ART LAFFER: I Was Wrong About Inflation And The Fed

Business Insider ^ | 01/03/2014 | Rob Wile

[Partisan Gunslinger]

Try again. Estimated declines in United States manufacturing output in selected sectors (1872–1876)[26] Industry % decline in output Durable goods 30% Iron and steel 45% Construction 30% Overall 10% From the source of your graph. Overall, 10% decline in output.

But GDP per person was way up. Businesses evolve, resources get allocated differently.

And this. In the US, from 1873–1879, 18,000 businesses went bankrupt, including hundreds of banks, and ten states went bankrupt

In a dynamic economy new, more efficient, businesses will replace businesses that refuse to keep up with the times. The bottom line is overall economic activity, and that was way up in the 1873 to 1880 period.

[central_va]

When you offshore your manufacturing base and put 11% of your workers on a FedGov™ stipend it is tough to induce inflation. The way they do easing the money ends up in stocks and NEVER makes it to the”common” man. Why is a 30 yr mort at 3.5% still? In this climate a 30 yr note should only be 2% or less.

[Toddsterpatriot]

200 Years of American Financial Crises

[Toddsterpatriot]

Why is a 30 yr mort at 3.5% still? In this climate a 30 yr note should only be 2% or less.

A 30 year Treasury yields 3.80% and you think a mortgage should yield half that? LOL!

You're funny.

[Partisan Gunslinger]

Confirms the Great Depression as the grandaddy of them all, by far.

[Toddsterpatriot]

Yes, as Friedman said, the Fed did it.

[T Ruth]

Professor Hans Werner Sinn, an economist and Fellow of the National Bureau of Economic Research in Cambridge (USA), stated an interesting hypothesis in a recent lecture. According to him, fiat money creation depresses interest rates because savers cannot compete with the printing press as the low-cost provider of capital. (Long lecture 1 hr, 35 min. in German.)

My professors taught that inflation leads to higher interest rates because savers demand a premium to make up for the devalued dollars they will receive at the end of the loan. But this assumes that savers have an alternative market for their money. The current situation shows that this is not always the case. How many investors do we hear complain that there is no place to put their money in today's market.

Interesting.