If youre not physically holding those futures.
It wont help you, because the guy who invested in lead will have it
If youre not physically holding those futures.
It wont help you, because the guy who invested in lead will have it
- Sep 29, 2000
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Yeah if you're truly worried you'll want to have that gold literally on hand, and not in a safety deposit box, but literally in your possession.Originally posted by: Acanthus
If youre not physically holding those futures.
It wont help you, because the guy who invested in lead will have it
This sounds to me like they're just injecting funds like the US does-- issue Treasury bills&bonds and then investors buy them. Nothing to see here....
To be more specific, perhaps they would like to take on a lot of debt and are fairly certain they could draw more investors than the US is with its dollar.
To be more specific, perhaps they would like to take on a lot of debt and are fairly certain they could draw more investors than the US is with its dollar.
Doesn't have to be hyper-- in the early 70s we had 10% inflation and that fostered plenty of "buy now" attitude. Don't know if you'd call 10% hyper; I wouldn't.
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Read the link. It specifically says, in fact I specifically say in my post that this is NOT what they are doing: it will pay for these assets not with a pre-raised cache of funds but by creating new money and transferring it to the investors Is this not different than what the US is doing when it has been buying/"stimulating"?
No it is not. The US does not have a "pre-raised cache of funds", we are issuing new Tbills, that is all.
For us, you could call it "printing" when the Fed starts buying Tbonds directly from the government; as that will be injecting cash into the system for the next 10 years. Tbills mature much faster; and the money is removed from circulation, hence currently there are only minor fears of inflation. If the Fed starts purchasing Tbonds then, depending on the volume, it's safe to say we're headed for inflation.
isn't the article implying that they aren't selling bonds to print money, but that they're just printing money?
BoberFett
Lifer
- Oct 9, 1999
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Wrong.
Encouraging spending is what got is in this mess. There is no money to spend, we already spent all the money years ago. That's what credit is. We borrowed from the future. Well the future is now, and we can't borrow any more. The borrowing that the government is doing right now might be a temporary fix, but give it another decade or two and we're going to see an utter collapse that will make the last year look rosy by comparison.
You can't avoid the inevitable.
Honestly I haven't read it yet. From the title it looked like a sensationalist take on issuing Treasury notes.
edit: so I just skimmed the article; apparently I mis-spoke. They're taking assets from holders, and simply depositing cash into their account. That would be creating money.
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Damn, at least read the article if you're going to argue its pivotal detail.
I received the implication that it truly is printing money and not even trying to put it through the system as normal. I am not positive and cannot find out for sure, but that is certainly what it's insinuating.
see my edit skoorb, you just beat me to it! I agree, sounds like they're printing.
This is of concern to me because it is propping up those who already have wealth, while hurting those trying to seek it. Imagine you're a new college grad looking to buy a home, start a family. The government buying these assets is propping up the value of them. Without this propping up the asset prices (house's prices) would be forced to fall in price until the market en mass, ie people like you looking for a house, deems them affordable to buy. However, they will now never be affordable to you, because you have student loans to pay off, and the government is keeping the prices from reflecting their natural market value.
I guess renting is still an option.
The Feds argument is that right now nobody is sure how much these are worth, because everybody is in panic mode. So, they will create a market for them until the market stabilizes and people can decide what they're willing to pay. My beef with this is they are basically preventing the market from deflationary forces, which in my opinion are a necessary side effect of a healthy economy. Everybody needs a kick in the butt every once in a while.
This is of concern to me because it is propping up those who already have wealth, while hurting those trying to seek it. Imagine you're a new college grad looking to buy a home, start a family. The government buying these assets is propping up the value of them. Without this propping up the asset prices (house's prices) would be forced to fall in price until the market en mass, ie people like you looking for a house, deems them affordable to buy. However, they will now never be affordable to you, because you have student loans to pay off, and the government is keeping the prices from reflecting their natural market value.
I guess renting is still an option.
The Feds argument is that right now nobody is sure how much these are worth, because everybody is in panic mode. So, they will create a market for them until the market stabilizes and people can decide what they're willing to pay. My beef with this is they are basically preventing the market from deflationary forces, which in my opinion are a necessary side effect of a healthy economy. Everybody needs a kick in the butt every once in a while.
