Powell: “We understand better how little we understand about inflation”

June 30, 2022

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12:21 am

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75 comments

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Economics

The ECB held a forum on inflation earlier today. The attendee list, quotes, and a video follow.

ECB Forum Attendees

Jerome Powell: Fed
Christine Lagarde: ECB
Andrew Bailey: Bank of England
Agustin Carstens: Bank of International Settlements
Francine Lacqua.: Bloomberg Moderator

Notable Quotes

Powell: “We understand better how little we understand about inflation.”
Powell: “What we don’t know is whether we’ll be going back to something that looks more like or a little bit like what we had before — we suspect it’ll be kind of a blend. We’re learning to deal with it.”
Bailey: “It’s how you deal with a series of large supply shocks with no air gap between them, which of course feeds through into expectations. Put them all together, they’re not transitory in the traditional sense of the term.”
Lagarde: “There are forces that have been unleashed as a result of the pandemic as a result of this massive geopolitical shock we are facing now that are going to change the picture and the landscape within which which we operate.”
Powell: “There’s a clock running here. The risk is that because of the multiplicity of shocks, you start to transition into a higher-inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening.”
Lagarde: “Moving gradually is certainly appropriate in times of high uncertainty.”
Powell: “The process is highly likely to involve some pain, but the worse pain would be in failing to address this high inflation and allowing it to become persistent.”
Powell: “If what we see is a re-division of the world into competing geopolitical and economic camps, and a reversal of globalization, that sounds like lower productivity and lower growth. That’s a possible outcome and probably a likely outcome“
Powell: “Households are in very strong financial shape. They still have a lot of excess savings from forced savings and also fiscal transfers. The same is true of businesses. The labor market is tremendously strong. Overall the US economy is well positioned to stand tighter monetary policy.”
Powell: “Our aim is to have growth moderate. It needs to happen.“
Powell: “Shape of the yield curve is not a top line worry.”
Lacqua to Powell: Paul Krugman said on Friday that the number one risk is the Fed could overdo it. Is that really possible?
Powell: “Is there a risk we would go too far? Certainly there’s a risk. The bigger mistake to make, let’s put it that way, would be to fail to restore price stability.”

Powell statements translate to damn the recession full speed ahead with hikes.

In contrast, Lagarde wants to move slowly despite the fact that inflation in Spain hit a record high 10 percent since being on the Euro.

YouTube Video

Real GDP in Billions of Dollars

Real GDP fell 1.6 percent in the first quarter.

More importantly, real final sales, the true bottom line measure of the economy fell 1.2 percent.

That downgrade came from the BEA today.

The Odds of Recession Starting in the “First” Quarter of 2022 Just Leaped

My comment on the downgrade was The Odds of Recession Starting in the “First” Quarter of 2022 Just Leaped

Allegedly consumers are in good shape. So why the massive inventory overhang?

“Our aim is to have growth moderate. It needs to happen,” says Powell.

Let’s translate that accurately: We Need a Recession.

Shocking Admission

“We understand better how little we understand about inflation,” said Powell.

For years it’s been obvious the Fed does not understand inflation. The only thing shocking is Powell’s admission of the obvious.

Will the Fed Overshoot?

That has been my stated position for a long time.

Today, Powell practically admitted that will happen.

Powell: “Is there a risk we would go too far? Certainly there’s a risk. The bigger mistake to make, let’s put it that way, would be to fail to restore price stability.”

Given that Fed policy works with a lag, another three-quarter point hike alone might cause an overshoot. But the Fed has penciled in many additional hikes through the end of the year.

I’ve Seen Enough, the US is in Recession Now, Q&A on Why

On June 22, I commented I’ve Seen Enough, the US is in Recession Now, Q&A on Why

Today’s GDP revision adds more evidence to the recession has already started thesis. It makes a mockery of Fed talk that the “consumer is strong”.

With the Q2 GDPNow estimate of RFS still at +1.7% I will stick with my estimate of a recession that started in May.

But we are one retail sales revision away from a recession that may be two-quarters deep right now (with much data for the quarter still on the way).

For a look at how the current quarter is tracking, please see GDPNow Forecast Inches Up to 0.3 Percent, But What’s On the Way?

This post originated at MishTalk.Com.

