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Yellen Says Fed Can Bring Down Inflation Without Causing Recession (yahoo.com) 72
Posted by msmash on Thursday May 12, 2022 @11:06AM from the how-about-that dept.
U.S. Treasury Secretary Janet Yellen said that she believes the Federal Reserve can bring down inflation without causing a recession because of a strong U.S. job market and household balance sheets, low debt costs and a strong banking sector. From a report:
Yellen told a U.S. House of Representatives Financial Services Committee hearing on Thursday that "all of those things suggest that the Fed has a path to bring down inflation without causing a recession, and I know it will be their objective to try to accomplish that."
https://news.slashdot.org/story/22/05/1 ... -recession

Inflation is a global issue and the US can no more solve it than they can solve global climate change. World central banks printed $27.6 trillion in counterfeit money and injected it into the world economy to keep the house of cards from collapsing. Who is going to buy this debt from the banks to rein in inflation?? Former Fed chair, Ben Bernanke, sees ‘stagflation’ ahead.

MonteQuest wrote:Inflation is a global issue and the US can no more solve it than they can solve global climate change. World central banks printed $27.6 trillion in counterfeit money and injected it into the world economy to keep the house of cards from collapsing. Who is going to buy this debt from the banks to rein in inflation?? Former Fed chair, Ben Bernanke, sees ‘stagflation’ ahead.

Sounds similar to what happened with global peak oil in 1979.

MonteQuest wrote:Inflation is a global issue and the US can no more solve it than they can solve global climate change. World central banks printed $27.6 trillion in counterfeit money and injected it into the world economy to keep the house of cards from collapsing. Who is going to buy this debt from the banks to rein in inflation?? Former Fed chair, Ben Bernanke, sees ‘stagflation’ ahead.

Welcome back! Missed you, how is life?

Peace

MonteQuest wrote:Inflation is a global issue and the US can no more solve it …...

Of course the US can solve inflation. The US previously knocked down much worse inflation then we have now by raising interest rates enough to cause a recession.

In fact, the FED is raising interest rates right now for exactly the same reason. If the FED doesn’t lose its nerve, look for higher interest rates and a recession to happen in the immediate future, followed by lower inflation.

Cheers!

AdamB wrote:

MonteQuest wrote:Inflation is a global issue and the US can no more solve it than they can solve global climate change. World central banks printed $27.6 trillion in counterfeit money and injected it into the world economy to keep the house of cards from collapsing. Who is going to buy this debt from the banks to rein in inflation?? Former Fed chair, Ben Bernanke, sees ‘stagflation’ ahead.

Sounds similar to what happened with global peak oil in 1979.

You're baiting him?

Of course the US can solve inflation. The US previously knocked down much worse inflation then we have now by raising interest rates enough to cause a recession.

I don't think the recession was caused by raising interest rates. The recession would have happened anyway, but the options were recession with or without hyperinflation, so the choice was without.

Monte, glad to see you here again. I remember my first post here was in response to one of your posts, and asking about your opinion. I used to think you went overboard on some issues (and got chucked out as a moderator at one point for being opinionated). But that was before... well, before whatever the hell has happened to the Internet. And the world at large. Including this forum. Nice to see a familiar person.

Plantagenet wrote:

MonteQuest wrote:Inflation is a global issue and the US can no more solve it …...

Of course the US can solve inflation. The US previously knocked down much worse inflation then we have now by raising interest rates enough to cause a recession.

In fact, the FED is raising interest rates right now for exactly the same reason. If the FED doesn’t lose its nerve, look for higher interest rates and a recession to happen in the immediate future, followed by lower inflation.

Cheers!

What about DEFLATION? I would love deflation. It seems the natural order of things, or should be.

Peace

The Fed target is steady year over year ca. 2-2.5% inflation….which we had for the last two decades or so.

Unfortunately, everything changed once BIden became President. Now we’ve got 8+% inflation, a war in Europe, more waves of Covid Pandemic coming but without masking or shut down mandates from the government so the death toll has now gone over 1,000,000 with no end in sight, food shortages, supply chain blockages, the highest gas prices ever, stock market collapse, crypto sell-off, and a recession likely coming very soon. And the President is a senile old fool who always seems to make the wrong decision.

Wow! These are very interesting times.

Good luck to you.

Cheers!

careinke wrote:

Plantagenet wrote:

MonteQuest wrote:Inflation is a global issue and the US can no more solve it …...

Of course the US can solve inflation. The US previously knocked down much worse inflation then we have now by raising interest rates enough to cause a recession.

In fact, the FED is raising interest rates right now for exactly the same reason. If the FED doesn’t lose its nerve, look for higher interest rates and a recession to happen in the immediate future, followed by lower inflation.

