U.S. CitiesCity-Data Forum Index
Happy Halloween!
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-14-2010, 11:21 AM
 
Location: Planet Eaarth
8,955 posts, read 18,581,024 times
Reputation: 7193

Advertisements

In this thread I told about........."Monetizing debt in order to repudiate the debt"
//www.city-data.com/forum/busin...iate-debt.html

Is seems now that the fed will use "quantitative easing" to do just that.

"The term quantitative easing (QE) describes a form of monetary policy used by central banks to increase the supply of money in an economy when the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.[citation needed] A central bank does this by first crediting its own account with money it has created ex nihilo ("out of nothing").[1] It then purchases financial assets, including government bonds, mortgage-backed securities and corporate bonds, from banks and other financial institutions in a process referred to as open market operations."

"Now keep in mind that disasters don't usually happen overnight. They usually build over time. When the Federal Reserve begins new rounds of quantitative easing, it will take time for the effects to be felt."

Will Quantitative Easing By The Federal Reserve Unleash Economic Hell?

Now I have to wonder if the public will learn of this (I doubt it) and if they do learn of it then will they raise enough hell to stop this sham before all are in the poor house.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 08-14-2010, 01:03 PM
 
13 posts, read 16,576 times
Reputation: 27
The Fed has had an open and transparent policy of QE since Q4 2008. This is nothing new. Their overt intent was to push down the yield curve in ways that loweing the discount and window rates couldn't. Most recently the Fed announced that it was going to use proceeded from maturing real estate based assets that it added to it's balance sheets at the onset of the credit crisis, to buy more American debt.

Given that we've yet to see rates or prices react in an inflationary way, this is probably the best and soundest course of action for the Fed to take. I don't like the policy myself, but it will be effective in stimulating the American economy. Effective in the same way that giving nacotics to a recovering IV druv user would be... but I digress.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-16-2010, 09:52 AM
 
Location: San Diego California
6,797 posts, read 6,594,169 times
Reputation: 5180
Quote:
Originally Posted by shrewdnlewd View Post
The Fed has had an open and transparent policy of QE since Q4 2008. This is nothing new. Their overt intent was to push down the yield curve in ways that loweing the discount and window rates couldn't. Most recently the Fed announced that it was going to use proceeded from maturing real estate based assets that it added to it's balance sheets at the onset of the credit crisis, to buy more American debt.

Given that we've yet to see rates or prices react in an inflationary way, this is probably the best and soundest course of action for the Fed to take. I don't like the policy myself, but it will be effective in stimulating the American economy. Effective in the same way that giving nacotics to a recovering IV druv user would be... but I digress.
BS, regardless of what massaged government statistics would lead you to believe, the working man out there knows undeniably that his pay check is not going as far as it used to. Costs are up, taxes are up, fees are up, utilities are up, government debt is way up, and it is all linked to QE. QE is designed by the banks to benefit the banks and to screw the people. Hopefully the people will wise up and realize this before it is too late.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-16-2010, 12:39 PM
 
Location: NC
1,672 posts, read 1,597,522 times
Reputation: 523
Quote:
Originally Posted by jimhcom View Post
BS, regardless of what massaged government statistics would lead you to believe, the working man out there knows undeniably that his pay check is not going as far as it used to. Costs are up, taxes are up, fees are up, utilities are up, government debt is way up, and it is all linked to QE. QE is designed by the banks to benefit the banks and to screw the people. Hopefully the people will wise up and realize this before it is too late.
Please explain how "QE" benefits the banks when conversely it has closed the gap on the banks' spreads? I don't see the connection...

Also nominally what you say seems true in your situation, but in "real" terms it may not be for the entire economy since CPI/PPI are so low.

I personally think my purchasing power is up over the past year, but then again what you are describing is infamously known as "monetary illusion." A lot of debate around that subject.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-17-2010, 10:09 PM
 
53 posts, read 46,679 times
Reputation: 51
Quote:
Originally Posted by jimhcom View Post
BS, regardless of what massaged government statistics would lead you to believe, the working man out there knows undeniably that his pay check is not going as far as it used to. Costs are up, taxes are up, fees are up, utilities are up, government debt is way up, and it is all linked to QE. QE is designed by the banks to benefit the banks and to screw the people. Hopefully the people will wise up and realize this before it is too late.
I agree. I have customers who say they can't afford to shop at walmart.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-18-2010, 07:14 AM
 
Location: San Diego California
6,797 posts, read 6,594,169 times
Reputation: 5180
Quote:
Originally Posted by Maabus1999 View Post
Please explain how "QE" benefits the banks when conversely it has closed the gap on the banks' spreads? I don't see the connection...

Also nominally what you say seems true in your situation, but in "real" terms it may not be for the entire economy since CPI/PPI are so low.

