Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21
Last Chance to GET FREE Money Crypto Mining with Your Desktop PC - 2nd May 21
Will Powell Lull Gold Bulls to Sweet Sleep? - 2nd May 21
Stock Market Enough Consolidation Already! - 2nd May 21
Inflation or Deflation? (Not a silly question…) - 2nd May 21
What Are The Requirements For Applying For A Payday Loan Online? - 2nd May 21
How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part1 - 1st May 21
INDIA COVID APOCALYPSE - 1st May 21
Are Technicals Pointing to New Gold Price Rally? - 1st May 21
US Dollar Index: Subtle Changes, Remarkable Outcomes - 1st May 21
Stock Market Correction Time Window - 30th Apr 21
Stock Market "Fastest Jump Since 2007": How Leveraged Investors are Courting "Doom" - 30th Apr 21
Three Reasons Why Waiting for "Cheaper Silver" Doesn't Make Cents - 30th Apr 21
Want To Invest In US Real Estate Market But Don’t Have The Down Payment? - 30th Apr 21
King Zuckerberg Tech Companies to Set up their own Governments! - 29th Apr 21
Silver Price Enters Acceleration Phase - 29th Apr 21
Financial Stocks Sector Appears Ready To Run Higher - 29th Apr 21
Stock Market Leverage Reaches New All-Time Highs As The Excess Phase Rally Continues - 29th Apr 21
Get Ready for the Fourth U.S. Central Bank - 29th Apr 21
Gold Mining Stock: Were Upswings Just an Exhausting Sprint? - 29th Apr 21
AI Tech Stocks Lead the Bull Market Charge - 28th Apr 21
AMD Ryzen Overclocking Guide - 5900x, 5950x, 5600x PPT, TDC, EDC, How to Best Settings Beyond PBO - 28th Apr 21
Stocks Bear Market / Crash Indicator - 28th Apr 21
No Upsetting the Apple Cart in Stocks or Gold - 28th Apr 21
Is The Covaids Insanity Actually Getting Worse? - 28th Apr 21
Dogecoin to the Moon! The Signs are Everywhere, but few will Heed them - 28th Apr 21
SPX Indicators Flashing Stock Market Caution - 28th Apr 21
Gold Prices – Don’t Get Too Excited - 28th Apr 21
6 Challenges Contract Managers Face When Handling Contractual Agreements - 28th Apr 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Price Stability Not a Fed Priority

Economics / Inflation Jul 29, 2010 - 04:07 AM GMT

By: Richard_Daughty

Economics

Best Financial Markets Analysis ArticleI knew the instant that I read the article’s title, “Fed Nominees Seek Economic Boost” in The Wall Street Journal, that I was probably going to be outraged and end up screaming a fearful and angry Mogambo Howl Of Anger (MHOA).

It was, alas, a feeling of doom that soon gave way to stark fear when I saw that the accompanying photo was captioned “Fed nominees – Janet Yellen, Peter Diamond and Sarah Bloom Raskin – at a Senate hearing Thursday.”


I am already petrified of this Yellen woman and the horrifying things that she has said over the years, and probably done, for all I know, and maybe far worse than even I expect. In fact, I am so distrustful of the “sacrificing the minority to benefit the majority” insanity that I am sure that they would have no qualms about killing all the first-born sons if it meant a higher standard of living for the remaining population, a proud tradition she perpetuates when she embarrasses herself by testifying, “Over the next few years, the Fed must craft policies that ensure that our economy accelerates its progress along the recovery path it has begun to trace.” Yikes!

Because I was paying so much attention to my sudden crushing chest pains and my left arm going numb at what she said, and the fearful inflationary implications thereof, I was not sure if my hands were shaking at the prospect of the Fed creating enough money to “ensure that our economy accelerates.”

So I stood up, raised my hands and loudly asked, “Hey! Are my hands shaking?”

Well, almost everyone said something rude along the lines of, “Shut up, you creepy little weirdo” or, “Hey! I’m on the phone here, moron!” but a few acknowledged that, yes, my hands were shaking.

So I said, “Of course my hands are shaking, you morons! Yours should be, too, when you read about the staggering amount of money and credit that the Federal Reserve is willing to create, according to this horrid woman, which is sufficient to be deemed ‘all the help that the Fed can provide over the coming year,’ which is a truly terrifying thing for those of us who fear the terrible miseries of inflation in consumer prices that such monstrous inflation in the money supply will bring!”

Well, everyone went back to work, most of them shaking their heads and muttering under their breath, so I went back to reading the article, and saw that Ms. Yellen apparently mentioned something along the lines of, “the Fed achieved price stability for a generation,” which made me want to laugh, and would have, too, if I wasn’t so angry that I was grinding my teeth together so hard that sparks were flying out of my mouth.

So, to distract myself, I looked up the definition of “generation” and found that a “generation” is 30 years, which really, REALLY makes me want to laugh that Ms. Yellen would be so boldly, so brazenly, so bereft of brains that she would DARE say that the Fed has achieved price stability for 30 years!

Even the Bureau of Labor Statistics calculator shows that $1 in 1980, 30 years ago, had the buying power of $2.65 today! That’s 3.3% a year, compounding for 30 years, for crying out loud!

As Exhibit A in my persecution of Ms. Yellen, according to thepeoplehistory.com, “In 1980 the average cost of new car was $7,210.00,” and now the average cost of a new car in the United States is $28,400, according to the National Automobile Dealers Association.

I apologize for bringing up the cost of cars because you and I both know that the car we really, really want is not an “average car” that costs $28,400, but one that costs at least $75,000, and usually more, lots more. Of course, we can’t afford either of them, like we are some kind of big-shots who could even afford the insurance on a snazzy ride like that, which we find, after careful research, that we could actually swing if the spouse left and took all the kids, vowing never to return, but who kept paying the mortgage!

Then you realize that THAT sure ain’t gonna happen, either, and this is just one MORE thing to be angry about, as if you didn’t already have enough heavy crosses to bear.

Well, peoplehistory.com also notes, probably as Exhibit B, that “From Our 80s Price of Food Section,” milk was 85 cents a 1/2 gallon, while I easily find that the average price for a half-gallon today is $2.06.

So, Ms. Yellen, price stability? Hahaha! A stable currency? Hahahaha! Isn’t the expressed mission of the Federal Reserve to provide a stable currency? Hahaha! I laugh at you! This is outrageous inflation!

Again, the more frightened and enlightened among us scream in dismay in the dark, dank dismay of doom and destruction, where all we have is a depreciating currency and gratuitous use of alliteration, meaning higher prices day after day, and month after month, and year after year, and decade after decade, each of them filled with people suffering because their incomes did not rise as much as inflation in prices because they were old, young, infirm, ignorant or just plain lazy, or otherwise had nothing to offer with which to bargain for higher incomes to offset inflation in prices.

So congratulations to the horrid Federal Reserve, and congratulations Ms. Yellen, for inflicting continuous financial pain on the population, despite the fact that the freaking mission of the Federal Reserve is to preserve the stability of the buying power of the dollar. Hahaha! Failures all!

So while everything else was a crappy investment that barely broke even in nominal terms, they were dismal failures when adjusting for inflation, although you might happily note that buying gold and silver were fabulous investment decisions over the last 30 years, and for the 2,500 years before that, too!

And, I might add, just like right now. This amazing, wonderful consistency of precious metals makes investing so easy that you cannot stop yourself from happily laughing and clapping your hands together, saying, “Whee! This investing stuff is easy!”

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2010 Daily Reckoning

© 2010 Copyright The Daily Reckoning - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in