Amazon's Current Employees Raise the Bar for New Hires - <AUTHOR> http://online.wsj.com/news/article_email/SB10001424052702304753504579285133045398344-lMyQjAxMTA0MDAwNzEwNDcyWj <comment><USER2> "With a word, they can veto any candidate, even if their expertise is in an area that has nothing to do with the prospective employee's."

Ah good, giving some extreme power to someone otherwise completely un-involved in the hiring process. Why should Rachel in accounting get to veto Sara as an engineer?

"Sailesh Rachabathuni, who developed software for Kindle devices before leaving Amazon in 2012, says he once vetoed a candidate for a programming job because the candidate didn't know much about a specific programming language, a detail others missed."

Great! A game of software trivia! Could be relevant, could just be this person being a douche, hard to say.

<comment><USER3> Pull the ladder up after you climbed it.

<comment><USER4> Exactly.

Why hire someone into the company who might end up competing against you?

The veto is a gift for Machiavellians lurking in the officefor

<comment><USER5> It doesn't work that way. The whole idea of the Bar Raiser (this should be evident from the name) is that we want to raise the expectations for a particular level or job position over time. The goal is to keep improving the quality of our hires at a given level over time.

<comment><USER6> The goal is clear, but how do you motivate "bar raisers" to work against themselves? If they hire smarter people than themselves they will be made obsolete. If you are not smart enough to see that you will be replaced by someone who will and the next iteration will correct the problem. It's a system that always converges to a "shrinking, but reasonable and politically correct cap on the performance".

<comment><USER7> To address that, as the article mentions - Bar raisers interview in another part of the company. They can't bar raise for their own team.

And in a 110k employee company, to think one extra hire will obsolete you is extreme paranoia. You would rather hire smart folks and increase the company value.

<comment><USER6> The negative selection rule applies transitively. It's not just one extra hire, these bar raisers hire 100s of people. Increasing the company value matters only if you own a stake in it that is big enough to offset the risk. And last but not least, in the context of software engineering and monekysphere(location) the population drops to less than a 1-2K people, not 110K.

It's a double-edged sword, if you hire smart people but demand them to act stupid, they will implode the company.

</comment></comment></comment></comment></comment></comment></comment><comment><USER8> I've worked at Amazon, both in the warehouse management division as well as AWS, and the whole "bar raiser" phenomenon is mostly just marketing fluff. There are a handful of engineers who don't mind interviewing (or at least hate it less than most), and they get picked often to be part of the interview circuit. After some number of interviews, you are considered one of the mystical "bar raisers". However, in my experience, they are not any different from other interviewers. More experienced sure, but the difficulty of questions is highly variable, and honestly there isn't much culture at Amazon to worry about culture fit.

<comment><USER9> Can you compare it to any of the other places you've worked to give some perspective to your comparison? Like "isn't much culture" compared to working at IBM or "isn't much culture" compared to Google/Zappos/RedGate?

<comment><USER10> Amazon has a certain body of engineers that get into the official culture, get involved in broomball and wing-eating competitions and the like, but there are far more engineers who pretty much ignore the whole thing. As far as I could tell, the biggest piece of their culture is now a bunch of bitter engineers on internal mailing lists slowly working up the courage to leave for more enjoyable companies.

That said, different teams at Amazon were SUPER different. Some teams went out drinking together twice a week, some teams were super extraverted and into video games, but many other teams were a bunch of quiet, serious introverts. TEAM fit was super important. This of course absolutely sucks for you if you get roped into interviewing for one team and you're a much better culture fit for a different team. Too bad. Rejected.

IBM has a culture, it's just a boring culture. Pretty much a bad IBM culture fit is a person who's passionate about something in life. I'm sure there are parts of IBM that are different (it's huge), but I was just glad that I didn't have to wear a suit.

Google-like companies are pretty much the opposite of IBM. If you don't have some weird interest you're passionate about, you kind of stick out.

<comment><USER9> "Pretty much a bad IBM culture fit is a person who's passionate about something in life."

I had to pick out this quote because it's hilarious. :)

</comment></comment></comment></comment><comment><USER11> There are a lot of factual mistakes with this article.

