Comments for The Post Makes It Up on Fed Stimulus at http://www.cepr.net , comment 1 to 4 out of 4 comments http://www.cepr.net Sun, 19 May 2013 06:33:36 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/the-post-makes-it-up-on-fed-stimulus#comment-1402 Yeah, they spiked at 4%. That's hyperinflation isn't it? - Christian Mannhood Thu, 08 Jul 2010 05:06:31 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-post-makes-it-up-on-fed-stimulus#comment-1399 However it's reported, one way it's never reported is how Baker describes monetized debt should be used during a deep recession. It's essentially extra money parked at the Fed, used to absorb excess productive capacity as reflected in the unemployment rate. As long as the two are reasonably in sync, more money for more capacity and labor utilitization, as indicated by low interest rates and deflation, it's not the problem railed at by the austerity crowd. That monetized debt was also used to quell the financial liquidity/insolvency crisis is a different question, which Baker has challenged as unnecessary, noting the government instead could have used its powers in other ways to accomplish the same result for far less cost, which amounted to a huge subsidized bailout. Most journalists can't tell the difference. They see the financial bailout and stimulus as the same thing, a massive subsidy by taxpayers and even slant it further by claiming the bankers paid back their part of the bailout. Thus the seemingly consistent but flawed explanation of "why the market is worried" as reflected in a spike here or a drop there. - izzatzo Thu, 08 Jul 2010 04:07:39 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-post-makes-it-up-on-fed-stimulus#comment-1397 The WaPo is apparently only aware of positive movements of interest rates. Look at this view of 10-year Treasury rate: http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=DGS10&s[1][range]=5yrs The significant spikes since late 2007 are negative: first, the huge drop in late 2008 at the time of the credit crisis; and second the current drop of about 1% starting with the European crisis earlier this year. The rise in mid-2009 was the recovery from the first drop, as general confidence returned and the flight to security abated. The movements (together with those of corporates, which can also be seen at the St. Louis Fed site) indicate that in times of uncertainty investors turn to Treasuries over corporates, and to U.S. securities over European. A few economists, notably Krugman, understood these movements from the beginning, but some others, including Bernanke, are still confused, or just pushing political objectives. - skeptonomist Thu, 08 Jul 2010 03:23:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/the-post-makes-it-up-on-fed-stimulus#comment-1395 10 year treasuries dropped from 3% to 2.5% March 17-18, then rose steadily to 4% in mid June, then bounced around 3.5% for the rest of the year. http://www.treas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_2009.shtml - fusion Thu, 08 Jul 2010 02:39:15 +0100