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Redpill me on Quantitative Easing
Carter Allen
Other urls found in this thread:
en.wikipedia.org
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triplecrisis.com
bilbo.economicoutlook.net
cis.org
politifact.com
youtu.be
bloomberg.com
youtube.com
youtube.com
paulcraigroberts.org
youtube.com
neweconomicperspectives.org
delong.typepad.com
moslereconomics.com
twitter.com
Hunter Green
Additional commentary: it's given credit for preventing a second Great Depression following the Financial Crisis, on the other hand, it is blamed for cementing struggling "zombie companies", especially in Japan.
Sebastian Collins
>preventing a second Great Depression
>The meme that 14 million jobs have been created since the Great Recession is constantly trotted out as a sign of how the labor market has healed, but these folks forget to add a detail: since the Great Recession, the US population has grown by 16.5 million. Turns out, jobs growth was smaller than population growth! So per capita – for each of the 323.2 million people in the US – there are now fewer jobs than at the bottom of the Great Recession.
nakedcapitalism.com
>So we have clear evidence that the big banks gained from the policy. But the impacts on wages and employment for the bulk of the population have been much more muted. Does this mean that a better policy would be to do as Paul, Paul and Perry propose? Doubtful. High interest rates and an inflexible monetary standard such as the “gold standard” would only bring us back to the days of costly credit, slow job growth, and new ways for lightly regulated Wall Street banks to crash the economy again.
triplecrisis.com
It prevented nothing. It was a giveaway to the bankers.
No
>Anyway, for historians, you will recall that the French and Belgian armies then retaliated after the German default and took over the industrial area of the Ruhr – Germany’s mining and manufacturing heartland. The Germans, in turn, stopped work and production ground to a halt. The Germans kept paying the workers in local currency despite limited production being possible and you can imagine that nominal demand quickly started to rise relative to real output which was grinding to a halt. The crunch came when the export trade stalled and the only way the German Government could keep paying their treaty obligations etc was to keep spending. The inflation followed.
Ethan Rivera
I suppose that giveaway -persisted because banks we're reluctant to lend the money further. It's the same today.
Ethan Powell
Unlimited debt ceiling
Sebastian Martinez
Get the fuck out of here with that foetal alchol cunt.
Joseph Long
>en.wikipedia.org
"printing money without the economic resources to back it up"
What exactly backs up the fed's doing of the same?
Aside from the enslavement of the American income tax payer through the rest of history?
Kevin Anderson
Government excuse to steal the value of the money in your wallet and bank account.
Brandon Anderson
pretty much a dead meme by now
Wyatt Campbell
They are spending your savings and eroding your wages to hand money to banks that buy bonds and shit from other rich people so that the rich can get richer.
Good for the economy ;^)
Michael Parker
I would argue that inflation started way before Germany paid miners for not working.
Josiah King
Nope. Lauren is cute.
Landon Lopez
It is even uglier than that article.
I did a report on the job market. 70% to 100% of all jobs created went to Illegals or H1-Bs since 2000 even left wing politifact acknowledges immigrants are literally taking jobs.
hows that for a redpill
cis.org
Politifact says it's "mostly false" because it's only 70% in their eyes
>Only 70%
Ethan Thomas
>What exactly backs up the fed's doing of the same?
Supply and demand. The money is not spent and there is a huge lack of demand (meaning unused productive resources as signified by unemployment, underemployment and capital underusitlization) and therefore does not lead to significacnt inflation.
If it was given to the population, it would first lead to greater demand which would lead to greater untilization of resources, which woulf lead to higher real wages, which would then eventually lead to some inflation, which would be in single digits and lower than the rise in real wages.
Nicholas Rivera
It's just giving money away to banks who are already rich af.
80% of businesses fail, so it's not a matter of banks not having the capital to invest in good businesses, it's a matter of making correct decisions with the money they do have.
All in all, it's just a way to funnel money to the .01% as they merely drive stock bubbles (hence why the stock market is doing so well under Obama) and companies just do stock buybacks.
I believe the stimulus was to the tune of 200k per each American.
You would've been better off giving 3-400k to every American not earning more than 200k per year.
Liam Ortiz
Source?.
Luis Jones
Again, theoretically, that money could've been put to productive use. Of course, this happens seldom, as banks prefer speculative circlejerks.
But the very reason we do NOT have inflation despite massive QE is that the money isn't put inti circulation. Banks say "thx" and keep it, even under negative interest.
Mason Mitchell
"Printing money" sounded too much like African economics.
Brayden Price
yeah she cute, good voice too
Noah Ross
So you're advocating helicopter money?
