Fed begins unlimited QE

[bfdd]

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.

It's simply just not noticeable right now because the Chinese peg their currency and the Euro is collapsing. IMO QE3 was rushed through due to European pressures on our financial bodies to keep the dollar in the decline along with the Euro to mask the true troubles Europe is having. Wonder when we'll hear that news roll out.

 

[dullard]

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...

Um, they tried almost exactly that. Don't you remember the stimulus plan? Each and every tax paying American citizen, who isn't dead, got a check and/or reduced taxes.

So how is repeating almost exactly what they did in the past going to do a "whole hell of a lot more" than what they did in the past?

 

[Nintendesert]

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.

The improvement sought is poll numbers, not economic numbers. :sneaky:

 

[bfdd]

Also, if you think I'm kooky. explain the nearly 50% drop in the dollars purchasing power vs the Japanese Yen over the last 10 years. How about against the Swiss Franc? Yeah..... keep the blinders on and watch the game they're playing, ignore the other fans leaving and the stadium collapsing all around you.

I'm not here to pimp gold or silver as an alternative either. They aren't, as far as I'm concerned, it's just that what is currently going on is so lulz that I can't help but make a comment.

 

[LegendKiller]

The hyperbole about hyperinflation is ridiculous.

This was already baked in, everybody knew it was coming. As far as the reasons, there are many, keeping interest rates low is a huge one. That benefits the economy quite a bit.

 

[Northern Lawn]

And you people call Canada Socialist, LOL!

 

[dullard]

The hyperbole about hyperinflation is ridiculous.

Let it be ridiculous. You can't alter people's fears even if they are unfounded. But, you can consider profiting from it: http://forums.anandtech.com/showthread.php?t=2269572

 

[Thump553]

Stock market investors don't find hyperinflation to be a credible worry-the stock market surged on the announcement, finishing up for the day well over 200 points and at it's highest level since 2007. But I guess these basement internet experts know more than people who do it for a living.

 

[bfdd]

Stock market investors don't find hyperinflation to be a credible worry-the stock market surged on the announcement, finishing up for the day well over 200 points and at it's highest level since 2007. But I guess these basement internet experts know more than people who do it for a living.

Why would they care? Honestly I find it so funny that people go "Well look the experts at Wall Street say it's fine, nothing to see here folks, move along". Then in another thread they're demanding these very people be brought forth for their crimes against us all. roflroflrofl

 

[nextJin]

The hyperbole about hyperinflation is ridiculous.

This was already baked in, everybody knew it was coming. As far as the reasons, there are many, keeping interest rates low is a huge one. That benefits the economy quite a bit.

It also continues on the same horrible path of malinvestment that comes with artificially low interest rates. The FED picking and choosing who gets what in the economy is the same reason we had the Housing Bubble as a recent example.

I do not take kindly to a school of economics where the Keynesian Prince said;

“To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.” - Paul Krugman

 

[LegendKiller]

Why would they care? Honestly I find it so funny that people go "Well look the experts at Wall Street say it's fine, nothing to see here folks, move along". Then in another thread they're demanding these very people be brought forth for their crimes against us all. roflroflrofl

You do realize that in order to have hyperinflation you need to have a complete loss in faith in the currency, correct? What currency, exactly, will replace the USD in faith? Don't even go there with gold because the notion is silly, there is simply not enough gold to transact the world's economy in any meaningful amount of physical gold.

 

[nextJin]

Stock market investors don't find hyperinflation to be a credible worry-the stock market surged on the announcement, finishing up for the day well over 200 points and at it's highest level since 2007. But I guess these basement internet experts know more than people who do it for a living.

Stock market investors likely have no idea what the Business Cycle is and only look at the short term gains. They couldn't care less, they see a man of stature say "Hey guys we are going to keep doing this until the economy comes roaring back", never mind the obvious example of the 1920's crash and the Great Depression.

 

[bfdd]

You do realize that in order to have hyperinflation you need to have a complete loss in faith in the currency, correct? What currency, exactly, will replace the USD in faith? Don't even go there with gold because the notion is silly, there is simply not enough gold to transact the world's economy in any meaningful amount of physical gold.

I don't believe in hyperinflation, I simply believe in regular good ol destructive inflation. What has the currency done against the Swiss Franc? Lost 20-30% of it's value in a decade. How about the Japanese Yen? around 50%. Canadian dollar? Around 30%. Euro? Euro lost value cause Europe is fucked. The West is so arrogant the only currencies they believe matter are the Euro and USD, look how they've tanked with respect to economies that are doing well. Seriously it's not hard to see that the value of our currency is tanking and inflation is occurring at great levels, it's simply not as obvious due to so much non-sense being shoved in your face every day.