(see notes at the end before flaming)

Amazon interviewers typically go through a long "shadowing" process where they calibrate their questions and evaluation criteria. You can't just go on to interviewing candidates on your first week. Also, interviwers interview for their own "job families", so e.g. SDEs and SDMs will typically interview technical roles and likewise for non-technical roles. All interviewers are also required to enter detailed "feedbacks" (if you've been put-off by the interviewer furiously typing away, please pardon them - they're not emailing, just taking detailed notes).

Amazon bar-raisers go through _additional_ rigorous shadowing process that typically lasts many dozen of interviews and calibrations. An Amazon BR is more like a "moderator" in the interview loop than an all-powerful veto- machine. Veto is a very powerful tool, to be wielded extremely sparingly. BR on a loop is an "external" third-party who makes sure no self-interests are in play while hiring a candidate - i.e. no team is compromising on quality just to fill open positions.

Also, it's patently false that BRs ask extremely hard questions. Infact, most questions of BR focus on soft-skills and Amazon's leadership principles (Google them, we take them very seriously!). Also, BR's do loop within their job families and anything otherwise may happen only under extraordinary circumstances.

Notes: Amazon being as large it is, is comprised of thousands of autonomous groups and hence some candidate's experience may be sub-par and might have been contrary to what I've written. If you had a bad experience while interviewing at Amazon, please reach out to your recruiter who'll then forward your feedback to BRs. We take instances of bad candidate experience _very_ seriously and will try to fix deficiencies if any. While recruiting, we consider the candidate as our customer and strive to make their interviewing experience delightful.

NB: Yes, I'm an Amazon BR. Posting using a throw-away account.

<comment><USER12> Rather than use a BR to make sure that a group doesn't compromise on quality, why not just have interviewers interview candidates outside of their group, or interview them for a generalist pool which are assigned to groups later, or randomly? That prevents the BR from inserting subjective bias into the process. Everyone has bias, but the best way to cancel it out is to distribute influence, not concentrate it, nor attempt to "fight" the influences of other interviewers.

<comment><USER11> That's one of the ideas often toyed with in Amazon. It hasn't worked out so well in Amazon because of rapid expansion of the company. As an SDE/SDM you have only so much time to devote to hiring, and with lot of pressure to hire, people like to devote time to hiring for their own team. Hence, the BR becomes the "balancer" to the process.

A BR can not be a "bar raiser" on his own team's interview loops.

</comment></comment></comment><comment><USER13> "he once vetoed a candidate for a programming job because the candidate didn't know much about a specific programming language, a detail others missed"

He appears to be pretty proud of this. Most top companies actually care less about knowing specific languages as opposed to having the critical thinking skills they're looking for.

Not sure him vetoing a candidate because of a lack of knowledge in one language was a plus for Amazon.

<comment><USER14> Amazon doesn't place emphasis on language-specific skill-set. But there are certain job roles that require specific skill set, for instance, someone interviewing for a Software Development Engg role might get asked a lot of Algorithms, Data Structures, Databases, Operating Systems and so on. Someone interviewing for Web Development Engg role might get asked questions about JavaScript and HTML. Same thing goes for SDEs being hired for Machine Learning or Big Data teams... there are times when these teams are on look-out for experts in certain fields.

But yes, generally, AFA technical roles are concerned, Amazon doesn't place emphasis on language-specific skill-set.

<comment><USER13> Yep, exactly.

I interviewed for a Front-end Development Engineer position with Amazon, and aside from the poor handling by the recruiter, the on-site interviews covered a very well-rounded set of topics that were extremely relevant to the position. One of the better interview experiences I had in terms of topics tested IMO.

</comment></comment></comment><comment><USER15> One fun benefit of having such a "tough" (low probability of hire, not necessarily difficult-question tough) hiring process is that smart people constantly get weeded out, which makes filling spots extremely tough, which means that your team is constantly understaffed. This of course means your existing staff are overworked and turnover is high, meaning you now get to try to fill even more spots.

</comment><comment><USER16> In context, Amazon is also one of the worst performing companies in the Fortune 500 for employee retention. An average employee lasts 1 year: [http://www.slate.com/blogs/business_insider/2013/07/28/turno...](http://www.slate.com/blogs/business_insider/2013/07/28/turnover_rates_by_company_how_amazon_google_and_others_stack_up.html)

<comment><USER17> I would take that report with a huge grain of salt.

First - it's based on dubious sources "_Payscale's report recorded data collected from 250,000 people working at Fortune 500 companies in the past year (July 1, 2012 to July 1, 2013)_" It's not from official company data. There is little to no information about how they collected the data.

