Archive for March, 2017

On the Nature of Price Movement

Saturday, March 18th, 2017

There are, I think it is safe to tentatively assert, only two reasons why the prices of things – whether goods, services, financial instruments, derivatives or other commodities – fluctuate.  These can be categorized as flow and state.  Consider first the notion of flow.  At the margin where price determinations are made, there are usually […]

Yellen Gleefully Endorses Wildly Elevated Stock Prices and Wildly Accommodative Monetary Policy

Wednesday, March 15th, 2017

In discussing the neutral level of the Federal Funds Rate after today’s Federal Open Market Committee meeting, Janet Yellen returned to her oft stated idea that there is research indicating that the neutral level of Fed Funds is 0% in real terms.  So if the Fed’s preferred level of inflation, PCE is at, lets say, […]