Fed stays the course...

[RWebb]

Originally Posted by onewhippedpuppy

Sure, because God forbid the government actually curb spending and balance the books. You know, like responsible citizens do.

God forbids this until you emerge from a recession because God knows what happens if you implement contractile fiscal policy at a time when you should have an expansionary one

of course, by the time things are humming along well, the demons shut everyone's ears to paying down the debt

[onewhippedpuppy]

Originally Posted by RWebb

God forbids this until you emerge from a recession because God knows what happens if you implement contractile fiscal policy at a time when you should have an expansionary one

of course, by the time things are humming along well, the demons shut everyone's ears to paying down the debt

Perhaps. But think of the economic benefit associated with a true reduction in government scope, spending, and subsequent taxes. Think of the benefit if the "economic stimulus" money spent on projects of questionable benefit had instead been distributed in the form of tax cuts. What if every taxpaying American individual and business had received a 20% tax cut?

[john70t]

Originally Posted by jyl

The Fed's problem is that while they have been doing their job of enabling the recovery through supportive monetary policy, for the past couple years Congress has been hurting the economy......

Bernanke has been repeatedly warning that fiscal policy has to start carrying its share of the load. He has come as close to chewing out Congress as he can......

Not to downplay Congressional responsibility, but I think you give far too much credit to the Federal Reserve(past and present).

During Iwrek, Greenspan flooded the market with cheap money(fraudulent loans) which created the RE crisis.
"Oh look a puppy!"
Physical gold holdings are still believed missing as well.

Then Bernanke cleaned up this banking mess by printing $26T and giving it away without disclosure or audit.
An immediate crash at street level was avoided by pumping 0% interest rates to keep people spending.
But a 100% open tap wasn't enough, thus QE.

These policies greatly benefited a select few in NYC, but did nothing for the long term stability of the general economy or infrastructure.

Now stocks are being pumped again, and Bernanke's ilk are going to take their money and run.
The rest of us will just have to deal with it.

[island911]

Seriously though, john70t is on to something there. That is we should look at all of these QE's in context of what happened with all the new money created for the housing market bubble. Specifically, what is the rate of new money creation now all vs. the massive new money creation which happened in the early-mid 2000's? I don't know the answer to that, but can imagine that money was being created faster back then as millions took out 10's - 100's of thousands in new equity. ... But I don't know. Anyone?

[RWebb]

Originally Posted by onewhippedpuppy

Perhaps. But think of the economic benefit associated with a true reduction in government scope, spending, and subsequent taxes. Think of the benefit if the "economic stimulus" money spent on projects of questionable benefit had instead been distributed in the form of tax cuts. What if every taxpaying American individual and business had received a 20% tax cut?

I appreciate that point but....

1. I am not glossy eyed enuff to believe that factions can be eliminated )nor were the Framers), or even shorn of their pork. We are also left with the idea of which govt. programs to cut - that has been floated in PARF and had little success. Rick Perry had problems with it also...

2. A 20% tax cut might have less economic benefit than govt. investment in infrastructure - you can think of ways to spend it all on air transport I bet...

[Porsche-O-Phile]

Absolutely criminal.

[RWebb]

Originally Posted by Porsche-O-Phile

Absolutely criminal.

I wouldn't call an across the board 20% tax cut absolutely criminal.

[Porsche-O-Phile]

I would consider virtually all actions taken by the fed to be criminal, the systematic devaluation of our currency, the destruction of wealth and selling out of our children to also be absolutely criminal.

There's a reason the Founding Fathers didn't want a central bank. It is an abomination what our nation's money system has turned into.

[KFC911]

Originally Posted by Porsche-O-Phile

I would consider virtually all actions taken by the fed to be criminal, the systematic devaluation of our currency, the destruction of wealth and selling out of our children to also be absolutely criminal.

There's a reason the Founding Fathers didn't want a central bank. It is an abomination what our nation's money system has turned into.

I doubt our Founding Fathers could have EVER conceived of the USA as being the single most powerful economic entity in the world either. I'm rather glad the central bank "does what it does" and has the capability to pull US (and the rest of the world along with it) out of the financial abyss we jumped into back in '08. They're a freakin' bank POP...you want to "barter" in global economies and become absolute nobodies instead? Do you seriously think we would have EVER risen to our position without one? Get real...it is a two way street....YMMV.