Also, what's causing this lack in demand?
Angel Collins
Oh and another awesome part about the modern versions of stimulus, even IF the ,01% actually invest it into the economy, when you factor in for inflation, the people getting it get it at a much lower value....so you can add 5-10% more to what the stimulus was in that that's what the rich get to spend it at.
18:30
To quote a former FEDERAL RESERVE official
2/3 of EVERY dollars spent in the 4 trillion dollar has just sat in the banks. 2.6 trillion dollars cash SITS in the big wall street banks and the other third of the cash, which was supposed to stimulate mortgage lending....by the end of the program, mortagage lending was DOWN and yet instead of lending...the banks began to use whatever cash we did deploy...SPECULATIVELY, they used the cash to pile into stocks/bonds and commodities
18:30
To quote a former FEDERAL RESERVE official
2/3 of EVERY dollars spent in the 4 trillion dollar has just sat in the banks. 2.6 trillion dollars cash SITS in the big wall street banks and the other third of the cash, which was supposed to stimulate mortgage lending....by the end of the program, mortagage lending was DOWN and yet instead of lending...the banks began to use whatever cash we did deploy...SPECULATIVELY, they used the cash to pile into stocks/bonds and commodities
bloomberg.com
Joseph Baker
You know lots of lots of money is being spent on the provision of basic necessities to your "refugees" what exactly do you think that is? It's helicopter money but not for people who work.
Can't have that. Workers can't be given money. They have to work for that. Let's hand huge sums of money to land lords and super markets though. They earned it.
Easton James
What Zimbabwe did has little to do with scientifically backed Central Bank actions... Hopefully.
Levi Edwards
Woops, the 2nd part that was supposed to be CVed was
“I don’t think there’s any doubt that quantitative easing enabled the rich and the quick. It was a massive gift.”
“It was deliberate in that we were hoping to create a wealth effect.” … “There was a more concentrated effect. And you see it in the kind of earnings that are announced by certain private equity groups and individuals and so on.” … “the distribution of the wealth effect was heavily concentrated” … “We don’t work for the rich and the quick. We work for the American people. So that’s been one of my bigger disappointments.”
Federal Reserve Chairman in Dallas, Richard Fischer
Brody Watson
Then why doesn't the official unemployment figure fall? One might argue it doesn't account for certain kinds of employment, but that's always the case.
Matthew Sanchez
Why do you think the west is so keen for refugees now? You spend lots of money on people and the state can control exactly how it's spent. Basic necessities.
The provision of basic necessities will drive the creation of minimum wage jobs. How wonderful!
Lucas Powell
>b-b-but muh dik
She's a feminist you traitor.
Camden Smith
It's a liquidity trap, plain and simple. We need to keep increasing the monetary base of the economy in order to maintain growth, but unfortunately that money gets stuck in the banks, so the only option they have is to keep increasing the monetary base.
Luis Price
Plus it grows their voting bloc
Plus it helps the super wealthy as it's just a tax transfer to them seeing as most of the rapefugees will be shopping at big chains and the velocity of money will increase.
The same money that could've sat in citizen's bank accounts or been used to invest in infrastructure will now be used in their stores and on their prodcuts.
Kayden Butler
Our unemployed also get a kind of helicopter money.
Also, I don't buy the implication these refugees are an programme. If so, why didn't the French, desperately in need of one, accept the refugees?
Jason Lee
Money may be cheap but wages for middle class people have not risen for a long time.
I'd love to be able to buy ten acres of land and build a house to my desires.. nothing lavish just comfy and green.. money is cheap but my income limits my access to enough..
I have an excellent credit file score but it isn't enough to achieve this modest aim and I suspect this is true for many who work all the time they have and still feel stagnant.
If Fed monetary policy had increasing the middle class to improve standard of living markers for the most people and not merely acting to thrust the already rich into super wealthy orbit their aims escape me.but then again I haven't had to think about all this at an academic level.
If I had I;d probably still think the central banks do not act in the interests of average citizens and had we the resolve to endure some trauma we should scrap it and return to the constitutional model
Dylan Lee
Need to get rid of muslims
Jaxson Davis
France has been flooding their country with GENUINE 100% FRENCH...north African Muslims...for a long time now. They didn't need it.
Adam Nelson
Handing it directly to people might indeed cause inflation.
Evan Ortiz
I'm considered a higher earner. I earn double what the average irish family does. The limit I can borrow is €130,000.
With that money iny city I could buy a very very nice car. That's about it.
