Ugh. The Fed's New Stimulus

polaris_x

inlet13 wrote:

I think it should have been, but no I don't.

In my opinion, it was more about fiscal policy - not monetary policy.... the tax the 1% stuff is what I remember most.

I do agree though elements of it were close when protestors discussed banks. OWS had a lot of potential for uniting a lot of people. If it stuck to monetary policy, I think it would have.

but it boils down to the same thing doesn't it? ... who's controlling the policy decisions and what are their motivations? ... the fed is just like any other corporation ... their interests are solely self-serving ...

hedonist

inlet13 wrote:

I just saw a poll that said 75% of people support a Fed audit. This is all of our money/currency - not just theirs. We should have a bit of a say in what they do to it. The fact that they sit in a black room making these enormous decisions with pretty much no check on them is pretty fucking scary. At least to me...

Thanks for the information you provided, inlet. It's a lot to process, for sure.

I too support an audit (by a third/totally separate party). Anyone, whether in the public or private sector, should be responsible and held accountable - by themselves, first and foremost. In this instance, there's more than just themselves to answer to.

Do a half-assed (no-assed?) job and be prepared to be called on it.

josevolution

inlet13 wrote:

josevolution wrote:

1- I do care ..
2- what are we supposed to do about it ..

Where is the protest so i can be there ...No sarcasm intended

Good question. I suppose for now - just being active in discussing this to those who don't know much about it can at least expose more people think about it. The truth is, as is, the voice of opposition to this sort of thing is no where near loud enough. Ron Paul is pretty much the only public voice. Not really though, I think Kucinich is the Dems main public voice. These two guys couldn't further from each other on some issues, but on this one they kinda come together. We need more of each.

People laughed at Ron Paul's presidential run. But, that dude knew he wouldn't win the Presidency. Truth be told, I don't think he cares at all. He knows, in a lot of ways, The President is a puppet to the Fed. The Fed's authority needs to be challenged and he tried to get more people behind that notion. It worked... a little.

The protests will follow if first more people learn about the problem. Truth is a lot of this info is convoluted and the semantics/lingo are tough to grasp if the interest isn't there. Even someone like Ron Paul does a horrible job of breaking this stuff down into layman's terms. But, I'd argue, the underlying issue is pretty damn simple. Expand the money supply or not. Inflate or not. Print money or not. Keep interest rates well below their natural rate or not. What are the problems with each - there's always a cost. AND... when should this stop? Even if one's on board with this stuff, they have to have a time to stop. Even Keynes knew that. The Fed, apparently doesn't.

I think once people learn about what they are doing in high enough numbers, which doesn't take more than a few minutes, the heavy majority (in my opinion) will come down against it. I just saw a poll that said 75% of people support a Fed audit. This is all of our money/currency - not just theirs. We should have a bit of a say in what they do to it. The fact that they sit in a black room making these enormous decisions with pretty much no check on them is pretty fucking scary. At least to me...

I agree i'm trying to learn and you and a few others here allways provide good info ...

whygohome

Damn! That was one of the best Keeping Up with the Kardashian episodes I have ever seen!!!!

It seems like we'll have to (at least I am) keep an eye on the euro, among other things. It hit $1.30 today for the first time in months (April? May?). (I didn't catch the uptick, unfortunately, but I did jump n the gold train today )
I'm not really sure what to make of this. I'm not in the camp that says any move the Fed makes will be disastrous, but I do understand the risks of manipulating currency. Is there any change, as far as implementaition, form QE1 & QE2; according to a Fin Times article, this could be seen as a positive for the housing market????

Obviously, an audit is necessary and will happen.
And, once there is (if there is) some type of return to "normalcy" for the housing market, can't the Fed just do what Volcker did in '81, and what Greenspan should have done (and what China did) in the mid 2000s? Wouldn't raising rates once housing and unemployment come down to a healthy level stave off the inflation that some/many are worried about?

Just shooting my mouth off.

