What is the economic rationale for allowing the Fed to create trillions of dollars out of thin air

Discussion in 'Economics' started by Phill Twist, Sep 15, 2015.

  1. Sig

    Sig

    Today as an experiment I decided to jump on a thread full of unsubstantiated assertions and attempt to counter that with quantitative rigor, point out obvious logical fallacies, or appeal to common sense counterexamples. It was fun, although as you can see clearly a “whack a mole” game. Post after post was debunked with actual data, with generally only “you’re wrong because I think you are” style responses if any, only to have another poster come on with an even weaker assertion, completely ignoring the fate of the previous posters. I’d love to do a study of this type of thing, it really does show that the more evidence against an unsubstantiated position is pointed out, the more those advocating for it dig in their heels, which is a nonobvious response to me at least.
    This concludes my experiment, I’ll leave you all to wilder and even less fact based conspiracy theories and only hope that you take my advice to take even one macro course. Thanks for the fun day though!
     
    #21     Sep 15, 2015
    Mr.Wahdy likes this.
  2. Why you so agitated with this massive QE?

    Let me guess, you miss the rally from the bottom in 2008? You miss this (or you short the market) because you think you are smarter than the Fed and the market should collapse??
     
    #22     Sep 15, 2015
  3. piezoe

    piezoe

    Sig, bless your heart. These lunatics don't actually read what you post, and if they do, they are incapable of understanding it.
     
    #23     Sep 15, 2015
  4. usrx201

    usrx201

    To keep non-bondolders, the majority of Americans not in the public sector from rioting and cities burning on fire, etc. Supposedly the 60+ trillion in unfunded liabilities will be recirculated by the debt paying public for the next few hundred years assuming it doesn't all collapse by 2019.
     
    #24     Sep 15, 2015
    loyek590 likes this.
  5. loyek590

    loyek590

    we fear what we don't understand and we hate we fear

    I don't understand how you can create money out of thin air, so I hate those that do it

    (and I fear someday they may just simply run out of thin air)
     
    #25     Sep 15, 2015
  6. Cool...sounds like you are desperately in need of an ivory tower to post from.
     
    #26     Sep 15, 2015
    Tsing Tao likes this.
  7. Good post. Agree on all counts and the "rub" is that the reflation of asset prices has major demographic implications. Two equity bubble/busts (2000 & 08) have also put a dent into the boomer's retirement plans (i.e. the typical entry/exit into the workforce that existed in prior generations). Clearly ZIRP isn't doing anybody favors either...Even if you are some CB lackey (like a few of the knobs on this thread), it would be hard to argue that the benefits of ZIRP outweigh the cons, in aggregate. It was intended, or so they said, to be an "emergency measure" (i.e. rates would be normalized in a reasonable measure of time...not 84 months!).

    Anyhow, you know all of this, but I do get tired of the usual hacks who pretend that there is some arcane rationale for all of this that the "peons" cannot comprehend.
     
    #27     Sep 15, 2015
    achilles28 likes this.
  8. Because he knows that payback is a bitch.
     
    #28     Sep 15, 2015
  9. loyek590

    loyek590

    the rationale is that the peons have been dead wrong for so long. Like any bear, they will eventually be right (never wrong often early) but I've been hearing them crying wolf and telling me the sky is falling for a long long time.

    like the frog in the pot I never notice the water is slowly boiling. Everyday every dollar in my account is worth less than what it was yesterday, but still somehow it buys more.

    Ordinary poor people today live a life of luxury our rich fathers could only dream of. Is it all due to QE and the fed?
     
    #29     Sep 16, 2015
  10. Incoherent, per usual...and nice twist connecting "peon's" to "bears", but since you went down that path, I'd love to hear how "wrong" anyone could be when we've had 2 pretty significant equity bubble/busts in less than 20 years (we'll see where we're at with this current one)...

    The only way those dollars in your account buy more than yesterday is if you're living under a bridge and shopping at the Salvation Army...
     
    #30     Sep 16, 2015