Saturday, April 16, 2011

Lost Comment...

Once again a comment arrived in my mailbox but not in the comments section.  Sorry for the mixup.

"I will miss him. The guy seems pretty sensible in his reasoning. I found this article about him to be quite informative. I don't think he has put a timeframe on his inflation predictions. He only says that the lag time of the effects of monetary policy are "lengthy and variable." By the time we can see a problem developing, it will be too late to control it. History has shown us that by the time we see a bubble, it pops rather than deflates. How can there be any argument to his views on "too big to fail?" Extremely low interest promotes investment in purely speculative instruments that do nothing to grow the economy.
Maybe I just don't have as much to lose on my balance sheet by agreeing with Hoenig. I will say that my admiration of his ideas on dissent probably makes my life more difficult than it needs to be in my service on boards." 

Fair enough. But the Fed is not just your average school board, and if during my career I had consistently been the lone voice of dissent among them I would have some doubts.

There is an old story about two mothers watching the school band go by. One says to the the other, "Look, there's my Tommy - and he's the only one in step!"

My objection is not his lone voice (been there), but that I think he has been seriously wrong for too long. 


Anonymous said...

Thank you for going to the trouble of reposting and commenting on my comment. I apologize if my slow computer and iffy internet connection is causing this problem.

On USFR today, I heard some guy talking about attributing the repeated successes of Wall Street executives (and farmers) to randomness. I just wonder if this same randomness could be the cause of Hoenig's failures to date.

John Phipps said...


I finishing a great book about that right now
Future Babble: Why Expert Predictions Are Next to Worthless, and You Can Do Better by Dan Gardner. I'll let you know what I got out of it.

My issue is there is no sign of wage inflation, yet inflation hawks seem determined to undercut this tenuous recovery.

Thanks for commenting. I don't know why this issue pops again now and again.