our social security obligations in 30 years?
Simple. Redefine the obligations.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>You're probably gonna tell me that your kid is writing a report and that I'm doing all his research...ok, here you go for oil:
>>
Dear Adrian - I know that you lost a few years recently, but the crash did occur before 10/12/2009. If you're gonna do my research for me, do it right please.
<< <i>Rising commodity prices driven by growing international demand from countries that do not produce those commodities (China, India etc) would weaken the currencies of all importers (China and India included) not just the US. Arguably rising commodity prices should negatively impact the price of rare coins as Americans would have fewer dollars left to indulge a hobby if they have to spend more of their income on gasoline, bread, clothing etc. At the highest tiers of US incomes, the super rich would be able to continue to spend as they please.CG >>
The rich are the ones who will have plenty of whatever they need and will buy more of what they want. What they will want more of in an inflationary period are historical hedges against inflation.....like certified rare US coins. Their demand will be what sends rare coin prices higher. Middle Americans do not typically buy rare investment grade coins so they will not want less of them because less of zero is........well....let me put it this way....they won't be regurgitating coins they don't have.
What you will see is a softening in the price of collector coins.....which we can all celebrate.....!!!!!
I'm not convinced that deflation messes things up any worse than inflation.
The American Dream of owning a home and retiring on it is based on inflation. You don't think that the falling home prices of the past few years have been worse than our normal inflation?
What you will see is a softening in the price of collector coins.....which we can all celebrate.....!!!!!
Unless, of course, we are unemployed. Or our retirement is based upon the value of our collection. Or our home equity has evaporated and we're forced to sell our collection in order to balance our finances.
The super rich will be better positioned to move their investment dollars into industries (eg. ownership of off-shore companies), currencies, real estate or other resources that are appreciating against the dollar based on weakness in the dollar as a foreign exchange in a collapsing dollar scenario. US coins are not as affected by a weak dollar so why would they park their dollars there? Another way of looking at it is this--if the dollar is losing value against foregin exchange why invest in things that are tied to a market that is based on the dollar?
<< <i>What you will see is a softening in the price of collector coins.....which we can all celebrate.....!!!!!
Unless, of course, we are unemployed. Or our retirement is based upon the value of our collection. Or our home equity has evaporated and we're forced to sell our collection in order to balance our finances. >>
That is true. You can eat a date but not an overdate......
You should only have a small portion of your assets in any one catagory. Some say no more than 25% in rare coins.
Evaporating home equity doesn't unbalnace your finances or make your mortgage go up, it just makes immoral people walk away because they no longer want to follow through on their obligations.
<< <i>I'm not convinced that deflation messes things up any worse than inflation.
The American Dream of owning a home and retiring on it is based on inflation. You don't think that the falling home prices of the past few years have been worse than our normal inflation? >>
American Dream? American nightmare more like it.
A home should never be anything but a roof over your head. In no way shape or form should it EVER be treated as an investment. Tons of folks received horrible advise from family, friends and talking heads that their homes would someday fund part or all of their retirement. Generational mumbo gumbo and wicked bad advise. In fact, this was one of the reasons for the housing bubble. Congress also believe it was every American's right to own their own home whether they could afford it or not. Enter Sub-prime, liars loans and pic a payment mortgage plans even if the pic was to pay ZERO. You are Approved.
The Housing 'Boom" was unsustainable. It will take years if not decades for housing to sort out from where it was in 2006.....................MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
So copper is 10% higher now than precrash, but the main thing that copper impacts us on is housing which is in the dumps. And oil is 40% less than precrash. Sugar is higher, but sugar seems to make huge moves independent of inflation.
You don't think that the falling home prices of the past few years have been worse than our normal inflation?
Well, I was talking about overall inflation vs overall deflation. But if you want to discuss housing prices instead, OK, let's. To answer your question, I'd want to consider whether home prices were too high to begin with before coming to a decision as to whether falling home prices are a bad thing. And my view is that home prices were too high and needed to come down.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<So copper is 10% higher now than precrash, but the main thing that copper impacts us on is housing which is in the dumps. And oil is 40% less than precrash. Sugar is higher, but sugar seems to make huge moves independent of inflation>
Housing is in the dumps in the US to be sure. Copper demand is mainly coming from China and that is the major reason for it's current price. Demand with a little splash of inflation perhaps. MJ
Walker Proof Digital Album Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
"I'm fairly certain that's not the only voices that you're hearing."
I don't hear voices. I am not God or Christ. I cannot predict the future. Today is January 11, 2010. I am in Colorado. I have never hurt anyone or myself.
Against what? The ruble? The Euro which some experts believe wont be around in a few years? The pound sterling--no wait, they import oil, copper and sugar too. The currencies of the sugar producing nations like Haiti and Cuba? The Chinese yuan that they have been manipulating to low levels for years in order to fuel domestic growth that is in turn causing the price they pay for raw materials to go up?