More importantly, median tenure says little about retention or employee loyalty in company that is doing a lot of hiring - e.g. if a company hired 50% of it's total work-force in the past year, the media tenure will be around one year.

Another potential source of skew would be if the data included contractors, which are often limited to one year of tenure.

</comment></comment><comment><USER18> In my younger days I interviewed with them twice, but every aspect of the hiring process was so protracted that I ended up accepting jobs with other companies instead. Inevitably, several days after I had started at the new company I would get a phone call from Amazon to schedule the next round of interviews.

This was before they were as desperate as they are today, but even then the questions were hardly brutal.

Here in Seattle the reputation most often associated with them is "sweatshop". This isn't universally true, of course--some teams are better than others--but just about everyone I know who works there always tells me, "Thankfully I work on a good team. I wouldn't want to be one of the guys working on XYZ, though. Those guys are chained to their desks." The people who had negative feedback about their own team didn't work for them anymore, of course.

Anyway, churn and burn. Bring on the H-1Bs!

</comment><comment><USER19> > John Sullivan, a San Francisco State University management professor, said > Amazon's protracted hiring process is an important signal for applicants > that Amazon is a tough place to work, with a lot of pressure.

A high-pressure interview, to work at a high-pressure, slightly-better-than- averagely paid job, that is then touted in the Wall Street Journal as being "bar-raising"?

No thanks. I guess Amazon is yet another company that failed _my_ interview process.

</comment><comment><USER12> I imagine using a bar raiser increases the randomness of the interview process at Amazon, as it effectively reduces the number of interviewers down to one in the veto case. Thus, more noise. However, reducing the false negative rate isn't a high priority in most organizations, and Amazon is so desperate for employees that you often see the same person interview multiple times until they get in, so perhaps it doesn't matter.

<comment><USER20> _Amazon is so desperate for employees that you often see the same person interview multiple times until they get in_

This doesn't make sense to me. Wouldn't they hire them first time around if they were truly desperate?

<comment><USER12> Because the interview process is structured to "raise the bar" but is also highly random. As with any tech company, you have to run the gauntlet to get a hire. It's politically easier to have candidates reinterview when they fail rather than get permission from executives to "lower the bar."

<comment><USER20> OK, I get that, but this assumes that their politics are not affected by their desperation, right?

</comment></comment></comment></comment><comment><USER21> Some HR goon wants to tout their new revolutionary system. The only way they actually look like they get work done.

<comment><USER22> Any experienced HR person woudl be having nightmares god only knows what discriminatory hiring practices are going on here.

<comment><USER14> It is not that Bar Raisers get away with just the Veto. Usually the process involves discussion between every one involved in the interview loop, including the manager, BR, other engineers, and the HR. A final "hire" or "no hire" call is made based on "data-points" collected over the course of the interview / interactions had with the candidates by the people present in the interview loop.

As evident, BRs clearly have a final say in the hiring process, but they don't always go about vetoing every candidate just because they can. They usually justify it with valid "data-points" and if one or two others have "data- points" to make a compelling argument against what the BR says, then they usually do so. And BR do listen to others who have contributed to the interview loop... they aren't in the mold of dictators exactly.

Even BRs get evaluated for performance... since the HRs are also involved in the discussion, one can be sure that no HR would tolerate discrimination, let alone 4-8 other engg or managers on the interview loop.

Again, just my take on things, I do not speak on the behalf of my employer.

<comment><USER22> Perception is everything

This sounds like the sandwidge chain in the UK which had staff make input into hiring and it turns out that they favored _nudge_ _nudge_ their country men and women from eastern Europe and funnily no local kids from say tottenham seemed to get hired.

Boris Johnson noticed that something was wrong Boris Johnson!!

</comment></comment></comment></comment><comment><USER23> Amazon is a sweatshop, from bottom to top.

Source: relative who worked for Amazon and had frequent interactions with Jeff Bezos.

<comment><USER24> It's a large company with diverse departments and diverse teams within those departments. You cannot generalize the sweatshop mentality to the whole company.

Source: Worked on an Amazon team that did not strike me as a sweatshop. Also these views are my own and I do not speak for Amazon

<comment><USER23> A fish rots from the head down.

</comment></comment></comment><comment><USER25> As a general policy, this seems fantastic. It just doesn't sound like they're scaling the culture carriers fast enough.

