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Response to eniwetok (Reply #45)

Tue Mar 29, 2016, 03:59 AM

47. And it hasn't worked well because of other issues that only Congress, not the Fed, can address.

Interest rates have been so low for so long that we should be experiencing really, really high inflation right now. We're really not. There's some, especially in rental housing, due to the aftereffects of so many foreclosures in the Great Recession and suppressed wages making it difficult to fund down payments. But outside of rentals, and maybe some food staples, there's not a lot of inflation, because even though unemployment has drifted down, wages haven't risen.

Any inflationary effect that the prolong low interest rates might have had seems to me like it has been offset in a decrease in the velocity of money, because wealth inequality has SOARED in the last decade. More than 90% of the economic gains of the "recovery" have gone to the top 10% (And that is actually quite an understatement because I don't have the exact numbers right now, so I am being conservative with them). Obviously that economic recovery isn't really being paid out in wages.

And rich people don't spend money, they hoard it, which has the effect of taking it out of the economy.

Only Congress can address that, for it would take some form of taxation and redistribution to get the hoarded money circulating in the economy again. The Fed has done what it can, but it is faced with a Congress that refuses to do anything with "that man" in the Presidency, and therefore the Fed lacks the tools to address the ACTUAL problems with the economy right now.

(Yeah, I know...the rich "invest" their money, but mostly by outsourcing to other countries, and 2008 showed us what some of those "investments" are like.)

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eniwetok Mar 2016 OP
TrueDemVA Mar 2016 #1
eniwetok Mar 2016 #4
OnlinePoker Mar 2016 #6
eniwetok Mar 2016 #11
eniwetok Mar 2016 #54
OnlinePoker Mar 2016 #57
Recursion Mar 2016 #38
1939 Mar 2016 #48
jeff47 Mar 2016 #2
eniwetok Mar 2016 #12
Major Nikon Mar 2016 #14
eniwetok Mar 2016 #23
Major Nikon Mar 2016 #25
jeff47 Mar 2016 #17
eniwetok Mar 2016 #24
jeff47 Mar 2016 #30
eniwetok Mar 2016 #40
jeff47 Mar 2016 #41
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Fuddnik Mar 2016 #3
eniwetok Mar 2016 #8
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eniwetok Mar 2016 #9
FBaggins Mar 2016 #15
eniwetok Mar 2016 #37
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eniwetok Mar 2016 #52
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eniwetok Mar 2016 #56
FBaggins Mar 2016 #7
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eniwetok Mar 2016 #19
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eniwetok Mar 2016 #43
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eniwetok Mar 2016 #21
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eniwetok Mar 2016 #44
Wounded Bear Mar 2016 #16
eniwetok Mar 2016 #20
Wounded Bear Mar 2016 #27
Hoyt Mar 2016 #29
jeff47 Mar 2016 #31
eniwetok Mar 2016 #45
LineLineLineLineLineReply And it hasn't worked well because of other issues that only Congress, not the Fed, can address.
strategery blunder Mar 2016 #47
Omaha Steve Mar 2016 #18
WhiteTara Mar 2016 #26
eniwetok Mar 2016 #36
Wounded Bear Mar 2016 #46
sendero Mar 2016 #49
GoneFishin Mar 2016 #51
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