The fed wasnt necessarily wrong... I think its quite likely that inflation was actually their policy goal. No way all those economists actually believed they could slash rates to 0 and do trillions in QE without serious inflation. This was the policy goal folks.
It’s a good way to increase tax revenue as long as you don’t have inflation so rampant that the economy stalls into stagflation. 7% is quite fine to keep things bubbling along. Now they need to get the currency down so to stimulate exports which also increases tax revenue and provides employment. But you’re correct; this is engineered not a “wrong” mistake.
@Finance Simply Explained I explain some of it above. There are many benefits to a rapidly expanding economy. The QE done throughout the prior years is absolute validation that the Fed wanted to kick start the economy. Wages are up! Employment is up! Tax revenue is way up! QT is reducing Govt spending drastically. Retail sales are up regardless of inflation. The housing market will take a hit resetting exorbitant prices. The equities market gets a nice reset. One of the nicest benefits is the reduction in federal debt levels through inflation. This is a good thing for America short term and the fed knows exactly what it’s doing with first the expansion and then the sharp contraction of monetary policy!
The FED KNOWS what to do; they just DON'T WANT TO DO IT. That's why they didn't start to act a until a YEAR AFTER they should have. They acted because the FED WAS FORCED to act.
He was the leading opponent against any kind of government regulations on the derivative markets. Which , in part lead to the 2008 financial collapse. Interestingly the big banks came out fine. surprise surprise!
Yellen is a fool, always has been. Send her back to the MidWest, where she belongs. Powell is a successful and wealthy lawyer, but he's out of his depth here in what was supposed to be a respectable sinecure, but which has turned out to be a high challenging nightmare. He'll hang around for a bit, until the situation gets so bad that he'll have to be replaced with someone (like Summers) who has the intellectual and moral authority to manage the situation successfully.
I think it's just a worry that inflation may take a while to get under control. Realistically with 8.5% inflation long rates should be in the double digits. The reason they're not is because there's still this belief that the inflation is transient. If there are signs inflation is going to hang around longer than the bond market is currently expecting, all hell is going to break loose and it's going to vaporize the stock market. Watch inflation indicators very carefully
If we see signs in the near future that inflation is moderating then we can get a big rally in stocks. My crystal ball just isn't telling me which one it is yet
Being a new trader, I'll cherish the idea of being educated more on how the yield correlates with the market and inflation. If you could be kind to share some materials I can read, Will be much appreciated. thank you.
@@PhilipMurray251From the little I learnt from my advisor who's a stock pundit, Inflation mostly affects stock yields in that, as inflation erodes the value of a dollar of earnings, it makes it difficult for the market too gauge the current value of the companies that make up market indexes. On the flip side, inflation favors value stocks (if you know how to take advantage of this in the market). I gain always from inflation because of the picks my advisor makes. I hope this helps.
@@Robertgriffinnethis is honestly educative, because I've always stuck with the growth stocks and loss has been a common occurrence in austere times like this. If you don't mind, who's the advisor you work with? will love to reach out for a rescue.
the inflation may not be transient after all, given that the Fed is tightening monetary policy, though the ECB has maintained it's assessment that the current inflation rate is transitory. Just don't keep your hopes high.
"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." - John Maynard Keynes
Incompetence or was it corruption to prop up asset prices for themselves and their wealthy overlord friends? Most of Fed committee members were insider trading the last two years including Powell.
I want to start investing. Is it safe to start now, or should I wait until the end of this possible correction/bear market, despite the economic crisis facing the world, is this the right time to invest in stock,Gold/crypto?
This is a shocker seeing melisa pamela perez is being mentioned here. I always had mixed feelings about hiring a lnvestment advisor. For the record, I started working with melisa in 2019, and she manages about 70% of my lnvestments, while I manage the other 30%. My philosophy is that I care more about my own money than anyone else, but she made me accept that they have wealth of information on current conditions and future trends
Larry Summers does not just have common sense. He has integrity and courage, which are much rarer qualities amongst public offiicials and senior academics in today's upside-down world. Added to his brilliant intellect and training, these qualities make him a standard-bearer for anyone who wishes to seek the truth and create a better world.
The CPI number is literally a lie. Not even hyperbolic. If you understand how it is calculated you see how the number is cooked to make actual inflation look better than it actually is. The actual inflation number is much closer to 20% right now. Rates need to be above inflation to put in under control. The Fed has been beyond reckless ever since 2008 by keeping rates at, or near, zero for the past 14 years and doing 5 different rounds of quantitative easing inflating their balance sheet to 9 TRILLION! The Fed has been propping everything up ever since 2008 by injecting steroids. Now the consequences have finally caught up with all of this reckless abuse. History is repeating. The 80's had this level of runway inflation and painful stagflation. Japan had an insane bubble in the 80's blow up in their face and it led to a lost decade afterwards. The Fed is run by clueless clowns. It's just that the clowns aren't wearing their costumes so people were fooled. We are going to have a depression. After a bubble like this bursts it takes an extended period of time to recover from.
PG, everything you said is spot on. Thanks for bringing honesty & rationality to this incredible situation. Things are just starting to hit the fan & our nation is already 30 trillion in debt. It may be "good by" to the American dream.
To me personally it seems like the current inflation situation now is exactly where the Fed wanted it to be. So to say, the really did a good job on that. Someone must be profiting heavily of this scenario we are in right now. Otherwise I cannot understand why they let this all happen. Congrats.
Summers is a good guy from what I can tell, and an objective one. Leaving politics aside, he seems to want the truth and he seems to want an overall good to be done.
