12 May 2020

Contra Krugman ep. 223: Krugman unwittingly agrees Fed has driven stocks since 2007

Contra Krugman 1 Comment

I handle this one all by my lonesome…

One Response to “Contra Krugman ep. 223: Krugman unwittingly agrees Fed has driven stocks since 2007”

  1. skylien says:

    Just shocking… Who would have thought that?! That just must mean there really is a connection, an inverse one that is, between interest rates and asset prices. It’s just like they wanted to inflate asset prices so that dumb average Joes like me, who need guidance from nice inherently altruistic unelected definitely not full of themselves people at the helm of our monetary institution with monopoly powers granted by the government, wouldn’t screw up our aggregate spending by making us feel wealthier than we actually are. So we just spend more by drawing from our inflated capital values (your house just doubled in value so just increase your mortgage and buy a new car; YOU have earned that by the FED people coming together and basically decreeing it like that! Let there be wealth!). What could possibly go wrong with this approach?

    The horn of plenty just showers us in wealth as long as consumer spending is high. Who cares how the horn of plenty internally works… The only metric that is important is that money needs to keep flowing in a circle. It’s not like the structure of production needs to be set up in a particular way to ever changing conditions and consumer demands, as to produce the right things, at the right place, at the right time with the right people with the right tools/capital/technology with the right expectations of each person when to receive how much of a reward for their work, or funds loaned/invested to the total operation. No, the interest rate only affects how much people spend, it could never screw with the ability of our horn of plenty to produce wealth… And even if, let’s be real, those guys have PHDs man, they would know exactly all the affects it would have on those few variables and adjust accordingly.. right?

    I don’t even know why I read this blog. It screws with my ability to be a well behaved guidable sheep. It has the risk of me questioning what those guys do, or actually want me to do. And second guessing them might make me do the opposite of what I am supposed to do. It certainly does make their job harder, because they need to take into account what I think that they think that I think that they think…. In any case if the economy doesn’t respond as they want to then it is the fault of people like Bob who have a really bad influence on people like me…

    Bob your blog should be banned!

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