[Sixstrings]

$this->bbcode_second_pass_quote('', '[')img]http://www.gannett-cdn.com/-mm-/02f7925085ed00e915826b075d38fd2154e1c809/c=295-0-2345-1543&r=x404&c=534x401/local/-/media/USATODAY/test/2013/09/11/1378925876000-AP-US-Obama-Fed.jpg[/img]

President Obama is expected Wednesday to nominate Federal Reserve Vice Chair Janet Yellen to lead the central bank, elevating her to the world's most powerful economic post just as a political showdown in Washington is propelling the nation toward a possible economic crisis.

The Fed's vice chairman since 2010, she's known for favoring policies promoting low unemployment as a chief concern of the Fed rather than controlling inflation.

Yellen is expected to face resistance from Republicans in Congress worried that the Fed won't do enough to prevent future high inflation. But she enjoys broad support among Democrats in the Senate and is expected to be confirmed.
http://www.usatoday.com/story/money/business/2013/10/08/obama-chooses-yellen-to-chair-fed/2823219/

[rollin]

It's fairly obvious at this point that "on the ground" investing is not being promoted by the federal government, except in a few areas. Lots of money has been pumped into the "system" with very little result on the ground (really a slowing of the negative slippage rather than local growth). The government seems to be supporting global trade more than internal or local recovery.

It has been obvious to me for a long time that placing that money into programs for energy transistion (solar, wind), improved fuel efficiency programs, local passenger and freight rail (forget those high speed rails) and building efficiency would have made an actual economic recovery within the US without as much economic loss to other countries. Communication efficiency and lower cost also needs to be addressed, we don't need more huge companies sucking the public dry just to talk to each other and watch corporate sponsored programming. It also would have set a great example to the world on how to reduce carbon output while increasing your local economy.

Promoting energy transistion, increased efficiency and building local business may seem like a dream when our Congress seems transported directly from the land of Lilliput, but there must be a way for the people to regain control of a government gone dysfunctional.

We need leaders who point people toward what they need versus what they think they want. The days of the corporate/marketing driven country need to come to an end. The current trend is only weakening us, making a giant empty doughnut hole in this country.

[Fishman]

Prolonged QE, money goes to the rich, poor folks money worth less. Welcome to the obamaconomy. While they scream (quite falsely) about how they help the poor.
Glad you figured it out Six.

[SteveO]

Yellen did a stint at Harvard before going to work for the Fed. She is a complete Fed insider, so I have no reason to believe that she won't continue the Greenspan/Bernanke bubble/bust cycle and she certainly won't rein in the big banks.

My guess is that she is totally unprepared to deal with the next financial collapse, because the last couple of years show the the only tool the Fed has (QE) doesn't work anymore.

[Sixstrings]

$this->bbcode_second_pass_quote('SteveO', 'M')y guess is that she is totally unprepared to deal with the next financial collapse, because the last couple of years show the the only tool the Fed has (QE) doesn't work anymore.

[Sixstrings]

$this->bbcode_second_pass_quote('Fishman', 'P')rolonged QE, money goes to the rich, poor folks money worth less. ...
Glad you figured it out Six.

[vision-master]

So you agree with me on the problem. That the rich have all the money. What is your proposal to get the money away from them and into the hands of the other 300 million Americans? It's got to be done somehow.


Rethug response.......

Work harder..........

Start your own business.......

Get an education.........

Thing is, I see these young people with college degrees working at Starbucks all the time.

[SteveO]

$this->bbcode_second_pass_quote('vision-master', 'G')et an education.........

Thing is, I see these young people with college degrees working at Starbucks all the time.

[Loki]

Six, you seem to be confused. On the one hand, you argue (correctly) that most of the quantitative easing has been used to fund the gambling habits of the financial industry. On the other hand, you argue (incorrectly) that QE-related inflation is a problem. These are self-negating propositions.