Energy driven inflation? We have crude but lack refinery capacity (designed?) - Corporate consolidation / Oligopoly ? The energy index rose 34.6 % over the past 12 months. The gasoline index increased 48.7 % over the span. The index for fuel oil more than doubled, rising 106.7 %; this represents the largest increase in the history of the series, which dates to 1935. The index for electricity rose 12.0 %, the largest 12-month increase since the period ending August 2006. The index for natural gas increased 30.2 % over the last 12 months, the largest such increase since the period ending July 2008.
@@wjpeaj8890 Oligopoly/Monopoly/Lobbying - Lack of Competition, high barriers to entry. Price collusion/manipulation - U.S. refinery inputs will average 16.7 million b/d during the second and third quarters of 2022. This average is lower than the 2019 refinery inputs average of 17.3 million b/d despite high utilization rates because of reductions in refinery capacity since early 2020. (Management?) If the Fossil fuel industry (C-suite) is unable to manage risk and needs more government supports, than the U.S. taxpayer should receive equal equity shares in the company in return for all corporate welfare received.
Larry Summers is the reason why we are out here thinking like investment bankers and not like general consumers under Bill Clinton they ended the protection of consumer investment products like saving accounts and CD etc now we want low interest and inflation of our assets. We need higher interest rates to bring down prices.
Credit unions often pay interest on checking accounts. I have 2 that pay over 3% and have for years. Shop around. I'll agree that they need to be more widespread on all bank accounts.
This is the reason why you don’t pay people before the work is done . Like paying the contractors before they finish. We rehired Powell what incentive does he have to fix inflation..none until election time which is 4 years from now.
Raise rates by more than expected to quell inflation. Let the economy go into a recession, albeit a very painful one. Then, lower rates. Rinse and repeat.
No. Your Taylor principle works in principle with respect to demand shocks. With respect to oil price shocks, monetary policy is impotent. The price of oil needs to come down. We saw this play out in the twin shocks of the 70s and 80s. My forecast models have oil stabilizing (i.e. price trajectory plateauing) q2 2023. CPI follows by 3 months, historically speaking. Generating a recession is unnecessary and will damage the credibility to Fed has invested towards over the years.
Congress loved that gravy train that was QE and low interest rates for treasuries. They benefited the most, especially by being able to kick the cans of worms down the road while collecting brownie points with irresponsible economic policies...time for government to pay the political price of ineptitude, and also time for the population to pay the price of supporting political nonsense.
It is too late. 66% debt to gdp in 2008, by 2011 the spending was putting USA into triple digit debt/gdp. Obama took the USA from 66% to 100+% and Trump before covid 108%, and now much higher than WW2, no infraasructure or productive capacity to pay back the debt. No desire to reduce consumption. It's too late. The size of interest payments is already at a ridiculous level and would cripple long term growth. They only pay 1.53% effective on their debt, but as a proportion to economy the debt will grow because if spending is reduced, we will see just how wasteful the era has been. Hyperinflation, but they get SOMETHING out of it, like infrastructure or factories or energy... SOMETHING REAL is a better choice. They will start over.
2001 was the last year the budget was balanced. Both Parties need to be blacklisted from politics & the voters need to put in an actual effort when voting for a candidate instead of voting the letter that's next to a candidate's name. There are countless independent parties, it's time for the dual monopoly to go into the dust bin of history.
Yes, some explanation is required. This applies to most policies and people who produce miserable failures should resign or be replaced. There is no accountability these days.
Real problem is govt borrowing and fed to manage that by increasing balance sheet. Interest rate won't solve the govt borrowing issue. Private sector can be deterred by higher interest rate. Fed must stop QE to bring inflation down. It means us govt going bankrupt because they cannot pay debt without fed balance sheet expanding. Fed has to increase balance sheet. They have no option. So fed is caught in catch 22. Higher interest rate will not affect corporations or consumer. Us govt has to shrink. If fed mention that, us economy will shrink by 8%.
Larry's remark in the end of the interview is worth listening for everyone, especially the head of decision makers of monetary policy had he have qualified academic training on macro economics.
macro economics is basically a scam. Everything is guess work. Most theories were based on tiny samples that can't possibly yield anything significant.
By the level of QE we had, the FED need us to live with high inflation (8-12%) for a while before they raise IR seriously... basically the goverment gave us money at 0% IR but after 2 years we have to pay for it at an avg. Of 10% for the next years until prices in general hit 2x or 3x from 2020.
More or less 95% of the money spend on covid whent to the 1%. Now they own 99% of the production in the USA so they can charge whatever they want. It exactly like in brasil were inflation rate is 11% and interest rate are 12%. Inflation keep going up. The same will happen in the USA
And when is my pay rate expected to go up 200-300%?? Or am I just expected to sit here silently with a smile on my face as my Standard of living gets cut in literal half ?? Or 2/3rds If your 3x price increases are real ?? When does my pay keep up!?! Fucking when !?!? I'm not doing this !!! I am NOT taking a god damn 50-75% hit to my paycheck silently !! You'll hear my fucking rage in the streets !!!
Trouble is the Public Debt has grown to incredible limits. Not a single country can spend more than what it produces for a long period of time. Eventually the Public debt, shall no longer be able to be withstood and the whole castle of cards shall tumble down.
The Greatest Generations had the courage and fortitude to work hard and fight hard to build the United States into a great country with good values. They are gone and that nation is gone. The majority of Americans have abandoned fairness and good values Every kingdom divided against itself is brought to desolation
It does but S&P would go to 1500, unemployment to 20% and US federal taxes would not cover interest payments on the national debt. Fed (and all of us) are now dammed regardless.
