Fed begins unlimited QE

[nextJin]

http://www.businessinsider.com/federal-reserve-decision-2012-9#ixzz26N1gaA3O

Let the Keynesians rejoice!

 

[Smoblikat]

So doesnt this mean unlimited printing of new money?

Thats like an inflated inflation on steroids.

 

[chucky2]

If they're going to inject money into the economy, they should just send everyone that paid taxes last year, who is a citizen, and who isn't dead, $1k or something like that. That'd do a whole hell of a lot more to stimulate the economy than the past stuff they've tried...

(not that I'd be in favor of this, but, at least it'd actually stimulate what they're wanting stimulated...minds out of gutter people!)

EDIT: Changed suggested amount. $10k is a little too steep...

 

[yllus]

Sounds good. Very curious though as to how this will effect your upcoming elections.

 

[Gigantopithecus]

 

[PokerGuy]

Fire up the printing presses, mo money mo money mo money!

 

[sixone]

Sounds good. Very curious though as to how this will effect your upcoming elections.

It won't be good for Obama. People understand that the last two didn't work, and they see the debt climbing. Count on R's to pound on it, hard.

 

[spidey07]

We've run out of tools to fight inflation, so we're going to cause inflation!

The open ended "we'll do it every month until it improves" doesn't sit right.

 

[nextJin]

Sounds good. Very curious though as to how this will effect your upcoming elections.

I doubt it will have much to do with the election. What most people want to see is who was right the Keynesians or the Austrians. If this works and everyone has a few million in the bank and a booming economy with no bubble within 2013 then the Keynesians win. If it's anything else the Austrians were right.

 

[Doc Savage Fan]

I doubt it will have much to do with the election. What most people want to see is who was right the Keynesians or the Austrians. If this works and everyone has a few million in the bank and a booming economy with no bubble within 2013 then the Keynesians win. If it's anything else the Austrians were right.

It'll probably take a decade or so to show that the Austrians were right.

 

[chucky2]

If they're chosing to do it now, then it'll likely be good for the elections. People are going to be a lot more swayed by short term gains (or pain lessening) than long term bennies (with no short term pain lessening, or it getting worse before it gets better).

This will do something for metrics, give Dems something to use during the election, etc. etc.

Will it be good long term? Probably not, but I doubt anyone knows...

 

[EagleKeeper]

If they're going to inject money into the economy, they should just send everyone that paid taxes last year, who is a citizen, and who isn't dead, $1k or something like that. That'd do a whole hell of a lot more to stimulate the economy than the past stuff they've tried...

(not that I'd be in favor of this, but, at least it'd actually stimulate what they're wanting stimulated...minds out of gutter people!)

EDIT: Changed suggested amount. $10k is a little too steep...

set it up as a debit card with restriction that $500 can be used each month. Other restriction is that item must be made in USA.
by having is as a debit card; the both items can be enforced electronically.

 

[soulcougher73]

 

[chucky2]

set it up as a debit card with restriction that $500 can be used each month. Other restriction is that item must be made in USA.
by having is as a debit card; the both items can be enforced electronically.

Cool idea...probably zero way to actually enforce the second provision though. Plus, what would people buy, like, the 100 things that are still Made in USA haha?

I'd rather have a restriction that the $500 can't be used for food or drink. You need some teeth there for stone owners and register operators, something like selling alcohol to underage kids.

Chuck

 

[nehalem256]

So there will be no QE4 in otherwords. What will prop up the market?

 

[nextJin]

So there will be no QE4 in otherwords. What will prop up the market?

There won't need to be a QE 4 because this will keep on going until they meet their goals. Usually a QE is set with certain figures and amounts. In this case they will just keep going forever if need be.

 

[Franz316]

Print mo money!! This should make gas go even higher, yay for us!

I really fail to see how buying mortgage debt will help the labor market, maybe I am missing something? All I see this doing is devaluing the dollar even more.

If they truly wanted to help the economy, they would send out checks to people with the following conditions: it must be used to pay off debt, and those without debt must invest it.

