Wising Up

We the people, might be wising up. From Reuters:
The president of the New York Federal Reserve Bank doesn't normally face a raucous crowd.
But in Queens, New York, on Friday, William Dudley was bombarded with questions about food inflation, and his attempt to put rising commodity prices into a broader economic context only made things worse.
"When was the last time, sir, that you went grocery shopping?" one audience member asked.

...So, Dudley sought an everyday example of a price that is falling.

"Today you can buy an iPad 2 that costs the same as an iPad 1 that is twice as powerful," 
...This prompted guffaws and widespread murmuring from the audience, with one audience member calling the comment "tone deaf."
"I can't eat an iPad," another quipped.

4 comments:

Anonymous said...

Tsachy, any thoughts on Japan nuclear crisis on markets?

Tsachy Mishal said...

From a human perspective its a tragedy but I dont think its a big deal from a market perspective.

Anonymous said...

People still don't get it. The fed is engineering inflation. Inflation targets have not been hit. What they don't want people to know is that they want more inflation, but they will simmer the frog up so to speak vs. price shocks

revelo said...

Sounds like a lower-middle class crowd. The sort of workers who have NOT been receiving wage increases, who do NOT participate in the stock market to any great extent, whose primary asset is housing, which continues to fall in price. The "inflation" this dumb money crowd complains about amounts to a tax increase, which is hardly "inflationary" in the sense of setting off a self-sustaining wage-price spiral.

@Anon: Of course the Fed is trying to engineer mild inflation. That's their job. And they most certainly DO want people to think they want inflation (at the target level of 2% or so). If people ever thought the Fed does NOT want inflation, we'd fall into deflationary depression immediately.