world markets surge on Fed move

[TakeAStepBack]

Corky?

 

[Nova78]

And NYMEX crude tops $100...

Oil prices are interesting.

at this time, supply is higher than it has been in years. Demand is lower than it has been in years. Yet prices have been rising. So much for supply and demand theory, eh.
So, why would that be. Simple. The gas and oil industry is an oligopoly. Very high monopoly power. If you read even adam smiths thoughts on monopoly power, you would understand what is going on.

With oil speculation, demand is effectively increased artificially. Then, since oil companies own production and refining capacity, supply is also owned by the oil companies.
So, prices do what they want them to do; Rise until the public squeals like stuck pigs, then lower part of the way back toward where they started. Repeat, repeat, and repeat.

Your rant is nothing more than dribble with nothing to back it up

 

[Truthmatters]

guess what guys.

America has figured out your ruse.

they now are realising you have been lying about being the fiscal party for decades

 

[TakeAStepBack]

Yes, yes. Your party is dying, stimulus works, we love the rich bankers and they deserve bail outs on our purchasing power....yadda yadda yadda....

 

[iamwhatiseem]

Yes, yes. Your party is dying, stimulus works, we love the rich bankers and they deserve bail outs on our purchasing power....yadda yadda yadda....

I guess that is why they call them the loony left.
The irony is so thick that it seems impossible. You got liberal loons like TdM actually talking about how good it is to take money directly from us - and give it to the wealthiest corporations in the world...and scream at anyone who doesn't think it is a good idea.
I mean - these are the same people who _S C R E A M E D_ about trickle down economics during Reagan - and here you have the worst case of trickle down economics the world has ever seen - and they are more than fine with it - they applaud it!!!
But then again...they also applauded the OWS....wow...people like TdM could employ an entire building of psychologist for months.

 

[TakeAStepBack]

If it wasn't so funny it woud be really sad. The problem these LOLberal turds like TM have, is that they really don't have a single solitary clue at all about economics. They are completely inept. It's why some people believe that liberalism is a mental disorder. At times, I'm inclined to agree.

 

[Jos]

World markets surge after Fed's pledge for U.S. economy | Richmond Times-Dispatch

Print more paper?
Americas debt is at $16 trillion, your cut of that is $55,000, wheres my money time is coming?
United States National Debt Clock

Spain has less than a one trillion debt, http://nationaldebtclocks.com/spain.htm
and is acting to reduce that by cutting services to the bone and setting sales tax at 21%, coming soon to the USA?

 

[Toro]

The market loves money-printing!

 

[TakeAStepBack]

The market loves money-printing!

That it does. And if you have a few minutes, I found this to be a pretty good read:

Ron Paul, QE 3, and Unintended Consequences

On Friday, Congressman Ron Paul, chairman of the House Subcommittee on Domestic Monetary Policy, invited James Grant and Lewis Lehrman to explore the unintended consequences of the Federal Reserve’s latest plan to install Quantitative Easing Number Three (QE3). The Fed’s announcement on September 13 that it would embark on an “open-ended” program to purchase mortgage-backed securities raised concerns about the long-term impact such a program would have on consumers, savers, and investors.

Grant, editor of Grant’s Interest Rate Observer, noted that “prices are the mechanism by which the economy operates” and when the Fed manipulates interest rates, it interferes with prices. In other words, the Fed, by its actions, is engaging in “financial price control” with predictable outcomes, distortions, and consequences:

First, such activity subsidizes speculative activities, as investors seeking higher returns on their capital are forced into making higher risk investments, increasing the chances that they will lose some or all of their capital.

Second, the Fed’s program raises the prices of commodities, as speculators and investors seek a “safe haven” in investments that can’t be inflated or expanded at the wish of a governing board.

Third, this action by the Fed punishes savers and wage earners. Savers receive lower and lower rates of interest on their savings, disrupting plans for home buying and retirement. Wage earners have less incentive to save as the value of their savings becomes more questionable as the dollar loses value.

