Purchasing $6 billion to $8 billion of U.S. government debt today as part of QE2.

Discussion in 'Wall St. News' started by ASusilovic, Nov 12, 2010.

  1. Securities due from 2014 through 2016.

    Open the flood gates....
  2. mahadiga


    What other options does Fed have?
  3. do you mean other option than commiting a crime by monetizing debt?

    maybe to aboilsh Fed?

    then default on its foreign debt, raise rates, implement tariffs and outlaw deficits
  4. I'm not an economist, but maybe QE2 is necessary. Without it we would have another depression. Also, there is little inflation risk with unemployment being around 9.5% .
  5. man, it's good you're not an economist

    several countries in eastern Europe had hyperinflation in 1990s with unemployemnt 20%+

    and you know why it happened?
    they all did QE (money printing)
  6. olias


    for the most part I agree with you. 'inflation' means different things to different people. I see your point though.
  7. Hyperinflation after regime change is pretty much SOP. This has nothing to do with QE.
    The US was way more in debt after the Civil War, when it issued a bunch of paper currency - the original greenbacks - and suffered deflation, not inflation, for the next thirty or forty years after.
    Most economists live in a dream world with only a tangential relation to reality.
    It used to be called political economy. There's a reason for that.
  8. did they print money then?
    I suppose not as US was on gold standard

    And I want to assure you hyperinflation happens _only_ in case of QE
    There are no other reasons
  9. Didn't I just say they printed money?
    There was a huge war on, and both North and South printed money not backed by gold.
    The South suffered hyperinflation, the North had an inflation spike during the war, but then settled into deflation afterwards. They did gradually retire the greenbacks, but they were in circulation for a long time, and by your logic their very presence should have caused hyperinflation.
    The fact that didn't happen was because the North won.
    The South of course lost, which also had something to do with why their money ended up worthless. In the North, money not only retained its value, but went up for the next few decades, if you consider deflation from the POV of the value of money.
    Like I said - political economy.

  10. Because US was on gold standard - no money printing, no QE

    and despite 30 years of deflation standard of life raised dramatically and economy expanded dramatically

    it would be interesting what whould happen if they had Bernanke who thinks deflation is an ultimate evil
    #10     Nov 12, 2010