 

[nehalem256]

If they truly wanted to help the economy, they would send out checks to people with the following conditions: it must be used to pay off debt, and those without debt must invest it.

Except the economy does not suffer from a lack of investment, but instead a lack of spending

 

[yllus]

If they're chosing to do it now, then it'll likely be good for the elections. People are going to be a lot more swayed by short term gains (or pain lessening) than long term bennies (with no short term pain lessening, or it getting worse before it gets better).

This will do something for metrics, give Dems something to use during the election, etc. etc.

Will it be good long term? Probably not, but I doubt anyone knows...

Yeah, I was thinking myself of Greenspan lowering rates in '92, but not in time to save Bush.

Print mo money!! This should make gas go even higher, yay for us!

I really fail to see how buying mortgage debt will help the labor market, maybe I am missing something? All I see this doing is devaluing the dollar even more.

If they truly wanted to help the economy, they would send out checks to people with the following conditions: it must be used to pay off debt, and those without debt must invest it.

People better acquainted with economics feel free to tell me this is completely wrong, but if done correctly QE3 shouldn't affect gas and commodity prices at all. The goal is to counteract the contraction of the money that occurs when banks decline to lend. Buying mortgage debt from the banks theoretically frees up cash to be lent out to businesses, which in turn hire people and buy equipment.

 

[Gonad the Barbarian]

You guys poopooing this saw what the markets did today right? This was an unexpected move and not already priced in. I don't know when the announcement was made, but from today's DJI chart I'm guessing around 12:30.

 

[bfdd]

QE1, QE2 and now QE3. I remember there being some quote about insanity?

lol @ all the idiots who think trickle down economics don't work, yet support QE. QE IS TRICKLE DOWN ECONOMICS. First the most power, the money printers, give money to the uber powerful uber rich institutions and peoples, who then dole it out to the super powerful and super rich, who then give it to business owners and it's supposed to trickle to the rest of us. With one little caveat, it plus interest needs to flow right back to the top. Trickle down/trickle up can't have one with out the other. so I lol

 

[michal1980]

QE1, QE2 and now QE3. I remember there being some quote about insanity?

lol @ all the idiots who think trickle down economics don't work, yet support QE. QE IS TRICKLE DOWN ECONOMICS. First the most power, the money printers, give money to the uber powerful uber rich institutions and peoples, who then dole it out to the super powerful and super rich, who then give it to business owners and it's supposed to trickle to the rest of us. With one little caveat, it plus interest needs to flow right back to the top. Trickle down/trickle up can't have one with out the other. so I lol

word.

How about super QE - A USA credit card with the same low interest, given to taxpayers. ;-)

 

[Jaskalas]

It won't be good for Obama. People understand that the last two didn't work, and they see the debt climbing. Count on R's to pound on it, hard.

The market loves money. It'll be a positive talking point for the media to pound on to reelect their party.

 

[CycloWizard]

People better acquainted with economics feel free to tell me this is completely wrong, but if done correctly QE3 shouldn't affect gas and commodity prices at all. The goal is to counteract the contraction of the money that occurs when banks decline to lend. Buying mortgage debt from the banks theoretically frees up cash to be lent out to businesses, which in turn hire people and buy equipment.

You may be right, but those are only first-order effects. Follow-on effects would necessarily include increased money supply and increased demand for gasoline. I think the latter would be relatively small effects though and were probably carefully timed to occur precisely after the election. :hmm:

My bigger concern is the value of the dollar. If the Fed shows that the dollar will simply be printed ad infinitum, then it is essentially a worthless currency. This could have significant negative effects (inflation comes to mind, losing its status as the world's reserve currency is also a contender). My guess is that problems in the EU (and, therefore, with the euro) have essentially given the Fed the ability to do this. The US is in a bad place, but it's still much better off than its nearest competitor so the playing field is sloped in our favor. I hope I'm right anyway...

 

[woolfe9999]

Oh noes, the 4,797th prediction of hyper-inflation I've heard in the past 30 years. Trust me, I'm shaking in my boots, THIS time.