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Thread: The Fed lost control

  1. #71

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    Quote Originally Posted by oak333 View Post
    What is wrong with the easy money experiment.
    ------------------------------------------------------

    This is a very important video. Jim Grant, a high class economist, takes the
    interview of Bill White, a great economist, who worked 50 years in central banking

    There are many aspects discussed here but I will mention (for the time being) just one:
    "what is the mistake of the central bankers."

    It is video # 2 on this site:

    https://www.dollarcollapse.com/top-t...eos-january-3/

    Quotes.

    Central Bankers are super-intelligent people, who want to do good.
    What is wrong then, with so many financial troubles ?

    The answer is that their error is not even an economic error. It is
    actually a philosophycal error. Their analytical framework is wrong.

    They start with the wrong assumption: the global economic system is
    comprehensible, understandable....and controllable. It is not.

    The truth is that the economy is a huge complex, adaptive system.It has
    unintended consequences, which cannot be modelled.

    The economic system does not tend to equilibrium all the time. It is
    highly non-linear . Real bad things can happen. The dynamic , stochastic,
    equilibrium model , used by central banking, does not work.

    The truth is "nobody knows anything."

    The butterfly effect

  2. #72

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    Quote Originally Posted by brutus2 View Post
    The butterfly effect
    Are we almost out of the cocoon stage?

    Small business is the incubator of employment. As it declines, so too do opportunities for first jobs, second chances and economic independence.

  3. #73

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    Quote Originally Posted by Westerner View Post
    Are we almost out of the cocoon stage?

    Will have to ask Mr Lorenz


    In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. The term butterfly effect is closely associated with the work of Edward Lorenz.

  4. #74

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    Quote Originally Posted by brutus2 View Post
    Will have to ask Mr Lorenz


    In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state. The term butterfly effect is closely associated with the work of Edward Lorenz.
    Right.

    Was thinking what will we then become a ugly dragonfly/moth or a monarch,? And how soon. Funny, got to laugh about it cause it's all down hill from a real market/fed pos dollar crash.

    IDK!
    Small business is the incubator of employment. As it declines, so too do opportunities for first jobs, second chances and economic independence.

  5. #75

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    Quote Originally Posted by Westerner View Post
    Right.

    Was thinking what will we then become a ugly dragonfly/moth or a monarch,? And how soon. Funny, got to laugh about it cause it's all down hill from a real market/fed pos dollar crash.

    IDK!
    The future is always uncertain so perhaps we get the Monarch this year for us common folk.

  6. #76
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    The estimated cost of Covid-19 in USA: 16.2 trillion $

    https://www.visualcapitalist.com/put...n-perspective/

  7. #77
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    The Fed wants to stimulate the economy. The massive QE has failed (so far !)
    to stimulate the economy.

    The Fed crammed the throats of the banks with money, thinking the banks
    will lend more for economic development. However, the lending did not keep
    up with the QE money.

    See charts below:
    https://mishtalk.com/economics/the-f...the-fed-failed

    Why ? There is not so much demand for loans. Banks are largely out of the mortgage business.

  8. #78

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    Quote Originally Posted by oak333 View Post
    The Fed wants to stimulate the economy. The massive QE has failed (so far !)
    to stimulate the economy.

    The Fed crammed the throats of the banks with money, thinking the banks
    will lend more for economic development. However, the lending did not keep
    up with the QE money.

    See charts below:
    https://mishtalk.com/economics/the-f...the-fed-failed

    Why ? There is not so much demand for loans. Banks are largely out of the mortgage business.
    At times, it may be more productive to watch what they do & not listen to what they say.
    They crammed money down the throats of the banks - true
    They were thinking that the banks would lend? I'm not as confident in this being the actual case. An excuse is not always a reason.

    As for the broader question of the Fed loosing control, I think that there are many more forces working in unison right now, then is being advertised. Lock downs & forced business closures certainly have an economic effect. That would seem to be a tool for economic management that is not officially acknowledged at this time. Preventing people from working & then keeping them alive on stimulus checks certainly has the ability to influence their spending behavior. There is more to this story than we are being encouraged to look at.

  9. #79
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    F.A.Hayek stated what is now the obvious to some but still not understood (or unconcerned about) by others. Price Discovery resolves itself in the marketplace and a free market, in kind resolves itself. Government intervention cannot resolve this as there are too many variables undeterminable by too many bureaucrats who don't have either the competency or concern - or (more likely, both).

    Plus, what we think we are "gaining" in our lifestyles and achievements is being off-set (lost) due to the ability for our adversaries and enemies to do the same (Modern Monetary Theory) as we......only, "they", may be doing it better. Incompetency applies to standards. Authoritarian intention has only one standard -Power.

    Chickens have ways of coming home to roost.
    Who are the righteous? ....Markpti

    What value did Burisma think to gain by hiring Hunter Biden as a Board member vs ALL other choices?

    Those who cannot articulate the other argument do not fully understand their own argument.

    "Much can be done by wise legislation and by resolute enforcement of the law. But still much more must be done
    by steady training of the individual - in conscience and character...." .......T. Roosevelt

  10. #80
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    The FED has many tools in its arsenal. Here you have them:

    https://www.yahoo.com/now/glossary-f...120337473.html

    It is much more than than QE, REPO, and low rates.

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