Article

2010-11-04 Economy

Quantitative Easing: Economic Suicide Pill

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Posted by tipper 2010-11-04 02:18|| || Front Page|| [6 views ] Top

#1 James,

Oh Boy, you guys really know how to cook the books, first the unemployment rate and now the inflation rate.

Karl, yep, we did it during the Clinton years big time but this Obama creap has taken statistical lying and politicizing of economic data to an entire new universe. Gadzooks those Chicago boys couldn't tell the truth if their lives depended on it.

Posted by James Carville/Karl Rove 2010-11-04 10:44|| 2010-11-04 10:44|| Front Page Top

#2 I'm not an economics expert but from what I can read, this move will devalue the dollar. It will be worth less (or worthless). It will be as if everyone had a 20% tax imposed or cut in pay.

This will be hard on seniors who live on fixed incomes. Their retirements got looted in 2008 when the stock market went to hell.

Is this the second or third looting of the economy--or can we just view it as constant?

Posted by JohnQC 2010-11-04 11:02|| 2010-11-04 11:02|| Front Page Top

#3 As long as they're in the position to loot, they'll loot. The legal caste and other elites have forgotten or buried the concept that the Constitution was an instrument to limit power. The inconvenience and the imperfections to attain goals that put in place was a guard against even greater destruction that is created when limits are not imposed. Good intents do not make up for disastrous results. The alternative is to make routine human sacrifices of those who fail as an example to others who'd overreach to deter repeat offenses.

Posted by Procopius2k 2010-11-04 11:10|| 2010-11-04 11:10|| Front Page Top

#4 Before we get too wound up over the Fed and the loss of the dollar's value since 1913, ask yourself this:

Would I rather live in 2010 or 1910?

For me it's no contest.

Sure, I need many more dollars to have the same 'purchasing power' today compared to 1910.

But I have them. And I live a LOT better today than I would have as a doctor in 1910.

The issue isn't what the dollar is worth today versus before. The issue is how well we all live, and what our prospects are for the future.

Posted by Steve White 2010-11-04 11:28|| 2010-11-04 11:28|| Front Page Top

#5 #4 Before we get too wound up over the Fed and the loss of the dollar's value since 1913, ask yourself this:

Would I rather live in 2010 or 1910?

Steve, these are in my mind two different issues. Yes, I'd rather live in 2010 than 1910. However, it wasn't the Fed who got us to 2010. It was the ingenuity, hard work, and the sacrifices of many along the way (such as by the military).

Posted by JohnQC 2010-11-04 11:48|| 2010-11-04 11:48|| Front Page Top

#6 Itsa tough one. In 1910, there were a lot of women around. Nowadays, it almost seem that many many of them turned to hyenas (bare our respective femalian mods and contributors).

Of course, my daughter is not a hyena. But the thing is, the young men presume that she is. No one of the youngons wants to marry, because they know that they may be potentially quantitatively eased. The real women are the true losers of the feminazism.

Posted by twobyfour 2010-11-04 14:55|| 2010-11-04 14:55|| Front Page Top

#7 Would I rather live in 2010 or 1910?

A false choice. The question is whether you would rather live in 2010 after a century of currency debasement where spending by going into debt was paramount or after a century in which the currency retained it's value and savers were rewarded.

Just as I would rather live in 2010 than 1910, I would rather have lived in 1910 than in 1810. The difference is that the value of the dollar in 1910 bore some resemblance to its value in 1810. In 2010, the dollar bears no resemblance to its value in 1910.

We were able to live high off the hog in the second half of the 20th century because the rest of the western world destroyed itself in the first half. Now its repaired and the rest of the world has caught on to how to get rich.

Congress was granted the power "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;". Congress has abrogated this responsibility by turning the power to regulate the value of money over to the unaccountable Federal Reserve. The result has been a century of debasement. And not coincidentally, a debasement of currency alone.

Bernanke needs to think about all the central bankers who are revered for destroying the value of their currency. For that is the path he is heading down. The fault is not his alone, but he is the one who will be remembered.

Posted by Nimble Spemble 2010-11-04 15:09|| 2010-11-04 15:09|| Front Page Top

#8 IIRC the 500-600 billion figure stuck me as something mentioned recently as the amount that corporations and other institutions are holding back from the economy because of uncertainty of the extent government is going to screw up the market and economy. If this is the Fed's means of 'jump starting' the economy, they failed Econ 101. I don't see those corporations or institutions altering their thinking by this act. However, I do see the speculators who's means of manipulating markets, paper or commodities, have been burned by the collapse of the housing and oil bubbles just past as being handed the means once again of screwing over the rest of us with this new paper.

Posted by Procopius2k 2010-11-04 16:26|| 2010-11-04 16:26|| Front Page Top

#9 P2K,

The intention is to spur inflation and avoid deflation.

They want prices to start rising for two reasons:

1. People will start buying things because they don't want to pay more later.

2. They think the price of houses will rise so not so many mortgages will be underwater on the banks' books.

Neither will happen:

1. Older people (more and more of us), who have money, will see prices rising and realize they have to spend less and save more just to be able to afford necessities, like food.

2. We just have too many houses. The only solution is to decrease supply, tear down houses, or increase demand, admit immigrants who can afford to buy houses in exchange for citizenship.

So, you're correct, they would flunk Econ 101. So who gave 11 unaccountable bankers the power to determine the value of our money when the Constitution gives it to Congress?

Posted by Nimble Spemble 2010-11-04 17:43|| 2010-11-04 17:43|| Front Page Top

#10 Government handouts now make up over 20% of personal disposable income.

40.8 million Americans on food stamps (record high) and 45% of the unemployed having been seeking employment for 27 weeks or more (record high).

Our local newspaper is still showing high foreclosure rates. I can't tell that foreclosures have gone down much over the nation. This would mean that inventories are high. Much housing is underwater--the mortgages are higher than what it can be sold for.

Consumer confidence is low. People who have jobs are uncertain whether these jobs will continue. Unemployed people are uncertain whether they will get jobs. Main street doesn't seem to have benefited much from the stimulus programs.

Jobs are going to have to come first. Spending will come after jobs are created. Henry Ford realized that people had to have good paying jobs to buy his cars.

The stock market is up a couple of hundred points today but that doesn't necessarily translate into jobs. Seems like this is mostly speculator activity. QE2 will lead to some inflation and increased prices on basics as well as everything else.

Our economy seems to be based on bubbles.

Posted by JohnQC 2010-11-04 19:22|| 2010-11-04 19:22|| Front Page Top

#11 Bubble, bubble, toil and trouble, JohnQC.

As for trouble, you've seen nuthin yet.

Posted by twobyfour 2010-11-04 22:40|| 2010-11-04 22:40|| Front Page Top

#12 What would today look like if the government had not stepped outside the true limits as originally imposed by the Constitution?

Posted by gorb 2010-11-04 23:23|| 2010-11-04 23:23|| Front Page Top

23:54 Steven
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