* Bar raisers may be asked to assess as many as 10 candidates a week, for between two and three hours each, including paperwork and meetings—all while doing their regular full-time job, be it in finance, marketing or product development.*

20-30 hours per week for a non-job activity? This can't possibly be correct. Or does Amazon have a workaholic culture that supports this - 20-30 hours for those hungry after their 50-60 hour workweeks?

I heard a story about Google that the employees who were vetoed as candidates but hired anyways actually outperformed, because they had something about them that was so valuable that it was worth trumping the process.

As someone who has hired in the past, I have gotten in trouble by letting too many people have vetos. You wind up having to accommodate so many pet peeves ("They don't have 5 years of specific experience", "I don't like their school"...) that it's impossible to get good candidates.

<comment><USER26> When I was at Amazon, BRs did maybe 5 interviews a week, and that was considered a lot. If BRs are really doing 10 a week these days, it's probably due to a temporary shortage of BRs.

<comment><USER25> Still a lot if you take the paperwork seriously. 10 hours falls into the 20% above and beyond category. It's a big investment in the importance of culture.

</comment></comment></comment><comment><USER27> Somewhat offtopic but I think there's a chance someone here might be able to help.

I had applied through Amazon's website for a graduate position nearly 2 months ago and according to the dashboard, my application is still under review but I have never heard from anyone. I think my application has been stuck in some limbo and is now invisible to HR. I tried looking for a relevant email so that I can follow-up but this has been impossible. Granted, I found a graduate email I had written down 1 year ago but so far haven't had any reply and the email seems deprecated because its not advertised on the website anymore. Even on on-campus events, Amazon recruiters would give only the website address, no emails.

Could anyone perhaps point me to someone I could ask to have a look?

edit: To clarify, I am certain the application has not been rejected. I also do believe I am at least worth looking into hehe ;)

</comment><comment><USER28> "To become a bar raiser, a worker generally must have conducted dozens or hundreds of interviews, and gained a reputation for asking tough questions and identifying candidates who go on to be stars."

Typical interviewing scenario where P(FA)>10^10 and P(Miss)=0. Such schemes create groupthink problems later on.

<comment><USER29> _...dozens or hundreds of interviews..._

When does a "bar raiser", like, _work_? I've never been part of an org large enough to afford this sort of distraction.

</comment></comment><comment><USER30> It sounds like the amazon hiring process takes a long time, which probably also contributes to their goal: employees who stay long term. Filtering on quality gives you little guarantee as to how long someone will stay (in fact, I wouldn't be surprised if those attributes were reversely correlated). But a slow hiring process will definitely reduce the field to those looking for a long term commitment.

</comment><comment><USER31> This happened to me. I got pretty far into a TPM interview and had a couple interviews with people that were so far out of my area they may as well have been working in a different company.

I still had fun and don't regret not working there, but thought it was odd that somebody who interviewed me for logistics backup plans had anything to say in my hiring process.

</comment><comment><USER32> ebay has 30k workers? no way.

they don't have inventory, they don't police listings, they don't do support by email anymore

what exactly are all those 30k people doing?

</comment><comment><USER18> By the way, Jeff Bezos owns both Amazon and the Wall Street Journal, which published this particular fluff piece.

<comment><USER33> Bezos owns the Washington Post, not the Wall Street Journal.

<comment><USER18> Shoot, you are correct! Thanks for the correction.</comment></comment></comment>


An Amazon patent put humans in cages and let robots roam free - <AUTHOR> https://www.fastcompany.com/90234351/an-amazon-patent-put-humans-in-cages-and-let-robots-roam-free <comment><USER2> haha the things you can find searching through patents...</comment>


Safety Check turned on after Lahore explosion, for many people far from Pakistan - <AUTHOR> http://www.independent.co.uk/life-style/gadgets-and-tech/news/facebook-safety-check-turned-on-after-lahore-explosion-sending-notifications-to-many-people-far-from-a6955476.html <comment><USER2> This is kind of funny - I'd bet the majority of the people who received the safety check were using one of the commercials VPNs that provide endpoints in Pakistan - very much liked by people who pirate movies or music.

<comment><USER3> I got the Safety Check and I most definitely wasn't using a VPN, nor was I in the same hemisphere.

