The Federal Reserve: Love it or Hate it

[Copernicus]

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your arguments are getting much weaker.. <font color="red"> your lack of ability to understand them doesnt make them weak </font>

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Because it was. The "gold gurus" have been touting it for 30 years, they finally got it right. Since their analysis were wrong for so long, clearly they were missing some aspect of the gold market and whatever they were missing changed. Thats why its speculation.

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what gold gurus? what are you talking about? wtf does this have to do with anything? <font color="red"> it has to do with your inference that the run up in gold the last few years was somehow predictable and a "good investment" a priori. When you continually throw darts at a dart board you'll eventually hit the bulls eye. That doesnt mean your aim has gotten any better. </font>

people having been saying the fed is great for a hundred years but the record shows theyve done negative things along the way, therefore you're wrong. Cool? <font color="red"> im not sure whether you are making this statement or being sarcastic about someone elses, or perhaps Im misunderstanding it altogether. It makes no sense as a serious statement.</font>

Also, are you saying that one event cant be deemed more likely to occur than another event through analysis? <font color="red"> No, Im saying that when the events you are talking about are investments where you have no information that the market doesnt have, no one has been consistently +EV.</font> Who cares if its speculation or not - thats obvious? You speculate when you play poker but that doesn't mean you cant make money as a player. <font color="red"> No but it means that if you can't you shouldn't play. </font>

Further what kind of investing is NOT speculation? i really dont see why this is relevant. <font color="red">Once again the issue isnt whether it is speculation, its whether you can speculate profitably. Hedged investing and indexed investing with long timr horizons have proven to be profitable...one that requires expertise, and one that doesnt. Naked commodities investing, market timing, fundamental analysis etc have demonstrated for decades that they are not profitable </font>
You seem to be saying you are just as good placing random bets as you're from economic analysis tied to prediction? <font color="red"> after transaction costs and over the long term yes. Im not the one saying it, decades of tracking investment professionals says it </font>

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if you want to make a case the US standard of living has gone down, be my guest. You havent done it yet.

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How bout not answering a question with a question. Also why the hell would i try do that when i never made any statement regarding the US standard of living other than if anything that its over inflated? WTF does this have to do with anything that we're discussing? We're talking about the pros and cons of monetary policy. Or at least thats what ive been talking about. <font color="red">you started the discussion about CPI and the relative values of currencies. I guess I wasnt clear enough. All of that amounts to statistical games if the standard of living has continued to improve </font>

If im just not understanding the relation then please spell out it to me like a baby.

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it started from the bull market and increases in real wealth and demand exceeding supply, just like any other market.

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If demand exceeds supply prices rise. Has demand changed since or is that people were given loans who never should have gotten any? <font color="red"> both. If there were no lack of demand currently then the quality of loans would be irrelevant, because the borrower could sell his way out of unaffordable debt. conversely the seemingly endless demand led to relaxing of loan standards. the level of defaults that have actually occurred is miniscule with regard to the total mortgage market. The reaction to date has been way overblown. </font>

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That in turn, as it has in every real estate boom in the past, invites highly leveraged speculators into the market and some of them always get caught. The actual subprime market defaults are concentrated with the speculators and flippers, not primary residences

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What invited the speculators were overtly and artificially low interest rates. <font color="red"> no, demand and low interest rates resulting from a non-inflationary economy invited the speculators </font> Even right now the only reason the fed will not fight inflation is because they're continuing to keep interest rates as low as they can to help the housing market. <font color="red">do you even follow the Feds interest rate movements? If anything they were raised too quickly for the level of inflation shown and they dampened economic growth </font>

People in that market are calling for cuts still. <font color="red"> cool you got one right. Of course virtually everyone is calling for cuts still, so that wasnt exactly a brilliant observation </font>

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you tell me. What were the spending that resulted in the deficits (which, by the way, are on their way down and projected to surpluses in 4 years or so).

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its a number of things. way too many to list off. Im really not concerned with which party did what though. Neither of them are fiscal conservatives.

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when you dismissed my comment about the reasons the dollar has tough times ahead and listed policy issues, clearly implying the Dems would be better.

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Thats a stretch. Im saying Dems and Repubs will both screw it up. You say only one of the two will. <font color="red"> No, I said the candidates have made it clear that one of the two will definitely be worse. </font> Therefore you should benefit against betting with me in favor of the dollar, since im speculating that its more likely to fail than you are.

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No question somebody with solid grounding in fiscal and monetary policy would be beneficial. Ron Paul isnt it except for tax policy, where he has nothing over the other Republicans. There are clearly no Dems who are, because none of them that I know of are talking about tax cuts or even maintaining current tax levels.

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Ron Paul has nothing over the Repubs for tax policy? I also said specifically we need someone hawkish, not just with a solid grounding in monetary policy.

Mike Gravel wants to abolish IRS and supports tax cuts i believe. Richardson ive also heard was a fiscally conservative governor but never looked at the record myself.

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Uhhh maybe because theyve been increased substantially over the last few years and we are in a non-inflationary economy? If anything you'll see interest rate cuts soon, which I already pointed out is dangerous in combination with the increased liquidity and needs to watched closely.

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Do yourself a favor and read any of the recent fed statements. If you disagree with the fed and support them there must be some contradiction.

From recent fed statement which was the least hawkish of all just because so many were expecting immediate bail outs:

"Although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the outlook for both inflation and economic growth, as implied by incoming information."


So you think inflation has already been weeded out and is not a concern, but the fed disagrees with you. If anything they'll bail out the markets at the at the cost of further inflation. Interest rate cuts will not come because of a strong economy. They will come to bail out the economy at the expense of the currency.

As of now the fed's primary bias, even among all this turmoil, is still inflation. <font color="red"> nothing youve said here disagrees with anything Ive said, other than the opinion of many that the Fed has been too conservative with regard to the threat of inflation. </font>

If the economy was non-inflationary why do you see interest rate cuts as dangerous? <font color="red">I said interest rate cuts in combination with the expansion of the monetary supply are dangerous. DUCY? </font>

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Its better than the alternatives as dcifr has clearly explained.

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not its not as Ludwig von Mises and followers clearly explained. Where is dcifr's proof of this btw? <font color="red">LvM, lmao. If Austrian economics was demonstrably better it would be the prevailing theory. It isnt, its not. </font>

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further manipulations are often the best opportunities to make money because they cant manipulate forever and you can exploit the manipulations too in a variety of ways. back to the craps table

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lol. i dont even have time to go over this one.
<font color="red"> perhaps I didnt explain clearly enough. If you arent one of the manipulators you are simply guessing at when to get in or out of a market. A perfect example is the Hunt brothers manipulation of the silver market. A lot of people made money on the way up, but if they didnt bailout in advance of the bottom falling out (or got in to late) poof they were gone. Put another way, speculation in commodities or any other market where long term profits arent driven by real growth in value of the investment is a zero sum game, and a negative sum game after transaction costs. </font>
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which is precisely what I do, other than the few times when I eliminate risk by moving out of the market altogether, such as when the Dow was in the 13900s, and I will do again when the primaries start to shake out and before the Democratic risk premium is fully priced in.

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i wasnt asking about your portfolio. I was asking why you were using that as an excuse to avoid committing to a bet. <font color="red"> you really are f$%^ing dense, arent you? </font>

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What part of "I don't speculate" don't you understand?

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Do you have any cash? Do you have any stock? You are speculating. Get over it.

[/ QUOTE ] <font color="red">Perhaps after re-explaining it to you once again youve come to understand the difference between naked speculation and consistently profitable investing. </font>