The Madness of Bill Gross

I agree that they cut rates too much, but I think they do it, not for political reasons, but for having their economic legacy tainted. Maybe that might be political in and of itself.

Chris of AZ @ Jun 04, 2008 19:16:43 PM

Chris, even you have noticed that the Federal Reserve went too far the wrong way cutting interest rates. They may excuse themselves, or state that they don't have to "justify" anything to us mere mortals, but no one at the Fed is dunce enough to "believe" that inflation is over-stated. They cut rates for political reasons and, in part, because they are SCARED of a meltdown on their watch.

Daniel David of @ May 29, 2008 15:54:33 PM

Daniel David, trying to base inflation on the rise in postage (a rate arbitrarily set by the Feds), a hospital day (which are not even set by market pricing), a nursing home month (also not set by market pricing), then a statistic that you don't believe is honest, would be even less honest. Yes, the CPI is not an accurate statistic, but until economists come up with a better way to measure inflation (and not based on the things you presented), the CPI is what we have. By the way, the CPI does try as much as possible to compare "apples to apples" goods and services.

If the Fed believes that inflation is "overstated" that can at least give some reason as to why they are still cutting interest rates. However, I think other factors (weak dollar, increasing commodity prices) should start forcing the Fed to rethink its rate policy and start looking at increasing rates.

Chris of AZ @ May 29, 2008 11:02:10 AM

Daniel David, trying to base inflation on the rise in postage (a rate arbitrarily set by the Feds), a hospital day (which are not even set by market pricing), a nursing home month (also not set by market pricing), then a statistic that you don't believe is honest, would be even less honest. Yes, the CPI is not an accurate statistic, but until economists come up with a better way to measure inflation (and not based on the things you presented), the CPI is what we have. By the way, the CPI does try as much as possible to compare "apples to apples" goods and services.

If the Fed believes that inflation is "overstated" that can at least give some reason as to why they are still cutting interest rates. However, I think other factors (weak dollar, increasing commodity prices) should start forcing the Fed to rethink its rate policy and start looking at increasing rates.

Chris of AZ @ May 29, 2008 11:01:46 AM

Bill Gross

While he may be well-known and sought after, Mr. Gross isn't much of a prognasticator. He appeared on a CNBC show in early July 2007 when the 10-yr. Treasury Bond was at 5.25%. He proclaimed that the Fed would begin to raise the Fed Funds rate anew at its August meeting and people should sell the 10-yr Treasury Bond because the economy was running too strong and it's yield would rise to close to 6% by the early fall of 2007. Well, he wasn't too far off, was he....?

marty f of NJ @ May 28, 2008 18:00:07 PM