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03-01-2015, 06:28 AM
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4,174 posts, read 2,786,238 times
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Why Didn't Quantitative Easing Lead To Hyperinflation?
Interesting to note that the FED is getting back our money in the form of interest payments on the debt they are holding. At some point they will also be able to sell the bonds. All that money is then rebated to the Treasury (taxpayers).
Interesting graphs regarding the M0 and M2 money supply. And a good explanation why hyperinflation has occurred in places like Weimar Germany and Zimbabwe and not the US.
I get that the libertarians took their best shot back in 2009 forecasting all kinds of "sky is falling" scenarios. But, given that their economic predictions have proven to be woefully inadequate, it appears that history has deprived them of any and all economic credibility. Not that that will stop them from decrying the FED and ignoring the impact FED policy has had on stabilizing the economy.
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03-01-2015, 09:51 AM
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8,299 posts, read 3,463,333 times
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Very few understand QE even today, and not just Libertarians. Most think it simply printing money and then tossing it out into the economy, generating money debasement.
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03-01-2015, 07:51 PM
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Location: Brawndo-Thirst-Mutilator-Nation
15,199 posts, read 15,237,422 times
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I>>>>>>>>>>>>>ummmmm, have no idea.
I mean, I am not very smart..........but this current economy is totally baffling, at least for me. Stock market basically going up and up and up for over 5 years straight, housing prices zoooooming past the last bubble in some areas, record corporate profits, low unemployment, rents skyrocketing, luxury condos/penthouses at an all-time high..............and inflation has been very muted.
I suspect that much of this is due to crazy manipulation and policies of the Fedgov. But who knows, there are MANY different opinions on what is going on.....take your pick????????????????????
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03-01-2015, 08:04 PM
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48,519 posts, read 81,086,895 times
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Because not enough money is chasing product even with low interest rates. Alot of money on the side lines plus those that can are paying down debt. Even in the stock markets retail investor has never really returned to markets. Many corporations are not spending ;they are buying their own stocks which drives the price higher. GDP is growing slowly and flat lining some months. The markets are volatile and will be hanging on FEDs every word.
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03-02-2015, 11:17 AM
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3,792 posts, read 1,771,914 times
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Quote:
Originally Posted by Hoonose
Very few understand QE even today, and not just Libertarians. Most think it simply printing money and then tossing it out into the economy, generating money debasement.
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In order to understand it you have to follow the money.
But to answer the Q in the threads title.
Because they couldn't find anyone to loan the bulk of the money too. |
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03-02-2015, 11:35 AM
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8,313 posts, read 8,593,884 times
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My answer is that few people realize what a dramatic shock the recession of 2008 really was. The economy dove into the worst tailspin it had been in since the Great Depression. A Depression was only averted by: 1. Quantitative Easing; 2. TARP; and 3. the Fiscal Stimulus passed by Congress.
At the time, there were a lot of whiners who said it would be the ruination of the country. Wrong. Its what kept the entire banking and credit system from collapsing.
In any event, the collapse of the real estate market sucked a lot of dollars out of the economy. Government was the only entity that had the power to fix what was wrong.
Inflation is naturally less of an issue today because of things like foreign competition, the information economy, and the decline of unions.
I predict there will be no significant inflation for years.
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03-02-2015, 11:44 AM
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3,792 posts, read 1,771,914 times
Reputation: 765
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Quote:
Originally Posted by markg91359
My answer is that few people realize what a dramatic shock the recession of 2008 really was. The economy dove into the worst tailspin it had been in since the Great Depression. A Depression was only averted by: 1. Quantitative Easing; 2. TARP; and 3. the Fiscal Stimulus passed by Congress.
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It was the oil boom that made the difference.
Quote:
Originally Posted by markg91359
At the time, there were a lot of whiners who said it would be the ruination of the country. Wrong. Its what kept the entire banking and credit system from collapsing.
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It is still in trouble. Too much debt and not enough income.
Quote:
Originally Posted by markg91359
In any event, the collapse of the real estate market sucked a lot of dollars out of the economy. Government was the only entity that had the power to fix what was wrong.
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The FED did a lot. But we need the wages to pay for the debt.
Quote:
Originally Posted by markg91359
Inflation is naturally less of an issue today because of things like foreign competition, the information economy, and the decline of unions.
I predict there will be no significant inflation for years.
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A safe bet. We aren't in for inflation until the debt in % of GDP comes down. And that is very painful economically.
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03-02-2015, 02:26 PM
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Location: Sector 001
7,154 posts, read 5,958,670 times
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It did cause inflation... it inflated the asset prices of the top's net worth via insanely valued stock prices, increasing real estate values, and a bond market bubble of historic proportions with silly low mortgage rates.
The average joe sees stagnating wages and blue collar types have historically low wages given the productivity that is expected out of them. You need to have money, and have it invested, to have benefited from this recovery, which is a recovery by the rich, for the rich.
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03-02-2015, 02:29 PM
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3,792 posts, read 1,771,914 times
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Quote:
Originally Posted by stockwiz
It did cause inflation... it inflated the asset prices of the top's net worth via insanely valued stock prices, increasing real estate values, and a bond market bubble of historic proportions with silly low mortgage rates.
The average joe sees stagnating wages and blue collar types have historically low wages given the productivity that is expected out of them. You need to have money, and have it invested, to have benefited from this recovery, which is a recovery by the rich, for the rich.
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Watch out for the pop. |
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03-03-2015, 09:16 AM
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7,846 posts, read 5,038,693 times
Reputation: 4025
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Quote:
Originally Posted by stockwiz
It did cause inflation... it inflated the asset prices of the top's net worth via insanely valued stock prices, increasing real estate values, and a bond market bubble of historic proportions with silly low mortgage rates.
The average joe sees stagnating wages and blue collar types have historically low wages given the productivity that is expected out of them. You need to have money, and have it invested, to have benefited from this recovery, which is a recovery by the rich, for the rich.
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No, it didn't cause inflation.
How do so many people not understand what causes inflation?!?!? 
Inflation has nothing to do with QE. QE is a bank bailout. Inflation is caused by global energy prices. The Fed reacts to energy prices to keep the core inflation rate close to its annual goal of 2%. |
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