Fed is feeling tail winds and just acting and it seems like they are in control but this economy has been hijacked from them they don't have any control. Take a look at 1 month T bill 25% up on Friday alone. They haven't even become selling them yet look at that jump. They lost all control
@@jivepatrol6833 you bet they will or they did. Time will tell. 1 month t Bill rose 25% in one day. And that used to be something fed had most of the control.
The only way to rectify inflationary pressures where you can't increase supply and drive down costs is to raise taxes on large incomes and corporate profits. Getting the deficit under control needs to be back on the table.
Fed forecasts are always wrong. The Fed is focused on what is best for their stockholders - the commercial banks - that is why they have been so slow to raise rates.
Inflation is good, look at Venezuela, they created wealth so strongly that all of them earn millions in income. Zimbabweans earn trillions in income, they even have a 100 trillion Zimbabwe dollar note. I want to be a trillionaire too
Even though the fed was wrong last year about the transitory inflation , nobody is admitting that a lot the current inflation Is tied up to russia s war , and in reality nobody could’ve has seen that coming not even the fed , we have to deal with what we have in front of us
I have an idea for how Americans can get inflation down. We should eat half as much (saves 40% off last year's food budget and some inches off waist size, and probably huge health care savings). We could also go back to multigenerational households or at least get a roommate instead of living alone (we all prefer living alone but come on guys, it'll be fun and we'll kill rental inflation quickly and gain the upper hand against landlords)
When the money supply is increased by 80% in 18 months then you'll get high inflation for 18-36 months at least to absorb the inflation of the money supply.
BBB would have fixed this, it was part and parcel of a major economic recovery plan. We'd still be sitting at 7% GDB right now with a NEEDED 5% inflation.
Clean the swap and clean the FED. If I made a mistake like that I'd lose my job in a second. I expect more from those who's misactions can bring down a nation.
Both parties need to be banned so that independents can take over. The fed is just continuing 20 years of fiscal irresponsibility, 20 years ago we should have passed a balanced budget amendment as the year 2001 was the last year the federal budget was balanced.
if I were at any OECD central bank, I would want a combo of negative real rates and inflation in the 6-7% range - would allow to reduce sovereign debts and facilitate business growth, no?
What’s funny is bitcoiners have been calling it for years. Kids on TH-cam seem to know more about monetary policy and it’s effects on the economy. Whatever tho, keep trusting the “experts”.
No. Austrians are 100% anti-central bank and frankly have no idea how to deal with supply side shocks such as a severe run-up in the price of oil. This inflation is not caused by central banking. There are other developed nations around the world which did not stimulate to nearly the degree we did but are currently struggling with similar/more inflationary pressure than we are. Don't stick to one macroeconomic ideology, read widely about the different schools of thought.
@@chrislimnios9180 correct Chris, we are 100% against central banking. AND we nailed this call. The wise central planners you worship have had about the same record as my 4 year old. You can’t believe anything they say, and they have such an abysmal job performance it’s amazing that people like you still think they have any credibility at all.
Austrian economics (as should all economic schools) does not try to prescribe all of the correct policies to micromanage the world economy. It’s entirely too complex for a few wise overlords to manage correctly. Economics is simply supposed to describe what is happening out in the economy.
In a time of woke, BLM loving democrat idiocy, it is very reassuring to hear an intellectual speaking. Joe and his crazies have to go or we will be doomed
I expect the FED a 5%....6%...7% rate at the end of the year.......right now the real inflation is 12%.. Inflation is a economic cancer........ Will need 10% rate to put back the genie in the bottle I'm ready since 2018...pay my last mortgage.......
Blame it on Russia, that's the only escape. But wait, they saw the war coming and warned it was imminent, but let it happen. Maybe they needed it. Helps with economic activity in defense and energy locally. You get people to rely and buy from you, sanction the other supplier and blame the guy next to Taiwan to keep the economic activity tilt to local vs import. Only way to save the house.
They need more accurate data. Firstly, by researching what exactly is the _real_ and _current_ rate of unemployment. We conservatively estimate unemployment--and --underemployment--to be near a whopping 30%. Secondly, confirm the physical locations of the middle class. Thirdly, what social changes need to be implemented A-S-A-P so the middle class doesn't become the non-participatory poor class. Preferably by enforcing _positive_ changes: offer more carrot and way less stick. Without a middle class, there's no one left to help transport and distribute goods nor to facilitate services. Stop flogging them in the back with predatory finances because we're bleeding to death in the streets.
This is about climate change and white supremacy these are the two biggest threats according to Brandon. His policy clearly show us, thats what hes focused on. Pushing Electric, killing gas, and CRT in every school in America. What you said would be great if we had a Bush Sir, or Trump but most our leaders are idiots.
Everyone in the financial industry is asleep at the wheel. I should stop losing money trading options and just get a job working at a firm. Im sure my lack of experience is 20x more useful than the inbreed activity they procure
Summers is quite disingenuous in his critique of Khan. Never forget that he was against regulations on banks trading derivatives which led to risky behavior and a precursor to the financial crisis. He’s not dumb but he advocates for incredibly dumb things.
Oil prices are the key to stopping the coming of a recession, all the rate increases will do is help bring on the recession by suppressing housing. Drill , drill, drill is the only way to bring down prices oil is the key .🙈
Biden needs to listen to Larry Summers. Biden could save face by taking cues from the Obama Administration. Summers could serve Biden well. Fed also would benefit from his counsel.
