Is the Fed artificially keeping the inflation rate near 2%?

Discussion in 'Economics' started by farmerjohn1324, Jan 4, 2020.

  1. dozu888

    dozu888

    which makes it right. the least crowded and the most uncomfortable trade is usually the right trade.
     
    #31     Jan 5, 2020
    nooby_mcnoob likes this.
  2. dozu888

    dozu888

    you are terrible and speechless.
     
    #32     Jan 5, 2020
  3. morganist

    morganist Guest

    Regardless of the central bank interest rate the free market interest rate will increase if inflation rises to compensate for the lost value of the money invested. In short if inflation rises interest rates tend to rise anyway regardless of the central bank rate. There is a whole school of economic thought called Austrian Economics which states the interest rate should not be altered by a central body but follow the natural rate set by banking institutions to reflect the risk or cost of borrowing. The Monetarists believe the interest rate should be altered to hit the inflation target which I think has been set to help with long term financial forecasting, read the article below.

    http://morganisteconomics.blogspot....-greatest-contribution.html?q=milton+friedman

    Regardless there are other methods of controlling inflation that have been used including fiscal policy, pension policy and other techniques of monetary policy. Read the article below to find out about using pension policy.

    http://morganisteconomics.blogspot.com/2019/03/pension-pumping.html

    Read the below article to find out how the central bank operates.

    http://morganisteconomics.blogspot.com/2012/12/macroeconomics-and-banking-have-central.html

    The below article may also help.

    http://morganisteconomics.blogspot.com/2012/10/is-way-central-banks-view-inflation.html
     
    #33     Jan 5, 2020
    ironchef and farmerjohn1324 like this.
  4. Amatrue

    Amatrue

    that makes no sense
     
    #34     Jan 5, 2020
  5. dozu888

    dozu888

    exactly. if it made sense to a lot of people it wouldn't be a good trade.
     
    #35     Jan 5, 2020
  6. In regards to the original question, the easy answer is yes and they have been for decades, ever since Reagan took office after interest rates went crazy during the Carter administration. The formula for calculating inflation was changed and presto, perpetually low to no inflation. The current formula doesn't allow for the inflation rate to stray outside the 1.75 - 2.25% range, with perhaps a rare exception. Along with employment, GDP, crime, etc,... really none of the numbers the Fed puts out,... are an actually true or accurate representation of reality. But it doesn't matter, because perception is everything. As President Nixon said, if the people(referring to the masses), see it on TV they will believe it.
     
    #36     Jan 11, 2020
  7. ironchef

    ironchef

    You can use your portfolio in your brokerage as collateral to borrow and buy real estates.... As the value increases you can buy more.....
     
    #37     Jan 11, 2020
  8. morganist

    morganist Guest

    In the United Kingdom you can get a type of pension called a SSAS Small Self Administered Scheme that enables you to borrow or buy into your business to support it using your pension fund, it is however only available to company directors or senior managers. There is a lot you can do with pensions, which gives you a way out of the problems in the economy. See my work that has been successful in the United Kingdom as a contingency against those problems in the United States, if you are interested in my work you can view it at morganist economics.
     
    #38     Jan 12, 2020