Miscellaneous News
- Thread starter bd popeye
- Start date
We are going to get more military exercises around taiwan for sure.
THE EDITORIAL BOARD
"
Jerome Powell, the chair of the Federal Reserve, has often expressed admiration for the resolve exhibited by one of his predecessors, , who was willing to crash the economy in the early 1980s to drive down inflation.
Inflation in the United States is now higher than at any time since Mr. Volcker’s recession, and Mr. Powell faces growing calls for the Fed to emulate that resolute performance and do , even if it hurts economic growth.
The present moment requires a different kind of courage. Instead of reprising Mr. Volcker’s shock-and-awe tactics, the Fed needs to pursue a more measured approach, one that would bring inflation under control without sending the economy into a deep recession. There is a risk that by forgoing stronger measures now, the Fed will ultimately have to impose greater pain. But there are also good reasons to think that the Fed can succeed — not least because of the enduring legacy of Mr. Volcker’s achievement.
The Fed already has begun to shut down the stimulus campaign that it launched in the spring of 2020 to limit the economic impact of the pandemic. The central bank its benchmark interest rate at its recent policymaking meeting, in March, by a quarter percentage point to a range between 0.25 points and 0.5 points. It is widely expected to accelerate this process by announcing on Wednesday an unusual half-point increase in the benchmark rate, and by announcing that it will begin to reduce the bond holdings that it amassed to further suppress borrowing costs.
It is time to raise rates. The economy has rebounded as Covid-19 has loosened its grip. Notwithstanding the weakness of reported growth in the first quarter of 2022, inflation is now the primary economic problem confronting the United States. Prices are outpacing wage growth for most Americans, eroding their living standards, and higher rates will help to slow rising prices.
The Fed’s benchmark rate would need to rise to somewhere between 2 percent and 3 percent to reach a level at which it is neither stimulating nor restraining growth. Some Fed officials and outside economists have argued for additional half-point moves in the coming months. Some already are convinced the Fed will need to raise rates well above that neutral level to break inflation. Under Mr. Volcker, the rate hit . Mr. Powell, to his credit, has maintained a more measured tone. He recently it was time for the Fed to move “a little more quickly.”
One reason to go slowly is that it takes time to judge the impact of changes in Fed policy. Merely by signaling that it plans to raise rates, the Fed already has initiated a significant reaction in financial markets. Average interest rates on home mortgages, for example, have climbed sharply. The monthly mortgage payment required to buy a median-price home has increased to $1,690 from less than $1,165 a year ago, according to Roberto Perli, the head of global policy research at the investment bank Piper Sandler.
Another reason for caution: Economists continue to debate the causes of the current inflation.
Some place the blame primarily on the pandemic, which has caused sharp reductions in the availability of services and goods, driving up prices. With new vehicles in short supply, for example, used vehicle prices by more than 50 percent through January. More recently, Russia’s invasion of Ukraine has disrupted global markets for and , driving up the prices of gasoline and in many parts of the world.
Others, however, regard the federal government’s response to the pandemic as the key factor. On top of the Fed’s efforts to lower borrowing costs, Congress distributed of dollars in aid. Despite widespread job losses, the average household had more money to spend, creating more demand for goods and services.
Here’s why the difference matters: The central bank’s decision to raise interest rates can curb demand; supply shortages, on the other hand, are best endured patiently. The Fed’s decision in the week ahead won’t ease them.
Lingering questions about the health of the economy provide another reason for the Fed to move cautiously.
A goal of the Fed’s stimulus campaign was to return the economy to , meaning that those who wanted work would be able to find it. By one popular measure, the unemployment rate, which sits at the low level of , the Fed has succeeded, prompting some to question the need for continued stimulus. But the government’s definition of unemployment is narrow. It includes only people actively seeking work, while many Americans remain on the sidelines. About fewer people are working now compared with early 2020.
In the 1970s, workers successfully demanded wage increases to compensate for expected increases in prices, while employers raised prices to cover the expected cost of higher wages. This dynamic, which economists call a wage-price spiral, can be dangerously self-perpetuating.
But in the intervening decades, American workers have suffered a significant loss in bargaining power. While many businesses say they are struggling to find enough workers, that has not translated into real wage gains for employees. Businesses are raising prices much faster than they are raising wages, allowing them to reap . While inflation is up by over the past year, wages for private-sector workers are up by just . In other words, there is no evidence the United States is entering a wage-price spiral.
Finally, Mr. Powell can afford to move more cautiously because Mr. Volcker and his successors convinced the American public and global investors that the Fed is committed to controlling inflation.