<< <i>"I'm fairly certain that's not the only voices that you're hearing."
I don't hear voices. I am not God or Christ. I cannot predict the future. Today is January 11, 2010. I am in Colorado. I have never hurt anyone or myself.
Any more questions? >>
Yes: are you going to continue to argue that oil costs more now than before the crash?
Oil has doubled in price since the beginning of 2009.
What, about oil, have I been wrong about?
Go back and show me where I said oil is more now than before the crash? What i said is that commodity prices are up lately.
Oh, and by the way.....what are you doing letting Laura make money for you? I thought you were a collector.
And besides, I think you have enough money. Anyone that can pay $900,000 for less than a pound of silver is being greedy. I am a starving child from Botswana and I need you to let me pick a few coins out of your dresser drawer. (Yes, I can see them now....oooohhhhhh....aaaaahhhhh....nice shiny coins....trade dollars.......seated dollars.....oooohhhhhh....skinny eagles......)
Against what? The ruble? The Euro which some experts believe wont be around in a few years? The pound sterling--no wait, they import oil, copper and sugar too. The currencies of the sugar producing nations like Haiti and Cuba? The Chinese yuan that they have been manipulating to low levels for years in order to fuel domestic growth that is in turn causing the price they pay for raw materials to go up?
Everything has gone up in price as a ratio to earnings and net wealth. I'm not sure you can call that inflation on a pure basis. It is moreso the deflation specifically in that area versus non inflation in other areas. All in all this is a very dangerous time for pure runaway inflation to make an appearance and I think that is what has people scared. Im not so sure buying up the bonds is such a bad idea. It is certianly better than issuing more. And I'm also not so sure the Fed is just printing up money to do it. The Fed has assets beyond the ability to just print paper. And if this move works those bonds will add significantly to those assets.
<< <i>Oil has doubled in price since the beginning of 2009.
What, about oil, have I been wrong about?
Go back and show me where I said oil is more now than before the crash? What i said is that commodity prices are up lately. >>
No, you didn't. You listed oil in response to a request for what's priced higher now than before the crash. It's actually almost 40% less than before the crash. OF COURSE commodity prices are up lately - and it has nothing to do with inflation or an impending crash of the dollar. It has everything to do with us pulling out of a near DEPRESSION. Goodness, sir - next you're likely to argue that if something falls 50% and then increases 100% that it's a sign of an impending crash!
Whenever your currency buys less stuff, that's inflation. Maybe I'm not smart enough to understand how that's not true.
Now, the printing of money could be thought of as an appropriate step to making sure we have enough liquidity to prevent a depression.....when no one has enough money to buy Baltic and Medeterranean, you can't build hotels to buy Park Place and Boardwalk. (Get your head around that one, TDN)
Comments
WASHINGTON (Dow Jones)--A senior economist at the Federal Reserve Bank of Richmond Tuesday said the U.S. central bank should be wary about injecting more stimulus into the economy because it could spark inflation.
"The provision of further monetary stimulus at this point in the business cycle is not without risks," the head of research at the regional Fed bank, John Weinberg, said in a speech in Frederick, Md.
Richmond Fed President Jeffrey Lacker, who was unable to give the speech for personal reasons, is part of a minority of officials at the central bank who are skeptical of the Fed's latest attempt to boost the economy by buying government bonds. The $600 billion program, which started in mid-November of 2010 and is set to run until June, is meant to aid the economy and boost jobs.
Weinberg argued this may no longer be necessary--and could even be dangerous. The U.S. economy's soft patch is over, with consumer spending set to grow at a solid pace this year, helped by an improvement in the jobs market, he said. Using monetary policy to encourage job creation, moreover, can be risky.
"Historical experience, including the inception of the Great Inflation of the 1970s, suggests that central banks should be careful not to steer monetary policy off course by targeting the unemployment rate," he said.
Despite the opposition, Fed Chairman Ben Bernanke looks set to have the necessary support to continue the bond buying this year. Fed Vice Chair Janet Yellen said Saturday that, together with some $1.7 trillion in purchases of mortgage and government bonds in 2009 and the start of 2010, the central bank has helped create around three million jobs.
...is defensible.
Oil? Really?
I don't understand. Please explain.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Inflation is good. Our entire economic system is built upon it
I don't understand. Please explain. >>
Controlled inflation is wonderful, everything works smoothly with such - deflation is the devil, it messes things up. Without real inflation of 5-6% per year being reported as 2-3% per year, how do you expect us to be able to pay our social security obligations in 30 years?
"Controlled inflation is wonderful, everything works smoothly with such - deflation is the devil"
then that explains why you listen to Laura.
