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Bernanke Sees No Quick End To High Rate Of Joblessness

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http://www.nytimes.com/2010/07/22/business/22fed.html?_r=1&ref=business

The unemployment rate in the United States is likely to remain well above 7 percent through the end of 2012 and the duration of President Obama’s current term, according to the Federal Reserve.

Ben S. Bernanke, the Fed chairman, told Congress on Wednesday that it would take “a significant amount of time” to restore the 8.5 million jobs lost in the United States in 2008 and 2009, and warned that “the economic outlook remains unusually uncertain.” He also warned that financial conditions, particularly the European sovereign debt crisis, had “become less supportive of economic growth in recent months.”

In presenting the Fed’s semiannual monetary policy report to Congress, Mr. Bernanke struck a more cautious tone than he did when he last submitted the report, in February.

In written testimony to be delivered to the Senate Banking Committee, Mr. Bernanke said that the economic expansion that began in mid-2009 was “proceeding at a moderate pace,” though with substantial help from “stimulative monetary and fiscal policies,” in the form of easy credit from the Fed and substantial federal spending.

He projected that rising demand from households and businesses should help sustain growth, although fiscal measures by the government and inventory restocking by businesses would account for less stimulus than they had in recent months. And he warned that the housing market “remains weak, with the overhang of vacant or foreclosed houses weighing on home prices and construction.”

Mr. Bernanke described the slow recovery of the job market as “an important drag on household spending.” Private payrolls grew by about 100,000 jobs a month in the first half of the year — a pace that Mr. Bernanke called “insufficient to reduce the unemployment rate materially.” And nearly half of the unemployed have been out of work for more than six months, with serious consequences for their long-term earnings and employment prospects.

Inflation has trended downward in the last two years, Mr. Bernanke said. That development has caused some Fed officials to worry that the economy could be threatened by the prospect of deflation, a fear that Mr. Bernanke did not explicitly address in his written remarks.

At its latest meeting, in June, the Federal Open Market Committee, the Fed’s top policy-making arm, slightly lowered its growth forecast for the rest of this year, to a range of 3 to 3.5 percent. It expects growth of 3.5 to 4.5 percent in 2011 and 2012, and the unemployment rate to drop to 7 to 7.5 percent by the end of 2012.

“Most participants viewed uncertainty about the outlook for growth and unemployment as greater than normal, and the majority saw the risks to growth as weighted to the downside,” Mr. Bernanke said. “Most participants projected that inflation will average only about 1 percent in 2010 and that it will remain low during 2011 and 2012, with the risks to the inflation outlook roughly balanced.”

Mr. Bernanke’s testimony came hours after President Obama signed into law a far-reaching overhaul of the financial regulatory architecture.

The Fed chief said that “much work remains to be done” to install the legislation through regulations, but added: “I believe the legislation, together with stronger regulatory standards for bank capital and liquidity now being developed, will place our financial system on a sounder foundation and minimize the risk of a repetition of the devastating events of the past three years.”

Laying the ground work for more printing?

So far trillions committed and you've not fixed it, well done Ben you know what your doing. He clearly needs a bigger cheque book to fix it. Easy peasy....

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Which I read as being "Hey, you know what people - I think we are going to have to live with this many unemployed for a 100 years"... and then they will prepare so, write them off and move on.

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absolutely, an excuse to flop his wad out.

bye bye dollar.

money dished out means that private lenders need lend no more...indeed, why would they want to? It could lead to a crackup boom in the US...except there isnt much that people can buy that will be worth anything to an impoverished population.

starving people dont want gold, houses or cars

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He should ask Cameron about how the UK private sector is going to create jobs at twice the rate of the boom. :lol:

Magic, prayer, wishful thinking and bull5h1t.

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If the US of A count their unemployed ln the same manner as us , if they say 7% they must have more like 14% .

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Unless they had a new WPA that created millions of jobs I don't see how unemployment would come down. Its not like there is companies scrambling to find large numbers of new employees.

The new economy companies like Google employ relatively few people. And have no need for average people of 100iq. The bottom 95% of Americans are basically useless to companies like Microsoft, Google, Apple, biotech companies and so on.