Larry Summers is the worst he is the reason why people can't get ahead right now go look at his policies under Bill Clinton and the bills he supported. that hurt 401ks and people savings.
Emergency rate cut should have been rescinded long time ago. Other than that, I do not see why the Fed should cause a global crisis by implying a high terminal rate. Do you have any idea on how the EMs are being squeezed due to strong reserve currencies? The inflation we are seeing today is primarily due to high energy prices and supply issues. Energy supply does not meet demand because we have collectively declared that fossil fuels are bad, and even some states sued energy companies. Why would there be investment into exploration and production when you threaten producers with banning internal combustion engines or tax-incentivizing EVs?
This is why you diversify and keep 50% cash in these environments. When we hit 3600 I'll slowly begin adding money to VTI and average down. Also UNH is my largest position along with NEE. Those stocks are doing well this year. You have to know what to buy. If not, just slowly average down in VTI and keep a good amount of cash. It's also better to sell with a 20% loss then lose another 30%!! It's NEVER too late to sell as these bozos are suggesting!! It's called CUTTING YOUR LOSSES! thank God for a friend of mine who introduced me to Sam williams. 2 weeks have been trading with him my btc has increased rapidly.and my portfolio grows to 5.7BTC in a week .....
My first investment with Sam gave me a profit of over $ 70K and ever since then he has never failed to deliver and I can even say he is one of the sincere brokers I have known .., .. 👊😎
Yeah that's right I think the best way is to invest with a professional, at least it saves the trauma of too much losses, This just surprised me because I also invest with Sam .
Larry there's was to much money printing and leaving the interest alone never seen in my live o interest rates to much money spending no one saved like the old days
![เขามัทรี - เอ็กซ์ ศุภกฤต - จอนนี่มิวสิค [ Official MV ]](http://i.ytimg.com/vi/AS9ufKuQIVs/mqdefault.jpg)
Inflation is 9% and interest rates are 1%
Lol
And 10 year bond just hits slightly above 3% 😎 Fiat is abs Trash!!
Treasuries are return-free risk
@@anonymousAJ . Nothing to do with the original comment. LOL
But ... but... it's transitory 🤡🤡🤡
lol indeed
The fed wasnt necessarily wrong... I think its quite likely that inflation was actually their policy goal. No way all those economists actually believed they could slash rates to 0 and do trillions in QE without serious inflation. This was the policy goal folks.
It’s a good way to increase tax revenue as long as you don’t have inflation so rampant that the economy stalls into stagflation. 7% is quite fine to keep things bubbling along. Now they need to get the currency down so to stimulate exports which also increases tax revenue and provides employment. But you’re correct; this is engineered not a “wrong” mistake.
maybe if they are sinister it was intentional
@Finance Simply Explained I explain some of it above. There are many benefits to a rapidly expanding economy. The QE done throughout the prior years is absolute validation that the Fed wanted to kick start the economy. Wages are up! Employment is up! Tax revenue is way up! QT is reducing Govt spending drastically. Retail sales are up regardless of inflation. The housing market will take a hit resetting exorbitant prices. The equities market gets a nice reset. One of the nicest benefits is the reduction in federal debt levels through inflation. This is a good thing for America short term and the fed knows exactly what it’s doing with first the expansion and then the sharp contraction of monetary policy!
@@jaywhoisit4863 exactly right. Peak debt = inflate or die.
They did it before in 2000s without much inflation
Fire the 900 economists at the federal reserve.
Hire some Austrian economists and fire the rest.
fire half. hire another half with diff view points. that's how we avoid groupthink.
They aren't delusional. They're lying.
Nail on the head.
Time to put the leaders on trial. Destruction of the middle class is a crime.
The FED KNOWS what to do; they just DON'T WANT TO DO IT. That's why they didn't start to act a until a YEAR AFTER they should have. They acted because the FED WAS FORCED to act.
Larry Summer is one of the few economists who still has common sense today
He was the leading opponent against any kind of government regulations on the derivative markets. Which , in part lead to the 2008 financial collapse. Interestingly the big banks came out fine. surprise surprise!
I bought 1lb of lentils today at Wal-Mart for $1.34. About 2-3 months ago I paid $1.00 for the same 1lb. bag.
Anybody who stepped out of the house in the past months would know that prices of everything has increased atleast by 25-30%. 8.6% inflation🤦
Should Powell and Yellen still keep their jobs after such epic policy mistakes
Yellen is a fool, always has been. Send her back to the MidWest, where she belongs. Powell is a successful and wealthy lawyer, but he's out of his depth here in what was supposed to be a respectable sinecure, but which has turned out to be a high challenging nightmare. He'll hang around for a bit, until the situation gets so bad that he'll have to be replaced with someone (like Summers) who has the intellectual and moral authority to manage the situation successfully.
No but he got re-elected again recently lol
No, but it won't matter.
I think it's just a worry that inflation may take a while to get under control. Realistically with 8.5% inflation long rates should be in the double digits. The reason they're not is because there's still this belief that the inflation is transient. If there are signs inflation is going to hang around longer than the bond market is currently expecting, all hell is going to break loose and it's going to vaporize the stock market. Watch inflation indicators very carefully
If we see signs in the near future that inflation is moderating then we can get a big rally in stocks. My crystal ball just isn't telling me which one it is yet
Being a new trader, I'll cherish the idea of being educated more on how the yield correlates with the market and inflation. If you could be kind to share some materials I can read, Will be much appreciated. thank you.