[john70t]

We have a national currency.
It's a private currency, and loaned to our government at interest.
Meanwhile the public has little control over what is printed, or why, or who it is distributed to.
Thus, the core of our capitalist economy is controlled by a small group of private bankers. Not by elected representatives chosen through a democratic voting process.

Is that 'Democracy'?

[john70t]

KC, FDR created the private printing press to pay for WW2. It almost didn't without bonds drives. He made private storing of gold illegal to force people into the federal reserve note.

Then Nixon uncoupled/floated the FR Note from the gold standard to pay our Vietnam action tab.
---The president essentially bypassed congressional spending authority---

These latest catastrophes didn't happen overnight, by accident.
Some people got very rich.

[onewhippedpuppy]

Originally Posted by RWebb

I appreciate that point but....

1. I am not glossy eyed enuff to believe that factions can be eliminated )nor were the Framers), or even shorn of their pork. We are also left with the idea of which govt. programs to cut - that has been floated in PARF and had little success. Rick Perry had problems with it also...

2. A 20% tax cut might have less economic benefit than govt. investment in infrastructure - you can think of ways to spend it all on air transport I bet...

It's an idealistic notion, I agree. But doing the right thing often is. I believe in taking care of myself and my family, and frankly I don't want the "help" of our inept federal government. If I only had that social security money to invest myself in a Roth IRA instead of being squandered by those fools.......

In regards to #2, I'm no economist but I've read a number of articles about the limited real impact of the stimulus dollars. In reality it was just another opportunity for the legislators to pay back their favorite constituents. As for aviation, I would greatly prefer that the government simply keep the hell out of it. Particularly our president that has on multiple occasions demonized an industry that contributes to a positive trade balance, i.e. evil rich CEOs and their corporate jets. His comments had a very real impact on business and cost American jobs, but you'll never hear that mentioned in a speech.

[PorscheA]

As an outsider... back around 06, the US stopped releasing M3 (ie 'money supply'). They also pegged inflation at 2.0% or so (semi recent number).

Which to me is interesting, because how can you figure out inflation if you don't know how much money is actually outstanding?

The massive printing of money (ie free money) has had destructive effects on countries like India, Vietnam and about 20 other 3rd world 'ish' countries. Look at their currencies and stock markets. 'Obliterated' is as close as I can come to describing them.

This is, in a strange way, good for the US dollar. Money flows back from these countries to the USD. So in effect, the more money the US is printing, the more money is held IN USD (strange, but logical).

Who else can print money in the world and have it NOT effect their economy in a negative way? So rest easy people, this is actually a good move.

Anyone remember Bretton Woods? This smacks of it again. But this time the US will declare 'the dollar is being repegged and we are defaulting on our loan, try to do something about it world!'. I LOVE IT!

This is the US economy end game and it's perfect. The world will be helpless to a US default. 14 Trillion? Who cares?!

[KFC911]

Originally Posted by PorscheA

As an outsider... ....

This is the US economy end game and it's perfect. The world will be helpless to a US default. 14 Trillion? Who cares?!

It's probably closer to 17T now, but as an "insider", I can answer that...the USA does....WE (citizens) hold the vast majority of that debt. The central bank simply comes with the territory imo. I'm certainly not a banker, but worked for two of the largest in the first half of my IT career. It's kind of overwhelming to think of the trillions that flow through these banking systems each and every day, and we are critical to the world wide economies and financial infrastructure. Just throwing out another perspective...this is an interesting thread imo...thanks for starting it!

[TheMentat]

Originally Posted by SeanPizzle

massive inflation in 3....2.....1.....


Our nations savers (our retirees) are getting massively screwed by this cheap money and the inflation it will cause.

Well... to be fair... the nation's retirees (and soon to be retirees) have been the primary beneficiaries of many of the fiscal policies that have gotten us into this mess.

[PorscheA]

But... inflation is only 1.50% Really, the US government says so!

United States Inflation Rate | Actual Data | Forecasts | Calendar

At this rate, surely everyone (in the US) must know the debt is never 'repayable' right? I mean, everyone else in the world just knows that, but are you saying Americans really care? Why? Wouldn't it be easier to default and start over? (Seriously, I'm not even joking here, this amount isn't even imaginable, and trying to repay it is never going to happen).

US Debt

[RWebb]

here is a better one - note WWII & what happened under whom...