So I'm out of thr game for now despite being a young person who earns a relatively large amount of money. If I can't get involved in the economy of buying and borrowing, who can? Only foreign investors.
Anthony Peterson
Complex discussion, entire books could be written about that.
youtube.com
From one perspective it has been about using the private debt to create demand. See, after WW2 all the governments had created money so all the debts could be paid. However, the primary deficits of wartime no longer couuld be paid, so an ever increasing private debt was needed to create the money to keep the eonomy running and the umployment high The US used to be really fucking rich:
paulcraigroberts.org
Still, you could make a dozen correct analyses of the topic from different perspectives.
Anthony Rogers
>Redpill me on Quantitative Easing
You weren't getting into debt fast enough Goy. Now we have to print more money for ourselves to make your meager savings worth far less next year. Remember, it's not inflation if we say it's too volatile a product for us to count it.
Luke Jones
The refugees are the helicopter money. Seriously. Not only will they spend the money but they will also want to take loans and work really shit jobs. Something we won't do and our parents are already mortgaged as much as they can or else own their homes.
Cooper Garcia
And Sweden? Sweden has a high birthrate (for European standards) and solid growth, yet they were still craving that BBC like there's no tomorrow.
Contrary, Portugal, Hungary, Spain, Poland, all countries with low birth rates, in need of an stimulation programme, weren't so eager to open their legs and borders.
Cooper Green
One redpill on quantitative easing, as requested:
youtube.com
Jeremiah Green
I guess it was always this way?
Liam Davis
Depends on level of employment. I'm assuming that one has high employment and wants to get a head start and the others have unemployment and don't want to add to that despite having a shitty economy.
Aiden Fisher
It means I have no future in my own country until my parents just hand me the price of a house, which they are doing because they are happy with my accomplishments but know I can't start my life with the way banks are behaving.
Andrew Mitchell
Why is there a need for debt to keep the economy running, in the first place? New money can be printed and distributed whenever there is a real increase in goods available.
Hunter Cooper
Makes sense, the countries with high employment were the only ones accepting refugees - the Netherlands, Sweden, Germany.
Interesting how this corresponds with an positive attitude towards immigration, because you can't pull a similar stunt in, say, Czechia.
Leo Ramirez
Again, it was always this way. There hasn't been a time where you could, without guarantees, lend enough money to build a car production plant.
Justin Thompson
Bump, if possible.
Thomas Thompson
neweconomicperspectives.org
True. Let's look at Greece. Massive destruction of productive capital, huge losses in wealth and educated population escapes the country.
Terrible? Depends. The ratio of profits to wages is higher than ever. If you are a millionairy business owner, you gain financial benefits from this, while the regular Greeks are fucked. Cui bono?
It echoes history. Athens was moving to the same direction. It was Solon, who broke the power of the oligarchs that made Athens a democracy and turned it into a rich and powerful empire.
Lincoln Rogers
that is about the same amount I could access for a home loan in 2001 with no income verification as i was self employed but at 10% interest.
fortunately I suppose I had inherited about the same amount put into a trust and was allowed to buy in my name a small condo for a little less than half that paid in full and in my name..
funny thing is back at that time I learned an old m8 of mine from my hell raising days of my 20's had become a mortgage banker.. I called him but he said he couldn't do me any better than the $135,000 @ 10% ... so how does one not born into money get on the inside of the Money Club?
Its really not a mystery .. you spend your life working at some high paying position like a large firm attorney and with smart investments you build a high net worth and then you build on that ala Warren "Can I get a Coke" Buffet
Critical mass is having enough disposable income to invest without that ability you will forever be a wage slave..
if you're under 40 its not necessarily too late..
Grayson Bell
in 1915 the jews got ahold of the money printing powers of america replacing the money system the founders gave we the people and its been down hill since. the end ing all paper currency achieves its actual value of(((zero))). one day it will be called treason.
Jace Thompson
I don't think it's as easy as you describe it. Greek businesses have a very hard time lending.
Also, it doesn't answer my question. You can increase the amount of money whenever there is an increase in goods. There's no need for debt to stimulate the economy.
David Gray
...
Nicholas Johnson
It forces money into risky assets by purchasing safe assets (government bonds) off of the market. This increased demand for bonds pushes the price up and interest rates down, keeping the "risk free assets" artificially cheap. Risky assets are thereby made artificially expensive.
End game: not sure.
Juan Russell
>You can increase the amount of money
You can. We don't. If you have the time, this explains it in depth:
delong.typepad.com
tldr: some people benefit from unemployment therefore it exists.
Same appleid to increasing private debts. That is why I brought up Solon and Athens.