@@PhilipMurray251From the little I learnt from my advisor who's a stock pundit, Inflation mostly affects stock yields in that, as inflation erodes the value of a dollar of earnings, it makes it difficult for the market too gauge the current value of the companies that make up market indexes. On the flip side, inflation favors value stocks (if you know how to take advantage of this in the market). I gain always from inflation because of the picks my advisor makes. I hope this helps.
@@Robertgriffinnethis is honestly educative, because I've always stuck with the growth stocks and loss has been a common occurrence in austere times like this. If you don't mind, who's the advisor you work with? will love to reach out for a rescue.
the inflation may not be transient after all, given that the Fed is tightening monetary policy, though the ECB has maintained it's assessment that the current inflation rate is transitory. Just don't keep your hopes high.
"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." - John Maynard Keynes
The government may not be the only entity confiscating wealth, secretly & unobserved. I know of another.
Wasn't he for money printing?
Congress is failing in its oversight role of the Fed. This quite frankly was sheer incompetence and Congress rewarded Jay Powell with another term.
Incompetence or was it corruption to prop up asset prices for themselves and their wealthy overlord friends? Most of Fed committee members were insider trading the last two years including Powell.
The federal reserve is a private bank…. Congress borrows money from the federal reserve and congress doesn’t control the federal reserve
They don't even know which questions to ask. Jokers
FED is supposed to be independent. But yeah, Yellen and Powell are jokes so is the ECB.
they aren't failing. this is all by design.
I want to start investing. Is it safe to start now, or should I wait until the end of this possible correction/bear market, despite the economic crisis facing the world, is this the right time to invest in stock,Gold/crypto?
This is a shocker seeing melisa pamela perez is being mentioned here. I always had mixed feelings about hiring a lnvestment advisor. For the record, I started working with melisa in 2019, and she manages about 70% of my lnvestments, while I manage the other 30%. My philosophy is that I care more about my own money than anyone else, but she made me accept that they have wealth of information on current conditions and future trends
Please how can I reach her easily, I think I should try this woman I've heard so much good news about her can anyone help with the digit line?
@@fredautomobile3827 Reach out to her through the details below
Let's talk about fed credibility lmao
Crash crash crash , there s no such thing as soft landing in turbulent skies if you know what I mean
Larry Summers does not just have common sense. He has integrity and courage, which are much rarer qualities amongst public offiicials and senior academics in today's upside-down world. Added to his brilliant intellect and training, these qualities make him a standard-bearer for anyone who wishes to seek the truth and create a better world.
You need to watch inside job.
Why is the FED still here?
the FED has failed with their mantra of "price stability".
The CPI number is literally a lie. Not even hyperbolic. If you understand how it is calculated you see how the number is cooked to make actual inflation look better than it actually is.
The actual inflation number is much closer to 20% right now.
Rates need to be above inflation to put in under control.
The Fed has been beyond reckless ever since 2008 by keeping rates at, or near, zero for the past 14 years and doing 5 different rounds of quantitative easing inflating their balance sheet to 9 TRILLION!
The Fed has been propping everything up ever since 2008 by injecting steroids. Now the consequences have finally caught up with all of this reckless abuse.
History is repeating. The 80's had this level of runway inflation and painful stagflation. Japan had an insane bubble in the 80's blow up in their face and it led to a lost decade afterwards.
The Fed is run by clueless clowns. It's just that the clowns aren't wearing their costumes so people were fooled.
We are going to have a depression. After a bubble like this bursts it takes an extended period of time to recover from.
I don't think Japan ever recovered to their all time high stock market.
@@MrSupernova111 forget the stock.
The ppp.
Low prices-low sales- even lower wages.
Japan had a lost 30 years. And the stagflation in the U.S. was in the 70s. You are no genius lol
PG, everything you said is spot on. Thanks for bringing honesty & rationality to this incredible situation. Things are just starting to hit the fan & our nation is already 30 trillion in debt. It may be "good by" to the American dream.
To me personally it seems like the current inflation situation now is exactly where the Fed wanted it to be. So to say, the really did a good job on that. Someone must be profiting heavily of this scenario we are in right now. Otherwise I cannot understand why they let this all happen. Congrats.
Someone remind me the last time any prediction made by the FED actually came true. 🤷🏼♂️
"Soft Landing"? Now that's delusional!
They need a new model: common sense. When most people will realize what's going on, we're in for some fun.
Summers is a good guy from what I can tell, and an objective one.
Leaving politics aside, he seems to want the truth and he seems to want an overall good to be done.
He was completely WRONG under Obama
He sounds almost republican by now... lol
He’s smart his answers make sense I like him
Energy driven inflation? We have crude but lack refinery capacity (designed?) - Corporate consolidation / Oligopoly ?
The energy index rose 34.6 % over the past 12 months. The gasoline index increased 48.7 % over the span. The index for fuel oil more than doubled, rising 106.7 %; this represents the largest increase in the history of the series, which dates to 1935. The index for electricity rose 12.0 %, the largest 12-month increase since the period ending August 2006.
The index for natural gas increased 30.2 % over the last 12 months, the largest such
increase since the period ending July 2008.
No one would like to invest on rifinery since the industry is having very low margin for a long time...
@@wjpeaj8890 Oligopoly/Monopoly/Lobbying - Lack of Competition, high barriers to entry. Price collusion/manipulation - U.S. refinery inputs will average 16.7 million b/d during the second and third quarters of 2022. This average is lower than the 2019 refinery inputs average of 17.3 million b/d despite high utilization rates because of reductions in refinery capacity since early 2020. (Management?)
If the Fossil fuel industry (C-suite) is unable to manage risk and needs more government supports, than the U.S. taxpayer should receive equal equity shares in the company in return for all corporate welfare received.
