Can Central Banks Really Fix the Economy?- Podcast 8.15.13

Can Central Banks Fix the Economy?

JM Bullion

Summary of Podcast

Ryan and Louis discuss the initial jobless claim data released this week.

Louis points out that fewer people not losing their jobs is not the same as people getting jobs.

Louis and Ryan discuss St. Louis Federal Reserve President James Bullard’s recent statement on tapering and discuss the prospects for tapering.

Ryan notes that the housing market in the Washington DC metro area is turning from a sellers market to a buyers market.

Louis notes that interest rates going up is not because the economy is getting better but only because the Fed is talking about not buying bonds.

Louis notes rising rates will kill the real estate and stock markets.

Ryan and Louis note the constant back and forth about tapering or not tapering.

Louis notes that this taper talk has been going on for months.

Louis notes that the incongruity of Fed saying its wants low rates but doesn’t want to continue QE.

Louis notes that the Fed doesn’t want to admit that QE hasn’t worked so they continue to pretend there is positive data that indicate a recovery. Louis notes that Bernanke said in his congressional testimony that the economy is weak.

Ryan and Louis discuss the inflation numbers and note that there is inflation in food, energy and housing costs- the three largest household costs.

Louis notes that if the Fed thinks QE worked then they should shut it down. Ryan and Louis discuss what would happen if the Fed tapered. Louis and Ryan discuss the dynamic between the President and the Fed.

Louis and Ryan discuss the negative impact that the central planners have on the economy.

Ryan notes some examples of what economists are saying about rising interest rates.

Louis and Ryan talk about the revival of the Adjustable Rate Mortgage. Louis call out those in the real estate industry who do nothing but incessant cheer leading noting that their opinions can’t change reality.

Louis and Ryan discuss the ways to spin data. Louis notes that this housing bubblet does not involve wide swaths of the population like the last housing bubble.

Louis notes that Egypt could be used as another excuse to continue QE.

Ryan and Louis discuss the short term benefits of stimulus spending including public work projects like those in china.

Louis and Ryan discuss the upcoming debt ceiling debate as another reason to continue QE or some form of Fed intervention.

Louis notes that the last two hundred years there has been a drive towards centralization.

Louis notes that the Federal government is far more powerful than individual states because of the Federal system and because they control more money and the ability to create more than the states.

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