YouTube Video of Zurich Conference
The Fed has never forecast a recession, even after they have started.
It reminds me of Bernanke’s denials on the housing bubble.
No Comment on Trade?
Everything’s Fine
https://twitter.com/realDonaldTrump/status/1169983251160731651
Accurate Reader Comment
“Not only has the Fed never forecast a recession they’ve never forecast a crash or bubble. But that hasn’t stopped them from telling us we don’t have a bubble or crash on the horizon.”
Mike “Mish” Shedlock
The Fed has never had a problem being blamed for recessions before. What has changed?
That is why Powell isn’t forecasting a recession or anything else. The Fed has embarrassed itself enough already.
Debt is a BIG problem. Unless debt levels come down, growth will continue to be anemic no matter what the Fed does or does not do. Fiscal stimulus is counterproductive, because it creates more debt. And diverting money from the private sector to the public sector via onerous taxes will only slow growth further.
The era of big government is over. From now on, big government will only serve to decimate its own tax base. Period. End of discussion.
No idea why the blog site — NOT ME — renumbered my points and formatted them funny.
Government in the US have been decimating its tax base since the early 70s at the very latest. Hence why its tax base is no longer able to land men on the moon. Nor build new airframes capable of challenging forever-patched 60s era ones. Nor much of anything else, other than mindlessly babbling about all tomorrows supposed parties (just hand me the money today….)
Nor provide for growth in what has been far-and-away the most reliable measure of real wealth, and growth therein, throughout near all of history: Median per capita energy consumption.
Yes, but that war against its own tax base has now caught up with them. And Obama’s debt binge (not saying the other presidents didn’t help mess things up too, just saying Obama more than doubled the debt without growing the tax base at all)
Agree with your thoughts on debt.
But not that Big Government is over. Just getting started.
And they’ll go for debasement over outright taxation. Capital is fungible. Tax too high and folks with plenty will up and leave.
They’ll tackle the coming recession like last one. Massive deficits.
Federal Reserve will go NIRP + $10 trillion balance sheet.
Ha — they are not “going to” debase, future tense. They are doing that already, have been for a while. Check your health insurance price, college tuition, rent, or many other non-discretionary spending items. Compare the inflation of those to CPI or PCE or any other alphabet soup coming from Washington DC
They have been using the debasement trick for awhile now.
The Fed never nornalized interest rates. They stopped short of CPI, never mind peaking above CPI like in a normal expansion. They didn’t even pretend to normalize their balance sheet.
Yes, the Fed will probably go full Zimbabwe the next recession. Its not like they have any other options, and its not like it will matter one way or the other. They like to appear like they are doing something. All pomp, no circumstance.
Congress will commission lots of studies, and probably write some legislation. They think legislation = progress. They might as well legislate that cereal is the same as a hippopotamus.
How many bank CEOs got arrested over Sarbanes Oxley? Remember that very important legislation? Dodd-Frank, named after two men crooked even by Congressional standards, was equally irrelevant — except for the Volcker rule, which Paul Volcker pointed out wasn’t actually what he recommended. They are working to water that down anyway.
Love Trump, hate Trump, or be on the fence about Trump — Comey and Brennan violated all sorts of laws in their inept attempt to rig the election. They are still free. Two US military personel went to prison and got dishonorable discharges for doing less than what Hilary Clinton did. No one in Washington blinked at that either.
It was absolutely critical for witch Pelosi to shove Obamacare down everyone’s throat, but then Congress exempted itself. That legislation wasn’t important enough for them to lead by example.
Read my lips, have sex with your intern, shove your WMD into your health care provider. I would criticize the content of Trump’s endless tweeting if I could ever figure them out.
Japan has been doing QE and zero interest rates for decades. No one even bothers to report about it anymore. Draghi was going to do whatever it takes to bankrupt Deutche Bank (not that DB needed help, but they got it anyway). And the Brits are busy comparing ladies blouses while arguing over a lost cause.