Larry Summers is the reason why we are out here thinking like investment bankers and not like general consumers under Bill Clinton they ended the protection of consumer investment products like saving accounts and CD etc now we want low interest and inflation of our assets. We need higher interest rates to bring down prices.
We need higher interest rates so people can put them money back into traditional savings accounts.
Hahaha. Delusional idiot…
This would be the solution. But one that will absolutely not happen due to the government debt interest payments ballooning with higher rates.
Credit unions often pay interest on checking accounts. I have 2 that pay over 3% and have for years. Shop around. I'll agree that they need to be more widespread on all bank accounts.
@@l.siestador7248 in USA credit unions pay 0.25%. Where CC pays 3% in USA??
@@theequalizer2727 I'm in the US.
This is the reason why you don’t pay people before the work is done . Like paying the contractors before they finish. We rehired Powell what incentive does he have to fix inflation..none until election time which is 4 years from now.
It was democrats who voted foe him smh
Raise rates by more than expected to quell inflation. Let the economy go into a recession, albeit a very painful one. Then, lower rates. Rinse and repeat.
That's their stated plan but the real plan is to postpone the day of reckoning until the day after everyone retires
No. Your Taylor principle works in principle with respect to demand shocks. With respect to oil price shocks, monetary policy is impotent. The price of oil needs to come down. We saw this play out in the twin shocks of the 70s and 80s. My forecast models have oil stabilizing (i.e. price trajectory plateauing) q2 2023. CPI follows by 3 months, historically speaking. Generating a recession is unnecessary and will damage the credibility to Fed has invested towards over the years.
@@anonymousAJ wrong. Have you check your 401k this year?
Honestly I don’t know why they wait, I mean they get a report and then they wait till the next meeting? What’s the point?
something smells fishy doesn't it?
They aren’t that stupid like people think they are. Must have a reason behind it.
Congress loved that gravy train that was QE and low interest rates for treasuries. They benefited the most, especially by being able to kick the cans of worms down the road while collecting brownie points with irresponsible economic policies...time for government to pay the political price of ineptitude, and also time for the population to pay the price of supporting political nonsense.
It is too late. 66% debt to gdp in 2008, by 2011 the spending was putting USA into triple digit debt/gdp. Obama took the USA from 66% to 100+% and Trump before covid 108%, and now much higher than WW2, no infraasructure or productive capacity to pay back the debt. No desire to reduce consumption. It's too late. The size of interest payments is already at a ridiculous level and would cripple long term growth. They only pay 1.53% effective on their debt, but as a proportion to economy the debt will grow because if spending is reduced, we will see just how wasteful the era has been. Hyperinflation, but they get SOMETHING out of it, like infrastructure or factories or energy... SOMETHING REAL is a better choice. They will start over.
2001 was the last year the budget was balanced. Both Parties need to be blacklisted from politics & the voters need to put in an actual effort when voting for a candidate instead of voting the letter that's next to a candidate's name. There are countless independent parties, it's time for the dual monopoly to go into the dust bin of history.
Yes, some explanation is required. This applies to most policies and people who produce miserable failures should resign or be replaced. There is no accountability these days.
Real problem is govt borrowing and fed to manage that by increasing balance sheet. Interest rate won't solve the govt borrowing issue. Private sector can be deterred by higher interest rate. Fed must stop QE to bring inflation down. It means us govt going bankrupt because they cannot pay debt without fed balance sheet expanding. Fed has to increase balance sheet. They have no option. So fed is caught in catch 22. Higher interest rate will not affect corporations or consumer. Us govt has to shrink. If fed mention that, us economy will shrink by 8%.
At least there are good deals on the assets I want .
I don’t believe in economist that explain a problem with just a couple of index. They should explain these king of issue much more deeply.
Larry's remark in the end of the interview is worth listening for everyone, especially the head of decision makers of monetary policy had he have qualified academic training on macro economics.
macro economics is basically a scam. Everything is guess work. Most theories were based on tiny samples that can't possibly yield anything significant.
By the level of QE we had, the FED need us to live with high inflation (8-12%) for a while before they raise IR seriously... basically the goverment gave us money at 0% IR but after 2 years we have to pay for it at an avg. Of 10% for the next years until prices in general hit 2x or 3x from 2020.
More or less 95% of the money spend on covid whent to the 1%. Now they own 99% of the production in the USA so they can charge whatever they want. It exactly like in brasil were inflation rate is 11% and interest rate are 12%. Inflation keep going up. The same will happen in the USA
And when is my pay rate expected to go up 200-300%??
Or am I just expected to sit here silently with a smile on my face as my Standard of living gets cut in literal half ?? Or 2/3rds If your 3x price increases are real ??
When does my pay keep up!?! Fucking when !?!? I'm not doing this !!! I am NOT taking a god damn 50-75% hit to my paycheck silently !! You'll hear my fucking rage in the streets !!!
No one cares about your rage in the streets. Try and behave like an adult and not a barbarian.
@@TheSnackAttackingSnorlax you should work more and harder before you blame others for your failure
Obey and Shut Up
Trouble is the Public Debt has grown to incredible limits. Not a single country can spend more than what it produces for a long period of time. Eventually the Public debt, shall no longer be able to be withstood and the whole castle of cards shall tumble down.
Summers always surprises me with his clear thinking and frankly accurate prognostications. And I say that knowing he is playing for the "other team."
What a Monday morning quarterback. Instead of allowing corrections you eased, so did Powell, go back to Harvard.