Isaac Cox
Unemployment has always existed, long before modern financial systems we're established. That sounds really far-fetched to me.
Brody Diaz
No it hasn't. Unemployment is a monetary phenomenon. Useful people with nothing to do are usually put to work. Only in the context of a monetary economy, where wages must be paid with a resource created by the state can ablebodies people suffer involuntary unemployment.
Even monetary economies have periods of full employment. Unemployment was gone pretty much the moment the US entered WW2. Smae with Hitler's economic policies which were based on printing money.
Lincoln Gutierrez
Daily reminder that all the firms that received TARP funds paid them back with interest, essentially netting the American taxpayer with a profit.
Lincoln Walker
Okay, but
a. this spending a induced employment comes at the cost of inflation.
b. there is a productivity benchmark below which people simply aren't employable, in times of globalization and automation
c. what alternative is there to a "monetary economy"?
Bentley Lewis
But that's a good thing.
Sadly, financial institutions don't.
Thomas Reyes
FDR rots in Hell for this alone.
Xavier Robinson
It's to buy junk bank loans in hopes banks will loan to higher risk people to increase the money supply in the economy. Operation Twist is a bit more interesting.
Gabriel Ortiz
>a. this spending a induced employment comes at the cost of inflation.
>b. there is a productivity benchmark below which people simply aren't employable, in times of globalization and automation
No.
A is wrong because inflation oonly shows up after demand surpasses supply. Before that, there is utilization of unused resources to create more stuff, thus keeping up with demand.
Now, inflation may be caused by supply side issues, like during the oil crisis.
moslereconomics.com
b. Not really. Only the disabled are useless enough for that to be the case. Waiting tables answering phones, etc is not that hard..
Automation does not reduce the need for labour, it just moves labour around, possibly making labour more productive.
c. Non-monetary economies. most of the world history has been non-monetry. Not a good idea, but what of it?
Eli Young
But as soon as there is demand, inflation comes crashing in. In Venezuela, handing out free goods lime televisions caused massive inflation. Same with the Socialist government in Chile. Same with the United Kingdom before Thatcher.
You can't helicopter money yourself out of every dire situation, like you suggest.
Also, non-related question, why is the European Union so obsessed with low inflation?
Michael Scott
Bump
Lucas Morris
>But as soon as there is demand, inflation comes crashing in. In Venezuela, handing out free goods lime televisions caused massive inflation. Same with the Socialist government in Chile. Same with the United Kingdom before Thatcher.
You are incoherent. I mentioned supply side causing inflation, I linkied to articles explainign it.
Do you not understand that you can helicoopter money yourself out of a demand crisis and unemployment?
Different problem, different solution.
Thacher inflation was due to oil crisis, which I also mentioned.
Eli Myers
Okay, I'll read it.
After the oil price shocks, most industrial countries abandoned Keynesianism in favor of monetary policies. Is this the cause of structural unemployment later on? (And full employment you had before was classical Keynesianism?)
Also, again, why is the European Union so obsessed with low inflation?
Oliver Parker
>"printing money without the economic resources to back it up"
>What exactly backs up the fed's doing of the same?
No, they are just above the limit when you function in the fractional reserve banking expanding the money of the economic productivity of the USA/EU.
In short the government is giving banks all and then some of the economic wealth being created.
Matthew Russell
>In short the government is giving banks all and then some of the economic wealth being created.
And what's the point of doing that? Banks already have money without end rotting around. It's so bad the ECB had to enforce negative interest rates.
Justin Parker
Bump
Henry Hall
We have had a 10% drop in unemployment since 08. As the other goy pointed out, the population and immigration level has also risen significantly.
Asher Morales
Okay, thanks Obama. I still routinely read about the state of US workers being dismal though.
Owen Jenkins
I'm not saying it's a good thing.
We have no production.
Ayden Taylor
You can't have actual production under competition China, I guess. Economies like yours or the UK's, with strong currencies, are bound to create a lot of bulls**t jobs.
Dylan Turner
Everything you read here is BS.
QE is used to expand GDP while in a liquidity trap. Liquidity trap is when usual monetary policy is not effective because interest rates near zero.
Don't get econ lessons from a manchurian imageboard
t. econ
Chase Russell
I know enough to distinguish Sup Forums crap from viable theory.
Can you comment on the notion that full employment through deficit spending is always possible?
Alexander Cook
Bump
Jonathan Bennett
>Who is Hayek, the post.
Keynesian pleb tier bullshit. What is Austrian School?
