Philman

Taylor Rule Estimate: Fed Fund Rate Differential at a Whopping 6.8%

The idea that we are going to face deflation is ridiculous. Inflation is already very evident so long as you avoid the government statistics which are massaged to show otherwise. Using the more honest 1980's inflation formula, shadowstats.com calculates the current inflation rate to be a little less than 6%, down from over 12% last year. That is reality.

Oh, but you're not including housing, you might claim. So what? Housing wasn't included on the upside, either. If we did include housing, we would have had a 20%+ inflation rate for the last 9 years. It was the Fed's policy not to mess with bubbles. Now, it is their policy to reflate them?

Taking rates down below zero by quantitative easing is punishment for the careful honest savers, and a free gift to the prolifigate spenders and wasters, who caused the worldwide economic Crisis. It shouldn't be done. It MUST NOT BE DONE! If it continues to be done, a point of no return will come, like in Weimar Germany 1919-23. I'm sure that if you run your ridiculous "Taylor formula" you would have claimed that the Germans, back in that era needed to print money, also. Well, they did, and, a few years later, people had lost so much faith in the German mark had devalued to 1 trillion to 1 compared to the pre-WW I value of the paper mark.