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Scooot

1 year ago

He’s been trying for inflation for years, he even wanted to overshoot their stupid 2% target for a prolonged time period. Now he says he knows how little he understands it and they want to prevent it from going into another inflation regime. What a load of crock! He understands it perfectly. They wanted 2% inflation to devalue government debt over time, and to tax savers so as to encourage them spend now instead of later. Now he’s completely lost control he’s feigning ignorance. He and most major Central Bank governors have been negligent.

CNNfakeNews

1 year ago

The majority of inflation is due to out of control energy prices that Bi-dumb created via executive order on day one. The Fed can’t stop THAT with raising interest rates. What they have done is cause stagflation. No growth and continued inflation due to ridiculous energy prices being passed onto the consumer of goods. The USA has close to 800 Billion barrels of oil in the ground (verified reserves) and we can only pump half of what we need due to this treacherous administration’s forced climate change agenda. Meanwhile the lefty politicians continue to launder money through Ukraine. It’s disgusting what this government has become…

JackWebb

1 year ago

Reply to CNNfakeNews

In the absence of reckless monetary growth, Biden’s stupid energy policies would have been contained to that sector + parts of the economy connected because of the input cost. Other economic sectors would have contracted, and prices would have dropped. If the impact was broad enough and severe enough, there’d be business failures, layoffs, and contraction. But not inflation.

Remember: Inflation is a monetary phenomenon, period. Not many things are that simple, but this is.

RonJ

1 year ago

Powell: “Is there a risk we would go too far? Certainly there’s a
risk. The bigger mistake to make, let’s put it that way, would be to
fail to restore price stability.”

Destroying the illusion of price stability. At a stable 2% inflation target, a worker has to get a 2% raise every year, just to keep up with the FED’s definition of price stability.

JackWebb

1 year ago

Reply to RonJ

Deflation is sufficiently destructive that a 2% inflation regime makes sense to me.

Lisa_Hooker

1 year ago

Reply to JackWebb

Sure Jack. I’m sure that no one wants to pay a little bit less every year for the stuff they need to survive. The price of everything should double every 35 years. But we do need to fix the problems with electronics and medical care. They are not following the rules.

JackWebb

1 year ago

Reply to Lisa_Hooker

It’s a bit analagous to the intense debate in the 1880s and ’90s over whether to stick with a gold standard or incorporate silver. Gold is ancient and accepted as money everywhere, but has a problem: The supply has increased by about 1.5% a year for the past 4,000 years. The economy grows faster than that, so a gold standard tends to be deflationary.

Banks love deflation, at least if it doesn’t spiral. Loan you $100,000 at 8%, and each $8,000 interest payment is worth more than the last, and so’s the principal at the end. Or at least that’s how it worked back then. Farmers and smaller businessmen joined the Free Silver movement because they wanted some inflation. It made loan payments easier over time, and generally tended to encourage rather than depress economic activity.

Things have changed, of course, with interest rates (theoretically, at least) incorporating inflation, although we all know how inaccurate those “expectations” can be. Still, I think the underlying dynamic is pretty much the same. Modest inflation encourages savings, investment, and economic growth. Yep, someone who sits on cash for 35 years ain’t going to like it, but everything’s a balance. Mind you, I’m endorsing 2%, not anything higher.

By the way, there are much more erudite and authoritative works by people much smarter than me on behalf of 2% inflation. My screed here is colloquial, but it’s 6 p.m. and dinner comes before research. LOL

Lisa_Hooker

1 year ago

Reply to JackWebb

Yup, either you mine more gold or you slow down the rate of progress. Then again look at what PMs did to Spain when they didn’t have to mine, only “collect” and ship them home. I just feel that we could accommodate an economy with money growth a bit above and BELOW so that it averaged out to around zero over time. This planned 2% over the past decade or more hasn’t worked out very well. Perhaps there’s a basic flaw hidden in the idea itself, notwithstanding the heaps of credentialed folks you mention. We are beginning to learn again about nude swimmers.

RonJ

1 year ago

Baily: Put them all together, they’re not transitory in the traditional sense of the term.”

I’m drawing a blank on figuring some other sense of the term.

KidHorn

1 year ago

Inflation is solely about supply and demand. Lots of things can affect the supply and demand, but the bottom line is prices are set based on supply and demand.

JackWebb

1 year ago

Reply to KidHorn

Inflation is a monetary phenomenon and nothing else.