Mr. Volcker once told an interviewer that he wore a path in his rug by pacing back and forth, wondering whether the pain he was imposing would accomplish that goal. It was a victory won at a high cost. Moving too quickly to confront inflation, or raising rates too high, would squander it.
"
The Courage Required to Confront Inflation
April 29, 2022"
Jerome Powell, the chair of the Federal Reserve, has often expressed admiration for the resolve exhibited by one of his predecessors, , who was willing to crash the economy in the early 1980s to drive down inflation.
Inflation in the United States is now higher than at any time since Mr. Volcker’s recession, and Mr. Powell faces growing calls for the Fed to emulate that resolute performance and do , even if it hurts economic growth.
The present moment requires a different kind of courage. Instead of reprising Mr. Volcker’s shock-and-awe tactics, the Fed needs to pursue a more measured approach, one that would bring inflation under control without sending the economy into a deep recession. There is a risk that by forgoing stronger measures now, the Fed will ultimately have to impose greater pain. But there are also good reasons to think that the Fed can succeed — not least because of the enduring legacy of Mr. Volcker’s achievement.
The Fed already has begun to shut down the stimulus campaign that it launched in the spring of 2020 to limit the economic impact of the pandemic. The central bank its benchmark interest rate at its recent policymaking meeting, in March, by a quarter percentage point to a range between 0.25 points and 0.5 points. It is widely expected to accelerate this process by announcing on Wednesday an unusual half-point increase in the benchmark rate, and by announcing that it will begin to reduce the bond holdings that it amassed to further suppress borrowing costs.
It is time to raise rates. The economy has rebounded as Covid-19 has loosened its grip. Notwithstanding the weakness of reported growth in the first quarter of 2022, inflation is now the primary economic problem confronting the United States. Prices are outpacing wage growth for most Americans, eroding their living standards, and higher rates will help to slow rising prices.
The Fed’s benchmark rate would need to rise to somewhere between 2 percent and 3 percent to reach a level at which it is neither stimulating nor restraining growth. Some Fed officials and outside economists have argued for additional half-point moves in the coming months. Some already are convinced the Fed will need to raise rates well above that neutral level to break inflation. Under Mr. Volcker, the rate hit . Mr. Powell, to his credit, has maintained a more measured tone. He recently it was time for the Fed to move “a little more quickly.”
One reason to go slowly is that it takes time to judge the impact of changes in Fed policy. Merely by signaling that it plans to raise rates, the Fed already has initiated a significant reaction in financial markets. Average interest rates on home mortgages, for example, have climbed sharply. The monthly mortgage payment required to buy a median-price home has increased to $1,690 from less than $1,165 a year ago, according to Roberto Perli, the head of global policy research at the investment bank Piper Sandler.
Another reason for caution: Economists continue to debate the causes of the current inflation.
Some place the blame primarily on the pandemic, which has caused sharp reductions in the availability of services and goods, driving up prices. With new vehicles in short supply, for example, used vehicle prices by more than 50 percent through January. More recently, Russia’s invasion of Ukraine has disrupted global markets for and , driving up the prices of gasoline and in many parts of the world.
Others, however, regard the federal government’s response to the pandemic as the key factor. On top of the Fed’s efforts to lower borrowing costs, Congress distributed of dollars in aid. Despite widespread job losses, the average household had more money to spend, creating more demand for goods and services.
Here’s why the difference matters: The central bank’s decision to raise interest rates can curb demand; supply shortages, on the other hand, are best endured patiently. The Fed’s decision in the week ahead won’t ease them.
Lingering questions about the health of the economy provide another reason for the Fed to move cautiously.
A goal of the Fed’s stimulus campaign was to return the economy to , meaning that those who wanted work would be able to find it. By one popular measure, the unemployment rate, which sits at the low level of , the Fed has succeeded, prompting some to question the need for continued stimulus. But the government’s definition of unemployment is narrow. It includes only people actively seeking work, while many Americans remain on the sidelines. About fewer people are working now compared with early 2020.
In the 1970s, workers successfully demanded wage increases to compensate for expected increases in prices, while employers raised prices to cover the expected cost of higher wages. This dynamic, which economists call a wage-price spiral, can be dangerously self-perpetuating.
But in the intervening decades, American workers have suffered a significant loss in bargaining power. While many businesses say they are struggling to find enough workers, that has not translated into real wage gains for employees. Businesses are raising prices much faster than they are raising wages, allowing them to reap . While inflation is up by over the past year, wages for private-sector workers are up by just . In other words, there is no evidence the United States is entering a wage-price spiral.