My guess, is that you guess that my answer will be 'inflated dollars'.
The peak oil price before the crash was $145. The current oil price is apprx 40% less. Which is more important to the health of our economy - sugar or copper a few percent higher than before the crash or oil one third less?
<< <i>If this is how you explain how inflation is good...
"Controlled inflation is wonderful, everything works smoothly with such - deflation is the devil"
then that explains why you listen to Laura. >>
Listening to Laura has made me millions of dollars. I could have listened to you instead, but I'm not sure I could get my mind around your train of thought sometimes.
Arguably rising commodity prices should negatively impact the price of rare coins as Americans would have fewer dollars left to indulge a hobby if they have to spend more of their income on gasoline, bread, clothing etc. At the highest tiers of US incomes, the super rich would be able to continue to spend as they please.
CG
I shall return to my status as an immutable stone.
Camelot
I've witnessed inflation for most of my life, but I don't remember ever seeing "everything working smoothly". Not even close.
deflation is the devil, it messes things up.
I'm not convinced that deflation messes things up any worse than inflation.
Without real inflation of 5-6% per year being reported as 2-3% per year, how do you expect us to be able to pay our social security obligations in 30 years?
Simple. Redefine the obligations.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>You're probably gonna tell me that your kid is writing a report and that I'm doing all his research...ok, here you go for oil:
Dear Adrian - I know that you lost a few years recently, but the crash did occur before 10/12/2009. If you're gonna do my research for me, do it right please.
<< <i>Rising commodity prices driven by growing international demand from countries that do not produce those commodities (China, India etc) would weaken the currencies of all importers (China and India included) not just the US. Arguably rising commodity prices should negatively impact the price of rare coins as Americans would have fewer dollars left to indulge a hobby if they have to spend more of their income on gasoline, bread, clothing etc. At the highest tiers of US incomes, the super rich would be able to continue to spend as they please.CG >>
The rich are the ones who will have plenty of whatever they need and will buy more of what they want. What they will want more of in an inflationary period are historical hedges against inflation.....like certified rare US coins. Their demand will be what sends rare coin prices higher. Middle Americans do not typically buy rare investment grade coins so they will not want less of them because less of zero is........well....let me put it this way....they won't be regurgitating coins they don't have.
What you will see is a softening in the price of collector coins.....which we can all celebrate.....!!!!!
The American Dream of owning a home and retiring on it is based on inflation. You don't think that the falling home prices of the past few years have been worse than our normal inflation?
Many young couples are glad that houses are now cheaper.
Unless, of course, we are unemployed. Or our retirement is based upon the value of our collection. Or our home equity has evaporated and we're forced to sell our collection in order to balance our finances.
<< <i>"You don't think that the falling home prices of the past few years have been worse than our normal inflation?"
Many young couples are glad that houses are now cheaper. >>
Many more aren't.
<< <i>Sorry....I am an idiot and deserve to die...
You said it, I didn't
Oil? Really?
ps - that's copper
CG
<< <i>What you will see is a softening in the price of collector coins.....which we can all celebrate.....!!!!!
Unless, of course, we are unemployed. Or our retirement is based upon the value of our collection. Or our home equity has evaporated and we're forced to sell our collection in order to balance our finances. >>
That is true. You can eat a date but not an overdate......
You should only have a small portion of your assets in any one catagory. Some say no more than 25% in rare coins.
Evaporating home equity doesn't unbalnace your finances or make your mortgage go up, it just makes immoral people walk away because they no longer want to follow through on their obligations.
Oil? Really?
The impact of a higher price of copper? It costs more to build a house. Okkkk - so go buy a foreclosure for 40% less instead.
(since the crash)
<< <i>Sugar:
What were the huge inflationary forces that forced sugar higher from 04 to 06? Perhaps the price of sugar isn't dependent upon inflation after all?
No, I am not arguing facts that are stipulated.
What have you conceded?
<< <i>I'm not convinced that deflation messes things up any worse than inflation.
The American Dream of owning a home and retiring on it is based on inflation. You don't think that the falling home prices of the past few years have been worse than our normal inflation? >>
American Dream? American nightmare more like it.
A home should never be anything but a roof over your head. In no way shape or form should it EVER be treated as an investment. Tons of folks received horrible advise from family, friends and talking heads that their homes would someday fund part or all of their retirement. Generational mumbo gumbo and wicked bad advise. In fact, this was one of the reasons for the housing bubble. Congress also believe it was every American's right to own their own home whether they could afford it or not. Enter Sub-prime, liars loans and pic a payment mortgage plans even if the pic was to pay ZERO. You are Approved.