Cheers!

What about DEFLATION? I would love deflation. It seems the natural order of things, or should be.

Peace

Indeed the big dirty secret is before 1913 when the Creature from Jekyll Island was created the USA had a remarkably stable currency. Every inflationary period was matched with an equal value deflationary cycle. However since the creature was created and set loose we have had nearly constant inflation with no matching deflation and the value of the dollar has been eroding in fits and starts with some steady grinding periods and some brutal high periods for 110 years now.

It is a real shame only historians learn these facts, you would think it should be front and center of every economics class everywhere and for always.

careinke wrote:

Plantagenet wrote:

MonteQuest wrote:Inflation is a global issue and the US can no more solve it …...

Of course the US can solve inflation. The US previously knocked down much worse inflation then we have now by raising interest rates enough to cause a recession.

In fact, the FED is raising interest rates right now for exactly the same reason. If the FED doesn’t lose its nerve, look for higher interest rates and a recession to happen in the immediate future, followed by lower inflation.

Cheers!

What about DEFLATION? I would love deflation. It seems the natural order of things, or should be.

Peace

The Fed hates deflation. They think deflation causes economic instability, is inconsistent with decent economic growth, etc.

As a saver, I think modest deflation would be great IF it were consistent with decent economic growth, but TPTB aren't on board with that. Since I'm not an economist, and don't pretend to be, unlike the various usual suspects around here, I presume they know far more about it than various random internet discussions, given the Fed is made up of top tier professional economists.

This is apparently also why a gold standard supposedly won't work -- it will cause ongoing deflation according to economists.

I'm not making any of this up -- google it. I did to double check my memory and got lots of credible looking hits.

Progressive D in New York says inflation is a good thing because it will force Americans to change their diets and eat less meat and more fake meat and insects and things like that.....

new-york-times-op-ed-applauds-inflation-means-enforce-green-diet


I don't care how much inflation Biden and the Ds throw at us......I ain't switching to eating insects. NO WAY!

If Biden and the Ds want people to eat less meat and more insects, then I wish Biden would ask the White House chef to serve him less meat and more insects. It would only be fair since he is responsible for triggering off the inflation in food prices that is hurting average Americans.

Cheers!

US citizens savings rate is now down to something like 4%- where it was in 2008 before the crash. People are not cutting back much on their lifestyle- restaurant sales are still booming. But people are dipping into their savings to keep their lifestyle going (and borrowing massively). This can't go on.

I do not understand borrowing money to eat at a restaurant. I was raised by a depression era survivor and we grew up poor. I save a lot and rarely treat myself.

C8 wrote:US citizens savings rate is now down to something like 4%- where it was in 2008 before the crash. People are not cutting back much on their lifestyle- restaurant sales are still booming. But people are dipping into their savings to keep their lifestyle going (and borrowing massively). This can't go on.

I do not understand borrowing money to eat at a restaurant. I was raised by a depression era survivor and we grew up poor. I save a lot and rarely treat myself.

I agree 100%.

And when most people use up all their savings they still keep spending.....they just put the spending on their credit cards.

As a result, US credit card is now just about at an all time high.....

consumer-credit-card-debt-near-an-all-time-high

The Biden people keep saying how great the economy is....and maybe it is great for them and their rich friends.....

But average people are really being hurt by the high fuel costs, high food costs, high interest rates, high housing costs, and and high everything else costs.

Janet Yellen just broke with the party line in the White House and personally blamed Biden for the High inflation we are seeing.

AND Elon Musk just said he had a really bad feeling about the economy going forward.....

I'm getting the same bad feeling....


I predict we're going to see a Biden recession before too much longer.

CHEERS!

C8 wrote:US citizens savings rate is now down to something like 4%- where it was in 2008 before the crash. People are not cutting back much on their lifestyle- restaurant sales are still booming. But people are dipping into their savings to keep their lifestyle going (and borrowing massively). This can't go on.

I do not understand borrowing money to eat at a restaurant. I was raised by a depression era survivor and we grew up poor. I save a lot and rarely treat myself.

I spent $400+ in a restaurant yesterday, something I very rarely do. It did come from my savings, though. I have never borrowed money to pay a restaurant bill, and never will. I do not have any debts of any kind, not even a dollar; my grandpa taught me better. We invited a couple we are friends with to celebrate the wife's birthday. We went to a Brazilian style, all you can eat, "Espeto Corrido" BBQ place. The bill included a bottle of French Champagne. The place was absolutely packed!

Most people in the USA buy almost everything on credit, cars, houses, boats, TVs, vacations, etc.