Contrary to the political talking points, QE has not caused significant inflation because it's been limited primarily to the financial industry. The money supply has indeed increased considerably, but this does not automatically result in inflation. The velocity of money is still quite low and we are currently experiencing below average inflation from a historical perspective:



This actually signifies a success for the Fed, as Bernanke's primary concern has been deflation, and rightly so. I'm surprised at how well they've managed to combat deflation. Whatever the drawbacks of their approach, I think they did stop a deflationary spiral, at least for now.

The “danger” is that QE will trickle down to us peasants. That would almost certainly result in significant inflation. Seems unlikely, though. I expect it'll take an even bigger deflationary spasm before the real inflationary dogs are loosed and everyone is cut a big fat check.

What folks often don't seem to get is that inflation is generally a sign of a growing economy. Our problem is that current inflation in energy and food---the two things that keep industrial civilization afloat---are being driven by hard resource limits, not economic growth. There's only so much monetary policy can do to alleviate this.

[Plantagenet]

It's hard to have much inflation when millions of workers can't find work with record numbers dropping out of the workforce and what jobs are being created are mostly low paying service jobs or mediocre part time jobs

[Sixstrings]

$this->bbcode_second_pass_quote('Loki', 'S')ix, you seem to be confused. ... Contrary to the political talking points, QE has not caused significant inflation because it's been limited primarily to the financial industry. The money supply has indeed increased considerably, but this does not automatically result in inflation. The velocity of money is still quite low and we are currently experiencing below average inflation from a historical perspective:

[Sixstrings]

My last post got messed up, I hit submit while I was writing it and then the site shut down and couldn't edit and complete.

Now I forgot what I was going to say.

Long story short Loki, I'm not against what the fed has done with QE. But that only helped the markets and the global financial system, it did not address fundamentals in the real economy.

The federal government was supposed to do that.. fed qe'ing on the one hand, and federal government stimulating in the *right* ways on the other hand. Fed did it's job but the fed gov did not.

So now we've got a trap. Fed reserve can't stop the qe, cuz if they do the fundamentals aren't there in the real economy to support this inflated paper market.

Also, inflation is high right now for all the wrong reasons -- it's the rich and banksters plowing free qe money into commodity futures. THAT is what has made energy and food so hi, all doomerism aside, if you open a floodgate of dollars handed to banksters then what the hell else do you think they will do with the money????? Other than put it in commodities????

These are banksters, they play market games for easy money, they don't go out and start brick and mortar businesses that employ Americans.

When not investing their 0% loan qe cash running up commodity prices, they're investing in these internet companies and Apple which don't even employ any Americans. Very, very little of any of this market money has trickled down to any companies employing significant numbers of Americans.

And Loki.. I disagree with you that working people in the real world making a living wage and not needing food stamps would somehow be worse than the rich getting their qe. You're shilling for the rich, accepting their paradigm and that it can't be any other way -- not sure where you're coming from on that.

[Sixstrings]

Loki.. you say that the working class getting just a sliver of the rich's pie would result in inflation and blah blah "worse than qe."

It's all propaganda to turn Americans into Chinese peasants, and it's bullsh*t.

A Michigan fast food restaurant was in the news the other night. They've made nationwide news because they start employees out at $15 an hour (which is the Australian federal minimum wage, I think). Well over here in poverty America fifteen bucks an hour is big news.

Heck, in my state a broad standard is like $13 an hour even for midlevel office work, call centers, and the lower end of medical and dental jobs.

So here's this fast food joint, paying everyone a decent wage, and they're donig well and making money and they're proving it's not impossible as all the Republicans say. The co-founder of the company asks:

"My question is, how much do we have to make? How big of a pile of money do CEOs have to sit on?”

That's refreshing, a ceo questioning the value of big profits with a non-impoverished workforce versus keeping workers in poverty just because you can, for just a bit more profit and maybe an extra $100 million for the CEO.

$this->bbcode_second_pass_quote('', 'M')oo Cluck Moo's $15-an-hour story starts with a lesson in minimum wage


Brian Parker is co-founder of Moo Cluck Moo in Dearborn Heights

If you pay your employees just enough to keep them from quitting, they will do just enough to not get fired.

