Deflation Flirts With America

[Ken Barrows]

Don’t you mean labor participation at a historic LOW?

[rapier]

The perfect thing would be higher rates and QE.

I’m agnostic on anyone’s desire for higher rates. Sure IM could be right. I just think the banking giants and the worlds 1% want QE to help asset prices, to hell with bank profits. Who needs profits now-days anyway? Amazon doesn’t need them and they are the darling of a whole new generation of so called intellectuals who focus on economics.

https://www.slate.com/articles/business/moneybox/2014/10/amazon_isn_t_the_problem_with_capitalism_it_s_the_solution_to_our_economic.html

And what about the near trillion US corporations are going to spend on their own stocks this year? What about Yellen’s remarks about poor people building assets?
https://www.federalreserve.gov/newsevents/speech/yellen20140918a.htm
The idea that asset inflation builds wealth is not just a fashion now it is doctrine. So I think more QE will come and everyone will know why, to boost asset prices and all the important people will cheer.

[Professorlocknload]

The Fed QE’s, by whatever name you want to pin on it, until every new dollar it creates results in zero GDP increase.

An no, it can’t force folks to spend on frivolous stuff, but it can sure force ’em to spend more on necessities. A lot more! The process is currency devaluation. The result, sans productivity growth, is called Stagflation. Or, in it’s advanced stage, an Inflationary Depression. The worse kind. Like in Venezuela, et al.

Watch for ever more, and obviously increasing Supply Chain disruptions for clues.

In word clouds, look for words like “Shortage” and “Bottleneck” to stand out in media headlines.

[Greenpa]

I almost emailed you that link a couple days ago; there it was; right on the front page of the NYT – the word “Deflation”, in a serious context. It’s always been ridicule before. ho ho.

[Raleigh]

rapier – why are you agnostic? Without QE, rates would have been much, much higher. Most of the people making money for the last five years would have been living out of a box if they weren’t bailed out; their assets would have been sold off for cents on the dollar. QE added so much liquidity that the world is sloshing in it – well, at least part of the world, the 1%. Then they used that money to prop up the assets. And let’s not even talk about all of the leverage. It’s all been artificial, and yet the profits these guys got to keep aren’t. They’ve booked them, at least a lot of them. “Yay, profits from nothing, something for nothing. It doesn’t get better than this.”

I’m having a hard time reconciling how anyone could be agnostic about what has occurred.

[Author]

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