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So guys. I think at this point the Fed going start the process of having another round of quantitative easing in an attempt to kick-start/ramp up the U.S. Economy. And while I have my doubt about this. I'd like to hear from you guys and see what you guys think about QE2.
So.............let me ask.
1. Do you think this new round of easing is going to help the U.S. economy?
a.) if so. Why will it work?
b.) if not. Why won't it work?
2. If you don't think it will help. What is an alternative way to possibly bolster the U.S. economy?
One last thing. I would like to try to keep the opinions on this tread somewhat academic. I would prefer the use of facts/numbers/etc. to back up your statements. I'm not looking for rhetoric.....that stuff for the P & C forum.
Oh yes. I'm going to add a yes or no poll to get a generalized idea of how people are feeling that don't wish to post a response.
Thanks
Baystater.
Last edited by baystater; 10-06-2010 at 01:50 PM..
QE is going to cause inflation so no, it will not work. The way to really help the economy is to get rid of all these nasty trade agreements such as NAFTA and GATT.
I dont think it will have much of an effect. If they want to help the economy then they need to cut spending and keep taxes where they are. That way they can get on budget and not cripple small and big business while they are doing it.
It will keep the Banks/Corporations content for awhile longer. It will persuade/delude the common man to invest even more in the stock market since there’s financially nothing else out there to believe in (intuition).
Long term problem: if Deflation doesn’t take place moral hazard on all fronts will not be addressed (intuition).
On the positive side: Maybe the USA is ready/determined to dump money that focuses on the new transportation & other oil-weaning technologies out there (influenced by a 9/2010 TIME magazine article)?
"Quantitative Easing" (whatever number) is nothing but a politically correct way of saying "printing worthless money out of thin air". How anybody can imagine that that would solve any problems, is beyond me.
I suppose in the short term, it would help debtors repay their debts with devalued currency, but all of us will eventually be paying more for food, fuel, housing, etc...as everything will go up in price (inflation).
If the banks continue to refuse to lend, none of the money can get into the system, as our monetary unit only comes into being when it is borrowed. In that case, the Fed will still be "pushing on a string", no matter how much they print. In fact, in the autumn of 2008 (2 years ago, exactly) the Fed doubled our money supply, but we have seen NO effects from that, as the banks will not lend. Thus more "quantitative easing" (printing of worthless paper out of nothing) will solve NO problems unless the banks decide to lend again (doubtful in near-term). If they did decide to lend, there is already plenty of money sloshing around in the banks to create noticeable inflation as soon as it is borrowed. No "QE" is needed. And it certainly won't help anything.
So guys. I think at this point the Fed going start the process of having another round of quantitative easing in an attempt to kick-start/ramp up the U.S. Economy. And while I have my doubt about this. I'd like to hear from you guys and see what you guys think about QE2.
So.............let me ask.
1. Do you think this new round of easing is going to help the U.S. economy?
a.) if so. Why will it work?
b.) if not. Why won't it work?
2. If you don't think it will help. What is an alternative way to possibly bolster the U.S. economy?
One last thing. I would like to try to keep the opinions on this tread somewhat academic. I would prefer the use of facts/numbers/etc. to back up your statements. I'm not looking for rhetoric.....that stuff for the P & C forum.
Oh yes. I'm going to add a yes or no poll to get a generalized idea of how people are feeling that don't wish to post a response.
Thanks
Baystater.
Look at what is going on in the currency markets. In may EUR/USD was in the 1.24 to 1.26 range. It is now in the 1.38 to 1.39 range. Look also at AUD/USD and NZD/USD. Also check out currency valuaitons in the Phillipines, Brazil, Viet Nam. The easiest trade in the world right now is to sell dollars and buy currencies on high interest rate countries and emergining markets. That is why QE2 won't help the United States economy.
Now banks, and speculators are going to make out like bandits!
If capital is allowed to flow freely it will ALWAYS flow to where there is the greatest rate of return given an investor's risk tolerance. That is NOT the United States in this point in time.
Look at what is going on in the currency markets. In may EUR/USD was in the 1.24 to 1.26 range. It is now in the 1.38 to 1.39 range. Look also at AUD/USD and NZD/USD. Also check out currency valuaitons in the Phillipines, Brazil, Viet Nam. The easiest trade in the world right now is to sell dollars and buy currencies on high interest rate countries and emergining markets. That is why QE2 won't help the United States economy.
Now banks, and speculators are going to make out like bandits!
If capital is allowed to flow freely it will ALWAYS flow to where there is the greatest rate of return given an investor's risk tolerance. That is NOT the United States in this point in time.
This is exactly right, I just posted a thread "The truth about QE" which has an article that explains this in depth, why it is causing turmoil worldwide and endagering trade wars.
im glad everyone read a few articles and now have this insight into whats next. .. do you really think you should let whats going to happen next out for public knowledge? i would think you would bet the ranch on the outcome and not tell anyone..
basically im just flipping a coin and calling it.
Last edited by mathjak107; 10-15-2010 at 04:09 AM..
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