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Old 06-17-2018, 08:21 AM
 
3,561 posts, read 1,997,421 times
Reputation: 6167

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The US economy is NOT REAL.


We have used QE to drive low interest rates while running national, state, and local current account deficits to drive the economy. This on top of private debt levels shooting to new all time highs for housing, vehicles, student loans, credit cards, and other personal debt.


This is a fiscally irresponsible recipe and downright dangerous game we have played. We are levered to the hilt and when credit markets contract all markets propagated by lending will contract significantly as well.


I'm not some doomsday whacko who says by gold, guns, and booze while keeping cash under the mattress. This is a very logical and real scenario that many of you educated folks should be able to easily recognize.


In my professional experience the relative "cheap" money has created a bunch of ineffiencent decisions to be made in the corporate world. Cash is cheap and easy to come by. Anybody with a pulse and revenue can get credit but these businesses are cash negative and just not sustainable. Once the party stops and the defaults start coming watch your butts!


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Old 06-17-2018, 08:39 AM
 
Location: Boston
5,097 posts, read 1,460,242 times
Reputation: 3735
I'm doing fine. Of course I went to college, developed marketable skills with a future, as did my kids and they all have good jobs got married, no surprise kids..

Poor decisions, make poor people. Wish you luck if you didn't follow the path to success.
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Old 06-17-2018, 09:29 AM
 
8,297 posts, read 3,460,242 times
Reputation: 1588
Quote:
Originally Posted by SWFL_Native View Post
The US economy is NOT REAL.


We have used QE to drive low interest rates while running national, state, and local current account deficits to drive the economy. This on top of private debt levels shooting to new all time highs for housing, vehicles, student loans, credit cards, and other personal debt.


This is a fiscally irresponsible recipe and downright dangerous game we have played. We are levered to the hilt and when credit markets contract all markets propagated by lending will contract significantly as well.


I'm not some doomsday whacko who says by gold, guns, and booze while keeping cash under the mattress. This is a very logical and real scenario that many of you educated folks should be able to easily recognize.


In my professional experience the relative "cheap" money has created a bunch of ineffiencent decisions to be made in the corporate world. Cash is cheap and easy to come by. Anybody with a pulse and revenue can get credit but these businesses are cash negative and just not sustainable. Once the party stops and the defaults start coming watch your butts!

The whole idea of QE was to stimulate the economy. And lending/borrowing is always a large part of business expansion. QE has not been very successful because businesses just did not borrow enough. An S-load of QE still just sits as excess bank reserves today as evidence. A major reason why inflation still runs low. Nothing 'fake' about it at all.

https://fred.stlouisfed.org/series/EXCSRESNS
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Old 06-17-2018, 10:43 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by Hoonose View Post
The whole idea of QE was to stimulate the economy. And lending/borrowing is always a large part of business expansion.
It didn't take a genius to realize that wouldn't work. Businesses can't expand in aggregate unless demand expands. Demand can't expand unless incomes or consumer debt rise. Since the crash was brought on by a debt crisis, increasing debt at that time was out of the question.

QE did exactly what was intended. It made the bankers and and other wealthy people who were hit by the crisis rich once again.

If they had wanted to solve the crisis to the benefit of the US public and the economy as a whole, then printing free money and giving it to individuals would have been the swift and effective method.
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Old 06-17-2018, 11:37 AM
 
24,738 posts, read 26,810,935 times
Reputation: 22732
There's a lot of rot underneath the surface. Too many working age people not working. Health care and college tuition costs still out of control. Budget deficits going from bad under Obama to worse under Trump. (And believe me, I'm no Obama fan).
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Old 06-17-2018, 11:44 AM
 
64,699 posts, read 66,183,819 times
Reputation: 43112
ha ha ha , the brightest minds on the planet could not figure out what was the right thing to do but c-d posters got all the answers to solve the countries ill's . monday morning quarterbacking is always spot on .
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Old 06-17-2018, 11:45 AM
 
24,738 posts, read 26,810,935 times
Reputation: 22732
Quote:
Originally Posted by rruff View Post
It didn't take a genius to realize that wouldn't work. Businesses can't expand in aggregate unless demand expands. Demand can't expand unless incomes or consumer debt rise. Since the crash was brought on by a debt crisis, increasing debt at that time was out of the question.

QE did exactly what was intended. It made the bankers and and other wealthy people who were hit by the crisis rich once again.

If they had wanted to solve the crisis to the benefit of the US public and the economy as a whole, then printing free money and giving it to individuals would have been the swift and effective method.
As much as I despise the printing of money, I can't disagree with what you said.
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Old 06-17-2018, 11:49 AM
 
Location: Ruidoso, NM
5,170 posts, read 4,735,913 times
Reputation: 4206
Quote:
Originally Posted by mathjak107 View Post
ha ha ha , the brightest minds on the planet could not figure out what was the right thing to do but c-d posters got all the answers to solve the countries ill's.
Their purpose was not and never has been "solving the country's ills". It's rather how to maximize long term power and $$$ for themselves and who they work for.
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Old 06-17-2018, 11:58 AM
 
8,297 posts, read 3,460,242 times
Reputation: 1588
Quote:
Originally Posted by rruff View Post
It didn't take a genius to realize that wouldn't work. Businesses can't expand in aggregate unless demand expands. Demand can't expand unless incomes or consumer debt rise. Since the crash was brought on by a debt crisis, increasing debt at that time was out of the question.

QE did exactly what was intended. It made the bankers and and other wealthy people who were hit by the crisis rich once again.

If they had wanted to solve the crisis to the benefit of the US public and the economy as a whole, then printing free money and giving it to individuals would have been the swift and effective method.
Very few understand that. Bush2 gave out a bit. Helo Ben left to his devices might have dropped more. Today I would send it out in HC services.
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Old 06-17-2018, 11:59 AM
 
8,297 posts, read 3,460,242 times
Reputation: 1588
Quote:
Originally Posted by rruff View Post
Their purpose was not and never has been "solving the country's ills". It's rather how to maximize long term power and $$$ for themselves and who they work for.
No doubt that it helped save many bankers azzes. But it was also done to try and light some inflation.
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