Posted on 03/10/2014 7:03:39 AM PDT by SeekAndFind
The Federal Reserve’s seemingly endless program of quantitative easing (QE) begun under Ben Bernanke, and continuing at a slightly slower pace under Janet Yellen, has some of the punditry and much of the electorate up in arms. With good reason.
Implicit in quantitative easing is the horribly obtuse notion that central banks can produce real economic growth through their monetary machinations. If only life were so simple.
Back in the world of the reasonable, the sole purpose of money is as a stable measure of value that facilitates the exchange of goods and investment. Quantitative easing, by its very name, involves the corruption of money’s sole purpose as a stable medium of exchange.
In that case it must be stressed that QE has in no way boosted growth. The latter results from investment in new and existing commercial concepts, and for destabilizing the value of money, QE works against the very investment that would drive economic growth.
Worse, the imposition of QE can only take place when the White House and Treasury support such a move, the latter support speaks to a desire on the part of the White House and Treasury to devalue the unit of account (the dollar), and as investors are buying future dollar income streams when they invest, QE acts as an investment deterrent.
Looked at in terms of financial markets, QE similarly has not been good for stocks. Indeed, stocks have been rallying ever since word emerged from the Fed two years ago about an eventual end to the program, and as markets always price in the future, it’s apparent that investors would logically prefer an end to what which logically does not, and cannot, work.
(Excerpt) Read more at forbes.com ...
The Fed Is Not Printing Money, It’s Doing Something Much Worse.............just creating it out of thin air and computer programs.................................
LOL, if that chart doesn’t make you panic nothing will.
Why panic... looks like there is an uptick, around 290 and the time of Claudius II, on the road to recovery for sure!
The reason for the push for a minimum wage is to replace stagflation with real price inflation. They desperately need it to monetize the debt. It is the only solution to our little national debt problem. And the situation is desperate. It WILL lead to hyperinflation and war. But they are not trying to prevent the unpreventable. Rather, they are simply trying to postpone it for as long as is within their power. And that power is diminishing daily.
The value that the Fed’s creation of equity in T-Bills and MBS’s inflating the money supply is that it in some measure keeps the Stock Market happy while giving the air of comfort that our debt is secured by value - somebody has bought our debt in T-bills.
The problem is that the monetary manipulation and Mortgage Backed Securities and banks, and the monthly perk-up legitimization of our debt ALLOWS Obama to plus up entitlements: take all comers on SNAP, increase Section 8, ease EITC free-money rules and all that while proposing ridiculous new uncollateralized ventures and giveaways on any number of foolish political promises.
It’s as if they are taking ten dollar bills and taking a Sharpie and drawing an extra zero on them and then passing them off as hundred dollar bills.
You just know that cbs, nbc & abc would report that and only that part!
Market open
--
Mar 10, 2014 1:30 p.m.
Bump for reference.
Please enlighten us then.
That's the first step over the cliff. When they start adding zeros...watch out.
The market. The overvalued market.
Please enlighten us then.
.................
Beats me.
But I can guess.
First of all 95% the money the fed has created is just ledger money. It just stays on the books. It hasn’t gone into the real economy. It hasn’t gone anywhere. The 5% or so that has got out into the real economy has gone to the stock market which has juiced up values there making the rich richer and returning 100 billion dollar or so in tax revenues to the government. —which shrinks the deficit.
There is something else and likely more significant.
The fracking revolution has added about 40 trillion dollars worth of oil and gas to back the dollar...That money came ex nihilo from nothing. (just like the feds QE’s. The fracking revolution is currently adding about 400 billion dollars annually to the USA economy on its way to 1 trillion dollars annually in 3-4 years. Last year the additional oil revenues added another 100 billion to federal coffers thereby helping to shrink the federal deficit. As well, annual increases in oil production in the 1 million barrel range for the last 3 years are according to the IEA expected to continue through 2015. These oil production increases are shrinking the US trade deficit steadily.
The fracking revolution is forcing some very serious shifts in capital flows around the world—that favor the dollar.
The long term (measured in decades and centuries) moral and social collapse of the USA continues apace but the short term (measured in years and decades)financial collapse of the USA has come to a sharp halt and is currently being turned around —at least for a time.
VERY good explanation. Time to find another country in which to live, pronto.
The only hope I see is if there is an intrinsic value within all the technological advances of my lifetime that has not been completely accounted for by the government printing press. Maybe enough to prevent a massive crash, at least IN MY LIFETIME.
No expert, just observing life and the market.
In my opinion, you win the thread.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.