When NY Fed's Bill Dudley was pressed by a working-class audience about how he can view inflation as low when grocery prices keep rising, his response: "You can buy an iPad2 that costs the same as an iPad1, that’s twice as powerful." Grumbling ensued, as Dudley is stunned to learn that iPads are more popular at Fed offices than on the streets of Queens.
This is not going to end well. No one at the Fed has a clue. They are isolated in a wealth bubble. They don't understand how people live. An Egyptian or Tunisian style melt-down looks more and more likely.
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The disconnect is the same in the UK.
The poiticians are overwhelmingly brought up studying politics at uni, get a job as a politicians aide or advisor, then getting elected through the political machine..they never touch the real world.
They are so disconnected that they think that they know what they're doing; "they know best"
It's all going to end in tears
By tears, I assume you mean wailing, gnashing of teeth, rending one's clothes, starving, riots, and massive social upheavel
I just don't get this cluelessness...I work in banking and while not in Fed income scales I'm in the top quartile or quintile depending on bonus and I'm having to adjust my budget to account for this stuff.
How can they be so lost in mathematical theory to not get that while an iPad and an iPad2 are fungible and thus more power for the same price is a deal neither can replace ground beef, bread, or lettuce?
These fools are quite disconnected alright. These are the same idiots that flood their countries with mass immigration and illegal immigrants. The same individuals who don't see the decline of the West. The same people that don't see the degradation of culture and the financial armageddon arriving.
While the iPad example is stupid, the inflation is low (albeit not non-existent, of course.)
A whole generation grew up and entered middle age without any real idea about what an actual high inflation looks like.
I'd argue that inflation has been improperly measured. Sure, China being the world's manufacture of cheap electronic goods, has lowered the prices of lots of toys. Prices meanwhile on housing, food, and clothing have been moving up even before the financial crisis of around 2007. Masked by historic lows in energy, which in turn were fragile, based on Russia, Iran, Mexico, and Nigeria desperate to pump out oil to gain earnings to pay off internal patronage networks.
Which as we've seen, was not sustainable. New oil production did not come on line, existing main producers are hideously vulnerable to political upheaval, and the costs of oil increase filters down to everything.
This is not rocket science. As Herb notes nearly every manufacturer and consumer products company and folks like McDonalds and Starbucks have been dealing with energy-led increased costs since 2007.
And yes, Peter Brimelow is correct. It will all end in tears, which is to say quite likely the end of the "Cold Civil War" and the outbreak of a hot one, based on divisions of spoils, etc.
The elites are getting awfully brazen in telling us who's boss. I saw another interview with a Fed governor who, asked about the affect of ZIRP on senior citizen's retirement income said something like "well, it's their choice not to move up the risk/return ladder". Meanwhile the bankers "borrowed" 2-3 trillion of free money.
And Obama's vacationing in Rio. How nice would it be to have an adult in charge?
The poiticians are overwhelmingly brought up studying politics at uni, get a job as a politicians aide or advisor, then getting elected through the political machine..they never touch the real world.
They are so disconnected that they think that they know what they're doing; "they know best"
Substitute "politicians" for MBA's, and "politics" for Business School. Voila!
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