I commented earlier in another video that Jerome Powell is no Captain Sully and there is no soft landing .
Great interview.
The Greatest Generations had the courage and fortitude to work hard and fight hard to build the United States into a great country with good values. They are gone and that nation is gone.
The majority of Americans have abandoned fairness and good values
Every kingdom divided against itself is brought to desolation
Fed Effective Funds Rates need to go up by at least 700 basis points. I agree with Summers what is the Fed waiting for??
It does but S&P would go to 1500, unemployment to 20% and US federal taxes would not cover interest payments on the national debt.
Fed (and all of us) are now dammed regardless.
Fed is feeling tail winds and just acting and it seems like they are in control but this economy has been hijacked from them they don't have any control.
Take a look at 1 month T bill 25% up on Friday alone. They haven't even become selling them yet look at that jump.
They lost all control
@@NikolaStamenkovic6 - agreed and market forces will take over and crash the bond markets for them.
@@jivepatrol6833 you bet they will or they did. Time will tell.
1 month t Bill rose 25% in one day. And that used to be something fed had most of the control.
If actual inflation is 9 percent then the interest rates need to hit 9.25 percent.
The only way to rectify inflationary pressures where you can't increase supply and drive down costs is to raise taxes on large incomes and corporate profits. Getting the deficit under control needs to be back on the table.
If everyone doesnt pay an equal % in taxes wtf does Equal mean?
Fed forecasts are always wrong. The Fed is focused on what is best for their stockholders - the commercial banks - that is why they have been so slow to raise rates.
This is completely wrong. Historically speaking, the financial sector does well in an environment of potential rate hikes.
Inflation is good, look at Venezuela, they created wealth so strongly that all of them earn millions in income. Zimbabweans earn trillions in income, they even have a 100 trillion Zimbabwe dollar note. I want to be a trillionaire too
😂
Even though the fed was wrong last year about the transitory inflation , nobody is admitting that a lot the current inflation Is tied up to russia s war , and in reality nobody could’ve has seen that coming not even the fed , we have to deal with what we have in front of us
Larry is obviously a highly intelligent person who understands the current negative effects of the modern PC culture.
There's no economist in the Fed, period.
I have an idea for how Americans can get inflation down. We should eat half as much (saves 40% off last year's food budget and some inches off waist size, and probably huge health care savings). We could also go back to multigenerational households or at least get a roommate instead of living alone (we all prefer living alone but come on guys, it'll be fun and we'll kill rental inflation quickly and gain the upper hand against landlords)
When the money supply is increased by 80% in 18 months then you'll get high inflation for 18-36 months at least to absorb the inflation of the money supply.
So was Janet Yellens transitory inflation..🤣
Ohh Lord protect us from democrat tyranny.
BBB would have fixed this, it was part and parcel of a major economic recovery plan. We'd still be sitting at 7% GDB right now with a NEEDED 5% inflation.
After 30 years of fooding the financial system with $$$ their HAS TO BE CONSEQUENCES...
Gas exporter, farm yields are good, why are prices going up so fast here ?
Larry Summers the one who dragged all of us into crisis in 2008 is now a super star hahah... People defo forgot what happened in 2008
Half a Point I baked in with this most recent selloff in stock and crypto if they raise 3/4 or 1 point the market will meltdown
Please don't sugar coat anything on our poor economic conditions anymore, the USA will soon become the next Venezuela.
Clean the swap and clean the FED. If I made a mistake like that I'd lose my job in a second. I expect more from those who's misactions can bring down a nation.
Both parties need to be banned so that independents can take over. The fed is just continuing 20 years of fiscal irresponsibility, 20 years ago we should have passed a balanced budget amendment as the year 2001 was the last year the federal budget was balanced.
if I were at any OECD central bank, I would want a combo of negative real rates and inflation in the 6-7% range - would allow to reduce sovereign debts and facilitate business growth, no?
I never expected the fed to admit to anything but they got close (all old blad wrinkled men in suits are the fed to me)
We all need mean nasty tweets back.
What’s funny is bitcoiners have been calling it for years. Kids on TH-cam seem to know more about monetary policy and it’s effects on the economy. Whatever tho, keep trusting the “experts”.
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Who is going to buy the is govt debt to finance deficit spending? The fed. This would be QE
Fire all 900 economists at the fed
End the fed
This guy just needs to run for President. We need a leader like Summers. The New Democrat and New Republican parties are a total joke.
Austrian economists have nailed this call.
No. Austrians are 100% anti-central bank and frankly have no idea how to deal with supply side shocks such as a severe run-up in the price of oil. This inflation is not caused by central banking. There are other developed nations around the world which did not stimulate to nearly the degree we did but are currently struggling with similar/more inflationary pressure than we are. Don't stick to one macroeconomic ideology, read widely about the different schools of thought.
@@chrislimnios9180 yes 10 trilions dolars injected into systems by central banksters isnt causing inflation lol.
@@chrislimnios9180 correct Chris, we are 100% against central banking. AND we nailed this call. The wise central planners you worship have had about the same record as my 4 year old. You can’t believe anything they say, and they have such an abysmal job performance it’s amazing that people like you still think they have any credibility at all.
Austrian economics (as should all economic schools) does not try to prescribe all of the correct policies to micromanage the world economy. It’s entirely too complex for a few wise overlords to manage correctly. Economics is simply supposed to describe what is happening out in the economy.
Because, unlike you, we don’t think we have the right to rule over other humans.
Fed members were getting rich on their policy decisions. They weren't wrong, they were greedy.