I promise.

I had my reservations about Brian Parker, co-founder of Moo Cluck Moo, and his eagerness to pay $15 an hour for work being done for $7.40 hourly at almost every fast food restaurant in the region.

Have you ever worked for minimum wage? If not, then you probably can’t relate to the struggle millions of Americans face every single day. You’ve probably never had to decide which bill to not pay or pleaded with an anonymous voice to keep your cell phone activated until payday.

Employees at Moo Cluck Moo make $15 an hour or about $31,000 a year. In comparison, a rookie Detroit police officer starts off at about $30,000. A newbie teacher in Detroit starts around $38,000. A cub reporter at a daily newspaper averages about $28,000 a year.

The impact of their higher-than-average salaries is not lost on Moo Cluck Moo's employees.

Lindsay Senia, 23, says she is able to pay her tuition out-of-pocket instead of taking out student loans.
Jennifer Aguilar is able to send her son to Boy Scout camp and can afford to send her daughter to cheerleading camp.
http://www.crainsdetroit.com/article/20130911/BLOG006/130919957/#

[Loki]

Point #1: My name is Loki, not Lore. F for reading comprehension.

Point #2: “Not trusting government statistics” means you're a conspiracy theorist or too stupid/lazy to examine the primary data yourself.

The data speaks for itself, even the ebil gooberment data. There has been no recovery for the majority of Americans, please examine the BLS data on mean income by quintile. And we are still experiencing ~10% real unemployment, please examine the BLS data on LFPR and U-5. No shadowstats conspiracy theory required. This is a deflationary depression, marked by deleveraging and a lack of access to money.

Inflation is not the bugaboo the interwebs makes it out to be, at least not QE-induced inflation. Please refer to my previous statement re. hard resource limits and their effect on price.

Six, you're very emotionally volatile, all over the map, like a monkey jumping frantically from branch to branch, you don't seem to have a center. You should calm down and dig into the data, move beyond conspiracy websites, and maybe read some Epictetus.

[Loki]

$this->bbcode_second_pass_quote('Sixstrings', '
')And Loki.. I disagree with you that working people in the real world making a living wage and not needing food stamps would somehow be worse than the rich getting their qe. You're shilling for the rich, accepting their paradigm and that it can't be any other way -- not sure where you're coming from on that.

[Sixstrings]

$this->bbcode_second_pass_quote('Loki', 'P')oint #2: “Not trusting government statistics” means you're a conspiracy theorist or too stupid/lazy to examine the primary data yourself.

[wildbourgman]

$this->bbcode_second_pass_quote('', 'A') Michigan fast food restaurant was in the news the other night. They've made nationwide news because they start employees out at $15 an hour (which is the Australian federal minimum wage, I think). Well over here in poverty America fifteen bucks an hour is big news

[ralfy]

Related:

"Triffin Dilemma"

http://lexicon.ft.com/term?term=triffin-dilemma

[wildbourgman]

Ralfy, thanks for the link. I think that we fit the defintion but we have other problems that add to the reasons in the definition. Our problem is not just that we run trade deficits as in the link you posted but we have a robust and growing Welfare state and Warfare state to feed. Had we not grew the Welfare state our productivity would be higher, population would be lower and we would be a more efficient society in general. Had we not fattened the Industrial military complex we would have save trillions in weapon systems that we didn't need and in actions such as Iraq 1 and 2. Fiat currency allowed us to do all of these things that we would have otherwise had to pay for.

[ralfy]

Given trade deficits due to the presence of a reserve currency, then it is likely that not just a welfare state but a consumer spending economy would appear, leading to increased borrowing across the board for several decades.

The military, in turn, would be employed to keep the petro-dollar propped up:

"The Road to World War 3"

http://www.youtube.com/watch?v=HP7L8bw5QF4

Also,

"The myth of the money multiplier"

http://www.businessspectator.com.au/art ... multiplier

Thus, we see increasing money supply brought about by borrowers and private banks, followed by a central banking system controlled by the latter.