QE

[firehawkocean]

As I have said in the past, I am not a doomsdayer:

However, what is continuing with regards to the Federal Reserve and Quantitative Easing is just plain scary.

The conservative inflation rate is 5.5 percent. Some indexes say it is close to 10%. However, our government says that it is something like 1.5%? Ha! They don't calculate how expensive energy costs are! They are manipulating data, along with unemployment data, so as not to scare anyone.

Furthermore, you have the federal reserve engaging in a program that has a world history of failure! The dollar is being devalued and, if QE continues, it will be devalued further.

What do you think?

[97guns]

i think we see much higher inflation coming and it will arrive faster and faster as the feds printing picks up steam, having appointed yellin as next chairman the monetary policy will be even more loose

i just sold a car and was looking through my old receipts, saw one for a case of 10w-30 synthetic oil for $2.49 a qt. , i then looked online and the cheapest full synthetic is now $5.99/qt

so in 5 or 6 years it doubled up, i expect it to double up again but in a much shorter time, then another double up and another and another, i think its called hyper inflation?

[JBinKC]

Thanks to hedonic regression modeling the inflation rate is what the government wants it to be and does not really reflect the inflation rate of required basic needs.

As for QE it would not surprise me if it never ended until we implode but at least it is great for the stock market.

[firehawkocean]

Thanks to hedonic regression modeling the inflation rate is what the government wants it to be and does not really reflect the inflation rate of required basic needs.

As for QE it would not surprise me if it never ended until we implode but at least it is great for the stock market.

I hear you. It is great for the stock market. However, I wonder how long the stock market will ride this high. I am in for the long term. However, high inflation and a major depreciation in all stock & bond assets may leave all the money we have made worth a fraction of what it is now.

[Joan.of.the.Arch]

If you are fearing inflation, you might not like this article which talks about why inflation might be good for the economy.

http://www.nytimes.com/2013/10/27/business/economy/in-fed-and-out-many-now-think-inflation-helps.html?nl=todaysheadlines&emc=edit_th_20131027&_r=0

By the way, 5 or 6% annual inflation is not hyperinflation. Hyperinflation is something never seen in the US in my lifetime.

Anyone else seeing gasoline for $3.82 today?
My heating natural gas is supposed to be a bit lower this season than last year.
Grocery prices seem about the same as last year to me.
---
update. Just saw this related note which would tend to reinforce the ideas in the first article. It regards Japan which has experienced many years of stagnant economy and deflation---

Since taking office, Prime Minister Shinzo Abe has, in effect, engineered exactly the kind of loss of confidence the debt worriers fear — that is, he has persuaded investors that deflation is over and inflation lies ahead, which reduces the attractiveness of Japanese bonds. And the effects on the Japanese economy have been entirely positive! Interest rates are still low, because people expect the Bank of Japan (the equivalent of our Federal Reserve) to keep them low; the yen has fallen, which is a good thing, because it make Japanese exports more competitive. And Japanese economic growth has actually accelerated.

http://www.nytimes.com/2013/10/25/opinion/krugman-addicted-to-the-apocalypse.html?src=recg

So there appears to be a real world experiment with deliberate inflation going hand in hand with economic growth. In a recent Charlie Rose program (PBS) Shinzo Abe wtalked about this, too, but I have no link for you.

[Chris Leese]

The continual money printing is very concerning to me and agree that the inflation rate is much higher than what the gov stats indicate especially since the stats do not include energy and food which are the largest expenditures for most consumers.

Figure rates need to rise as some point but then that will cause more issues as interest payments on the US debt will increase. Not to mention, at some point, you would think holders of US debt will begin to question their investments.