I personally think my purchasing power is up over the past year, but then again what you are describing is infamously known as "monetary illusion." A lot of debate around that subject.
QE allows banks to borrow money from the FED at near 0% percent rates and then loan that same money back to the FED overnight at a profit. It also allows them to take that same 0% money and use it to manipulate equity and commodity markets using super computers running algorithms that do literally hundreds of trades per minute. Last year Goldman lost a laptop containing one of those programs and admitted that it could be used to "manipulate the market". This is how banks have been able to post record profits and give out record bonuses during a depression, while doing little in the way of lending, having massive amounts of non performing loans, and the market being in a restricted trading range.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-18-2010, 10:26 AM
 
Location: NC
1,672 posts, read 1,597,522 times
Reputation: 523
Quote:
Originally Posted by jimhcom View Post
QE allows banks to borrow money from the FED at near 0% percent rates and then loan that same money back to the FED overnight at a profit. It also allows them to take that same 0% money and use it to manipulate equity and commodity markets using super computers running algorithms that do literally hundreds of trades per minute. Last year Goldman lost a laptop containing one of those programs and admitted that it could be used to "manipulate the market". This is how banks have been able to post record profits and give out record bonuses during a depression, while doing little in the way of lending, having massive amounts of non performing loans, and the market being in a restricted trading range.
While the financial sector has amazing power (lobbying wise) and argueably too strong a share of GDP, I do not believe you understand the term "spreads" by your post on QE. It does not matter what the Fed funds rate is; what matters is the spread.

For example, credit card spreads are a little silly at the moment but that is because of the risk with a recession. All other spreads are at near record lows. Besides, if you ever take the time to look at the income statement of a bank, you will see the majority of their profits come from "fees" which are indifferent to interest rates. The only correalation is that low rates are supposed to increase loan demand(which is meant to increase money supply) which in theory may increase fee revenue which leads to higher profits.

Again, there are questionable issues with the banks, but your arguement is not one of them if you truly understand how the system works.

The main purpose of QE is to modify the M2 money supply, which has dropped the last few quarters; it is the job of the Fed Reserve to manage that supply, so a drop in the supply needs to be compensated for.

In actuallity, the M2 supply is still lower then what the Fed sees as necessary, and is why deflation is still a risk (think about it, if there is less "liquid" money in the system, then prices will go down which is deflation). You can disagree with the idea, but in economics, that is their job and honestly without them, recessions/bubbles would happen more often and be more severe.

I would worry less about what the Fed is doing and more about the government's debt load.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-18-2010, 12:24 PM
 
Location: San Diego California
6,797 posts, read 6,594,169 times
Reputation: 5180
Spreads are only relevant if the banks are loaning, which they are not. They are using QE funds for speculating. Your statement about recessions/bubbles being more severe without the FED is preposterous. The FED causes recessions/bubbles. It was the FED's easing in the early 90's and 00's which caused this whole credit bubble that has ruined the economy. The FED are and always have been private banks who's interest is doing what is profitable for banks and using the American people as pawns in their game to dominate the wealth of the country. Their aim is to enslave the people in a system where they are perpetually in debt, working their entire lives making payments to banks and in the end dying poor.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-19-2010, 08:02 AM
 
Location: NC
1,672 posts, read 1,597,522 times
Reputation: 523
Quote:
Originally Posted by jimhcom View Post
Spreads are only relevant if the banks are loaning, which they are not. They are using QE funds for speculating. Your statement about recessions/bubbles being more severe without the FED is preposterous. The FED causes recessions/bubbles. It was the FED's easing in the early 90's and 00's which caused this whole credit bubble that has ruined the economy. The FED are and always have been private banks who's interest is doing what is profitable for banks and using the American people as pawns in their game to dominate the wealth of the country. Their aim is to enslave the people in a system where they are perpetually in debt, working their entire lives making payments to banks and in the end dying poor.
I see there is no point in discussing with you if you hold an opinion like the above. I have my own problems with the banking system, but yours is on the point of a conspiracy theory and is baseless opinion.

You may disagree, but one of the founding reasons of the Fed was to reduce the severity of recessions/bubbles and was given the tools to do so. They have made some argueable mistakes (hindsight is 20/20) but they are human and have to go off forecasts...

They are not some boys club whose entire purpose is to keep you in your place Jim...
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-19-2010, 03:17 PM
 
Location: San Diego California
6,797 posts, read 6,594,169 times
Reputation: 5180
Quote:
Originally Posted by Maabus1999 View Post
I see there is no point in discussing with you if you hold an opinion like the above. I have my own problems with the banking system, but yours is on the point of a conspiracy theory and is baseless opinion.

You may disagree, but one of the founding reasons of the Fed was to reduce the severity of recessions/bubbles and was given the tools to do so. They have made some argueable mistakes (hindsight is 20/20) but they are human and have to go off forecasts...

They are not some boys club whose entire purpose is to keep you in your place Jim...
Apparently you have not studied the history of central banks and the world banking system in general. There has been a battle over the existence of a central bank in this country since its conception.
In fact the FED is the third of such central banks, the first two having been abolished. Central banking was condemned by both Thomas Jefferson and Andrew Jackson who saw it as an engine for speculation, financial manipulation, and corruption.
On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON.
The petition for Articles of Impeachment was thereafter referred to the Judiciary Committee and has
YET TO BE ACTED ON.
There were two assassination attempts against McFadden before he was finally poisoned in 1936.

As far as my opinion of the Federal Reserve, I stand with some very good company, here are a few quotes that may interest you...

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." -- Charles A. Lindbergh, Sr., 1913

"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world-- no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men."
--
President Woodrow Wilson

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs." -- Thomas Jefferson, U.S. President.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 04:06 PM.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top