[shortonoil]

"Fortunately, the people that make the policy, have access to real time numbers, and the computational capacity to use those numbers."

Interesting that you would conclude that the CB's have a clue as to what they are doing? The CB's have taken $13 trillion out of their respective economies, and handed it over to the banks. In that respect I would totally agree that they knew exactly what they were doing.

[AgentR11]

$this->bbcode_second_pass_quote('shortonoil', '[')i]"Fortunately, the people that make the policy, have access to real time numbers, and the computational capacity to use those numbers."

Interesting that you would conclude that the CB's have a clue as to what they are doing? The CB's have taken $13 trillion out of their respective economies, and handed it over to the banks. In that respect I would totally agree that they knew exactly what they were doing.

[AgentR11]

$this->bbcode_second_pass_quote('pstarr', 'S')o let me get this right, AgentR11: DEFLATION is headed off with zero-interest free-money for the super wealthy? Which impoverishes the elderly. But the same free-money should also be good for anyone else who borrows, right? The economy rebounds and peak oil becomes the myth it always was. No energy (no pollution) and economic growth. The best of all worlds.

[AgentR11]

Its a word and numbers game I guess. Final Stagflation isn't a bad name for it really. The only consumer metric that is important is getting bread distributed from the stores into pantries. The only finance metric that is important is getting wheat from the field and into the store as bread and flour.

ZIRP / QE let us do that all the way to the end of industrial civilization.

[Tanada]

Of course there are alternatives if your only goal is keeping the farmers farming and the delivery system delivering food. For example they could cancel all outstanding farm debt and give free money they digitize to the farmers in exchange for their crops which would encourage them to produce more crops next year. In essence I am saying the Government could become the purchaser of first resort by offering to buy all food crops for a set price high enough to encourage farming, no matter what the commodity markets do.

[Sixstrings]

We are *most likely* getting ready to head into a recession.

Canada's already been officially in recession for most of 2015, if I'm not mistaken.

Isn't Europe at zero growth, or in recession, too?

And then china -- their growth rate majorly stumbled, cut in half. It's still growth but thing is, that's really a recession when China slows down that much.

So.. we're still growing at like 2% or whatever.. but I think that's not going to last and by the time of the general election, we may be smack into another bad news big recession, with mass layoffs and the whole nine yards.

Which sucks. There was hardly any recovery as it is, for a lot of America, from the LAST recession, the "great recession."

[SeaGypsy]

China is not in a technical recession, calling a slowing growth rate a recession is revisionist. They are playing a subsidised industrial game with trillion dollar stakes against the likes of the global steel industry, selling at or even below cost, destroying already weak secondary commodities markets.

Overall growth is dead, but cannibalistic capitalism is maturing & will maintain the key strategy for investment for the forseeable future.

[GoghGoner]

China's manufacturing index has been in contraction for 8 months in a row. Based on that alone, you could make a decent argument China is in recession. Of course, if you would rather use the official GDP figures then we have a slowing of growth.

Anyway, the first sensible argument on when to raise interest rates was put forth by a Democratic congressman:

$this->bbcode_second_pass_quote('', '&')quot;As I argued then back in the summer, God's plan is not for things to rise in the autumn. As a matter of fact that's why we call it fall. Nor is it God's plan for things to rise in the winter, through the snow. God's plan is that things rise in the spring. And so if you want to be good with the Almighty, you may want to delay until May."

[Pops]

"normalization" looking more likely
http://www.reuters.com/article/2015/11/ ... x83ZQO9.97

[shortonoil]

"Overall growth is dead, but cannibalistic capitalism is maturing & will maintain the key strategy for investment for the forseeable future."

Cannibalistic capitalism is now the only way to keep the oil flowing, and without oil the internet reverts to two tin cans, and string. The world is now like an animal caught in a trap; gnawing off its own limbs to escape; never thinking about where it is going to go, or how it is going to get there!

[EdwinSm]

Just a few more hours, to the expected rise.

It troubles me that so many commentators seem to indicate a very small rise will create trouble all over the world. It could be that they are saying the world economy is very fragile - or it could be that they don't want to loss the profits they make from "free money"?

Example of warning: $this->bbcode_second_pass_quote('', 'T')he World Bank warned in September that a US rate rise could increase the risks to emerging economies caused by disruptions to capital flows.

[Subjectivist]

$this->bbcode_second_pass_quote('EdwinSm', 'J')ust a few more hours, to the expected rise.

It troubles me that so many commentators seem to indicate a very small rise will create trouble all over the world. It could be that they are saying the world economy is very fragile - or it could be that they don't want to loss the profits they make from "free money"?

Example of warning: $this->bbcode_second_pass_quote('', 'T')he World Bank warned in September that a US rate rise could increase the risks to emerging economies caused by disruptions to capital flows.

[Pops]

Lots of the developing world took out cheap, dollar denominated loans in the days of free money.
Increasing the interest rate increases the demand for dollars, increasing the value of dollar and making payments on those loans much higher, relatively speaking.
I think too the easy dollars meant "money changers" could borrow here and loan there and make money from day one on just the difference is value.

Preventing inflation in the US is our concern, what happens down the road for everyone else is their problem.

I think...

[ennui2]

If you look at these charts closer, you'll see Greece, for instance, has been at or above 100% GDP on its debt since 1994. That was a time when we were quote "drowning in oil" unquote. You'll also see how Ireland's debt went down significantly from 1992 to 2008.

So I do not draw a straight correlation = causation connection with GDP debt and the oil spike. It had to do with the contagion from the credit crisis and other just plain stupid (voluntary) moves of certain countries.

[GoghGoner]

Well, one day post ZIRP now. Nice 250 point drop in the Dow today. Will the Fed make it to the next step up or will they have to step back down before then? I say back down.

Fed will have to reverse gears fast if anything goes wrong

$this->bbcode_second_pass_quote('', ' ')Yet zero rates and QE set off torrid credit bubbles in the emerging world, pushing up the global debt ratio by 30pc of GDP beyond their previous record in 2008. The Bank for International Settlements calls this a “Pareto sub-optimal” for the world as a whole. The chickens have not yet come home to roost.

Mrs Yellen has no margin for error as she tries to right the ship and slowly restore the US economy to a “Wicksellian” natural rate of interest, without detonating the debt-bomb in the process.

If she fails, the world is in trouble. We have never been in a predicament where a global recession began with rates already near zero. The Fed typically needs 350 basis points of monetary ammunition to fight a downturn.

The only way out then would be "helicopter money", a potent use of QE to fund fiscal spending directly and inject stimulus straight into the veins of the economy. But that is a saga for another day. She has not failed yet.

[Tanada]

Nothing lasts forever except true love lol, and that includes quarter point interest rates having a large impact.