From an admittedly-unscientific sampling of my friends who also got the Safety Check alert, it seems like the geofence or query that led to alerts being pushed was misconfigured.</comment></comment>


Fed Undertakes QE3 With $40 Billion in MBS Purchases Each Month - <AUTHOR> http://www.bloomberg.com/news/2012-09-13/fed-plans-to-buy-40-billion-in-mortgage-securities-each-month.html

<comment><USER4> First the problem:

Say your company brought in $1M a year in revenue and you had $1.04M in debt and growing. Say you had 40% margins and were trying to service that debt with your 400k of gross profit.

You would not be in business long.

The fiscal reality of the US government is the same save for one key fact: they can print money. As a result, they can carry on this sorry fiscal situation for an amazingly long time, but not forever.

Japan has been in this situation more than a decade. They remain powerful.

This state of affairs will affect you as a company in these ways:

1\. Your taxes must go up. This isn't a political thing so much as bottom line math thing. The more they take in revenue from you, the less they have to borrow or print and the longer this whole system keeps going. They can tax the rich at 100% and still not have nearly enough money to service their current debt, let alone the constantly increasing spend.

2\. Market certainty will go down. No one wants increased taxes - <USER2> or citizens. This pressure from both sides creates things like the coming 'fiscal cliff' where either we reach a budget cutting agreement or draconian cuts go into effect. The market hates not knowing and people spend less in these cases. It looks like there will be a pattern of these occurring in the foreseeable future, which means less people spending less money with your business.

3\. Dollars will be worth less. To hold the true value you receive for your service steady, you will have to increase the number of dollars you ask for from customers. Unfortunately, these customers will have less dollars in their pocket because wage inflation tends to trail price inflation. Be aware that as long as the US can borrow money and keep interest rates on bonds low as a result, inflation reported by the feds will remain low. It also pays to be the tallest midget. US dollars remain the world standard, so when there is a panic in Europe or Asia, people rush to buy our bonds, which bolsters our dollar and purchasing power relative to other nations. This ends when the market no longer believes we can pay. This could be tomorrow, next year, in 10 years or never if we really get our act together.

4\. The dollars you've earned might not be worth much when you go to spend them. Say there's nothing to worry about for the next 10 years, but then it gets so bad that the market says 'enough, we're not buying these bonds anymore USA.' The USA at that point can print the money and pay the bonds with it or default. Either way, the dollars you earned through sweat and tears aren't worth much and the business that made them isn't attractive to customers at the "new normal" price points. At this nearly worst case point, you are poor, hit from both sides of the inflation game. This is one reason any thread of this nature has at least one mention of 'Gold!', as it holds its value no matter what the government does - assuming you can both hold onto it and trade it for fair value when you need it.

<comment><USER5> One additional point you didn't mention: The US Dollar was, for a long time, the worlds reserve currency. It still is in many ways.

This means that for nearly 100 years the USA has been able to print dollars and have much of the effects of this monetary inflation absorbed by foriegn countries that needed to hold dollar reserves.

Or put another way, there is a massive amount of inflation that has been exported. It will remain overseas so long as the dollar remains the worlds reserve currency.

But as that changes, and the dollar loses credibility due to this "Quantitative Easing" (which is nothing more than a euphemism for monetary inflation) at some point the rate of people switching from dollar reserves to other reserves- gold, yuan, whatever-- will reach a tipping point and as the dollar declines ever faster people will panic to get out of the dollar.

This is like an axe over our heads. We've got hyperinflation built in, because once that turning point happens, the panic will trounce the dollar, and that will imediately force the government to crank up the printing presses even faster- trying to outrun these ramifications, and we'll wake up one morning in Zimbabwe.

And I'm not kidding about it happening "one morning", when this happens it often happens very fast. The Ruble lost half its value between breakfast and lunch when it happened. In argentina it was a matter of weeks.

Neither of those currencies were world currencies.

No way to know when it will happen, or exactly how-- we've been helped by europes problems. Since they've been going down faster they have made the dollar look good in comparison.

We've also been helped by China's dependance on exports- as europe went down and we slowed down, that's hurt china, making them not look as relatively strong compared to us.

Finally we've also been helped with outright manipulation of the market. One of the key indicators is the price of gold (which is really the price of dollars measured in gold.) The FOMC is an entity within the fed whose job is to "stablize prices" which is also known as market manipulation, and it takes big chunks of that QE money and uses it to short gold. Notice how gold was on its way to $2,000 when they killed that momentum and brought it back to $1,500? That helps shore up the percieved value of the dollar.