Milk was about 1.50 a gallon a decade ago, how much is it today? Eggs? Gallon of gasoline, etc etc etc. Oh yay tech prices are coming down or staying stagnant, the only thing that proves is Moore's Law.

 

[LegendKiller]

I don't believe in hyperinflation, I simply believe in regular good ol destructive inflation. What has the currency done against the Swiss Franc? Lost 20-30% of it's value in a decade. How about the Japanese Yen? around 50%. Canadian dollar? Around 30%. Euro? Euro lost value cause Europe is fucked. The West is so arrogant the only currencies they believe matter are the Euro and USD, look how they've tanked with respect to economies that are doing well. Seriously it's not hard to see that the value of our currency is tanking and inflation is occurring at great levels, it's simply not as obvious due to so much non-sense being shoved in your face every day.

Milk was about 1.50 a gallon a decade ago, how much is it today? Eggs? Gallon of gasoline, etc etc etc. Oh yay tech prices are coming down or staying stagnant, the only thing that proves is Moore's Law.

So you think Japan is doing well? You think the Swiss are doing well?

This is the type of argument I truly love with Austrian libertopians, they think that all inflation is monetary inflation. You just mentioned 3 things that are affected less by monetary inflation and more by tangential policies. Eggs and milk? Ethanol and global demand for food, especially in China and India. Gas? hot money into commodities, unrest in the ME, and China, all that despite US use of fuel going DOWN. But hey, lets ignore all other variables and peg the correlation coefficient of inflation solely on currency.

Why don't you do some research and figure out how much oil has gone up denominated in Yen, same with eggs or milk. Sure, SF and Yen have gone up less, but then consider Ethanol, taxes and other non-monetary issues.

You austrian libertopians really make me chuckle in your tunnel vision.

 

[cliftonite]

I don't believe in hyperinflation, I simply believe in regular good ol destructive inflation. What has the currency done against the Swiss Franc? Lost 20-30% of it's value in a decade. How about the Japanese Yen? around 50%. Canadian dollar? Around 30%. Euro? Euro lost value cause Europe is fucked. The West is so arrogant the only currencies they believe matter are the Euro and USD, look how they've tanked with respect to economies that are doing well. Seriously it's not hard to see that the value of our currency is tanking and inflation is occurring at great levels, it's simply not as obvious due to so much non-sense being shoved in your face every day.

Milk was about 1.50 a gallon a decade ago, how much is it today? Eggs? Gallon of gasoline, etc etc etc. Oh yay tech prices are coming down or staying stagnant, the only thing that proves is Moore's Law.

How has the Yen getting stronger hurt you? It has been killing the japanese industry as their exports become more expensive. Why do you thing Nissan, Honda, etc are building factories over here?

 

[QuantumPion]

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...

Why is $10k to steep? Why not just send everyone a check for a billion dollars, then everyone would be filthy rich.

 

[bfdd]

How has the Yen getting stronger hurt you? It has been killing the japanese industry as their exports become more expensive. Why do you thing Nissan, Honda, etc are building factories over here?

The Yen didn't actually get a whole lot stronger, only mildly, the rest was the USD falling.

And talking about food prices in the USA are important seeing as we produce more food than anyone fucking else and we aren't exactly shipping it to everywhere while leaving our own people starving. We throw enough food away to feed the rest of the world and you don't think that the cost of it going up for us is any indication of inflation? lol idiot. Also, your diversion from "monetary inflation" to laugh at me is HILARIOUS seeing as we're talking about QUANTITATIVE EASING WHICH IS A MONETARY PRACTICE. Seriously YOU make ME laugh because you have this grandiose idea that must be played out in your head, everything can be planned out and executed. Who do you think you are a deity? lol

 

[Jhhnn]

The inflationistas & bond vigilante scarifiers are out of their minds. If investors thought there was a remote chance of it, we wouldn't be seeing this-

Investors are paying Uncle Sam to hold their money.

Devaluation? What a giggle. Devalued against what major currency, exactly?

Current market trends are strongly deflationary. In the absence of constructive fiscal policy from Congress, the FRB has little choice if they want to prevent that.

Thanks, Repubs.

 

[the DRIZZLE]

The inflationistas & bond vigilante scarifiers are out of their minds. If investors thought there was a remote chance of it, we wouldn't be seeing this-

Investors are paying Uncle Sam to hold their money.