Face it: G7 big government doesn’t matter. They don’t even take themselves seriously. Big government is impotent.
I assume the US government will “go Japanese”. They will continue to run deficits, they will continue to ignore their own laws, they will continue to be less and less relevant. Servicing the debt, hoping to rob Peter to pay Paul and stay ahead of the debt collector will occupy most of their time.
The socialists won’t win, even if they get elected. I seriously doubt Americans will be anywhere near as tolerant of stupid elders as the Japanese people are. New Yorkers are openly telling Mayor Deblasio to stuff it (expect New Yorkers use their own stream of expletives not suitable for this blog).
If you think the #resist movement is strong against Trump, just wait until the next clown (and it doesn’t matter who it is). Only insane people (doing the same thing and expecting different results…) think government can solve problems.
Stalemate and gridlock are the future, with a little quagmire thrown in.
PS — the future will be OK (not great, but just fine) in the G7 for those not dependent on big government
Plenty of Japanese people are happy, even though their government is useless.
Thank you for arguing my point.
We’re not far apart on many things. But Big Gov here to stay … and taxing the rich (too heavily) not an option.
If I understand your comment, you appeared to be saying the government was GOING TO (future tense) debase etc. And this would allow big government to continue.
I was countering that debasement etc has already been happening for a long time, and has pretty much run its course. They have been doing financial repression for more than a decade, decimating people’s savings (those that have savings anyway). Not that they won’t raise taxes a little here, lower them there — but no material increase in revenue (or backhanded revenue via debasement) is possible. They can raise an extra 1-2% here or there, but to make good on their existing promises (not new promises), they need an extra 10-20%. Expanding government further would require revenue on top of that.
I don’t think there is enough slack in the system to support the promises they already made. If they try to raise taxes (and some individual US states have tried), people move away or work fewer hours or simply shut down their business — all of which shrinks the tax base and lowers tax revenue.
If you think big government will continue, tell me how. I don’t dispute that they WANT to have big government. Show a politician that doesn’t. I’m arguing they can’t (not able to) finance their existing promises.
Even the Kings and Emperors of yester-year had to placate their commercial class (gentry, merchants, whatever label) or else they would meet the business end of a guillotine.
It took the “mighty” US military how many days to conquer Iraq? DAYS. And how many YEARS have they spent so far trying to make it work?
China is learning the hard way that their army can easily snuff out Hong Kong protesters, but doing so will suffocate the economic “miracle” Beijing needs to stay in power. They would easily win the battle but lose the war.
“If you think big government will continue, tell me how.”
…
The same way it has. 10 years ago everyone blanched when US ran a $trillion deficit in a recession. Now? US running a $trillion deficit in a (supposedly) great economy. And nary a pushback from anyone … including offshore.
Really no alternative. And US will get away with it since rest of developed world is wearing even dirtier shirt.
Go ahead. Sell your $US and buy renminbi … or euro. They WILL fare worse.
I explicitly wrote that China has the same problems, so I don’t know why you would suggest buying rembi instead of USD. I certainly didn’t write that.
Obviously you aren’t bothering to read my comments, you are just arguing with a straw man in your own head.
Ha. Guilty as charged.
Your posts are way too long and at times contradictory.
But no straw man. Strike renminbi (my apologies) and insert whatever (including gold). King Dollar not going anywhere anytime soon.
You don’t bother to read my posts, because they are long and you are lazy…
but somehow you think your strawman arguments contradict with your other strawman — and that is someone else’s fault?
Read what I actually write, instead of what you imagine. Then it won’t be contradictory. I can’t help what all your strawmen are arguing about — that is between you and your therapist
Taxing the truly rich is never really an option. As the truly rich exists, by definition in a totalitarian state, symbiotically with the state itself.
What always happens as dying regimes decay, however, is that more and more layers of the truly rich gets peeled off, and demoted to merely “evil rich,” which can then be ceremoniously slaughtered to keep the regime in accustomed splendor for another few years.