Maybe these boys know a bit more than we do. I do not agree that they are only as smart as the common man; let's be serious.

Shit, America's Got [No] Talent is on. (Oh, Howard, say it ain't so, say it ain't so!)

p.s. I'm gonna go read what Krugman has to say.......

EdsonNascimento

mikepegg44 wrote:

inlet13 wrote:

mikepegg44 wrote:

with this mortgage interest deal...I just don't understand how this is going to do anything but re-inflate the real estate bubble, am I missing something? How is this going to put more money in pockets and into circulation?

This always comes back to the Keynesian multiplier effect and it's (in my opinion - faulty) logic.

I am working on a refinance right now actually. So they believe that the money I save every month on my payment is going to go back into the economy right?

If this program works, how long before mortgage rates go down further? I don't quite understand what affect this will have on them and how quickly the market will see the affects

Also, if banks have more collectibles taken off their books and mortgate rates go down, loans become more available and (in theory, but not reality) become more affordable. So, loans go up creating more "fake" money in the economy. By the time folks realize they really couldn't afford these mortgages - oops!!! Now we have to bail them out and dollars start to flow back to the banks to pay back the loans these folks shouldn't have taken in the first place. Which is EXACTLY the mess that started all this (despite what the left would have you believe). So, now more homes are back under water, more cash is sent to the banks by the Fed (money they don't really have b/c they have no authority to collect money, only to print it). Then, prices need to go up b/c the value of said dollar goes down.

Meanwhile, everyone screams at the banks because they want the money they loaned back. :?

Think of it this way - you get money from somewhere (not the Fed, but imagine some magic money fairy drops money in your lap) and decide it'd be a nice thing to lend some to your buddy, but he can't afford a 10% interest rate from you. Somehow, he believes he can afford 5% b/c it makes the current payments lower. For a short time, he can afford it b/c he can borrow elsewhere (credit cards, etc.). But, eventually that dries up and he shows up to pay you with a shrug of his shoulders. You are SOL. The difference is, you can't PRINT money when he can't pay it back. All you can do is kick his ass and go to jail. I guess we can allow the banks to not collect on said mortgages, but while folks scream about that, that's not what we really want. If banks go insolvent, we'd really be done for. (and btw, these excess loans allow the banks to make short term profits which "justify" large CEO bonuses that folks only really care about once the bubble bursts. Though the reality is, the bonuses don't actually effect anything b/c in the scheme of things while abhorrent, they are a drop in the monetary bucket. They just look REALLY bad.).

It is a terribly vicious cycle caused by the fact that a non-elected body gets to PRINT MONEY!!!!!!! And a President will get re-elected b/c of its (very) short term impact!!!!! One man is basically tipping this election, making the hole even bigger to dig out of (which is the most important part of this rant) and everybody's busy worrying about whether some social policy that's never going to get overturned gets overturned, or how one candidate's dog travels.

polaris_x

what about nationalizing the fed? ... make it part of the treasury department?

EdsonNascimento

polaris_x wrote:

what about nationalizing the fed? ... make it part of the treasury department?

And let the President print his own money? Egad!!! How much would Obama have printed already? His whole platform would be a Doritos commercial - "Don't worry. We'll make more."

The problem isn't where the Fed lies. It lies with what they do and have the power to do and the fact that folks are more concerned about their individual picadilloes then things that actually affect, you know, the daily life of everyone.

polaris_x

EdsonNascimento wrote:

And let the President print his own money? Egad!!! How much would Obama have printed already? His whole platform would be a Doritos commercial - "Don't worry. We'll make more."

The problem isn't where the Fed lies. It lies with what they do and have the power to do and the fact that folks are more concerned about their individual picadilloes then things that actually affect, you know, the daily life of everyone.

the president wouldn't be able to enact anything without congress's approval ...

i find it confusing that in one sentence you claim it isn't who is in charge of the fed ... but then in the next you list what they do, have the power to do and the fact they are self-serving as the problem ... aren't they one in the same?

brianlux

Where's the discussion on resource depletion, the roll of unsustainable suburbs and over-population and how that all ties in to all this? (Please don't tell me we're going to mine the moon next.)

whygohome

brianlux wrote:

Where's the discussion on resource depletion, the roll of unsustainable suburbs and over-population and how that all ties in to all this? (Please don't tell me we're going to mine the moon next.)

