Market crash: are we there yet ?

[Rickm505]

Here's a question.

How is that:

fuel prices have doubled,
food prices are up 14%,
the dollar is at record lows ( even the chinese Yuan has risen 10% in the last year against the dollar)

and yet the consumer price index in March only rose 0.3%???

Is the CPI now being calculated by Mrs Rose's kindergarden class or is this the 'New Math' we hear so much about?

[sailaway21]

Originally Posted by sck5

Never in the history of the US has monetary policy been aimed at the exchange rate if internal concerns dictated otherwise. There is no way that is going to change in the near future. And it is very true that that if they keep pumping money out while the economy is tanking and foreigners are not wanting to hold them then the only possible outcome is more inflation.

Actually that is only completely wrong, not just partially wrong. since leaving the gold standard, we've had nothing else to base our monetary policy on than the exchange rate. Inflation, interest rates, etc... are all reflected in the exchange rate. Think of it as a measure of how the rest of the world feels about our credit worthiness.

[chris_gee]

Surely you don't mean that monetary policy is based on the exchange rate? I would have thought it was based on propping the economy or market up, and the fact that being the reserve currency allowed this to be exploited. The third factor is that it allows money to be transferred to the rich by the poor.

[sailaway21]

How do you transfer money from the poor to the rich since the poor have no money?

[chris_gee]

There are more poor than rich and every little helps, besides the middle-class are fair game.

[Rickm505]

Originally Posted by chris_gee

There are more poor than rich and every little helps, besides the middle-class are fair game.

What there is left of us is still fair game.

[Valiente]

Don't know why/there's no sun up in the sky/Stormy weather...

Why the next mortgage crisis may be worse. - By Mark Gimein - Slate Magazine

[xort]

And just who was it that eased all the credit standards, accounting rules and the bankrupcy laws over the last 15 years?
I can remember all the way back to 1993 when conservatives in the US house were being called stupid outright "It's the new economy, stupid" for objecting to changes in the accounting laws; laws put on the books after the '29 crash.

[sailaway21]

"Socializing losses while keeping profits private". More from Geo. Will on pig farming here: RealClearPolitics - Articles - What the Fed's Job Isn't

[sailaway21]

good link, Val.