Interesting comment from Janet Yellen today about qualitative easing. Qualitative easing was first talked about in 2012 on ET in this thread: http://www.elitetrader.com/vb/showthread.php?t=251196&highlight=qualitative+easing&page=4 The first step in fixing an economic policy is to admit it isn't working. The consequences of doing the right thing so late in the game will be very bad but the consequences of continuing on down the wrong road would be much worse. I am encouraged by the comments today. Now that the banks have been saved, some debt must be destroyed so that world GDP is more balanced and we can get out from under the Triffen Dilemma and an overspending binge. Hyperinflation can do that, but perhaps there are other ways. Could an insurance tax be placed on institutions that are Too Big To Fail payable to the Fed? Or an incentive that banks that fail to meet Basel III by 5 years hence will be taken over by the government and all share capital will be seized to pay off the bad debt absorbed. Would that stop reckless risky predatory behavior ? Any ideas out there to help the Fed with policy in the next few years if they switch to qualitative easing?
Problem is that the Fed is the economy and lost its independence by becoming part of political establishment and major supporter of political and global status quo. Here we go again; new face, "new economic" mumbo-jumbo and pseudo-economic reasoning that supports the notion that monetary policy based on randomly derived economic metrics is major and the only economic driver. It is not. The only think that the Fed should be doing is to return to its primary role as independent gatekeeper of money supply so politicians can not print money at will and elect themselves using borrowed money and deficits. This in turn would force selection of country leaders who could prove that they can implement policies favoring domestic economic expansion and economic freedoms. Unfortunately this is not going to happen because current establishment would loose power and they are addicted to it regardless of the cost to the society.
Good points imho Apparently the West is still using paper money to pay it's debts while China and Russia have been building mountains of gold reserves. I know which I would prefer to be paid in. Another target of Putin is to asset strip the Russian oligarchs. The Crimean crisis is the vehicle. Putin can say to the Russian Parliament that it was these bandits that asset stripped Russian industry and made fortunes so big they can buy UK football clubs, huge luxury yachts etc. The West helps by freezing their assets etc. Various companies will go bankrupt thanks to the sanctions and some people will lose a lot of money.
The US has a lot of gold but I see that you are in the UK. totally different story. In that case, teeheehee.
In my views the real problem is these "too big to fail" have an easy time because there is not enough competition: they are basically in a monopoly. May be making it easy or encouraging business moguls to associate and create new banks. I mean how easy would it be for the "too big to fail" to take it easy, if 200 new mega competing banks were created by different business moguls consortium?
Well has it ? I read somewhere it has just given 40 tons of gold back to Germany. Now there are rumours Fort Knox is near empty. So empty that noone is allowed in to check. Why is that unless there is a big nothing to hide ? Nobody trusts the Govts anymore. They have been caught out lying all too often. Most politicians lie about their expenses too, even in Britain !! There is noone else but some vigilant people to keep tabs on the thieving lot.
Is qualitative easing different from quantitive easing ? Just good ole printing some more of the stuff ? Apparently the mafia in Russia print up loads of dollars too. It is one of the easiest currencies to copy.
I believe most overlook the fact that when old man Sam Walton died, so did America manufacturing. http://www.butler-bowdon.com/made-in-america-my-story Walton use to sell 98% products made in America when he was alive, one of the reasons 1980's were a bull market, when Walton died in 1992 and kids took over is when America went to China and other cheap market countries, so much of manufacturing started to die in USA. We are no longer #1 in the world and each day getting more behind. We don't have free trade, we have no equality of trade and until America gets a strong President who has the balls to start implementing high taxes on foreign made good at the sales counters, we will continue to slide away. Companies never going to return to build plants here with 35% taxes, reduce them if they would return jobs to America, and if they won't, increase taxes paid a sales counters so Americans see it in their face. I am just glad I have the means to live somewhere else in the world when things truly get bad down the line here is USA.
Putin is the number 1 oligarch of Russia. You could reason that he's trying to get rid of the competition though, that would make sense. And doing it while also being able to say "it was the west that snatched your money, not me".