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Do we need a Fed Chair Interpreter?

fairsheet

Senator
Remember Garret Morris's "interpeter for the hard of hearing" on SNL? or, that funky dude who did the sign language at Mandela's funeral? I just listened to a half hour of Fed Chair Janet Yellen. And in her defense, that's more than I listened to Greenspan and Bernanke, combined!

Now I am sufficiently literate with respect to her particular "lagnuage", to've picked up that she WAS answering the questions that were being put to her. And considering how much detail she was providing, she really didn't seem to be wasting too many words.

But.....holy shit! Listening to, and keeping up these types' droning on and on, is exhausting! I'm certain that a skilled "interpreter for we rabble" could've condensed each of her 5 minute answers down to about 3 or 4 sentences.

In case you're wondering by the way, apparently one of our bigger "issues" right now, is our LACK of inflation.
 
Remember Garret Morris's "interpeter for the hard of hearing" on SNL? or, that funky dude who did the sign language at Mandela's funeral? I just listened to a half hour of Fed Chair Janet Yellen. And in her defense, that's more than I listened to Greenspan and Bernanke, combined!

Now I am sufficiently literate with respect to her particular "lagnuage", to've picked up that she WAS answering the questions that were being put to her. And considering how much detail she was providing, she really didn't seem to be wasting too many words.

But.....holy shit! Listening to, and keeping up these types' droning on and on, is exhausting! I'm certain that a skilled "interpreter for we rabble" could've condensed each of her 5 minute answers down to about 3 or 4 sentences.

In case you're wondering by the way, apparently one of our bigger "issues" right now, is our LACK of inflation.
True. The inflation monster has not shown up for a long time has it? The sad truth is that monetary policy for the USA really has very little to do with inflation. In a world where almost anything can be bought on a global market that is running at under capacity, how exactly does money influence pricing especially since most of the money created by the Fed has been going to protect balance sheets? Yellen may end up being the first Fed chairman to start fully grasping the essence of fiat money and global markets. Unless some critical commodity like oil, energy, water or food suffers some form of shortage or artificial restriction (monopoly power), I really don't see how inflation could ever start roaring back in our lifetimes. Think about it for a second. What drives prices upwards? The answer is not that easy to define.
 

fairsheet

Senator
True. The inflation monster has not shown up for a long time has it? The sad truth is that monetary policy for the USA really has very little to do with inflation. In a world where almost anything can be bought on a global market that is running at under capacity, how exactly does money influence pricing especially since most of the money created by the Fed has been going to protect balance sheets? Yellen may end up being the first Fed chairman to start fully grasping the essence of fiat money and global markets. Unless some critical commodity like oil, energy, water or food suffers some form of shortage or artificial restriction (monopoly power), I really don't see how inflation could ever start roaring back in our lifetimes. Think about it for a second. What drives prices upwards? The answer is not that easy to define.
I guess what struck me most listening to her, is the realization that we might (I say might. I don't enough about any of this.) actually be in a position of needing a little more inflation. And on top of that, an institution like the Fed may actually have the power to ingender a bit of inflation.

That's is SO backwards from what's been our conventional wisdom - that less inflation must be our goal and it's the Fed's job to "fight" inflation.
 
I guess what struck me most listening to her, is the realization that we might (I say might. I don't enough about any of this.) actually be in a position of needing a little more inflation. And on top of that, an institution like the Fed may actually have the power to ingender a bit of inflation.

That's is SO backwards from what's been our conventional wisdom - that less inflation must be our goal and it's the Fed's job to "fight" inflation.
You are right because since the 70's, bankers have been scared to death of inflation. As some have pointed out, inflation forecasts by the FED have all been wrong on the high side for decades yet they still keep fretting about it. While runaway inflation is to be feared, how exactly will it happen via monetary policy? We have been increasing the money supply by trillions for decades and inflation is pretty stable or negative in some cases. This goes to my own opinion that most of what we endure in macro these days is still stuck in the Gold Bug era where the money supply was fixed to an amount of gold and we owed other nations a lot of dough or gold. But that has not been true since 72 or 74 and we have adjusted to OPEC pricing so what exactly will drive up inflation today?

One possibility would be the devaluation of the dollar. But that would just make our goods cheaper and we would end up buying less foreign goods due to the higher cost. Then prices would stabilize again and depend upon the supply of goods and the demand for goods. One other would be if everyone was a billionaire. Not going to happen is it? Or what if all the 1%ers spent all their assets in one giant orgy of consumption? Well, we have so much idle capacity both here and abroad that nothing would really happen to inflation would it? Sure, the price of a Rolex might go up, maybe Gucci bags would sky rocket but staples? Nope. A billionaire cannot eat a billion dollars worth of meat or eggs or milk.
 
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