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Unless they had a new WPA that created millions of jobs I don't see how unemployment would come down. Its not like there is companies scrambling to find large numbers of new employees.

The new economy companies like Google employ relatively few people. And have no need for average people of 100iq. The bottom 95% of Americans are basically useless to companies like Microsoft, Google, Apple, biotech companies and so on.

Except as customers.....

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Except as customers.....

Yep. A few rich guys just don't buy very much. See the collapse of the US auto industry and the wipeout of its shareholders as the mass market contracted.

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"They have tried this before (printing) and it does not work. What we need to see is a kowtowing to the inevitable economic cycle which will allow the patient to recover far more quickly than another dose of the same poison that caused the sickness in the first place. The swelling must be allowed to go down and a sharp period of deflation will heal the patient in the long run."

I agree.

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"They have tried this before (printing) and it does not work. What we need to see is a kowtowing to the inevitable economic cycle which will allow the patient to recover far more quickly than another dose of the same poison that caused the sickness in the first place. The swelling must be allowed to go down and a sharp period of deflation will heal the patient in the long run."

I agree.

"Realistbear quotes random crap out of context without attributing anyone because his arguments don't have a leg to stand on. There is no basis for almost anything he says either empirically or historically and he has to get by invoking random authrity and changing headlines and sometimes article content. It's damn sad. He'll still be talking about deflation as he unloads his wheelbarrow full of ten grand notes at his local supermarket"

I agree.

Edited by Injin

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"Realistbear quotes random crap out of context without attributing anyone because his arguments don't have a leg to stand on. There is no basis for almost anything he says either empirically or historically and he has to get by invoking random authrity and changing headlines and sometimes article content. It's damn sad. He'll still be talking about deflation as he unloads his wheelbarrow full of ten grand notes at his local supermarket"

I agree.

I disagree with what appears to be an opinion if I am not mistaken.

Embrace deflation--its every HPCer's friend.

PS Been buying gold on the dips again? ;)

Edited by Realistbear

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I disagree with what appears to be an opinion if I am not mistaken.

Just an observation.

Embrace deflation--its every HPCer's friend.

I'd love to if there was any. There isn't so I won't bother.

PS Been buying gold on the dips again? ;)

Nope.

I now have no gold.

edit - I have also never been a goldbug. There is however, hyperinflation in prices to come after the hyperinflation that has already occured.

Edited by Injin

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Just an observation.

I'd love to if there was any. There isn't so I won't bother.

Nope.

I now have no gold.

edit - I have also never been a goldbug. There is however, hyperinflation in prices to come after the hyperinflation that has already occured.

"I am sometimes asked if there is any difference between an opinion and an observation. The first involves subjective analysis whereas the second is much like it in that it involves subjective perspective."

I agree.

BTW:

I saw an example of deflation yesterday when a house I looked at a week ago just deflated by £20k.

Edited by Realistbear

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"I am sometimes asked if there is any difference between an opinion and an observation. The first involves subjective analysis whereas the second is much like it in that it involves subjective perspective."

I agree.

Which is why my comment was an observation, not an opinion.

There is only inflation.

You are in denial of that fact.

There is no empirical data for your position.

You do alter headlines and articles.

You do invoke authority.

You do quote out of context and unattributed.

Everything I "quoted" about you is true.

Get over it.

Edited by Injin

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I disagree with what appears to be an opinion if I am not mistaken.

Embrace deflation--its every HPCer's friend.

PS Been buying gold on the dips again? ;)

What about those HPCers who will inevitably be made unemployed and never be able to afford a home - possibly for a very, very long time?

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Which is why my comment was an observation, not an opinion.

There is only inflation.

You are in denial of that fact.

There is no empirical data for your position.

You do alter headlines and articles.

You do invoke authority.

You do quote out of context and unattributed.

Everything I "quoted" about you is true.

Get over it.

Deflation and inflation is another way of expressing the economic cycle. Brown thought he could give us endless inflation but the cycle beat him.

Invoking authority is like quoting something. I have seen most on this forum quote authorities from all kinds of sources. Some even invoke their own opinions (observations). IMO quoting sources or invoking them is quite acceptable.