Finally, Mr. Powell can afford to move more cautiously because Mr. Volcker and his successors convinced the American public and global investors that the Fed is committed to controlling inflation.
Mr. Volcker once told an interviewer that he wore a path in his rug by pacing back and forth, wondering whether the pain he was imposing would accomplish that goal. It was a victory won at a high cost. Moving too quickly to confront inflation, or raising rates too high, would squander it.
"
Limit on # of words. So separate my take on the editorial.
[My Comments]
This is an editorial article on the state of the US economy by the NYT Editorial Board. So in my book, this is among the more serious US media undertaking for domestic elites. And here lies the problem: the board is clueless about the US economy of "what is happening; how we got here; where we should go".
The highlighted sentences pretty much summarizes my take on the board's take, i.e., clueless on economy and disconnected from the American public.
Inflation in the United States is now higher than at any time since Mr. Volcker’s recession
This is a data point.
The present moment requires a different kind of courage
One of the primary reasons we got here is that the administrations and Feds after Volcker have not possessed any political courage to do the right things in managing the fiat money system and as a consequence in dealing with inflation.
It is time to raise rates.
Another reason for caution: Economists continue to debate the causes of the current inflation.
The central bank’s decision to raise interest rates can curb demand.
Raising Fed funds rates to fight inflation is a classic Fed mandate under the conventional rationale of Fed managing the fiat monetary system. But the QEs and other boneheaded policies and actions by the Admin/Fed/Congress severely damaged such foundation. As a result, raising rates aggressively (needed to temper inflation) is going to cause severe unintended consequences that could dwarf the very objective of such action in the first place.
A goal of the Fed’s stimulus campaign was to return the economy to , meaning that those who wanted work would be able to find it.
Bullcraps. Fed's primary mandate is to manage the fiat monetary system as well as to manage inflation expectations. Employment rate is a result of the overall economic activities, including but not limited to Fed policies and actions.
But in the intervening decades, American workers have suffered a significant loss in bargaining power.
Totally, because of people like you after Volcker retired from the Fed.
Finally, Mr. Powell can afford to move more cautiously because Mr. Volcker and his successors convinced the American public and global investors that the Fed is committed to controlling inflation.
No, he cannot afford. To the opposite, the American public is sick and tired of the people like you after Volcker. And that is one of the primary reasons Trump was elected in the first place. Given similar craps like yours in the same echo chamber, it is just more likely that Trump 2.0 is coming.
Check out the stock market today.
Might be more than exercise. Salami slicing in the other direction.
CHINA has to unequivocally declare a RED LINE if NATO dares to bring their tentacles out of their area of geographical area of operation especially when it's using Japan (Chief of defense is being invited for the 1st time to take part in NATO meetings) what the U.S. and the entire collective west are doing is nothing more than a replay of the Ukrainianization in the Asia-Pacific most pertinent to this case is with the case of Taiwan and now the Diayao islands.
One can argue that in order for China to stop this possibility is to ensure it's economy remains very competitive, vibrant to ensure that ASEAN countries and the vassalized East Asian countries of Japan, and South Korea can't go full tilt against China due to integration and reliance of their economies to China.
The U.S. shares of global GDP in today's time is at 16% (in PPP terms) which is projected to be further reduced to 14.99% by 2026, whereas China's share of GDP currently stands at 18% per recent announcement from the Chinese government.
I guess am contradicting myself here but I guess for as long as China isn't being pushed to act of no return in the case of Taiwan, China's current strategy must probably be maintained to ensure it's dual circulation strategy is fully realized which is something that American strategists are hard at work to prevent from happening.
Japan let's go banzai against China by joining the U.S. in Taiwan meddling.
Then you have this ongoing economic anxiety precipitated by the war in Ukraine.
Democrats going to have their political heads on the floor come this November driven by inflationary hikes with America's two richest people (Musk, Bezos) firmly against the rising inflation for good reason.
Then you have this ongoing economic anxiety precipitated by the war in Ukraine.
Democrats going to have their political heads on the floor come this November driven by inflationary hikes with America's two richest people (Musk, Bezos) firmly against the rising inflation for good reason.
Things aren't getting any better in Sri Lanka. The country is completely bankrupt, I think largely because of the loss of tourism thanks to covid and rising global energy/food prices.
I think all countries that are too dependent on the west are going to be seeing similar scenes like this soon. I think Thailand, Egypt and Turkey are countries to watch in particular.
All the more reason why the export strategy of China is bad going forwards.
I think all countries that are too dependent on the west are going to be seeing similar scenes like this soon. I think Thailand, Egypt and Turkey are countries to watch in particular.
All the more reason why the export strategy of China is bad going forwards.
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