Saez And Zucman’s Failure On Wealth Inequality

For aficionados of how the world is going to pot, the plutocrats are just sucking it all up, a correction to the Saez and Zucman estimates on wealth inequality:

It ain’t happening like they say it is.

There is though this interesting additional question:

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US CPI Inflation Is Still Below Federal Reserve Targets

The big economic question is, well, when is the Federal Reserve going to raise interest rates again? Or, if you’re very gloomy about Trump’s tax cut boost and its effects, when is the Fed going to lower them again? That is, monetary policy does actually matter.

At which point everyone is looking to the runes of the various inflation measures. On the sensible grounds that the Fed has an inflation target, we can look at how reality is according with that and thus divine.…

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Producer Price Inflation Isn’t There – Thus No Change In Federal Reserve Policy

Whether and or when the Federal Reserve is going to change its monetary stance is one of those questions we’d like an answer to. The Fed even tell us what it is they’re looking at which will guide their decision. Therefore we can go look at the same things and make up our own minds about that evidence. And, of course, hope like hell that we’re drawing the same conclusions as the Fed:

Food and energy are always more volatile in price than the rest of the economy.

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Well, Yes, Obviously Mr. Dalio – The Fed Raising Interest Rates Should Impact Asset Prices

This is not the most remarkable observation of all time by Ray Dalio, that the Federal Reserve interest rate rises are reducing asset prices. For the point and purpose of the Fed’s reducing interest rates – and that QE – during the recent unpleasantness was to raise asset prices. Now that’s all over things should return to normal, including the inflationary effects of that increase in the money supply upon asset prices. This isn’t a mistake nor an oversight, it’s the point:

Hedge fund billionaire Ray Dalio argued Thursday that the Federal Reserve has raised rates to a point where they’re hurting asset prices.

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Trump’s Shouting At The Fed Over His Own Tax Policies

There is a certain amusement to watching Donald Trump shouting at the Federal Reserve over interest rate rises. Less amusement about the Dow falling 800 points but still. For the rate rises are the result of the tax policies that Trump has pushed through.

Do note, I think the tax policies are just fine, beneficial. But the rate rises are still the result of them:

President Donald Trump has renewed criticism of the US central bank, blaming “crazy” interest rate rises this year for prompting steep stock market falls.

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Tankslapper

In motorcycling, there exists the charming term “tankslapper”

A small instability in the steering begins a cascading failure as the handlebars first twitch, then tremble, and then finally oscillate violently enough to buck the rider off the bike.

We can apply it elsewhere.

The Federal Reserve started in 1913, and the gold standard was abandoned the following year. Then in 1971 even the gold exchange standard was abandoned by Richard Nixon – governments in the developed world could suddenly print money to their heart’s content, without having to perform the tiresome act of hoiking metal out of the ground.…

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