More Good News for the Economy & Obama!

[DSGE]

QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.

If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.

Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.

Hyperinflation is rather unlikely for the US. What is extremely likely, is default.

I disagree, but thanks for having some god damn sense.

 

[DSGE]

They WANT too, or there is a severe lack of safe places to park wealth?

Same thing. It applies equally in good times, to any asset. "They want to, or it's the safest asset which offers the highest return given their appetite for risk?".

 

[Oddball]

QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.

If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.

Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.

Another case in point being Japan.

How has that whole "lost decade" thing shaken out for them?

And let's just oh-so-conveniently overlook Argentina.

 

[TakeAStepBack]

They WANT too, or there is a severe lack of safe places to park wealth?

Same thing. It applies equally in good times, to any asset. "They want to, or it's the safest asset which offers the highest return given their appetite for risk?".

Well, with the federal reserve buying 61% of the treasury issuance in 2011 (i've seen no figure for 2012 yet, but expect it to be the same or more), I'm not so sure that there is the appetite for monetized debt that is believed.

 

[TakeAStepBack]

QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.

If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.

Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.

Hyperinflation is rather unlikely for the US. What is extremely likely, is default.

I disagree, but thanks for having some god damn sense.

I don't apply it equally to other countries because our currency is the reserve of the world. When other nations quantitatively ease, it has a lot less net effect in the world than when the US does it.

 

[DSGE]

QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.

If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.

Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.

Another case in point being Japan.

How has that whole "lost decade" thing shaken out for them?

Without hyperinflation. They engaged in QE to fight deflation, then as soon as the inflation rate hit zero they sucked out all that money. They also happened to rack up enormous debt for funding idiotic fiscal stimulus. Oh there's something else interesting, not only was there no hyperinflation, people were also warning of the imminent collapse of the yen and soaring government bond yields due to risk of sovereign default. People have been warning about that for... what, 15 years now?

And let's just oh-so-conveniently overlook Argentina.

What about Argentina? Would you like to talk about its history of hyperinflations due to funding the Peronist government's spending, the currency board that caused a depression, or the central bank that denies that printing money causes inflation?

 

[DSGE]

They WANT too, or there is a severe lack of safe places to park wealth?

Same thing. It applies equally in good times, to any asset. "They want to, or it's the safest asset which offers the highest return given their appetite for risk?".

Well, with the federal reserve buying 61% of the treasury issuance in 2011 (i've seen no figure for 2012 yet, but expect it to be the same or more), I'm not so sure that there is the appetite for monetized debt that is believed.

Well there seems to be, given the low yields on the long end of the yield curve; which the Fed can't control by buying long bonds, as discussed here?

 

[DSGE]

QE3 and Operation Twist will never end. The reason is simple. These actions put the federal reserve at the top of the pyramid in market acting. It's all about the flow of asset pruchases.

If they never end it means that there'll never be any recovery. We'll be stuck at the zero lower bound forever. If there is a recovery somewhere, anywhere, in the future, the Fed with have to shrink its balance sheet or face hyperinflation.

Also, your argument should apply equally to other countries, but recall that other countries have done QE and undone it down the road; case in point being Sweden.

Hyperinflation is rather unlikely for the US. What is extremely likely, is default.

I disagree, but thanks for having some god damn sense.

I don't apply it equally to other countries because our currency is the reserve of the world. When other nations quantitatively ease, it has a lot less net effect in the world than when the US does it.

I don't understand. How does that impact whether or not the Fed will undo QE? The options for the Fed are: there's a permanent depression forever and they never stop QE; there's a recovery sometime which leads to a hyperinflation due to the bloated monetary base; or there's a recovery sometime and they undo QE.

 

[TakeAStepBack]

It doesn't. I thought you telling me to apply the use of QE equally with other countries. Which I do not based on the posting.

Yes, those are two options/scenarios of several.

 

[DSGE]

Yes, those are two options/scenarios of several.

Okay... So do you see an option where QE and Twist never end, but the US recovers at some point without experiencing hyperinflation? I thought those 3 options I gave partitioned the possibilities. You've already said you don't think hyperinflation will happen, so the two remaining possibilities I see are either a) there's a depression forever, or b) the Fed ends QE. Have I missed something?

 

[TakeAStepBack]

Yes, the never ending business cycle. The federal reserve believes it has reached its goals. It stops QE3 and Twist, raisies interest rates and pops a few bubbles it built with the current policies. Rinse and repeat.

 

[kiwiman127]

I can't say I agree with William Kristol on this but,,,,,,,

Kristol: Obama did “pretty well” with financial meltdown
Bill Kristol - Salon.com

I think Kristol was referring to the top percentile and corporate America. This rosy claim certainly doesn't reflect Main Street America.

 

[DSGE]

Yes, the never ending business cycle. The federal reserve believes it has reached its goals. It stops QE3 and Twist, raisies interest rates and pops a few bubbles it built with the current policies. Rinse and repeat.

Ahh, I see. And yes, even if you don't subscribe to the Austrian theory of the business cycle, it's extremely likely that in every future business cycle nominal rates will hit the zero lower bound. So we're going to see lots more QE in our lifetime, unless the way the Federal Reserve operates fundamentally changes.

 

[bigrebnc1775]

I'm calling bull shit?
This link was from April

NEW YORK (Reuters) - U.S. home prices rose for a sixth straight month in July in the latest sign of a sustainable housing market recovery

This was the post I was responding too dumb ass

for the right wing.

Home prices rise for sixth month, a sign of recovery - Yahoo! News

This was the title of the news release

Home prices rise for sixth month, a sign of recovery

And I especially like the way you mangled my post

I'm calling bull shit?
This link was from April


Residential House Prices Will Continue To Fall;
Residential House Prices Will Continue To Fall; Invest In Multifamily Properties Via REITs - Seeking Alpha


April
Zillow forecasts 2012 bottom in home prices

September 26, 2012
Crisis In The Housing Market : NPR

 

[EdwardBaiamonte]

I can't say I agree with William Kristol on this but,,,,,,,

Kristol: Obama did “pretty well” with financial meltdown
Bill Kristol - Salon.com

I think Kristol was referring to the top percentile and corporate America. This rosy claim certainly doesn't reflect Main Street America.

"Pretty well" is not a rosy claim. Kristol was saying that without bailouts we would have had a serious depression that would have been far worse than what we have. All agree on this, except those with an aversion to bank bailout but a fondness for liberal personal bailouts