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I agree about the house. In another thread at least one person said he has been good with his money, saw the housing bubble, and is waiting for houses to reset to worldly values, at which point he can buy. If they continue to stay inflated, that doesn't become possible. In reality, though, they are continuing to fall. I like the analogy above with the water hose from 10 feet. This is a very dangerous precedent England has now done and rather like cheating the first time and not getting caught, it will be harder to convince yourself not to do it again. It's also why you don't snort crack once, because it's hard to stop. And so now with the cost of their 150M pounds being no more than the paper it's printed on (or in this case, the electricity used to increment the numbers in a mainframe somewhere), such easy money will be hard to say no to next time.
Originally posted by: Skoorb
Damn, at least read the article if you're going to argue its pivotal detail.
I received the implication that it truly is printing money and not even trying to put it through the system as normal. I am not positive and cannot find out for sure, but that is certainly what it's insinuating.
It isn't literally printing money. From the article, I quote the part 'effectively printing money'
Also, got this from the Economist:
http://www.economist.com/world...9&source=features_box2
I don't know what exactly the Fed is doing, but it sounds very similar to the Fed's actions
- Sep 29, 2000
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Bernanke May Need to Ramp Up Fed?s Asset Purchases
BO Japan May Buy Subordinated Loans to Boost Bank Capital
Are these both in the same vein as England, i.e. printing money? This appears to be a qualitative change in approach now.
BO Japan May Buy Subordinated Loans to Boost Bank Capital
Are these both in the same vein as England, i.e. printing money? This appears to be a qualitative change in approach now.
No they are not printing money. The money at the federal reserve is money that already exists.
Printing money = creating money with no liability created, i.e. Zimbabwe.
zephyrprime
Diamond Member
- Feb 18, 2001
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With our debt based monetary system, money is created out of thin air by issuing debt. Since debt must be repaid with interest, there is not enough cash money to pay back principal plus interest. Our current problems are merely a symptom of this simple fact.
Because there is not enough cash money to pay back the money that was issued, either debt defaults of money printing is essential to keeping our debt based monetary system going.
Because there is not enough cash money to pay back the money that was issued, either debt defaults of money printing is essential to keeping our debt based monetary system going.
zephyrprime
Diamond Member
- Feb 18, 2001
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Japan did indeed start to actually print money (monetization is the euphemism used by governments when they do this). It should be noted that even when they did this, there was still not a lot of inflation in Japan.
You got to understand right now that we have deflation. There is actually less money in existence today that yesterday. That crazy 30x leverage that investment banks used is gone. In the future, banks will keep reserves at 10x like they are supposed to. A lot of money that was lent out in the past under 30x leverage will simply cease to exists as it is paid back over time thus shrinking the money supply. Also, a lot of the off balance sheet assets that banks hold are possibly overleveraged too and that stuff will probably be reigned in also. Monetezation can step in and fill the void left by destruction of bank created money.
zephyrprime
Diamond Member
- Feb 18, 2001
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The issuance of tbills would be considered a "pre-raised cache of funds". What England is doing is different. They are actually creating money. I don't know why you find this so hard to believe since many times in history (although not so recently in the UK) governments have done this.
zephyrprime
Diamond Member
- Feb 18, 2001
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Of course it can print money. The government has to power to issue coin and regulate the value thereof.
Yes, and notice how the pound has fallen against the dollar? In part because of the structural weaknesses in England's financial sector, but also because printing money suggests serious weakness in England's overall economic outlook for the short term.
Take Premium Bonds. You take them, I'd rather not. My friends in England have had 10,000 pounds invested in PBs for about 10 years, but in the last year they've received not one pence in returns. They are taking their money out June 1, unless they hit it big. I hear the fund is way way down, and this is a way a lot of families in England saved for their kids. A tennis pro friend of mine has been putting 100 pounds a month into PBs for his son for 9 years now, and he says he's thinking of taking it out to pay expenses because he's not giving as many tennis lessons.
Things in England are looking even tougher than they are here. Blimey!!
-Robert
Take Premium Bonds. You take them, I'd rather not.
My friends in England have had 10,000 pounds invested in PBs for about 10 years, but in the last year they've received not one pence in returns. They are taking their money out June 1, unless they hit it big. I hear the fund is way way down, and this is a way a lot of families in England saved for their kids. A tennis pro friend of mine has been putting 100 pounds a month into PBs for his son for 9 years now, and he says he's thinking of taking it out to pay expenses because he's not giving as many tennis lessons.Things in England are looking even tougher than they are here. Blimey!!
-Robert
- Sep 29, 2000
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IMF poised to print billions of dollars in 'global quantitative easing'
This was just PMed to me.
Fun times!
This was just PMed to me.
Fun times!
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