Personal Finance

Is the fed pulling a fast one on us?

  • Last Updated:
  • Sep 10th, 2021 9:12 pm
[OP]
Sr. Member
Feb 14, 2010
620 posts
517 upvotes
Toronto

Is the fed pulling a fast one on us?

I'm starting to think the fed is using reverse psychology to get the economy going and everything they do is just an experiment. Jim Cramer said it right the fed really knows nothing.

The fed says inflation is transitory and is only happening in pockets of the economy.
Of course no one believes what the fed says.
We have asset price inflation and stock market booms while wages are stagnant.
People are emptying their bank accounts and going all in.

Where do you guys/gals think we are headed?
10 replies
Deal Addict
May 16, 2017
1837 posts
2333 upvotes
thelastword wrote: ...

Where do you guys/gals think we are headed?
Clearly to a place where the Centre of the Universe has moved from Toronto to the Eccles Building.
Deal Guru
User avatar
Mar 12, 2005
10237 posts
2194 upvotes
Victoria
I'm generally of the belief that no one can predict the future. Who knows. After the 08-09 crisis we also saw inflation ramp up, but then it subsided. Right now I think the governments around the world are once again hoping it's temporary.
Deal Addict
User avatar
May 7, 2017
1065 posts
599 upvotes
Is this click bait? Cramer knows about Fed? lmao.
Jr. Member
Jun 22, 2011
169 posts
61 upvotes
thelastword wrote: Where do you guys/gals think we are headed?
Death. But that's a certainty. Everything else is whatever in the mean time :)
Deal Addict
User avatar
Nov 26, 2003
1278 posts
297 upvotes
Its basically schrodingers inflation. It is both transitory and not transitory simultaneously. The problem is if a central bank looks inside the box and the inflation is not transitory, then they need to come out and say "we believe there is persistent inflation", then they would a) be bound to act on it and b) consumers would act accordingly, and it becomes self fulfilling

So you are right in the sense that central banks are calling this transitory inflation because a) they really hope it is and b) they have no choice but to call it transitory, otherwise it becomes self fulfilling.
Last edited by camzie on Sep 10th, 2021 2:16 pm, edited 1 time in total.
Deal Addict
Nov 24, 2013
1720 posts
1027 upvotes
Toronto
The Fed did pull a fast one - they increased the money supply and had inflation jump up and now will use this price level as the baseline for the future inflation rate. Expect this to happen every 3-4 years from now on.

90% of the Fed's job is managing expectations. The rest is (maybe) monetary policy. The 90% include lies and dodgy prognosis in the hope that the financial system maintains short term stability.

Economics as a science is a joke. Economists like to use high-falutin math to pretend that their profession is grounded in the real sciences, but their models are wrong 100% of the time. Finance, rather than economics, is much more innovative. Some economists may argue that economics forms the theoretical basis of finance, but that is debatable is my opinion. The Nobel Prize for Economics should be replaced with one for Mathematics and/or Finance.
Jr. Member
May 15, 2020
121 posts
73 upvotes
Thornhill ON
"The budget will balance itself".

Nuff said.
Deal Fanatic
User avatar
Nov 13, 2010
7222 posts
1458 upvotes
Scarborough
its a sign of the end times, coming more/increasing financial enslavement...wages stagnant yet price of everything gone up several fold.......its not looking pretty at all for the middle class/poor
Deal Addict
Sep 11, 2006
1892 posts
624 upvotes
thelastword wrote: I'm starting to think the fed is using reverse psychology to get the economy going and everything they do is just an experiment. Jim Cramer said it right the fed really knows nothing.

The fed says inflation is transitory and is only happening in pockets of the economy.
Of course no one believes what the fed says.
We have asset price inflation and stock market booms while wages are stagnant.
People are emptying their bank accounts and going all in.

Where do you guys/gals think we are headed?
Jim Cramer has an audience?

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