Interest rate prediction thread

[fskimospy]

No need. Your critiques summarized for everyone else:
1) The study wasn't written by someone with good enough English.
2) The data, while repeatedly backing me up, is just exceptions and that eventually (maybe) you'll be correct.
3) You don't like the author.
4) Etc. with tons of other really valid critiques.

You have not a shred of evidence. Tell us this: if producers get loans and expand their production, why should prices go up?

Your description of my critiques is unsurprisingly lacking, haha.

The effects of monetary policy are primarily felt through long term investments like housing, which are very sensitive to inflation rates. People buy 30 year mortgages based on their monthly payments, not so much on the actual price of the house. As interest rates are lower, you can buy a more expensive house for the same EDIT: monthly payment, causing a general increase in housing prices. This has a ripple effect, leading to broader price increases, ie: inflation.

If you have a problem with this you should go argue with an econ 101 textbook. (or even better, read an econ 101 textbook)

 

[Blackjack200]

Tell us this: if producers get cheap loans and expand their production to expand supply, when consumers rarely get the cheap loans, why should prices go up? Let me guess, your answer will be that smart people you probably won't name might disagree.

That suggests that production is being constrained by the cost of capital rather than demand. I'm not sure how you measure that, but it seems very unlikely to be the case to me. It seems like production is contrained by demand.

 

[fskimospy]

Why do you care? As a Keynesian you support spending money on whatever the fuck you can, from digging holes then filling them, to an imaginary alien invasion.

You made a concrete statement about government spending, so I figured you had some basis for it.

Was I incorrect?

 

[dullard]

Your description of my critiques is unsurprisingly lacking, haha.

I can only summarize what you posted. Post something that isn't lacking and then I would summarize that.

I left out one of your critiques: you say that you could prove your side, but won't bother to do so. Yes, that is very valid too.

 

[fskimospy]

I can only summarize what you posted. Post something that isn't lacking and then I would summarize that.

I left out one of your critiques: you say that you could prove your side, but won't bother to do so. Yes, that is very valid too.

I told you that your analyses were amateurish and I told you what would be required to run one competently. You then tried to get me to do it for you, which I declined.

Just stop.

 

[glenn1]

You made a concrete statement about government spending, so I figured you had some basis for it.

Was I incorrect?

Oh right, this is the part where you say the Stimulus didn't work because it wasn't large enough. We've already gone through this, you've created a non-falsifiable viewpoint and thus using logic with you is pointless. The billionaires who benefit from your ideas thank you though, maybe you can "stimulate" them some more by taxpayer funding a few new stadiums for the sports teams they own. After all, it's a "fiscal multiplier."

 

[cbrunny]

My prediction: Barack Hussein Obama will be looking at the Fed's GUI on the rate off his Islam Computer (which is behind his Muslim curtains). He will be hovering over the "Increase It Until The Working Class Bleeds To Death" button. And just as he is about to click on it, Donald J. Trump will kick down the door and yell; "Don't you DARE, you clown!!"

Then the dictator of the ACLU will jump up from under Obama's desk and scream; "YOU ARE A RACIST!!!"

Trump will reply; "No, YOU are the racist!!" And he will impale the ACLU fascist on a wooden pike that says 'Made In America'.

Obama will then panic and call for ISIS to invade the US. But, Trump knew he was going to do that, and he had Marine Todd and his Marines waiting for them at Ground Zero in NYC (that 'mosque' that was built on the dead bodies of murder Americans on 9/11, it is really a doorway to Islam that Muslims use to enter the US and kill Christians) - where they will defend NYC (even though NYC constantly spits and attacks any military service people that set foot in that city).

Trump will then kick the crap out of Obama. But, Obama will sic Hillabeast against Trump. Just as Hillabeast is about kill Trump, Vladamir Putin rappels through the White House roof and stomps on Hillabeast. "Don't worry Don," says Vlad, "I got this bitch - you take care of the other bitch".

And Trump does take care of that other bitch.