In a time of woke, BLM loving democrat idiocy, it is very reassuring to hear an intellectual speaking. Joe and his crazies have to go or we will be doomed
This video is talking about inflation and you bring up BLM. Stfu.
Dual mandate is at least partly to blame
I expect the FED a 5%....6%...7% rate at the end of the year.......right now the real inflation is 12%..
Inflation is a economic cancer........
Will need 10% rate to put back the genie in the bottle
I'm ready since 2018...pay my last mortgage.......
Nice!
Blame it on Russia, that's the only escape. But wait, they saw the war coming and warned it was imminent, but let it happen. Maybe they needed it. Helps with economic activity in defense and energy locally. You get people to rely and buy from you, sanction the other supplier and blame the guy next to Taiwan to keep the economic activity tilt to local vs import. Only way to save the house.
And people made decisions believing the fed
😂😭😂😭😂😭😂😭😂😭💀💀💀
Hard assets, buy 'em if you can but save some cash for when the economy collapses.
Yep! Unfotunately most Americans don't have that kind of wealth.
By the time this really crashes.. I'll be lucky to have 2 nickels to rub together !!
They need more accurate data. Firstly, by researching what exactly is the _real_ and _current_ rate of unemployment. We conservatively estimate unemployment--and --underemployment--to be near a whopping 30%. Secondly, confirm the physical locations of the middle class. Thirdly, what social changes need to be implemented A-S-A-P so the middle class doesn't become the non-participatory poor class. Preferably by enforcing _positive_ changes: offer more carrot and way less stick. Without a middle class, there's no one left to help transport and distribute goods nor to facilitate services. Stop flogging them in the back with predatory finances because we're bleeding to death in the streets.
This is about climate change and white supremacy these are the two biggest threats according to Brandon. His policy clearly show us, thats what hes focused on. Pushing Electric, killing gas, and CRT in every school in America. What you said would be great if we had a Bush Sir, or Trump but most our leaders are idiots.
Amen brother 💯
Everyone in the financial industry is asleep at the wheel. I should stop losing money trading options and just get a job working at a firm. Im sure my lack of experience is 20x more useful than the inbreed activity they procure
Shutup
Summers is quite disingenuous in his critique of Khan. Never forget that he was against regulations on banks trading derivatives which led to risky behavior and a precursor to the financial crisis. He’s not dumb but he advocates for incredibly dumb things.
Oil prices are the key to stopping the coming of a recession, all the rate increases will do is help bring on the recession by suppressing housing. Drill , drill, drill is the only way to bring down prices oil is the key .🙈
Biden needs to listen to Larry Summers. Biden could save face by taking cues from the Obama Administration. Summers could serve Biden well. Fed also would benefit from his counsel.
The Fed under Obama, kept quantitative easing going and artificially held the interests rates down; so stop the nonsense.
Biden isn't head of the Fed you clown.
Larry Summers is the worst he is the reason why people can't get ahead right now go look at his policies under Bill Clinton and the bills he supported. that hurt 401ks and people savings.
Summers rocks 💪🏽
But they do have a full ground to be panicked! 😆 Where else to look!!
Inflation is 20%
Academic populism of a rather unfortunate sort…too true…
It still is delusional
Will the incompetent in the Federal reserve be FIRED or not????
He took us to 07
Fed up
Emergency rate cut should have been rescinded long time ago. Other than that, I do not see why the Fed should cause a global crisis by implying a high terminal rate. Do you have any idea on how the EMs are being squeezed due to strong reserve currencies? The inflation we are seeing today is primarily due to high energy prices and supply issues. Energy supply does not meet demand because we have collectively declared that fossil fuels are bad, and even some states sued energy companies. Why would there be investment into exploration and production when you threaten producers with banning internal combustion engines or tax-incentivizing EVs?
What fool is surprised? 9 TRILLION DOLLARS of printed money.....duh
Money supply is one part of multi part problem.
This is why you diversify and keep 50% cash in these environments. When we hit 3600 I'll slowly begin adding money to VTI and average down. Also UNH is my largest position along with NEE. Those stocks are doing well this year. You have to know what to buy. If not, just slowly average down in VTI and keep a good amount of cash. It's also better to sell with a 20% loss then lose another 30%!! It's NEVER too late to sell as these bozos are suggesting!! It's called CUTTING YOUR LOSSES! thank God for a friend of mine who introduced me to Sam williams. 2 weeks have been trading with him my btc has increased rapidly.and my portfolio grows to 5.7BTC in a week .....
My first investment with Sam gave me a profit of over $ 70K and ever since then he has never failed to deliver and I can even say he is one of the sincere brokers I have known .., .. 👊😎
Yeah that's right I think the best way is to invest with a professional, at least it saves the trauma of too much losses, This just surprised me because I also invest with Sam .
Great skills and knowledge about the market. I enjoy full profits and easy withdrawal with no complains, trade with the best.
Any possibility Fed will hike 75 basis in June as contagency move?
Zillow, what say you?
Larry there's was to much money printing and leaving the interest alone never seen in my live o interest rates to much money spending no one saved like the old days
All intentional
Puts on the spy500 paid great today!
Larry is a Democrat, and even he is blaming this on Biden’s reckless 2021 spending, first and foremost
Nobody can't predict the economy,......economy is like a dragon with seven head.....you cut one head...grow back with different scale
Recession is most likely, maybe a depression. God save us if we have Stagflation. The fact they are using the word is terrifying.
Nobody can't means that everybody can.
Jerome Powell better conjure up his inner Paul Voelker and get this inflation under control.
“Never heard of the guy”
does anyboby know where the fed came from. dont be scared