Money and Finance
Link to interview: Q&A: Former Federal Reserve chairman Paul Volcker '49
[H/T Zero Hedge]
- Which Way For Bonds? Mapping A Path Forward - By Bill Gross
Q: Can you explain what is happening in markets now? Gross: In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later...
- John Mauldin: The Theology Of Inflation
We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I’m sorry – your answer is wrong. Or rather, we can’t know if your answer is right or wrong because we are not sure what is meant by the question. We may...
- Beating Inflation…
Via notes from Berkshire Hathaway’s 2010 Annual Meeting: Question: What are key metrics you look for on inflation, and catalysts for a future rise? Warren Buffett: You give me credit for more brainpower than I actually bring to the question. You can’t...
- Leucadia National Annual Meeting Notes 2012
From The Brooklyn Investor blog (found via the Corner of Berkshire & Fairfax). LUK is an Inflation Play In answering the above question about the future of LUK, Steinberg said that they started first and foremost as opportunists. He...
- Thomas W. Phelps Quote (another On Inflation)
From the book 100 to 1 in the stock market. Remember this was published in 1972. The correct answer to the question, “What does inflation mean to common stocks?” is: “Whatever inflation means to their earnings and dividends.” Inflation is...
Money and Finance
The Daily Princetonian speaks to Paul Volcker
Link to interview: Q&A: Former Federal Reserve chairman Paul Volcker '49
DP: Pretty recently, some economists have suggested that the central bankers took [the threat of] inflation too seriously.
PV: I’ll give you a simple answer. The responsibility of any central bank is price stability. I was at the helm at that time. Price stability is two percent inflation, which we can’t closely control anyway. They ought to make sure that they are making policies that are convincing to the public and to the markets that they’re not going to tolerate inflation.
DP: And does high inflation matter as long as it’s expected?
PV: It sure does, if the market’s stable. And if it is expected, then everyone adjusts, and it doesn’t do you any good. The responsibility of the government is to have a stable currency. This kind of stuff that you’re being taught at Princeton disturbs me. Your teachers must be telling you that if you’ve got expected inflation, then everybody adjusts and then it’s OK. Is that what they’re telling you? Where did the question come from?
...
DP: Okay. And to get back to the central banking a little bit, given the trade-off between inflation and unemployment –
PV: I don’t believe that. That’s my answer to that question. That is a scenario and a delusion, which economists have gotten Nobel Prizes twenty years ago to disprove.
[H/T Zero Hedge]
- Which Way For Bonds? Mapping A Path Forward - By Bill Gross
Q: Can you explain what is happening in markets now? Gross: In 1980, the Federal Reserve, led by Paul Volcker, tightened the quantitative noose to tame double-digit inflation, fueling an unprecedented tailwind for bond prices. Thirty years later...
- John Mauldin: The Theology Of Inflation
We begin this week with a simple pop quiz. Is inflation good or bad? Answer quickly. I’m sorry – your answer is wrong. Or rather, we can’t know if your answer is right or wrong because we are not sure what is meant by the question. We may...
- Beating Inflation…
Via notes from Berkshire Hathaway’s 2010 Annual Meeting: Question: What are key metrics you look for on inflation, and catalysts for a future rise? Warren Buffett: You give me credit for more brainpower than I actually bring to the question. You can’t...
- Leucadia National Annual Meeting Notes 2012
From The Brooklyn Investor blog (found via the Corner of Berkshire & Fairfax). LUK is an Inflation Play In answering the above question about the future of LUK, Steinberg said that they started first and foremost as opportunists. He...
- Thomas W. Phelps Quote (another On Inflation)
From the book 100 to 1 in the stock market. Remember this was published in 1972. The correct answer to the question, “What does inflation mean to common stocks?” is: “Whatever inflation means to their earnings and dividends.” Inflation is...