Using a title for a new post that quotes an article with a different headline is part of the subjectivity you cannot escape from. For example The Express might have a headline "House Prices set to soar" and a HPCer might title the thread something different to express a contrary view. For example "Daily Excess Ramping Again," or "More False Stats from the Excess."

You have seen many articles referring to periods of deflation (Japan, USA post 1929, 1950's etc.) but it seems to be your view that only inflation can exist. Deflation is simply a state of being where prices fall relative to some other given--perhaps relative to wages. If there are more things in your basket that are going down than up you have overall deflation. The word exists in the dictionary because it was coined to describe an actual state of being. Why do you deny it?

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What about those HPCers who will inevitably be made unemployed and never be able to afford a home - possibly for a very, very long time?

A very big downside to the HPC, I agree. Taken in isolation a HPC is a good thing and the bad part will always be the collateral damage. But to try to avert a HPC to avoid collateral damage may be the worst option. This was what Brown essentially tried to do after the first signs of a HPC emerged.

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Deflation and inflation is another way of expressing the economic cycle. Brown thought he could give us endless inflation but the cycle beat him.

Inflation and deflation are to do with the money supply.

No clue what Brown thought.

Invoking authority is like quoting something. I have seen most on this forum quote authorities from all kinds of sources. Some even invoke their own opinions (observations). IMO quoting sources or invoking them is quite acceptable.

Unattributed is lame, and doing it like the authroity alone is enough to mak rthe argument is pathetic - Shakespeare said that so you must be wrong.

Using a title for a new post that quotes an article with a different headline is part of the subjectivity you cannot escape from. For example The Express might have a headline "House Prices set to soar" and a HPCer might title the thread something different to express a contrary view. For example "Daily Excess Ramping Again," or "More False Stats from the Excess."

I agree completely. And am glad you are now admitting to doing it.

You have seen many articles referring to periods of deflation (Japan, USA post 1929, 1950's etc.) but it seems to be your view that only inflation can exist. Deflation is simply a state of being where prices fall relative to some other given--perhaps relative to wages. If there are more things in your basket that are going down than up you have overall deflation. The word exists in the dictionary because it was coined to describe an actual state of being. Why do you deny it?

Japan had the carry trade and no deflation whatsoever and there are NO examples of deflation at all under fiat money, except for full blown currency repudiations. The US had a deflation only if you completely ignore the change from gold to paper and say that dollars are the same thing if you go from a real weight of gold to a signed certificate from a known fraudster.

I don't deny that deflation is theoretically possible with fiat money, only that it's never actually happened under a fiat regime and it isn't happening now.

You are seizing on anything and everything to call deflation with zero actual evidence for it.

Edited by Injin

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Inflation and deflation are to do with the money supply.

No clue what Brown thought.

Unattributed is lame, and doing it like the authroity alone is enough to mak rthe argument is pathetic - Shakespeare said that so you must be wrong.

I agree completely. And am glad you are now admitting to doing it.

Japan had the carry trade and no deflation whatsoever and there are NO examples of deflation at all under fiat money, except for full blown currency repudiations. The US had a deflation only if you completely ignore the change from gold to paper and say that dollars are the same thing if you go from a real weight of gold to a signed certificate from a known fraudster.

I don't deny that deflation is theoretically possible with fiat money, only that it's never actually happened under a fiat regime and it isn't happening now.

You are seizing on anything and everything to call deflation with zero actual evidence for it.

What's your explanation of the Money Supply?

To me Money supply = money in circulation in the economy in all forms.

therefore fall in money supply = deflation vice versa

If money is escaping from the system faster then it's put in we have deflation.

If were having inflation, ok , please expain.

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What's your explanation of the Money Supply?

To me Money supply = money in circulation in the economy in all forms.

therefore fall in money supply = deflation vice versa

If money is escaping from the system faster then it's put in we have deflation.

If were having inflation, ok , please expain.

Money is whatever most people think it is, i.e. what they will most often accept in a given area for trade.

While the truth of the matter is that most trade is conducted in bank credit debt, the population doesn't operate on that understanding - and currency or cash is the actual money supply as far as they are concerned.

So we get debt deflation (Steve keen is good on this) and monetary inflation.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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