He defeats Obama, puts him in hand cuffs and sends him off to prison - on the way, Americans (who are in tears over finally being free) will be tossing rotten vegetables at former King Obama. Before Obama is placed in prison, a little girl will walk up to him and say; "You almost had me aborted, by allowing women of the USA to kill innocent children - but, since Trump stopped you - I am a nuclear scientist who has proven Climate Change is not real and have solved the energy crisis, by allowing Americans to buy more gas for their cars".

Obama then lunges forward and tries to bite the little girl - Trump then pulls out an Israeli Desert Eagle and puts a round into the former tyrant of America.

Vladimir Putin then says; "Shoot, is good."

And then America finally becomes great - forever and ever.

Oh,... sorry; the rates will remain as is. For a very long time.

Legitimately, I take back all the times I voted that you were a raging moron in your polls. And there were a lot of those.

 

[fskimospy]

Oh right, this is the part where you say the Stimulus didn't work because it wasn't large enough. We've already gone through this, you've created a non-falsifiable viewpoint and thus using logic with you is pointless. The billionaires who benefit from your ideas thank you though, maybe you can "stimulate" them some more by taxpayer funding a few new stadiums for the sports teams they own. After all, it's a "fiscal multiplier."

The stimulus worked just fine, as backed up by the economics research.

I'm going to take that as a 'no' from you though. I figured your opinion about reaching the limits of government spending's usefulness was based on nothing, but thanks for confirming it.

 

[Attic]

So given manufactured, rather than true market driven, low interest rates and stimulus for the 1% is not a real answer to Americas economic issues, then what's next?

At some point the gig has to be up right? How much longer can Americans be fooled by the academia moron's about monetary and fiscal policy?

How much longer can the whipping continue until moral improves?


Consider that the last economic crash was really just an unwinding of a massive FED fueled housing and equity bubble. The manufactured boom and busts do one thing extremely well, transfer wealth to the elite. We are not changing anything by continuing to let a small elite group of men who represent the Banking cartel set and control the flow of money.

The median household has seen tepid if any recovery since 2007, the top wealth holders have done much much better. The benefactors of Stimulus and ZIRP is not exactly a question mark.

 

[fskimospy]

So given manufactured, rather than true market driven, low interest rates and stimulus for the 1% is not a real answer to Americas economic issues, then what's next?

Can you define for me what a 'true market driven' interest rate would mean under our current system?

 

[Attic]

Can you define for me what a 'true market driven' interest rate would mean under our current system?

Market participants setting the overnight interest rate as opposed to the FED setting it.

 

[fskimospy]

Market participants setting the overnight interest rate as opposed to the FED setting it.

So in other words a return to the gold standard?

Yeah, that sounds like a great idea, haha. The gold standard was a shit show.

 

[Blackjack200]

Market participants setting the overnight interest rate as opposed to the FED setting it.

That doesn't really make any sense. The federal funds rate is intricately tied to reserve requirements and the money supply, both of which are matters of public policy.

 

[shira]

Yellen can serve out the remainder of her term as could the individual bank governors, but Obama (and his successor) can and would attack them relentlessly from the bully pulpit. FDR couldn't do much directly against the SCOTUS either but likewise his political assaults on them eventually had their desired effect. Regardless, if the Fed gets serious about raising rates I think any pretense about the supposed norm of protecting them from "undue pressure and influence" of politicians goes out the window.

Oh - My - God. Obama would say really bad things about Yellen and the Fed? "Scorched earth," is that what you call it? This is "undue pressure?"

You're a joke.

 

[glenn1]

Oh - My - God. Obama would say really bad things about Yellen and the Fed? "Scorched earth," is that what you call it? This is "undue pressure?"

You're a joke.

Was FDR's threat to pack the SCOTUS just "saying really bad things"? Also Obama or successor could urge Congress to modify the Federal Reserve Act, rein in its authority as a financial regulator in favor of another (like the CFPB or others), limit the operational support it receives from other executive branch agencies (IT, GSA services, etc.), subject it to very public audits for purposes of humiliation, or any other number of things. The rhetorical assault would just be the tip of the iceberg.

 

[fskimospy]

Was FDR's threat to pack the SCOTUS just "saying really bad things"? Also Obama or successor could urge Congress to modify the Federal Reserve Act, rein in its authority as a financial regulator in favor of another (like the CFPB or others), limit the operational support it receives from other executive branch agencies (IT, GSA services, etc.), subject it to very public audits for purposes of humiliation, or any other number of things. The rhetorical assault would just be the tip of the iceberg.