Jojo

1 year ago

Reply to JackWebb

As far as consumers are concerned, inflation is about price increases. PERIOD.

Lisa_Hooker

1 year ago

Reply to KidHorn

Then there’s inflation by edict.

Naphtali

1 year ago

In my experience, inflation is very regionally dependent. Regardless, I use a very simplistic measure and consider housing the fundamental element, since so much in the way of life costs are rooted around it. 40 years ago a house here in Portland such as mine could be had for $50k. Today it will fetch about $750k. Thus 50k*(1 + R)^40 = 750k, where R is the average annual rate of inflation. Solving for R yields about seven percent for the average annual rate of inflation. Should I be one of the blessed individuals to monitor the effects of monetary policy, I would recommend this simple tool for the detection of bubbles. Wasn’t the target two percent? At that rate I would have expected a value of around 110k for my house. Oops.

worleyeoe

1 year ago

“Households are in very strong financial shape. They still have a lot of excess savings from forced savings and also fiscal transfers. The same is true of businesses. The labor market is tremendously strong. Overall the US economy is well positioned to stand tighter monetary policy.”

Translation: If JPowell is correct, then the FFR will have to go much higher to tame inflation.

“Given that Fed policy works with a lag, another three-quarter point hike alone might cause an overshoot.”

Assuming JPowell is correct, I totally disagree with your statement, Mish. There’s absolutely zero chance a FFR of 2.25% creates an overshoot. Even the proposed year end 3.25% target won’t lurch the US into a recession IMO, again, if JPowell is to be believed. The Biden admin & European energy policies, the entire oil industry, & the war in Ukraine are all conspiring to keep fossil fuel costs at their maximum for a long time.

My gawd, the FFR was 5.25% just prior to the Great Recession. In addition, we’re a good 6 months now into rising inflation, and I don’t see any pullback in my area, so maybe JPowell is right about the consumer. Certainly, that’s a big if, but he’s starting to sound a lot like Rumsfeld with these “known unknowns”. It’s a clown show, IMO.

8dots

1 year ago

Consumer confidence sank, SPX tank. If SPX low stand at 0.435 retracement of the move from Mar 2020 low to the top, or cont down to 3,500 area, a 0.50 retracement, to the weekly ma200, even if we are in technical recession, ==> it’s possible that SPX will reach 5,600, before the sharks injure us badly.

BDR45

1 year ago

Wouldn’t the market (if it was a relatively free market) determine what the rate of interest should be under different circumstances? Why do we have, what is it, 400 “economists” at the Federal Reserve who apparently don’t know any more about the economy than a high school student, be controlling interest rates? Personally, I think these “economists”, including Powell, La Garde, et al are all traitors to the public.

KidHorn

1 year ago

Reply to BDR45

Because, now, central banks primarily exist to fund governments. Not help the economy.

Lisa_Hooker

1 year ago

Reply to KidHorn

Exactly. Governments have outgrown their ability to tax at levels acceptable to their populations. The only solution is to borrow and/or print.

Six000mileyear

1 year ago

There was no mention of crypto in the best-of quotes. Does that mean crypto will be left to rot on the vine? Bitcoin dropped 6% overnight, and is set to challenge support at 17500. Those margin calls will be resuming, and will eventually negatively impact banks under Powell’s / Lagarde’s supervision.

worleyeoe

1 year ago

Reply to Six000mileyear

I certainly hope so. Right after NFTs, crypto is much like CDO “fueled the fire” from the Great Recession. If the Fed & the Treasury had their act together, we’d be on par with China with a CBDC. As expected, this will be yet another example of China trouncing America.

We’re sitting here arguing over a 20 month old election, airing prime time specials just to keep Trump from running again while it’s DeSantos who the greater threat to the dems, and absolutely nothing is getting down. Absolutely zilch!

JackWebb

1 year ago

Reply to worleyeoe

I view DeSantis as Trump with organization and discipline. The Dems want to knock Trump off the stage. So do I, but for very different reasons. Get Trump outta there and it’s going to clear the decks for DeSantis/Sears or DeSantis/Noem. If I were “progressive,” truly Machievellian, and had the political juice, I’d do everything I could to be sure that Trump was the Repub nominee in ’24. If they think Trump was bad in terms of their goals, they ain’t seen nothing yet.