Stop it with that hippie, liberal, treehugger propaganda!

inlet13

polaris_x wrote:

what about nationalizing the fed? ... make it part of the treasury department?

As a start, how about the Fed goes back to one mandate - constrain inflation. The dual mandate - economic growth AND constraining inflation is seriously very problematic. They are almost always at odds with one another.

I mean - hasn't anyone heard of the Phillip's Curve?

inlet13

brianlux wrote:

Where's the discussion on resource depletion, the roll of unsustainable suburbs and over-population and how that all ties in to all this? (Please don't tell me we're going to mine the moon next.)

What does that have to do with The Fed? No offense, but this doesn't make sense at all in the context of this discussion, Brian.

DriftingByTheStorm

I'd actually prefer if the Fed stuck with buying MBS (or some similar private-sector instrument, from a sector in distress) rather than fruitlessly meddling in the US Bond market (something it already does to great extent anyhow) to dubious conclusion...

[good article on differences between the 3 QEs: QE1vs2vs3]

The swapping of "good money" for bad "money" (i'm assuming the MBS they are buying are at least somewhat distressed, ie. ownership of these "assets" is encumbering the bank, er sorry - institution - that currently owns them) is at least a valid tactic of "bail out" disguised as monetary policy.

If the central banks around the world would just focus on these type of activities that relieve REAL pressure from REAL economic activities that affect the average person (rather than just handing cash carte blanche to "the street" via government bonds), then perhaps "the system" can stay afloat for long enough for "them" to reach consensus on how to do the same thing for the central banks themselves (ie. come to agreement on a process for global public debt restructuring \ forgiveness).

Its not that I think its a great thing (in-and-of-itself) to hand owners of bad investment decisions money for those choices ... but it is at least a more productive use of money-power than pissing it to the wind for temporary blips of price in the public bond markets. At least in this process, money is selectively doled out to institutions with encumbered asset sheets, and - to the point of doing REAL good - REMOVING those encumbrances from the books.

Again, all of this will be for naught if the global powers can not agree on how to globally reduce all public debt by massive amounts. The world, in total, is currently encumbered by levels of debt it can NEVER hope to "repay" (the term itself is a joke anyhow, it would be like handing all of the money in players' hands in monopoly over to "the bank", and thinking your problems were solved, "the bank" can't distribute money in monopoly, only players actions can, except not without money to use in transaction first).

polaris_x

inlet13 wrote:

As a start, how about the Fed goes back to one mandate - constrain inflation. The dual mandate - economic growth AND constraining inflation is seriously very problematic. They are almost always at odds with one another.

I mean - hasn't anyone heard of the Phillip's Curve?

so, you don't think the fact the fed is run by private corporations has anything to do with it?

DriftingByTheStorm

polaris_x wrote:

so, you don't think the fact the fed is run by private corporations has anything to do with it?

so you don't think the government and the largest private corporations are run by the same people?

inlet13

polaris_x wrote:

inlet13 wrote:

As a start, how about the Fed goes back to one mandate - constrain inflation. The dual mandate - economic growth AND constraining inflation is seriously very problematic. They are almost always at odds with one another.

I mean - hasn't anyone heard of the Phillip's Curve?

so, you don't think the fact the fed is run by private corporations has anything to do with it?

I think you're kinda misconstruing the issue. I certainly am aware you don't like nor trust corporations. But, I don't think that's the issue here. The Fed would have no (or certainly less) power if it was private.

