Print money, and give it to the banks

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Disoputlip
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Print money, and give it to the banks

Postby Disoputlip » Sat Nov 06, 2010 8:23 pm

My first political thread. I started to write a reply to Teflor, but thought it should have its own thread.

http://www.infowars.com/the-biggest-ban ... n-history/

Right now The Democrats are printing more money and giving it to the banks. I think they mainly does that because the so-called experts advice that.

I wonder if someone like Palin could stand for the pressure and not print more money and give to the banks, and thus be called dumb because she wouldn't. Or she, like Obama, would keep in line, and follow all the advice of the experts.

I am unsure, but I actually think someone like Sarah Palin is smart/dumb enough not to listen to the experts.

Polically I would be a far leftist, but I stongly disargree with the current american financial policy. As I see it they should let the market fix it. Right now they are wetting themselves, and they know it will hit them double in a few years when the current bonds run out.

As I see it major inflation will be hitting the US soon.
Corth
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Re: Print money, and give it to the banks

Postby Corth » Sat Nov 06, 2010 8:45 pm

They are trying to create inflation expectations because we actually have the opposite problem right now: deflation. If people expect inflation in the near future they will go and spend their cash - which is what the misguided policymakers want. What is likely to happen is one of the following two options:

a) They don't print enough to free us from the so-called 'liquidity trap' of deflation. The destruction of money and credit from defaulting loans, etc., overwhelm the creation of new money. Because of political considerations, we aren't able to print as much as necessary. This is essentially Krugman's prediction.

b) They print too much and inflation expectations go wild. Older people who might have spent their whole life accumulating a 'nest egg' see the value of their life work wiped out in a matter of months. The dollar loses 'reserve currency' status and so we are forced to borrow money in foreign currencies like everyone else - except nobody wants to lend to us because we are no longer considered 'creditworthy'.

Actually I think both might happen. I think the current deflation issue (scenario A) outlasts everyone's expectations - until at some point we overshoot with the printing and we have a bout of strong (but not quite hyper) inflation (scenario B).

The right thing to do is let Scenario A play itself out. Eventually all the bad debt gets liquidated and we come out of it in 5-10 years on much more solid footing. We will be much worse off for all the attempts at inflation - and watch out if they overshoot.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth

Goddamned slippery mage.
Teflor Lyorian
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Re: Print money, and give it to the banks

Postby Teflor Lyorian » Sat Nov 06, 2010 9:09 pm

QE2: Electric Boogaloo. I haven't posted on this subject yet because I'm still trying to develop an opinion. So far, it's been hard.
"You see, the devil haunts a hungry man.
If you don’t wanna join him, you got to beat him."
- Kris Kristofferson (To Beat the Devil)
Kindi
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Re: Print money, and give it to the banks

Postby Kindi » Sat Nov 06, 2010 10:20 pm

i like deflation since i have no debt
Teflor Lyorian
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Re: Print money, and give it to the banks

Postby Teflor Lyorian » Sun Nov 07, 2010 11:02 pm

Deflation is only a problem because we allow countries like China to trade with us against a fixed currency designed to pull more wealth to their country from ours.
"You see, the devil haunts a hungry man.
If you don’t wanna join him, you got to beat him."
- Kris Kristofferson (To Beat the Devil)
Corth
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Re: Print money, and give it to the banks

Postby Corth » Mon Nov 08, 2010 1:33 am

Your next name should be Teflor Bernanke!
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
kiryan
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Re: Print money, and give it to the banks

Postby kiryan » Mon Nov 08, 2010 7:21 pm

I don't know that Republicans as a whole would handle themselves any different... They are "fiscal conservatives" but thats in terms of spending (on social programs). They are also aligned with big business which depending on the industry is very concerned about deflation / inflation / import / export. This is a problem inherent when politicans can pick who wins and loses and that crosses aisles.

I agree with some of your statements, and not others. We have been living off debt, but at the same time, America is largely responsible for raising living standards in a number of countries, like China, by granting them access to our markets. Several economists have said somethign to the effect of we can't allow China to profit off the American market forever, you have to develop your own domestic demand. Probably just a self serving view, but really would China have developed like it has if its currency was not manipulated or if the WTO had allowed them to join?

So moving on specificalyl to QE2 and I've heard 3 is already planned. I see QE2 as a shot in front of our allies across China's bow... China wants to currency manipulate... The rest of the world wants to cower and look the other way... Well we have other less favorable methods of fixing the imbalance. Tbeki said something interesting while trying to mediate the zimbabwe crisis between Morgan and Mugabe. He said that they needed to accept a president/vice president structure to bind their feet together and either both fail or succeed.