If this sounds like conspiracy theory, google GATA and read the details-- the FOMC minutes come out eventually and their interventions in the gold market are documented.

I can't say what a fair value for gold is, but it is well north of $2,000. (Say if you compared the monetary inflation in dollars since the last time there was gold peg to the gold price then.... )

But so long as people are made to believe that a currency is stable, they will keep using it and the currency remains stable.

When people realize the currency is worthless paper being pumped out at insane levels, then it will be treated as such and quickly attain that market price.

<comment><USER6> You said it. You can't say what the fair value of gold is. Can you eat it? Can you build a house out of it? It's just a bit of shiny metal that the world has no shortage of.

<comment><USER7> You can exchange it for something that you can eat and you can exchange it for somebody to build a house for you, just like dollars. Unlike dollars, you can't produce it out of thin air.

<comment><USER6> You used to be able to exchange salt, seashells, large stones for all these. Try getting someone to build you a house for salt. Gold could be worth 1/10th of what it is worth today (purchase power) or it could be worth x10 in 10 years. It's purely a speculative play, people pay more because they think someone else will pay more tomorrow. That's all it is.

</comment></comment></comment></comment></comment><comment><USER8> The PhD's at the Federal reserve, the same ones who have gotten every major economic and financial prognostication wrong, think that printing more money, i.e., debasing the currency, is going to create jobs.

Since the Federal Reserve now is the largest single owner of US government bonds[1] and since it has come close to purchasing all available bonds at the long end of the spectrum[2], it is doing the last thing it can think of: an open-ended, unlimited purchase of Mortgage-Backed Securities. This is the terminal end-game of central banking.

This won't end well.

[1] See [http://cnsnews.com/news/article/fed-now-largest-owner-us- gov...](http://cnsnews.com/news/article/fed-now-largest-owner-us-gov-t-debt- surpassing-china) (2011), updated data here [http://www.federalreserve.gov/monetarypolicy/files/quarterly...](http://www.federalreserve.gov/monetarypolicy/files/quarterly- report-20120630.pdf) and here [http://www.treasury.gov/resource-center/data- chart-center/ti...](http://www.treasury.gov/resource-center/data-chart- center/tic/Documents/mfh.txt).

[2] [http://www.zerohedge.com/news/scary-math-behind-mechanics- qe...](http://www.zerohedge.com/news/scary-math-behind-mechanics-qe3-and-why- bernankes-hands-may-be-tied)

<comment><USER5> Printing unlimited money has a political advantage as well-- not only does the Fed profit from it, but the government, and more specifically, politicians profit from it.

A good example is Obama's "stimulus" which was a big old pork package, underwritten by the Fed that he got to pretend was "taking action" to "improve the economy" / "create jobs".

It was a complete failure by even its own promises, but that has not hurt Obama's re-election chances, because people don't hold politicians accountable for damaging the economy.

And this goes for Bush, Clinton, Bush 1 and Reagan -- all of whom took at least some actions that damaged the economy.

</comment></comment><comment><USER9> .. and just when I was starting to forget the details of the insane rabbit hole called the "economy" that make leading a simple life, getting a salaried job, and making an incremental contribution to society an utter non-starter. Even more direct subsidies to the bankers who own "your" house, so they can continue their charade of overinflated home prices and demanding hefty rent simply for a place to _exist_. Never mind that you're still responsible for the maintenance, and probably have not the knowledge nor time to do it yourself, as you're too busy working to service your indentured servant mouse wheel.

I just don't get what keeps most people complaining about one or two narrow pieces of the puzzle, but yet completely accepting of the entire perverted ball of wax of over-abstracted, hollowed out, and corrupt institutions. This mild dissent is then amazingly converted into _support_ every time an election roles around, where the socially acceptable thing is to cheer on your chosen republocrat, pretending that electing new faces will change anything (not that a third party would magically fix things either, it's just a minimum viable dissent). Is it just straightforward cognitive dissonance because of how painful it would be to admit most things you take for granted are simply not there? Is it that most people smart enough to actually see how rigged the game are still able to achieve an "above average" place in society and thus aren't interested in meta questions ? I suppose anything is easier than developing an adversarial individualist perspective which can't be unseen.

</comment><comment><USER10> Based on the results of QE1 and QE2, I expect the price of gold to rise, and the action to provide no long term benefit in terms of jobs or GDP growth. The answer to our problems is cheap energy, not more paper.