KidHorn

1 year ago

Reply to Six000mileyear

If people believe a crypto tax is coming, watch the price plummet. Everyone will be trying to sell before the tax is enacted.

Captain Ahab

1 year ago

What an admission! Some of the statements should scare the crap out of us:

Lagarde: “Moving gradually is certainly appropriate in times of high uncertainty.”

As much as saying they have NO F&%KING IDEA. ‘High uncertainty’ is now acknowledged.

What comes next? Duh! We don’t know, but it’s not our fault.

My favorite example of the Fed’s gross incompetence exposed;

Powell: “If what we see is a re-division of the world into competing
geopolitical and economic camps, and a reversal of globalization, that
sounds like lower productivity and lower growth. That’s a possible
outcome and probably a likely outcome.“

Welcome to depression, if not WW3.

Jojo

1 year ago

Perhaps this would be of help to Powell? Does anyone have his email address?

——–

Who Is to Blame for Inflation, 1-15

June 28, 2022

Barry Ritholtz

Who is to blame for the rampant inflation the United States (and the entire world) have been experiencing over the past 12 to 24 months? Which individuals and institutions can we hold accountable for the highest consumer price increases in 40 years?

A variety of people have been asking this question lately. The last time we saw an issue generating this much interest and confusion was when the country tried to understand who was to blame for the Great Financial Crisis (GFC). The approach I used in assigning blame for the 2008-09 financial crisis was based on the premise that the world is complex and ascertaining actual causation is a challenge.1 We can use the same approach to the causes of inflation.

People seem to like simple, binary answers to complex questions. Econ-Twitter will tell you “It’s the Fed’s fault; Blame Biden, no, it’s Trump’s fault.” But the world is a much more complicated place, not easily broken into clear black and white answers — at least, if you value accuracy. Over-simplified faultfinding is more suitable for ideological slogans that fit on bumper stickers than actual economic analysis.2

Prices change from moment to moment, but the factors that drive those changes can be years or even decades in the making. We tend to overlook this, caught up as we are in the here & now. The reality is many things have contributed to the current inflationary pressures.

Here are 15 or so drivers of rising prices, roughly in order. Most of the blame goes to those at the top of the list, the bottom of the list are very modest but real contributors:

Inflation Blame

1. Covid-19

2. Congress

3. President Biden CARES Act 3

4. President Trump CARES Acts 1+2

5. Consumers (overspent without regard to cost)

6. Consumers (shift to Goods)

7. Russian Invasion of Ukraine

8. Just in Time Delivery (supply chains)

9. Fed/Monetary Policy

10. Wages/Unemployment Insurance

11. Home Shortages

12. Semiconductors/Automobiles

13. Corporate Profit Seeking

14. Tax Cuts (2017) / Infrastructure (2022)

15. Crypto

Let’s delve into each of these:

…

link to ritholtz.com

Felix_Mish

1 year ago

Reply to Jojo

I dunno. If I were Powell … First I’d be familiar with Ritholtz and probably already know what his opinion would be. Second, I’d see that list and stop reading.

Causes of higher prices will distribute on a Pareto curve, roughly speaking. 2, 3, and 4 are vanishingly unlikely to be in their positions on this list. Why? They are US-specific things. Higher prices of many high-profile items (AKA “Inflation”) are not a US-only thing.

Hmmm. I’d think the CARES Acts (to the extent they are money-printing) would explain why the dollar has dropped relative to other currencies and prices have thereby dropped for many things outside the US, what with people now having more valuable cash in their pockets. … … … Oh. Wait. 🙂

worleyeoe

1 year ago

Reply to Jojo

I like your post. You should consider adding: Fed/Congress adopting Modern Monetary Theory

Deficits don’t matter and to tame rampant inflation, you’ve got to raise taxes. Brilliant!

Jojo

1 year ago

Reply to worleyeoe

I didn’t write the post. Follow the link to communicate with the author.

Jojo

1 year ago

Powell: “We understand better how little we understand about inflation”

Sounds like he is channeling Defense Secretary Donald Rumsfeld.

“…there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.”

Felix_Mish

1 year ago

This word, “inflation”, continues to be irritating. I’m old enough to remember when “inflation” meant there was too much money running around so people cranked up their prices, be it for widgets or work.