2008-2010 saw the beginnings of that process in earnest, in the US. With the outer layers of “the smart people who invested in real estate” peeled off, in order to protect those above them. Per regime propaganda, being demoted from “those who took risks in a free market,” to “house flippers.”
Next time there is a hickup, another layer will have to go. Cannot be otherwise, as persistent, never ending burning of seedcorn/capital under cover of money printing, is rendering the pie smaller and smaller each go-around, and the guys with the big guns sure ain’t going to be the ones sacrificing “their” share to make the smaller pie add up.
Look at Argentina. It’s getting pretty darned lonely at the top there, these days. With fewer and fewer square miles of safe areas in BA left, for tango tourists to keep dancing in, as long as the music lasts.
Debt is sucking the life out of the economy, because the lower yields go the less incentive there is to increase productivity rather than to just borrow more and more. I don’t think Powell understands this, I think he just sees debt as a problem of having larger interest payments to make. Any sane economist should be freaking out that low-risk yields are dropping to zero, and that money is pouring into sovereign debt (which is NOT productive investment, it is a destructive claim on tax slavery), and what this all means. But central bankers embrace dropping rates, and say with a straight face that we are having moderate growth and a positive outlook.
They are the ones who get to define what “growth” and “outlook” is in the first place. So, of course, they define it such that it is maximally easy for them to claim that we have more of it, and in a way that give themselves maximum leeway to effect positive measurements.
No different than how the Catholic Church once got to determine what it took to get to heaven. And hence provided a definition which gave themselves maximum benefits.
Of course, neither their definitions, nor the Catholic Church’s determinations, have even the remotest relation to anything of real economic relevance. It’s all made-up nonsense, force fed their captive pliable and not so bright indoctrinati since birth , in order to justify themselves living large based on their own irrelevant-to-straight-up-destructive makework.
Economists are perversely incentivized to say what other people want to hear. Voters want a free lunch, politicians want to promise them a free lunch, and economists find that free lunch theories are popular. … If a deflationary depression comes, the voters will suffer the most — but I’m not sure they won’t deserve it, since they have had the power to demand fiscal responsibility all along.
They can’t even predict where interest rates are headed. Over 95% of the time FED adjusts interest rates AFTER the bond market has made a move. Nobody can simultaneously lead and follow, unless he’s chasing his tail.
“The Fed has never forecast a recession, ” And they are almost always right. Way higher accuracy than those who predict recessions.
Do ya think? LoL
Way higher accuracy?
Really?
If you are going to play that game, please explain how the Federal Reserve – the first 5 years out of last recession – CONSISTENTLY called for real growth of 3% to 4.5% annually, when it bounced around 2%? At best a push, since not even “bears” (at least ones I follow) consistently called for a recession.
That you, Jay?
Yes, but I’d rather have the counsel of someone too vigilant than not enough. All it takes is one missed call and you lose all your money.
Sticking with my “light switch” prediction*
*Economic activity more or less stable … then falls off the cliff
“then falls of the cliff” – when?
The Federal Reserve’s track record speaks for itself
Ben Bernanke:
“Overall economic growth was quite slow but apparently positive in both the fourth quarter of 2007 and the first quarter of this year. Activity during the current quarter is also likely to be relatively weak. We may see somewhat better economic conditions during the second half of 2008, reflecting the effects of monetary and fiscal stimulus, reduced drag from residential construction, further progress in the repair of financial and credit markets, and still solid demand from abroad. This baseline forecast is consistent with our recently released projections, which also see growth picking up further in 2009.”
From a speech given on … June 3rd, 2008 … otherwise known as 7 months deep into last recession.
It will be slow growth ~1%. But if inflation is running closer to 2% what does it mean ? It may not feel like a recession but the treadmill will make sure most people get nowhere.
GDP is relative to inflation. In theory at least.