The Housing 'Boom" was unsustainable. It will take years if not decades for housing to sort out from where it was in 2006.....................MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>Oil:
(since the crash)
So copper is 10% higher now than precrash, but the main thing that copper impacts us on is housing which is in the dumps. And oil is 40% less than precrash. Sugar is higher, but sugar seems to make huge moves independent of inflation.
Hmmmm. Let them eat cake???
I don't know but a scripture keeps poking into my head.....Proverbs 26:4.
<< <i>"Counselor - you continue to argue facts already stipulated to in this thread. Why?"
No, I am not arguing facts that are stipulated.
What have you conceded? >>
Apparently you missed this partial sentence in one of my posts: ...."sugar or copper a few percent higher than before the crash "
<< <i>"What were the huge inflationary forces that forced sugar higher from 04 to 06?"
I don't know but a scripture keeps poking into my head.....Proverbs 26:4. >>
I'm fairly certain that's not the only voices that you're hearing.
That the price of copper, sugar, oil (just to name a few) have increased in value?
That we are having inflation?
That inflation is bad?
That many experts think we are heading into inflationary times?
That the dollar is going to collapse?
Let me know what has been conceded and I will stop arguing it.
Well, I was talking about overall inflation vs overall deflation. But if you want to discuss housing prices instead, OK, let's. To answer your question, I'd want to consider whether home prices were too high to begin with before coming to a decision as to whether falling home prices are a bad thing. And my view is that home prices were too high and needed to come down.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
That does not surprise me one bit. Getting one's mind around Laura is easy.
Housing is in the dumps in the US to be sure. Copper demand is mainly coming from China and that is the major reason for it's current price. Demand with a little splash of inflation perhaps. MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>I repeat, what have you conceded?
That the price of copper, sugar, oil (just to name a few) have increased in value?
>>
Copper, yes - not that it matters
Sugar, yes - but not the reason for the increase
Oil - you are mistaken and continue to state and restate a falsehood
I don't hear voices. I am not God or Christ. I cannot predict the future. Today is January 11, 2010. I am in Colorado. I have never hurt anyone or myself.
Any more questions?
<< <i>"but I'm not sure I could get my mind around your train of thought sometimes. "
That does not surprise me one bit. Getting one's mind around Laura is easy. >>
Well, she's pretty consistent - whereas you sir are all over the place. You're certainly the more fascinating of the two
<< <i>That the dollar is going to collapse? >>
Against what? The ruble? The Euro which some experts believe wont be around in a few years? The pound sterling--no wait, they import oil, copper and sugar too. The currencies of the sugar producing nations like Haiti and Cuba? The Chinese yuan that they have been manipulating to low levels for years in order to fuel domestic growth that is in turn causing the price they pay for raw materials to go up?
CG
<< <i>"I'm fairly certain that's not the only voices that you're hearing."
I don't hear voices. I am not God or Christ. I cannot predict the future. Today is January 11, 2010. I am in Colorado. I have never hurt anyone or myself.
Any more questions? >>
Yes: are you going to continue to argue that oil costs more now than before the crash?
What, about oil, have I been wrong about?
Go back and show me where I said oil is more now than before the crash? What i said is that commodity prices are up lately.
Oh, and by the way.....what are you doing letting Laura make money for you? I thought you were a collector.
And besides, I think you have enough money. Anyone that can pay $900,000 for less than a pound of silver is being greedy. I am a starving child from Botswana and I need you to let me pick a few coins out of your dresser drawer. (Yes, I can see them now....oooohhhhhh....aaaaahhhhh....nice shiny coins....trade dollars.......seated dollars.....oooohhhhhh....skinny eagles......)
<< <i>
<< <i>That the dollar is going to collapse? >>
Against what? The ruble? The Euro which some experts believe wont be around in a few years? The pound sterling--no wait, they import oil, copper and sugar too. The currencies of the sugar producing nations like Haiti and Cuba? The Chinese yuan that they have been manipulating to low levels for years in order to fuel domestic growth that is in turn causing the price they pay for raw materials to go up?
CG >>
Bingo. Give the man a Kewpie Doll!
<< <i>Oil has doubled in price since the beginning of 2009.
What, about oil, have I been wrong about?
Go back and show me where I said oil is more now than before the crash? What i said is that commodity prices are up lately. >>
No, you didn't. You listed oil in response to a request for what's priced higher now than before the crash. It's actually almost 40% less than before the crash. OF COURSE commodity prices are up lately - and it has nothing to do with inflation or an impending crash of the dollar. It has everything to do with us pulling out of a near DEPRESSION. Goodness, sir - next you're likely to argue that if something falls 50% and then increases 100% that it's a sign of an impending crash!
Now, the printing of money could be thought of as an appropriate step to making sure we have enough liquidity to prevent a depression.....when no one has enough money to buy Baltic and Medeterranean, you can't build hotels to buy Park Place and Boardwalk. (Get your head around that one, TDN)