The principle can be applied to China's entry into the WTO, and the other membesr of the WTO are getting a raw deal as China keeps its markets closed, manipulates its currency and refuses to take substantive action on Intellectual Property protection... basically not living up to the spirit of the WTO if even the letter of the law. US and China are also inextricably bound, by debt and market access... but China and the US both have a lot to lose by pushing their bluff.

Sure a Ron Paul and probably Rand Paul would stand against the fed, but I don't know that Republicans are platform wise against the fed... I'd be careful with thinking Democrats are resposnible for QE... and the FED.

--

Now on the other hand, QE2 is advertised as anti deflation... The quickest solution I can imagine to the problem in America is to make bad debt good through inflation. Its also the quickest solution to our long term debt problem... Obviously its not that easy and I'm wholly against it. On the other hand, its one hell of a do over if America needs it. We would lose reserve status, but we're losing it already and China is diversifying so our biggest threat is slowly and surely insulating themselves from a nucelar option. I don't know how much credit our financial policy makers get, all I ever hear is bitching about America, the great "decoupling" Europe and China were wetting themselves over in early 2000s and how great the EU is even though its probably in more immediate danger of currency collapse than the dollar.
Last edited by kiryan on Mon Nov 08, 2010 8:38 pm, edited 1 time in total.
Teflor Lyorian
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Re: Print money, and give it to the banks

Postby Teflor Lyorian » Mon Nov 08, 2010 7:52 pm

Corth wrote:Your next name should be Teflor Bernanke!

I'm not advocating for deflation or inflation, but there are, of course, ramifications to any change.
"You see, the devil haunts a hungry man.
If you don’t wanna join him, you got to beat him."
- Kris Kristofferson (To Beat the Devil)
kiryan
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Re: Print money, and give it to the banks

Postby kiryan » Tue Nov 09, 2010 5:08 pm

I'm really not sure if the tail is wagging the dog here, but I'm quite sure that our government new QE2 would raise the value of the yuan... which has been a top policy issue.

http://www.bloomberg.com/news/2010-11-0 ... imits.html

“Some international funds will flee from dollar assets because of the Fed’s easing, and China’s SAFE is trying all means to plug loopholes in possible channels for hot-money inflows,” said Zhao Qingming, a senior analyst at China Construction Bank Corp. in Beijing, the country’s second-largest lender.

The yuan jumped 0.51 percent to 6.6440 per dollar as of 6:08 p.m. in Shanghai, bringing gains this year to 2.7 percent, according to the China Foreign Exchange Trade System. Twelve- month non-deliverable forwards were at 6.4463, reflecting bets the currency will strengthen 3 percent in one year.
...
“The strengthened controls on hot money can’t change the yuan’s trend of appreciation,” said Isaac Meng, an economist at BNP Paribas SA in Beijing. “The yuan will continue to appreciate as the Fed easing prompts more capital inflows and China’s economy grows faster than the U.S.”
Disoputlip
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Re: Print money, and give it to the banks

Postby Disoputlip » Tue Nov 09, 2010 6:39 pm

As I see it the problem isn't China, it is the US.

In regards to the red and the blue, then money don't care if they are spend on healthcare or war, they still generate deficit.

If american citicens actually had to pay the price their housing would have cost, then mabye they wouldn't have bought so many dancing elmo's that China made.

The whole wild west banking sector is what have brought the cardhouse down. Their trading of loans and short selling.

Call it marxism, but production is the key to generating surplus on the finances.

Right now Japan, US and UK are trying to win the inflation war. And that is just as dangerous as China that manipulate the other way. It is however interesting that China deliberatly keep their population in poverty.
Corth
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Re: Print money, and give it to the banks

Postby Corth » Tue Nov 09, 2010 7:51 pm

What's wrong with short selling?
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth



Goddamned slippery mage.
kiryan
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Re: Print money, and give it to the banks

Postby kiryan » Tue Nov 09, 2010 8:21 pm

Depending on what metrics you measure anyone could be the problem.

I don't think its arguable that China is a currency manipulator. I also don't think its arguable that the US is engaged in currency manipulation.

I'm curious how you view import and export taxes. Would it be ok for the US to address its trade imbalance with China via import tariffs instead of debasing the dollar? You mention China keeping its people in poverty, should we all be complicit in that? If the yuan was allowed to appreciate would chinese kids make 22 cents an hour in a factory?
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Re: Print money, and give it to the banks

Postby kiryan » Tue Nov 09, 2010 11:17 pm

Yea I'm going to have to agree with whats wrong with short selling...

Short sellers don't make money when stocks down, they make money when they are right.

Who figured out Enron was full of baloney, the shorts. Not the government, not the board, not the investors, the shorts.

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