Juan Hill
Yes. Remember the State has almost infinite power. Practically the political power is capable of everything. The problem lies in the consequences of these very actions.
NK has full employment and it's a debt slave of China (allegedly). I think it's perennially in deficit.
The State can make everyone rich overnight by giving everyone millions of euros. Inflation ensues, obviously.
The State can provide full employment too. Paid for by the taxpayers and by tons of debt.
The State can kill us all. It's the Leviathan.
Stupid socialists think the State is a rich puppy that can give everything to everyone with no consequences. They don't understand the State is a gigantic, schizoid beast to be chained and regulated.
Brandon Gomez
What's that supposed to tell me?
So why isn't full employment maintained? Why is the EU so obsessed with low inflation instead, when it has horrid unemployment and slumping growth?
Noah Fisher
boomers are desperately trying to keep the ponzi scheme going at the expense of young generations, won't be much longer I reckon
fiat currencies all failed at one time, average joe's only hedge against the destruction that will come is real money - silver and gold - and real assets like crop-producing land, machinery, firearms, any useful thing really, not some wishy-washy number on an account or holding publicly traded stock somewhere in lalaland
Robert Cox
not good
Brody Robinson
Bump
Jonathan Gutierrez
kraut, you have any financial youtube channels or books you would recommend?
Thomas Fisher
The ECB is non political entity. They don't give a shit about people. They want low inflation and low inflation shall be. Low inflation is needed because inflation erodes the purchasing power of savings.
However, they are in deep shit because inflation is so low it nears full on deflation. The inflation index must be kept at 2% and it's negative now.
Monetary policy can't be used because of the liquidity trap and tampering with the interest rates upsets the capital market. QE is a tool that can become effective.
According to me, the ECB can't make this shit up alone. Europe has to reform and throw the high-tax/semi-socialist state model in the toilet.
Anthony White
Buy a Bloomberg terminal. All financial news are bs. The news are inside GS and friends and no one knows what really happens in the capital markets because insider trading is a thing.
If you want econ news read the Economist 'economics and finance' weekly. FT and WSJ are good.
Liam Edwards
I do, but they're kinda left-wing biased. Not a problem?
For news, read wsj, they do explain background stuff.
Asher Hall
So, basically, wealth is being cemented with low inflation targets? When higher inflation could possibly be necessary to allow for more employment and growth?
I don't see an alternative to high taxes, given the ageing of the population. You see, 40+%of the German household are spent on pensions and health care for the elderly.
High taxes don't necessarily impede growth, look at the US post-war.
Lincoln Smith
Burgers need to stop breeding.
Jordan Evans
>$20,000/yr terminal
why?
Josiah Myers
Bump
Dominic Jackson
I think the growth/employment problem is not a monetary policy issue now. The ECB can't use usual monetary policy to boost growth and prices because of the trap. QE is a rather obscure tool and its effectiveness is obscure too.
We have to boost growth by lowering taxes and slashing public spending. The social democratic model has to be trashed. Employment rises once the private sector is freed from the tax burden.
Luke Evans
Because that's what the insiders use. All financial news are scams to boost/dump stock prices and profit. When your favorite fin news says 'dis stock is gud it's time to buy' they want you to buy because they will dump their stocks once the price rises thanks to you dumb asses. Buy the terminal and get in the field or abandon finance. It's a major scam.
Kayden Ramirez
Then why did the economy perform better inter Democrats then under Republicans on average? Also, Denmark (over 50% effective taxation) had 2% unemployment before the financial crisis.
I still find the inflation targeting interesting, cause its goals are kinda arbitrary. Don't you think there is a specific reason low inflation is targeted, instead of high growth?
Hunter Ross
Aren't there alternative methods of obtaining the same data? What about other trading platforms?
What redpills are monopolized by having the terminal?
Nathan Carter
Bump
Thomas Morris
Trends don't depend on Rep/Dem rule. A good short term Republican policy may reap its benefits once Democrats are in power.
Thus, Democrats get the credit.
I really don't know how the Nordic Countries made that model sustainable but I know that they are seeking reform rn.
I think the sky-high cost of living in Denmark has something to do with it.
The inflation target is arbitrary because it is known that very low inflation is somehow healthy.
They chose the 2%
Jayden Jenkins
You can pay an investment banker to get insider info. It's extremely risky and you both can go to jail.
Christian Baker
Holyshit
Julian Ramirez
But that's bullshit when the gdp increase all goes to the .01% golbilsits.
that formulalic monetary policy response relies on so many assumptions on the underlying economy structure to be useless in any real life problem. QE is useless in a world with flat wages and high immigration