Now, “inflation” seems to cover at least 4 big things:

1) Lots of money running around. Too many printing presses working 24/7, that is.

2) De-globalization leading to more resources needed for many things to be made available, and some things no longer available at all, and some things only available further in the future than they could be.

3) Lack of people – or people ready, willing, and able – to do what is needed. Demographics. Training. Schooling.

4) Echos of the response to Covid affecting flows in many, many industries. Traffic jams that haven’t cleared, so to speak.

It’s unclear to me how the financial industry, Fed included, can do much good in #2, #3, and #4, though that industry could certainly make #4 worse.

Felix_Mish

1 year ago

Reply to Felix_Mish

I forgot a #5: Worldwide, people have gotten richer. At some point in that process, they start wanting new things in a big way. But, producers haven’t yet realized that people are no longer poor, so there’s a mismatch of product to wants.

Lisa_Hooker

1 year ago

Reply to Felix_Mish

There’s that. And the fact that some gotten richer folks woke up and said: “Maybe I’ve got enough and I don’t have to work anymore. Ever.” Relates strongly to #3.

Robbyrob

1 year ago

“If you can’t dazzle them with brilliance, baffle them with bullshit”

W.C. Fields

MPO45

1 year ago

Powell’s and the Fed’s problem is there doesn’t seem to be any connection to the demographic situation and thus the underlying root cause of the inflation problem: labor. Labor is needed to produce anything and everything and when it diminishes, the cost of labor is going to go only in one direction UP. I get the feeling they are using economic models from the 1960s and don’t understand that the planet has changed, way more people and demand for resources at all levels (energy, food, public services, etc).

Here is just ONE dimension to the problem written and explained very well on airline pilots.

link to pilotinstitute.com

The problem doesn’t stop with airline pilots, the same can be applied to nurses, teachers, doctors, oil drillers, geologists, lawyers, judicial employees, etc. The higher the skill level the worse the labor shortage problem. If you look at the pilot link, they have 0.3% unemployment. Wow! no wonder airlines are paying triple pay now.

The world is aging, the cheap labor in China is gone as they too have an aging problem. Japan ditto. Germany, yes getting too old. South Korea? check.

The only places with young labor is Africa and parts of Latin America both of which have little infrastructure to do what needs to be done. the rest is boomerville.

Sadly, the Fed thinks destroying the economy will return us to Leave it to Beaver times, lol. It won’t. There is no going back and there is no way to produce 60 million babies. It’s massive immigration or bust. Still waiting on those robots…

MPO45

1 year ago

Reply to MPO45

Gave wrong website. This one has the demographic breakdown and the unemployment for pilots is 0.93 not 0.03 but it’s still less than 1%. It’s been a late night of reading for my investment portfolio.

link to zippia.com

Lisa_Hooker

1 year ago

Reply to MPO45

That’s OK. Appears you just confused the unemployment rate and the interest rate at your bank.

Mish

1 year ago

Reply to MPO45

Powell mentioned demographics and the labor force perhaps at the same time he made this statement

“If what we see is a re-division of the world into competing geopolitical and economic camps, and a reversal of globalization, that sounds like lower productivity and lower growth. That’s a possible outcome and probably a likely outcome“

MPO45

1 year ago

Reply to Mish

If you read the pilot link, they note that the labor shortage began in 2016 and only grew worse. Covid and de-globilization only added to the problem. If neither had happened we would still have the same problem.

Everyone knows there are 60 million exiting the workforce + another 12 million that are already out (the boomer+ generation) so we will have 70 million or so demanding goods and services on the backs of those that can and do work.

This is the biggest crisis on the planet aside from trashing the planet, its not interest rates, recessions, wars, or the stock market. Its people being around to keep things going and there is HuGE infrastructure to maintain globally at all levels.

SleemoG

1 year ago

Reply to MPO45

Great comment, agree 100%.

Pontius

1 year ago

Reply to MPO45

Interesting related article on EY being fined $100M for enabling accountants to cheat on CPA exam. Just not enough young, capable, accountants out there to hire – so they reach. Assume/hope same mindset does not apply to the medical field.

Captain Ahab

1 year ago

Reply to Pontius

Rest assured that woke politics have ‘dumbed down’ ALL education. The US Army no longer requires a high school diploma.