Fourth, Grant pointed out that the Fed’s plan interferes with international trade, which depends on price predictability over time.

But most importantly, according to Grant, the Fed’s willingness to continue to purchase government securities allows Congress to put off the “day of reckoning” — dealing with the inevitable consequences of price inflation that comes from overspending.

Lehrman’s plaints were similar: The Fed’s new plan allows the government to spend without limit or consequences, at least in the short run. Capital that would otherwise be invested in new capacity is instead shunted into money market funds and other safe havens while waiting for the skies to clear. Lehrman called the Fed’s plan “the most pernicious form of trickle-down economics,” noting that the banks are the primary beneficiaries of such activity, while borrowers have little incentive to take on the risk of making new investments.

Paul himself wrote that

because the coordination between savings and consumption was severed [by the Fed] through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable.

Once it is determined that those signals were false, capital that was misdirected into unprofitable use is liquidated, usually at significant losses. Paul explained:

In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.

More at the link.

 

[EdwardBaiamonte]

The market loves money-printing!

That it does. And if you have a few minutes, I found this to be a pretty good read:

Ron Paul, QE 3, and Unintended Consequences

On Friday, Congressman Ron Paul, chairman of the House Subcommittee on Domestic Monetary Policy, invited James Grant and Lewis Lehrman to explore the unintended consequences of the Federal Reserve’s latest plan to install Quantitative Easing Number Three (QE3). The Fed’s announcement on September 13 that it would embark on an “open-ended” program to purchase mortgage-backed securities raised concerns about the long-term impact such a program would have on consumers, savers, and investors.

Grant, editor of Grant’s Interest Rate Observer, noted that “prices are the mechanism by which the economy operates” and when the Fed manipulates interest rates, it interferes with prices. In other words, the Fed, by its actions, is engaging in “financial price control” with predictable outcomes, distortions, and consequences:

First, such activity subsidizes speculative activities, as investors seeking higher returns on their capital are forced into making higher risk investments, increasing the chances that they will lose some or all of their capital.

Second, the Fed’s program raises the prices of commodities, as speculators and investors seek a “safe haven” in investments that can’t be inflated or expanded at the wish of a governing board.

Third, this action by the Fed punishes savers and wage earners. Savers receive lower and lower rates of interest on their savings, disrupting plans for home buying and retirement. Wage earners have less incentive to save as the value of their savings becomes more questionable as the dollar loses value.

Fourth, Grant pointed out that the Fed’s plan interferes with international trade, which depends on price predictability over time.

But most importantly, according to Grant, the Fed’s willingness to continue to purchase government securities allows Congress to put off the “day of reckoning” — dealing with the inevitable consequences of price inflation that comes from overspending.

Lehrman’s plaints were similar: The Fed’s new plan allows the government to spend without limit or consequences, at least in the short run. Capital that would otherwise be invested in new capacity is instead shunted into money market funds and other safe havens while waiting for the skies to clear. Lehrman called the Fed’s plan “the most pernicious form of trickle-down economics,” noting that the banks are the primary beneficiaries of such activity, while borrowers have little incentive to take on the risk of making new investments.

Paul himself wrote that

because the coordination between savings and consumption was severed [by the Fed] through the artificial lowering of the interest rate, both savers and borrowers have been signaled into unsustainable patterns of economic activity. Resources that would have been used in productive endeavors under a regime of market-determined interest rates are instead shuttled into endeavors that only after the fact are determined to be unprofitable.

Once it is determined that those signals were false, capital that was misdirected into unprofitable use is liquidated, usually at significant losses. Paul explained:

In order to return to a functioning economy, those resources which have been malinvested need to be liquidated and shifted into sectors in which they can be put to productive use.

More at the link.

Greats points all!! Not only is printing money to buy 77% of all 2011 federal debt stupid, but its crazy too. The savers have no incentive to save (a nation's savings equal its investment) so there is no or little investment, and, the savers are deprived of about $400 billion a year in interest payments much of which could be seen or used as a huge and legitimate free market stimulus or investment program.

Barry's got to go!!!