Members of Congress have already made noises about doing this because interest rates are too low. Do you consider them to be currently running a 'scorched earth' campaign against the fed?

 

[glenn1]

Members of Congress have already made noises about doing this because interest rates are too low. Do you consider them to be currently running a 'scorched earth' campaign against the fed?

You're better than this. You very well know the difference between "making noises" and what I'm talking about as that goes magnitudes above simple rhetorical scolding. Everyone has an opinion so the former is to be expected, the later is what I'm concerned about. Even if we were to assume greater political pushback could come for either higher or lower rates, the reasoning would likely be very different. Those supporting lower rates would be doing so from a (misguided) desire to protect debtors and minimize debt servicing costs, whereas most of the proponents of higher rates do so to preserve "more flexibility" to lower rates again in case of future recession.

 

[fskimospy]

You're better than this. You very well know the difference between "making noises" and what I'm talking about as that goes magnitudes above simple rhetorical scolding. Everyone has an opinion so the former is to be expected, the later is what I'm concerned about. Even if we were to assume greater political pushback could come for either higher or lower rates, the reasoning would likely be very different. Those supporting lower rates would be doing so from a (misguided) desire to protect debtors and minimize debt servicing costs, whereas most of the proponents of higher rates do so to preserve "more flexibility" to lower rates again in case of future recession.

Obama would have little to no ability to affect the Fed without the acquiescence of Congress, which given Republican control wouldn't happen.

Here's my prediction: if the fed raises rates (foolishly, IMO), Obama and others will complain as others do now and nothing else will happen.

 

[Pens1566]

Guessing no change.

 

[MomentsofSanity]

Prediction. No change, language hinting at possible increase 1st quarter 2016 possible.

Edit: Crap posted at 2:02. That will look bad if it's right... dammit.

 

[brianmanahan]

it's official: no change in rates

 

[Attic]

That doesn't really make any sense. The federal funds rate is intricately tied to reserve requirements and the money supply, both of which are matters of public policy.

Not true. The overnight rate is currently set via FOMC, that is the problem we need to resolve.

Mispricing this rate has drastic effects on the overall economy. I think it's implied the rate is currently mispriced, so this is a problem for the overall economy. If we can't do any better on it, that's that. But given what we are seeing in our economy and given the importance of this rate, we ought to consider having something besides a few academia blowhards setting this rate.


As for the Gold Standard comment above,

Granting control of huge powers at play in the economy to an elite few, rather than keeping some of that money creation out of their hands, has enabled the privelaged and powerful to gain huge sums of money while the rest of the country was put on standby.

The money supply is being used to create and enhance wealth in the hands of the few. Creating a bottomless pit of money, and granting this to the FED... the results of the demise of the middle class and the explosion of wealth at the 0.1% level should not be a surprise.

Retaining the status quo at this point is absurd.

 

[fskimospy]

Not true. The overnight rate is currently set via FOMC, that is the problem we need to resolve.

Mispricing this rate has drastic effects on the overall economy. I think it's implied the rate is currently mispriced, so this is a problem for the overall economy. If we can't do any better on it, that's that. But given what we are seeing in our economy and given the importance of this rate, we ought to consider having something besides a few academia blowhards setting this rate.


As for the Gold Standard comment above,

Granting control of huge powers at play in the economy to an elite few, rather than keeping some of that money creation out of their hands, has enabled the privelaged and powerful to gain huge sums of money while the rest of the country was put on standby.

So Nixon ended the gold standard and the elite few decided to wait a decade and a half before using that power to gain huge sums of money?

Also, how different does that chart look if you take it back to the 1870's or so? Back to, you know, the Gilded Age when we were on the gold standard? (or at worst a bimetallic standard) I'm totally shocked that those years weren't included. Goldbugs are nothing if not consistent in their selective acceptance of facts.

 

[JSt0rm]

his chart reads like this:

 

[Hugo Drax]

his chart reads like this:

Well harder storms, choppier waters makes it difficult for pirates to board ships. So Global warming has some positive side effects.