Are all the answers different now?

Trading Discussion News and Economy
#1

There is an old joke about … the Ph.D. economist who returns to his university for
his class’s 50th reunion.

He asks if he can see the most recent Ph.D. generals exam. After awhile it is brought to him.
He reads it carefully, looking perplexed, and then says,

“But this is exactly the same as the exam I wrote over 50 years ago.”

“Ah yes,” says the professor. “It is the same, but all the answers are different.”

Stanley Fischer, in the introductory remarks to his speech
[I][B]Reflections on macroeconomics then and now[/B][/I]
Washington, D.C., March 7, 2016

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Stanley Fischer’s speech
(for serious students of fundamentals)

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#2

50 years ago we went from silver coins to the worthless tokens we have today. Our currency still had -some- gold backing. Derivatives, as we know them today, were 30 years in the future. So, yes, all the rules have changed. There is a rule that will never change, however, THIS TOO SHALL PASS.

#3

This book, which I heard mentioned yesterday by John o’Donnell on the Power Trading Radio show, is one that I would like to share:

https://www.google.co.uk/url?sa=t&source=web&rct=j&url=https%3A%2F%2Fmises.org%2Fsites%2Fdefault%2Ffiles%2FWhat%20Has%20Government%20Done%20to%20Our%20Money_3.pdf&ved=0ahUKEwjV5K2O-vDLAhUDQBQKHZL0BQ8QFggaMAA&usg=AFQjCNH_HqmmNZmRYrBJuqjKF92IoN5pwg&sig2=bg575ndAe29rXQ_Y7p7wJA

That is the direct .pdf download link to M. Rothbard’s 1963 volume: ‘What did government do to our money?’…

Just the sort of bed-time reading I was looking for :slight_smile:

#4

I just love how Yellen touts that the FED and their “mandate” are not politicized, yet they blatantly choose to overlook the facts that QE has done more harm than good, and that the US economy is in major trouble right now (which would go against the Obama administration’s narrative). For how long have we maintained their 2% inflationary target (as if rising prices were a [B]good thing[/B] on the avg consumer) and sub 5% unemployment, yet they continually balk on moving rates.

The 25BP hike was nothing more than a mere test to see how the market would react. And, look what happened. We saw the worst start to ANY year in the history of trading in JAN/FEB. The FED is in the corner and the world is waking up to the false recovery. Sure, NFP #'s look great- but, on average, how many of those jobs are low-wage, part-time ? Joe Schmo loses his 90K salary, and takes 2 part-time jobs making 60K total. This is not a recovery- it’s a rally that was fueled on cheap money and the FEDs balance sheet.

If the economy is where Obama and Yellen say it is, then why was MAR not a live meeting? Yellen claimed that literally nothing had changed (in terms of economic indicators) from the meeting prior to hiking 25BP, yet, we’re still sitting @ that same level. Yellen will do what she can to tow the Obama party-line to ensure that Hilary can get in and further their efforts to destroy this nation.

#5

We must not forget, also, that unlike the RBNZ, for example, where the Governor makes the decision on rates, for the Federal Reserve Bank of America it is the FOMC which makes the decision, not the Chair…so, even if Yellen had a divergent view from the FOMC, it would matter little… It was wrong of the markets to read so much into her speech the other day, exactly for this reason…

I agree with Forexunlimited about the frustratingly slow progess on ‘the tightening’; indeed, a number of journalists at the March rate decision press conference with Yellen seemed irritated by the FOMC’s reluctance to keep moving on rate hikes, wondering why all the pusillanimous caution when data keeps suggesting that ‘the markets’ have had plenty of time to adjust to ‘the tightening’ initiated under the last months of Bernanke’s leadership and continued in Yellen’s own…

I also agree with Jake (Forexunlimited) that there is a political issue here, in that the presidential elections are in full swing and it is a dangerous game to be rocking the boat too much, especially as the Fed has been repeatedly coming under pressure to be further scrutinied by the Senate and House of Representatives, which it has so far managed to avoid by providing as much transparency in its meeting minutes and forward guidance - certainly, if you compare this Fed to that of smoky-roomed, closed-doored Greenspan years, it is miles ahead in terms of transparency.

We also, finally, forget that IT IS NOT A CENTRAL BANK’S JOB TO CREATE EMPLOYMENT OR WAGE GROWTH: it is the government’s job to do so, therefore instead of blaming Yellen or Bernanke we should look at what Obama or Bush Jr. have done to create those jobs and grow the real economy…

:slight_smile:

#6

It’s not the government’s job to create employment. (Directly ;), that is)
It’s the government’s job to foster an environment where individuals and businesses can compete.

High corporate and individual taxes (amongst other things- such as a high minimum wage level mandated by govt) do nothing but stifle job growth and force multi-national corps to flee the country and small business to fail.

#7

Indeed!

I vote Jake for president!!! :slight_smile:

#8

I’m willing to sign his nomination-papers as a “seconder” on the grounds that he’ll clearly be better than The Donald.

#9

Trump’s ancestral homeland bewildered by his presidential campaign - CBS News

#10

Look, it’s prob going to come down to Trump or Clinton. From a purely economic standpoint, I feel Trump would actually be able to right this ship. Clinton will further the Obama agenda and Keynesian principles. Unfortunately, I also think the US Economy is due for an event that will be 2x “as bad” as the GFC in 08. Trump would be the perfect fall-man to usher in, pull the plug, blame, then implant another DEM for 8 more years.

#11

One thing to remember is that we may like to think that all politicians are untrustworthy or hopeless, in our cynical cerebellum, and yet there is much worth in sobriety: having to choose between two politicians like Clinton (H.) and Trump, or Obama and Bush Jr., of course you should choose Clinton (H.) or Obama…

Why?

Because diplomacy is vital in world politics, in international negotiations, in personal relationships between national leaders, etc.

I can put my hand on my heart when i talk about the damage that Berlusconi did to my country, and although he was preceded and followed by equally incompetent politicians, he inflicted even greater damage on Italy by his shenanigans, on and off the tv screen…

When someone like Bush Jr. could not string three words together in international consortia, how credible would America come off?

I know that ‘money speaks its own language’, and that world leaders will put up with other leaders, regardless of personal sympathy or respect, when big trade deals are at stake; however, I still think that
the personal charisma of a leader like Obama, versus someone like Bush Jr., or of Pope Francesco versus Pope Ratzinger (for the Catholic Church), really can make a difference…

#12

I see what you’re saying, and thanks for providing a unique “outside-of-the-US” perspective.

Personally, I think the whole idea of having a “President” is pretty archaic, and simply doesn’t work. It was a way of amassing power for your party, which then trickled down to favorable legislation, etc etc. The [B]internet [/B]exposed the frailty of this system and how easily human beings can become corrupted.

#13

That is a fair point… With so much scrutiny, the mystique of presidential power has somewhat been diluted…