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And this guy is a hawk? Minneapolis Fed President Kocherlakota suggests last week's FOMC...

And this guy is a hawk? Minneapolis Fed President Kocherlakota suggests last week's FOMC statement didn't go far enough. What's needed is a liftoff plan where the FOMC promises ZIRP until unemployment falls below 5.5%. Prices? They may become pesky, but the FOMC can just raise its inflation target to perhaps 2.25%.
Comments (8)
  • sheeple2012
    , contributor
    Comments (203) | Send Message
     
    they should promise ZIRP until the next passing of Halley's comet, or until a loaf of bread costs $5,000... whichever comes first
    20 Sep 2012, 03:02 PM Reply Like
  • davidingeorgia
    , contributor
    Comments (2713) | Send Message
     
    My (steadily more worthless) money is on the $5000 bread getting here first. That comet has no chance.
    20 Sep 2012, 03:49 PM Reply Like
  • Stoploss
    , contributor
    Comments (1727) | Send Message
     
    For those that actually do math, we already know that 5% unemployment will be reached before 2016 if the FED didn't do anything at the meeting.

     

    Now, since the QE lid has been thrown into the Marianas, we could probably shave a year or two off to get us to 5% by 2014.
    Fortunately, the new issuance until the end of time, should insure a zero percent unemployment rate by 2017, with not one private sector worker in existence!

     

    Atta boy!!
    20 Sep 2012, 03:19 PM Reply Like
  • 2MuchDebt
    , contributor
    Comments (275) | Send Message
     
    These morons don't get that the Fed has a dual mandate; STABLE prices and maximum employment. Since they can't fix the current employment situation (which is blatantly obvious), why not go 0 for 2 and cause serious inflation (or dramatically inflate inflation expectations) in the meantime. I'm glad I'm currently working hard to earn money that will be seriously devalued in the future. The talk emanating from the Fed Presidents is really becoming scary in my opinion. Someone needs to put a hardness on these lunatics.
    20 Sep 2012, 04:21 PM Reply Like
  • wapiti
    , contributor
    Comments (711) | Send Message
     
    Read his comments (Kocherlakota) says...."people will spend more today, and that will drive up economic activity"... so we want more highly leveraged, no saving individuals consuming to the nth degree and when that trains derails...what's the FED going to do? Just give everybody $100-150k a year for being nice? Enough of the PhD theoroists...how about some real biz people
    20 Sep 2012, 05:00 PM Reply Like
  • EK1949
    , contributor
    Comments (1840) | Send Message
     
    I have some questions.

     

    What level of inflation is consistent with economic growth over time? Does the economy do better at 2%, or 4%? Also, are the larger number of dollars I have at 4% inflation worth less than the smaller number I would have at 0%? IOW am I better off working hard for inflated dollars? Given the history of the dollar and the economy taken together it looks like a dollar that has "lost 96% of its value" is more valuable when you consider that you have many more of them, and particularly when you factor in all the things you can buy with them that you couldn't get at any price a century ago.

     

    Let's take that loaf of bread. How much of your income did you pay for it in 1960? How much do you pay today? And how much of your income pays for gas compared to 50 years ago? I think that if the percentage of income for these and other essential items has not risen and even fallen then you have to view inflation in a different light. If the value of money falls and the value of your income rises which is more important to you? What is the real connection between moderate inflation and economic growth?

     

    Unemployment and wage stagnation look to me to be far more serious problems both in the short term and the long term than mild inflation. The Fed can't do much to boost employment other than jumpstart housing. Other than that they are acting defensively. to prevent wealth destruction. These are worth doing in my view, necessary but insufficient measures. No wonder Bernanke is hated. He's trying to help, the help is inadequate, therefore he must be the cause of our troubles. People tend to think that way in a crisis.
    20 Sep 2012, 05:34 PM Reply Like
  • winningtrader
    , contributor
    Comments (2465) | Send Message
     
    Double digit inflation is guaranteed within several years. This joker Kocherlakota was saying in April that the FED would start its exit strategy in 6 to 9 months (as soon as October). What the hell happened. What a joke.
    20 Sep 2012, 05:42 PM Reply Like
  • EK1949
    , contributor
    Comments (1840) | Send Message
     
    If we are to abandon the strategy of easing in a slump and tightening in a boom, shouldn't we have a coherent reason? I doesn't seem like "easing now causes inflation later" could be the reason. It's saying the same thing in a mean angry voice, pretty low yield as a criticism.
    23 Sep 2012, 02:50 PM Reply Like
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