Devaluation? What a giggle. Devalued against what major currency, exactly?

Current market trends are strongly deflationary. In the absence of constructive fiscal policy from Congress, the FRB has little choice if they want to prevent that.

Thanks, Repubs.

Do you understand what the Fed does? The Fed now controls the long and short ends of the curve so yields are no longer a valid signal of inflation expectations.

 

[the DRIZZLE]

So you think Japan is doing well? You think the Swiss are doing well?

This is the type of argument I truly love with Austrian libertopians, they think that all inflation is monetary inflation. You just mentioned 3 things that are affected less by monetary inflation and more by tangential policies. Eggs and milk? Ethanol and global demand for food, especially in China and India. Gas? hot money into commodities, unrest in the ME, and China, all that despite US use of fuel going DOWN. But hey, lets ignore all other variables and peg the correlation coefficient of inflation solely on currency.

Why don't you do some research and figure out how much oil has gone up denominated in Yen, same with eggs or milk. Sure, SF and Yen have gone up less, but then consider Ethanol, taxes and other non-monetary issues.

You austrian libertopians really make me chuckle in your tunnel vision.

Of course not all inflation is monetary inflation. That doesn't change the fact that a large % of the change in oil prices is due to the dollar's decline. It also doesn't change the fact that the Fed imposing negative real interest rates causes massive distortions in the economy or that it has significant distributional consequences.

 

[LegendKiller]

Of course not all inflation is monetary inflation. That doesn't change the fact that a large % of the change in oil prices is due to the dollar's decline. It also doesn't change the fact that the Fed imposing negative real interest rates causes massive distortions in the economy or that it has significant distributional consequences.

Then explain the huge run up in oil prior to the crisis when the Fed was actually sucking liquidity OUT of the market?

This is what monetary inflationists don't get. The inflation in oil has almost nothing to do with the dollar and almost everything to do with hot money into the market, global demand for a limited supply resource and a few other factors. Thats not even to begin to discuss the market manipulation by the speculators, which I firmly believe in.

 

[the DRIZZLE]

Then explain the huge run up in oil prior to the crisis when the Fed was actually sucking liquidity OUT of the market?

This is what monetary inflationists don't get. The inflation in oil has almost nothing to do with the dollar and almost everything to do with hot money into the market, global demand for a limited supply resource and a few other factors. Thats not even to begin to discuss the market manipulation by the speculators, which I firmly believe in.

I already said that monetary policy doesn't explain all inflation. We could run a bunch of regressions on various exchange rates and commodity prices to see how much of the change is attributable to monetary policy, but I don't see the point. Commodity price inflation is actually the QE side effect that I am least concerned about.

 

[chucky2]

Um, they tried almost exactly that. Don't you remember the stimulus plan? Each and every tax paying American citizen, who isn't dead, got a check and/or reduced taxes.

So how is repeating almost exactly what they did in the past going to do a "whole hell of a lot more" than what they did in the past?

Other than no one in this thread proposed tax cuts, but instead proposed a debit card loaded up with say $1k, it's not really. Would you have $1k in your pocket and be on the hook for it, or have them do what they're going to do and never see a dime but still be on the hook for it? Pick one, it's really that simple...

Chuck

 

[chucky2]

Why is $10k to steep? Why not just send everyone a check for a billion dollars, then everyone would be filthy rich.

If there were 174M total taxpayers in 2011, something like 46% didn't pay federal taxes when everything was said and done. That's about 87.8M that should be getting the EBT card. 87800000 * $1,000 = $87B. I figured that would be enough of a stimulus to start with.

If it's not enough, they can always dump more money on the same cards. Ten times that amount, the $10k, would be $870B. While I don't think even that amazing high of a number would be too much for the spenders to throw out there to keep the house of cards going, I myself wouldn't propose it for fear they'd actually take up the challenge.

We've had like what, $3-4T in stimulus so far? Would another $.87T do it?

Maybe that's the ticket?!?! Express the amount in decimal so it looks really small! Look America, we're only going to blow point eight seven Trillion, what's the big deal?!?!

You heard it here first folks...



Chuck

 

[juiio]

The inflationistas & bond vigilante scarifiers are out of their minds. If investors thought there was a remote chance of it, we wouldn't be seeing this-

Investors are paying Uncle Sam to hold their money.

The largest buyer of T-Bills is the Federal Reserve. In about a year and a half, the Fed doubled their holdings to over $1.6 trillion.