MPO45

1 year ago

Reply to Pontius

The pilot links talks about increasing the pilot retiring age to 67, reducing education requirements, and flight time to solve the problem. Getting on a plane with a old uneducated and untrained pilot doesnt instill any confidence in flying with airlines.

Just sit back and watch plane crashes increase over the next decade. There will be consequences like this for every profession.

Lisa_Hooker

1 year ago

Reply to MPO45

Then there’s the old, uneducated and untrained airplane mechanics that keep the turbofans and avionics flying. Or not.

Captain Ahab

1 year ago

Reply to MPO45

I wonder if the real problem here isn’t about population as it is the percentage of people wanting to work (labor participation rate) and; just a guess, mind you; that Covid adversely affected the productivity of labor. Just a thought. I mean the average age of the population didn’t suddenly grow older in a year. If anything, old people died at a faster rate.

JackWebb

1 year ago

Reply to Captain Ahab

I think the unemployment numbers need to be taken with a grain of salt. Not because the Bureau of Labor Statistics is playing any games, but because the viroids made hash of participation, and maybe even the household and employer surveys. I dove into it a few months back, and thought that you really have to add 1.5% to the U-3 (headline) number. I have only medium confidence in that, and think that in any case we’ll soon see unemployment going up.

Keep in mind that employment lags, so I don’t think we’ll see that move much before Q4. But when it starts moving, watch out!

Lisa_Hooker

1 year ago

Reply to JackWebb

The Bureau of Labor Statistics is not playing games. They are simply lying by omission.

JackWebb

1 year ago

Reply to Lisa_Hooker

They’re not lying.

KidHorn

1 year ago

Reply to MPO45

India has young workers too. And they’re much better educated than Africans.

There will be a lot of layoffs coming later this year. Will help ease worker shortages.

KidHorn

1 year ago

Reply to MPO45

Many pilots left because they refused to take the vax. I couldn’t care less if the pilot of the plane was vaccinated or not.

Lisa_Hooker

1 year ago

Reply to MPO45

Wait MPO. Are you trying to tell me that we can’t simply hire two more women and get the baby in three months?

Maximus_Minimus

1 year ago

We knew before you even realized it, old fella.

Dean_70

1 year ago

Spoken like a true government employee. Notice I didn’t say government ‘worker’. We all know they don’t actually do any real work.

JackWebb

1 year ago

These people. How does one even start?!

Nuddernoitall

1 year ago

Powell: “If what we see is a re-division of the world into competing geopolitical and economic camps, and a reversal of globalization, that sounds like lower productivity and lower growth. That’s a possible outcome and probably a likely outcome”

Maybe a reversal of globalization would not lower productivity or lower growth. Does he know that for a fact? Maybe Powell is wrong here. Certainly, Powell has been incorrect before. Also wondering how long the Powell apology “mea culpa” tour goes on. How many cities and countries will he tour? How can I buy tickets? The Beatles may have been called the Fab Four, but Jerome Powell is the man that makes the financial industry Twist and Shout. Shake it Up Jerome!

JackWebb

1 year ago

Reply to Nuddernoitall

Fine, but do you have anything intelligent to say?

Felix_Mish

1 year ago

Reply to Nuddernoitall

“Maybe a reversal of globalization would not lower productivity or lower growth.“

Wanna bet?

Higher volume => lower prices is a simple way to put it.

At the small-size (super un-globalized) extreme, you, yourself, make everything you have; clothes, shelter, etc. How productive would you be? How much more would you make as time goes by?

At the large-size extreme, someone you’ve never heard of specializes only in designing the best plastic to make those little aglets at the ends of your shoe laces. Really cheap. Allowing you to make 10 million blue buttons every year for back pockets of medium sized, distressed denim, adult jeans. Each button, really cheap.

The line between those extremes won’t be straight, but it’ll be relentless. And you’d not want to bet against it.

Christoball

1 year ago

Reply to Nuddernoitall

So true. Cheap imports are a broken window economy. Products are destined for more frequent replacement. The stuff I have that was made in the 50’S and 60’S still works. America was a wonderful Single Continent Economy at one time.

Captain Ahab

1 year ago

Reply to Nuddernoitall

Have you dared to read The Wealth of Nations (Adam Smith)? Like the USA, it’s a little antiquated (published in 1776)

HippyDippy

1 year ago

When you look at the overall picture, the only logical conclusion is that all of this is on purpose. Are they idiots? Yes! But that doesn’t mean it’s not being done on purpose. It just means it’s an idiotic plan.

