Erin Burnett Makes False Claims About Federal Reserve

[davidpdx]

The Federal Reserve has made food and gas more expensive, one television news show host said Friday, but evidence shows that's not really the case.

"Easy money has also sent commodity prices higher. This is the rub," Erin Burnett said Friday on her CNN show "OutFront." "Gas prices, as you can see, about double. Regular unleaded was $1.89 in November of 2008. It's now $3.82 a gallon. And food prices are up 54 percent over that same time frame. So easy money isn't so easy."

But there has been no correlation between the Federal Reserve's quantitative easing and commodity prices. The Federal Reserve started its first round of quantitative easing, or asset purchases aimed at stimulating the economy, in November 2008 and its second round in November 2010; there was no resulting, lasting spike in commodity prices. Commodity prices actually peaked in the summer of 2008 before quantitative easing began.

http://www.huffingtonpost.com/2012/09/08/erin-burnett-federal-reserve_n_1866971.html


Damn pesky details! Just another reason to say FUCK YOU to CNN!

[liberal N proud]

1. They keep touting those 1.89 gas prices in 2008, I recall, those prices being much higher...

Until a few weeks leading up to the election.

Many people at the time thought it was the oil companies conspiring to help the drill baby drill campaign if Palin/McCain.

They never show the average gas price for 2008

http://66.70.86.64/ChartServer/ch.gaschart?Country=Canada&Crude=f&Period=60&Areas=USA%20Average,,&Unit=US%20$/G

[davidpdx]

4. When I left the US at the beginning of 2004 to move to Korea

The gas price was still below $2, but that was only a few months into the Iraq War. When I was there last summer it was about $3.75ish (depending on where you are buying the gas).

[liberal N proud]

6. History does not support the story that prices are high because of Obama's policies.

[davidpdx]

11. No, I wasn't saying taht

I was noting that they've been higher for a long time and mostly as a result of things done during Bush's Administration. I should have noted I was talking about last year.

[zbdent]

15. gas was under $3 a gallon in October 2010 ...

and in two weeks (right after the GOP retook the house), it jumped 30 cents. Until the Repugs re-took the house, gas was consistently around $2.50 or less under Obama "and the control of Congress by the Dems".

In fact, the national gas price average was $3.85 in August 2008, $3.84 in September 2008 (those spouting "Hey, gas was under $2 a gallon in 2008 at the election" fail to mention that). They cherry pick.

[Lucky Luciano]

16. Oil prices cratered along with stocks.

There is a high correlation with the economy and oil. E.g. When we had cheaper gas in early June this year, that was also when stocks were getting clobbered due to European concerns.

[dkf]

2. So why did oil and metals jump at the bad jobs number?

Was that not due to expectations that the Feds would ease more?

Oil is affected by a few things as far as I've noticed...supply and supply issues, demand aka growing economies whether global or domestic and fears of inflation.

Why wouldn't it make sense to put your assets in something that will hold value regardless of inflation and currency movements?

[Lucky Luciano]

17. This is true. Oil is highly correlated with the economy,

but government intervention that weakens the dollar also makes oil and other commods more expensive.

If anyone wants a rough gauge to what is happening in oil, just watch what happens to stocks and the direction is about the same. QE jacks up stocks and oil, but do far core inflation is still muted.

[TomClash]

3. Gas prices were over $4 in the summer of 2008

Erin Burnett is a capitalist tool.

[inchhigh]

5. Huff Post sucks. But this article is DEAD ON!

"But there has been no correlation between the Federal Reserve's quantitative easing and commodity prices. The Federal Reserve started its first round of quantitative easing, or asset purchases aimed at stimulating the economy, in November 2008 and its second round in November 2010; there was no resulting, lasting spike in commodity prices. Commodity prices actually peaked in the summer of 2008 before quantitative easing began."

Whoever said this is in la-la land. This is basic supply and demand, not even ECON 101, more like 7th grade Family and Consumer Science. More money in circulation chasing fewer goods is textbook inflation. Commodities may have front-run the Fed some because more easing was expected than we actually got (so prices spiked earlier than they might have) but if the Fed had come through with the "expected" easing, prices would have clearly kept moving upward. As it turns out "easing" by the fed hasn't quite been enough to counteract the money destruction of the credit implosion but to argue this additional money in the system DIDN'T cause commodity prices to be higher than they would have been without it in the system is just embarrassingly ignorant.

There are plenty of good reasons to bash CNN but this isn't one of them.

[Lefty Thinker]

12. Except

that, with quantitative easing, the Fed is using created dollars to buy Treasuries, so it is just an exchange of government liabilities. To be fair, Treasuries do pay interest to the holder, but that is a small percentage of the face-value. This is why QE has not had as much effect (other than lowering the overnight interbank rate) as many people expected because of the quantity of dollars involved.

[Lucky Luciano]

18. No, the correlation is there and you will notice better

if you watch day to day. There was no QE in summer 2008, so you can't base your analysis on that. When QE increases, so does oil all else being equal.

[CobaltBlue]

7. CNN and Erin Burnett

Last edited Tue Sep 11, 2012, 06:28 PM - Edit history (1)

CNN heading down the toilet is their own doing. And Erin Burnett being a part of CNN is example enough why Corporatist News Network is now irrelevant. As Wolf Blitzer would say, "We'll have to just leave it at that."

[Jim__]

8. Gas prices dropped in 2008 because the world dropped into deep, deep recession.

Would these people be touting the low gas prices if we were still in the depths of the Bush recession? No, they'd be blaming Obama for not restoring the world economy.

[Progressive dog]

9. Correlation does not prove causastion and this moron doesn't even have correlation

I believe that excess money in the hands of the wealthy does result in higher prices, since they have so much more to gamble with. When the income of the vulture class and low taxes free up so much money to gamble (they're the casinos) on commodities, tech stocks, housing mortgages, etc.. Eventually these high prices collapse, after people with normal incomes can no longer afford them.
There is at least an obvious correlation that supports my belief.
I suppose, in a sense, that I agree with Burnett, but there is no easy money in the pockets of those who actually use the commodities. These prices are not high due to an excess of money, they are high due to an excess of unchecked greed.
FUCK YOU CNN

[davidpdx]

13. I agree, I'm getting sick of CNN's "faux checking"

haha I just made that up. Damn I'm good.

[davidpdx]

14. She's working on her resume so she can get on at the Neo-Nazi Network

As someone said the other day, you have to be skinny, white and good looking to be employed at Murdock's joint.

[Bad Thoughts]

19. That's profound ignorance of economics

Burnett should know that the cratering of gas prices, which occurred after major highs during the summer, was the result of the collapse of the American and global economy. Things were moving around the world at nearly the same rate. The problem is that gas prices never really adjusted back to their previous levels, but the economy has rebounded some.

Now, if she thinks we need another Great Depression so that she can fill up the SUV for cheap ...