I was referring to US QE1, I do believe that it prevented the start of a 1930's scenario since M2 would have collapsed by 7-8% without it(in the 30's the decline was around 10% a year but the debt levels were smaller) I made that case before, its about preventing debt deflation and downward spirals. The evidence is presented on Bernanke's book Essays on the Great Depression where he has a large sample of countries in the 30's showing that getting out of the gold standard induced real growth to improve. All of those improvements happened before WW2, which is used by Keynesians to support the idea that fiscal packages got the world out of the depression I agree with the forecast thing. The Fed was boasting for having a better track record of forecasting compared to private firms for many years but it seems that it was an illusion created by being consistently optimistic during good times. 2008-2009 showed that, so I'm in favor of having the Fed targeting either market inflation expectations or market NGDP expectations Government mistakes can happen but I can't see no good alternative. To accept the gold standard is to accept a 1930's style period when price instability takes place(and debts are high), which will require government intervention to stop anyway, so might as well keep the government there and try to make the best of it That said the ECB has a better system to prevent some of the mistakes because the chairman stays for a 1 8y term and then leaves, there is no re appointments involved and incentive for trying to boost employment. The Fed needs to do the same(The Fed president terms are also too long)
FOMC to get a bit more hawkish next year even though Hoenig departs http://ftalphaville.ft.com/blog/2010/11/09/399111/fomc-composition-and-future-monetary-policy/
Buy the rumor, sell the news ... the US 30 year price is now down more than 4 big figures since QE part deux was announced, and now threatens to go lower than early Sept when Ben started this QE nonsense. Is it just me, or was one of the big reasons for QE was to lower long term rates?
Sold GGP after they delivered the spinoff(HHC, howard hughes company or something). small profit there
"Is this the Irish trigger? November 11, 2010 7:01pmby Emma Saunders | Share Rumour has it that certain European investors are no longer willing to provide Irish banks with overnight funding. If true, this could trigger the much-discussed bail-out (for itâs unlikely to end in default). A bail-out might still impose losses on bondholders, though, after recent discussions at the EU. Until now, Ireland didnât need any extra funding till mid-2011. Shenanigans in the secondary (resale) bond market were troubling, then, but did not need to affect the countryâs cost of debt. Just as long as debt auctions took place once things had calmed down. That reasoning assumed, however, that the Irish state would not need more cash than it had planned. Overnight funding itself might not be the problem - it is only overnight, after all - but it could trigger a liquidity crunch that sees banks come cap in hand to the government. And the government, at the moment, can ill afford to help them." http://blogs.ft.com/money-supply/2010/11/11/is-this-the-irish-trigger/
EU stepping in, naturally. 2& rally in European stock markets in the last couple of hours. FWIW, Chinese stocks were off 5.2% last night. Its not a lot of fun when the gubmint looks like it might turn off the monetary spigot.
Only if the government's role is viewed as maximising societal living standards without regard for anything else. No government views that as its sole aim, there are constraints such as not victimizing innocent people (for example, forcing the top 1% of attractive young women into prostitution and letting the public have sex with them for free, would improve living standards for millions). And quite a few political philosophies don't view that as a legitimate aim of government at all. You shouldn't assume that everyone is a blind worshipper of utilitarianism. Besides, the laissez faire position is that this is only in the short-term, and that longer-term things will be far better off. A bit like a painful bit of medicine that ultimately cures the disease, so to speak. We certainly *know* for an empirical fact that we now have higher debt loads, and currency debasement. It is pure speculation whether these will lead to an ultimately better set of "living standards", or whether we're just copying the mistakes of Japan. The laissez faire approach at least *guarantees* that we wouldn't have huge public debt loads to bail out banks and pursue potentially disastrous policies. We might have had a worse recession, or even a total banking collapse, but the generation that caused it would be the one that suffer the consequences, rather than the younger ones and children unlucky enough to be following. And there is a credible case that either free banking, full-reserve banking, or some "ideal" level of minimum reserve ratios would avoid the entire problem in the first place. None of which is proposed by Bernanke and co, or even any Keynesian at all as far as I know. Also, regarding this whole "central banks prevent recessions" idea you seem keen on, don't forget that the Great Depression, the 1998 Asia crisis, the 1990s lost decade in Japan as well as the crash of 2008 - some of the worst economic busts of all time - all happened under central banking systems. Your analysis seems to overlook this fact.