Even Monetary Authorities Think We're In a Depression

Real Clear Markets ^ | September 9, 2016 | Jeffrey Snider

[palmer]

This navel gazing over “R*” is silly. The main reason why “R*” is so low is because the monetary authorities have lost all credibility that they will stop colluding to keep “R*” low. The main problem is QE and the threat of QE. What!? I thought we ended QE? No, we did not. We merely shifted ours overseas temporarily. “R*” cannot rise until that stops because “R*” is based on the future value of money which is based on future monetary policy.

[yefragetuwrabrumuy]

It is vital that the US public labels the current situation as “the Obama depression”. Because unless we create and push this label into the public mind, Obama and his failed policies will be given a pass, and the media and Democrats will blame all their incompetence and arrogance on “the Trump depression”, starting from his first day in office.

They may even begin the blame game before he takes office.

You know they will. So do I. So if we want a Trump presidency to be potent, we need to assign the Democrat’s mistakes to them, NOW, or else.

[thoughtomator]

There's no adjusting for systemic corruption.

As a great man once said - it's not a recession, it's a robbery!

[Dick Vomer]

So what is a prudent investment strategy?

[PTBAA]

There is a natural rate of interest that has been calculate by the greatest mind in the universe. R*=42.

[Diana in Wisconsin]

“Better to save all your money and invest in gold, silver and lead bullets.”

In the past 5 years I have liquidated the vast majority of my assets, bought another gun and more ammo. (I kept the truck.) I am now 100% debt free. Sold my farm, which I would’ve held onto, but paid off faster, only because I had the opportunity, through my Fiance, to move to a bigger farm that he owns free and clear.

I’ve been a Gold/Silver Bug since 2000.

I could see no other way going forward to protect me and mine. Plan for the worst, Hope for the best because Reality is usually somewhere in-between. ;)

[Diana in Wisconsin]

“[The Banksters] do not, of course, speak at all about why it took them nearly ten years to come to this realization.”

Well, they’ve been just a LITTLE bit busy playing both ends against the middle!

*SPIT*

[Diana in Wisconsin]

“It immediately raises issues of basic logic, as how can the rate at which employment and inflation normalize be less than zero when nominal rates are constrained by a zero lower bound? We must destroy money to get inflation?”

Either that or WWIII. Choose wisely, Grasshopper! :)

[expat_panama]

the rate at which employment and inflation normalize

That's been a big part of the problem, this idea that there is some rate were we can have " employment and inflation normalize ".  Bck in Niixon's time some moreon took the numbers from the 1960's and it ended up setting policy big-time:

It failed miserably (remember when Carter's 'stagflaion' was supposed to not have been able to happen?) and this is how inflation and employment eventually did work out over the long run:

Since then all kinds of eggheads have gotten rich 'explaining' how it really works but my take is there is no conncection  between inflation and employment --and that the Fed does nothing for jobs.

[expat_panama]

...what is a prudent investment strategy?

Those of us on this thread are waiting for someone to tell us tha answer to that question.  Meanwhile my guess is that nobody really knows and for weeks now I've be all set to leap either all in or all out --and for weeks nothing's happened.

Please do let the rest of us know if you by any chance find out something first...

[citizen]

Obama initiated the largest tax hike in history (Obamacare) coming out of the 2008 economic crisis.

---

Yes, that would be the Chief Justice John Roberts Tax. [spit]

[Biggirl]

Mr. Trump WILL WIN in a LANDSLIDE.

[Diana in Wisconsin]

“...is no connection between inflation and employment.”

Agreed.

[Recompennation]

economists believe low rates are incentivizing businesses to invest through the low costs of borrowing when in fact businesses refuse to borrow because as a matter of basic logic and common sense there is no reason for them to do so...
Exactly!
And when morning in America lifts the pall that has been cast the last seven years people will feel like dancing again.