.. looks like gold spiked up 2% on the news.

<comment><USER11> Gold is already overvalued, I'm really not sure of its outcome

<comment><USER5> Please share with us your calculations to determine the intrinsic value of gold.

I don't think you can do it, which is why I don't have an opinion about its intrinsic value.

But if you look at the price of gold as actually the price of dollars measured in gold, then things look much different.

By that measure, taking monetary inflation into account over the past 100 years, gold is historically cheap.

<comment><USER11> Well, it's simple, isn't it

Gold has "two values" (and one sale price)

It can be a "money substitute"

But it is also a mineral, with an extraction cost, and usage in the industry

Now let's compare to oil

Oil is very liquid (pun intended), it can almost anytime be converted into money. And then, used, converted into products or services.

Gold has no such property.

Yes, seeing "the price of dollar in gold" is certainly eye opening, still, the US has enough gold (and other resources) to keep the price of dollar (compared to gold) high enough.

</comment></comment></comment></comment><comment><USER12> Can someone with knowledge of economy explain what's going on here and how does this affect me as an individual or as a company?

<comment><USER13> Finance geek here. The whole point of this is to raise inflation. Not by a lot, but by a little. The market is currently forcasting ~2.5% inflation looking forward and this won't likely push that expectation above 3-3.5%.

The reason for this is because the fed's 'dual mandate' to keep inflation low and unemployment low. The big theory behind this is the so-called Phillips Curve, which states that there's an inverse relationship between unemployment and inflation. The reasoning here is threefold:

1\. It's believed that inflation 'lights a fire' under capital (i.e. it's expensive to hold cash), which spurs people to invest, which in turn creates jobs.

2\. Wages are sticky -- after losing a job, people tend to be reluctant to take a big pay cut when accepting new job and so tend to wait for something better to come along. Paradoxically, people are more willing to take a REAL pay cut when the NOMINAL pay cut is smaller, as would happen in an inflationary environment (note: there's no change in actual spending power).

3\. Higher inflation acts as a transfer to borrowers from lenders. Any debt currently issued before a change in inflation will have been valued in light of lower epected rates of return. A change in inflation expectations effectively decreases the debt burden on any debt held before the change. This improves firm's balance sheets by decreasing the value of debt on their balance sheets, making them more able to invest.

As an individual, there's not much to guard against here. We should expect this to have a slightly positive impact on jobs and asset prices. We should also expect inflation to run a little higher, but there's little risk of any sort of run-away, or "hyper," inflation because of this -- the fed can stop inflation as easily as it can start it by

[Edit: Corrected Taylor Rule to Phillips Curve]

<comment><USER14> I think you mean the Phillips curve instead of the Taylor Rule here - <USER3> excellent explanation.

<comment><USER13> Thanks, you're right and I changed it above. For those curious, the Taylor Rule is more accurately a method for optimizing along the Phillips Curve.

</comment></comment></comment></comment><comment><USER15> Fellow HNers - the comments you see here are from random people on the internet without the slightest qualifications and their own pet theories and agendas so please take them with a grain of salt.

</comment><comment><USER16> Is that why the BitCoin is roaring back?

<comment><USER17> Is it? It's still only around $11 after previous spikes of $15 or even $30.

</comment></comment><comment><USER18> Got gold?

<comment><USER19> yes :)

</comment></comment><comment><USER20> I'm confused, how is this hacker news?

<comment><USER21> Well it is a kind of hack

<comment><USER22> Hah, for finance geeks, this was a particularly clever rebuttal :)</comment></comment></comment>


Why Warhammer Failed - <AUTHOR> https://ealouse.wordpress.com/2010/10/12/hello-world/

<comment><USER2> This is a great example of what not to write when you're getting fired. This person needs to find a new job soon, and it -will- get out who this person is, anonymous or not.

They even have a little distinct way of writing some things that I'm sure I could recognize if I worked with them from emails they had sent.

<comment><USER3> _it -will- get out who this person is, anonymous or not._

Assertions presented with zero evidence are not persuasive.

 _They even have a little distinct way of writing some things that I'm sure I could recognize if I worked with them from emails they had sent._

Why would that matter? A small handful of people in the world might be able to identify him, but so what? I mean, if he's misrepresenting the situation, it might be a problem, but you'd have to present evidence that he's, you know, misrepresenting the situation.</comment></comment>