Monetary Insanity

Discussion in 'Politics' started by Mav88, Dec 14, 2012.

  1. Mav88

    Mav88

    I don't know

    What is the point of an exchange market when everyone has freshly printed dollars? Nobody in their right mind holding dollars will want a new reserve because that would negate their 'wealth'. The only apparent alternative would be the Euro, what a joke. China isn't going to just flush their dollars down the toilet.

    Let's say the whole world wants to keep playing extend and pretend forever and China keeps the rate pegged. At some point all that exported inflation will have to come home because they are aren't buying bonds anymore. The stampede for what remaining assets have value might be enormous... is the bernanke really hoping people will want that huge steaming pile of shit known as the fed balance sheet? madness

    The Bernanke and the entitlement liberals have trapped us. The bernake wants to keep pretending that monetary games are a substitute for a real economy and the democrats want to keep pretending we can afford the welfare state. Fiscal insanity meets monetary insanity- perfect storm for the death spiral.

    Make no mistake, QEx is now QE until death do us part.
     
    #11     Dec 15, 2012
  2. Mav88

    Mav88

    copy-n-paste I know, but relevant, and seriously depressing

    http://money.cnn.com/2012/12/14/news/economy/federal-reserve-unemployment/index.html?iid=Lead


     
    #12     Dec 15, 2012
  3. pspr

    pspr

    I think Obama and the Dems have backed Bernanke into a corner. He knows things are just a hairs breath from collapsing and that the Democraps mistakenly don't believe that more debt will cause a problem.

    So, what choice does he have? Stop the QE's and let interest rates rise and precipitate the collapse or keep printing and hope some sanity shows up in Washington before inflation and massive currency devaluation does. He keeps telling the markets that he won't let rates go up for years to try to provide some certainty for business since Obama and the Dems won't with taxes, healthcare and regulatory policy all in flux.

    Right now Asia is the only threat to dollar devaluation. But China wants to stay pegged to the dollar. So, all is in a precarious state of stability. It's just a steady march to the day of reckoning unless Obama changes his ways in a big way and pronto.
     
    #13     Dec 15, 2012
  4. jem

    jem

    I believe the fed will keep interests rate low until its owner banks... have become solvent.

    I am no longer sure... because my two best suppliers of info are doing other things... but when they last knew... the big banks still had massive exposure to commercial real estate. Which is still down pretty big.
     
    #14     Dec 15, 2012
  5. Mav88

    Mav88

    inflation is the other threat to dollar devaluation, and it's probably the larger risk

    Bernanke has a choice, he just won't do it. He has now officially jumped into bed with the democrats by funding their spending with QE and tying QE to an unemployment rate, however dubious that rate is.

    The logical course of action for a nation in our position is to cut entitlements just like the Swedes and Canadians did, the official democrat line is no way are we doing that.
     
    #15     Dec 16, 2012
  6. Mav88

    Mav88

    QE turns out to be a way to give government money to banks, I agree. But the fees they collect for taking fed money are not really what I'm talking about. The cash does it make it out into the economy in the form of gov't deficit spending. Ok but deficit spending is not producing results...

    Secondly when you bid your own horse at the auction, that trick can only work if you are a small part of the market. The fed balance sheet is probably going to be near $5-7T, with about half in mortgage backed securities, when and if this ends. They are the market, the balance sheet cannot be unwound. Then what? Cash will be trash by then.

    We will all pay dearly for this
     
    #16     Dec 16, 2012
  7. I agree. The Fed does what the member banks want, not the other way around. The "regulation" that it supposedly does of the banks is a redirection from the reality. History proves they do nothing of the kind. To paraphrase: "Are you going to believe the Fed, or your own eyes?"

    So the game is to save the Big Banks. To do that, they will flush the economy down the toilet - but if you notice, it is the Big Banks that are benefiting the most from the flush. And like in any crime, you first look to who benefits when searching for motive and opportunity.
     
    #17     Dec 16, 2012
  8. jem

    jem

    exactly.
     
    #18     Dec 16, 2012
  9. Redneck

    Redneck

    Honestly the shit going on with the Gov/ Fed/ economy simply makes my head spin – which is why I stay out of conversations about it


    That said


    Monetizing debt – stupid beyond believe

    I believe there is no correlation between QE and unemployment

    The banks end up receiving the $’s onto their books – and not lending it out


    All under the guise of helping the people


    http://www.gold-speculator.com/case...se-keeping-banks-afloat-g-edward-griffin.html


    RN
     
    #19     Dec 16, 2012
  10. pspr

    pspr

    I think they borrow the money from the Fed then lend it back to the Fed for a slightly higher rate for a risk free profit with the Fed's money.

    Can't beat a deal like that!
     
    #20     Dec 16, 2012