JackWebb

1 year ago

Reply to HippyDippy

I’m not sure these people are capable of planning a two-car funeral, let alone what you’re suggesting. Never, ever underestimate sheer stupidity and incompetence. Just because these jokers have power doesn’t mean they’re any good at using it.

Lisa_Hooker

1 year ago

Reply to JackWebb

They have enough experience to realize that nothing they do has much effect, same as you and me. So they just roll with it. The money and perks are great.

Siliconguy

1 year ago

“For years it’s been obvious the Fed does not understand inflation. The only thing shocking is Powell’s admission of the obvious.”

The first step in wisdom is admitting that you do know know. Although Powell’s statement is encouraging, I’m still not optimistic.

JackWebb

1 year ago

Reply to Siliconguy

I am a major believer in admitting ignorance. It’s on a bunch of my posts. I don’t expect officials to be oracles, but to have the chairman of the Federal Reserve say that he doesn’t understand inflation? I suppose I could salute the honesty, but I’d be a lot more respectful if he’d have then announced his resignation.

prumbly

1 year ago

It astonishes me how poor our leadership in the West has been and continues to be. Almost all the problems we are currently facing are own-goals – COVID (escaped from a lab and the massive over-reaction to the pandemic), energy crisis (overreaction to Russia-Ukraine border dispute and years of “green” policies), inflation (massive money printing and years of ridiculously low interest rates), the “climate crisis” that only exists in people’s heads…

The strangest for me has been Germany. I always thought of the Germans as being very logical, albeit in a plodding, unimaginative way. But then Fukishima happened and Germany panicked and started closing its nuclear power plants with no available alternatives. A word with a geologist would have told them that unlike Japan, Germany is not in an earthquake zone, and a glance at a map would have shown them that almost all Germany’s nuclear power stations are at least 40 miles from the coast and not vulnerable to a Tsunami. And today they are having a similar panic reaction to the Russia-Ukraine border dispute and their reliance on Russian natural gas. It really is a kind of madness. I guess their absurd “Energiewende” should have been a clue that they’ve lost the plot.

radar

1 year ago

Reply to prumbly

Seems the world has become a bunch of children that never grew up.

JackWebb

1 year ago

Reply to prumbly

First, this German-American second generation would like you to understand Germans. Here in the U.S., it took until the mid-20th century to start to unclench. Over there, my visits tell me they have a long ways to go. Germans are so tightly constrained that they are incredibly civilized and productive, until they go nuts. Second, look on the bright side. That war with the Frogs in the 1800s. Two world wars, Onkel Adolf. This time, at least they’re destroying themselves. Count yer blessings. Trust me, it could be worse. LOL

Captain Ahab

1 year ago

Reply to JackWebb

Bring back Berlin of the 1920s!

Lisa_Hooker

1 year ago

Reply to Captain Ahab

Or San Francisco of 1966-67.

Maximus_Minimus

1 year ago

Reply to prumbly

Boxed in from the cradle, divergence from the established thinking verboten.

Need an established philosopher to figure out what to others take a blink of imagination.

Dichtschaedels is our strength.

JackWebb

1 year ago

Reply to Maximus_Minimus

I took German in high school, but that’s a looooong time ago. Here in America, that knowledge pretty much died on the vine with me for lack of daily practice. So I had to look up the word, and the translation came back as “sealing ropes,” which makes no sense in this context. So what does it mean? I do enjoy my bouts of schadenfreude. LOL

Maximus_Minimus

1 year ago

Reply to JackWebb

Thick skulls.

Jojo

1 year ago

Reply to prumbly

Sure, Russian and Chinese leadership is far better, yes? [lol]

Captain Ahab

1 year ago

Reply to prumbly

Germany exterminated its brightest citizens, and exported most of the rest. The US is doing much the same, but by different means with a lousy education system, mediocre media, and Facebook for all. Flabby bodies and flabby minds do not achieve much.

Jojo

1 year ago

Reply to Captain Ahab

Many of Russia’s brightest have bailed on the country and Pootin.

KidHorn

1 year ago

Reply to prumbly

I think Germany is still scarred from the two world wars. They do too much to be a good world citizen.

Powell: “We understand better how little we understand about inflation”

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