Central Bankers - Are They Mad??

Discussion in 'Economics' started by ShoeshineBoy, Oct 30, 2007.

  1. What are these people trying to do? I've never been one for conspiracies, but it almost makes you wonder. Here's what Jim Jubak reports in his column dated actually tomorrow:

    "Let's count the money:

    In the United States, the Federal Reserve shows M2, the broadest measure of the money supply that the government still tracks, grew at an annual rate of 6.7% from September 2006 to September 2007. That's $465 billion in new money.

    In Europe, M3, a broader measure of money supply still tracked by the European Central Bank, climbed at an annualized 11.6% rate in August. That's 875 billion in new euros, or about $1.25 trillion U.S., added to the money supply.

    China, of course, makes everybody else in the world look like models of monetary prudence. M2 in China grew at an 18.5% annual rate in September. That's 6.2 trillion yuan, or about $815 billion U.S., added to the money supply.

    And I haven't counted Saudi Arabia, Russia and the rest of the oil-producing world, or the new money being created in the other export economies of the developing world."


    But I digress: are the bankers really just trying to suck money out of the non-asset holders through the winds of inflation? (That wasn't my best metaphor.) Or are they just trying to avoid problems by "throwing money" at their economies? Or are they all just dumb males who figure if a little is good then a lot has to be better? Has everyone gone mad??
  2. Bernake is a die hard inflationist. Thats why we have a massive housing bubble and a stock market bubble. He refuses to apply any restraint.
  3. What?!? He's only going to do a quarter point on Wednesday! :)
  4. An inflationary bull market feels better than a deflationary bear market.
  5. I was thinking the same thing. The dollar is in freefall mode. Cutting rates here would mean terrorism and tyrrany onto the working class. After all, it is not like they will be making any money off of a rate cut. And you heard Paulson, we dont really care about people making unsound decisions when it comes to investments. Understandable, but perhaps if they introduce economics to students before they leave high school, maybe we would not be in this mess to begin with.

    The way they see it is the further the dollar is cut down the middle, the higher collateral values appreciate, the less your money grows in the bank, the more you invest it in the equity markets or into some good ole real estate. What we need is to go back to traditional saving and conservatism. Not reckless spending, speculation and gambling. With our credit markets where they are now, and the fed looking to ease, ask, who, will take the other side of the trade? Let things collapse already, deflation is good sometimes. I mean who really wants to spend 1M on a shack? Surely it would be very nice if all were able to get out of the dotcom crash in 99 with all of their paper profits. But then, how would the greedy learn?

    I forgot what the guys name is but the guy who does the hardball show, chris matthews or something, I remember said something like, "well, what happens when we do not pay back our debtors, and it comes down to a matter of national security, we happen to disagree on something, then China or whoever says"who are you talking to like that, your DEBTOR?" I am very puzzled right now and I cannot believe that a cut in rates will cure everything. The shit will hit the fan sometime. p
  6. It'll help the markets and the economy in the short term and hurt them in the medium term. And it will probably lower the dollar a little more which will only help my investments, so it's okay with me...
  7. Again, if you just sweep the dirt under the rug, sooner or later a mound builds up and someone trips and breaks their face.
  8. The rich get richer , the poor get poorer and the middle class pays for most of it .
    I am a saver with a lot of money in CD’s . Need I say more .
  9. You really should consider liquid, commodity-based investments like GLD, USO, UNG. But you need to time them. Stay away from stock-based indices.
  10. i second this however, I would add they should be in some either foreign money markets, solid gold bullion(real gold not the future contract) and other non USD denominated assets. Canada is great, as is australia. Rich in natural resources and paired against the USD. If the dollar would get cut in half, you would have 2x your previous purchasing power. good luck. p-
    #10     Oct 30, 2007