The Fed is not owned by anyone. It is not a private, for-profit institution. It received it's authority from Congress. I'd argue that although board members certainly do many times have private market affiliations outside the Fed, but the Fed - in and of itself - is an entity within government - yet with zero (or very limited) checks against it. I'd say it's pretty much a public body and a government body. The nature is without a doubt different than other governmental institutions, however. Much of that has to do with it's independence, which I'd say one of the major real issues.

They can do what they want and we, the people, sit back and deal. Now if you're claiming their private market affiliations and linkages affect their governance, I wouldn't argue that... but, that kinda takes us back to checks.

polaris_x

DriftingByTheStorm wrote:

polaris_x wrote:

so, you don't think the fact the fed is run by private corporations has anything to do with it?

so you don't think the government and the largest private corporations are run by the same people?

no ... i definitely believe that ...

polaris_x

inlet13 wrote:

I think you're kinda misconstruing the issue. I certainly am aware you don't like nor trust corporations. But, I don't think that's the issue here. The Fed would have no (or certainly less) power if it was private.

The Fed is not owned by anyone. It is not a private, for-profit institution. It received it's authority from Congress. I'd argue that although board members certainly do many times have private market affiliations outside the Fed, but the Fed - in and of itself - is an entity within government - yet with zero (or very limited) checks against it. I'd say it's pretty much a public body and a government body. The nature is without a doubt different than other governmental institutions, however. Much of that has to do with it's independence, which I'd say one of the major real issues.

They can do what they want and we, the people, sit back and deal. Now if you're claiming their private market affiliations and linkages affect their governance, I wouldn't argue that... but, that kinda takes us back to checks.

i would say then our difference is semantics ... the result is the same whether you consider the fed a public or private institution ... either way - i don't see it operating in the interests of the people ... nor do i necessarily think that if it was nationalized it would run any better ...

brianlux

inlet13 wrote:

brianlux wrote:

Where's the discussion on resource depletion, the roll of unsustainable suburbs and over-population and how that all ties in to all this? (Please don't tell me we're going to mine the moon next.)

What does that have to do with The Fed? No offense, but this doesn't make sense at all in the context of this discussion, Brian.

I seriously do think it ties in because resources and environment are directly tied to everything we do in general and the shaky economy the feds are trying to prop up in particular. War is also related to resources- that and religion are what most of them are about- and war and economy are strongly related. And trumping all of that is population. When populations exceed carrying capacity, resources become a source of contention which affects the shaky economy the feds are trying to shore up and that most often leads to war. War creates a temporary false sense of a strong economy but when the bills come due the truth is plain to see. It's all related.

That's my holistic view on almost everything.

inlet13

brianlux wrote:

inlet13 wrote:

brianlux wrote:

Where's the discussion on resource depletion, the roll of unsustainable suburbs and over-population and how that all ties in to all this? (Please don't tell me we're going to mine the moon next.)

What does that have to do with The Fed? No offense, but this doesn't make sense at all in the context of this discussion, Brian.

I seriously do think it ties in because resources and environment are directly tied to everything we do in general and the shaky economy the feds are trying to prop up in particular. War is also related to resources- that and religion are what most of them are about- and war and economy are strongly related. And trumping all of that is population. When populations exceed carrying capacity, resources become a source of contention which affects the shaky economy the feds are trying to shore up and that most often leads to war. War creates a temporary false sense of a strong economy but when the bills come due the truth is plain to see. It's all related.

That's my holistic view on almost everything.

Maybe you should make a thread about that then and not hi-jack this one.

Before you create that thread though look up Thomas Malthus. He said that because our resources are scarce and populations expand when economies grow - economics should be called the dismal science - because economic growth would cause populations to expand and due to limited scarce resources (like food)... that economic growth would end up causing starvation and death. Bottom line - economic growth does nothing good. He was wrong. He didn't account for technology. No one ever does. We can get more from limited resources with technology. As a result - the economic growth did result in population increases, yet everyone's better off then they were 200 years ago.

Anyway, back to the subject. The money supply has nothing to do with "scare" resources. In fact, if it were actually tied to a scare resource - like gold - we probably would be better off.