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Fed Running Out Of Options To Ward Off Double-Dip Recession

With the economy growing at a snail's pace and the job market still disconcertingly weak, economists are wondering whether the Federal Reserve will undertake a new round of stimulus efforts to keep the country from slipping into a double-dip recession. Even if the Fed goes that route, however, it may not have much of an effect.

Such a program would be known as QE3 -- a third session of quantitative easing, which the Fed has done twice before. "Quantitative easing" refers to the Fed buying up assets, particularly longer-term Treasury bonds, as a way of pumping more money into the economy and stimulating investment.

Both rounds of quantitative easing have occurred during the current economic crisis, with the previous round, known as QE2, lasting from November 2010 to June of this year. Economists gave it decidedly mixed reviews.

At the end of QE2, unemployment was still high, GDP growth was discouragingly slow and consumer spending was on the way down.

Critics of quantitative easing say that not only was the second round ineffective, but the influx of new money put the country at greater risk of inflation. Nevertheless, stimulus advocates are keeping a close eye on the Fed, looking for signs that QE3 is on the way.

Not everyone believes that it is.

"The hurdles facing QE3 are very high," said David Jones, an executive professor of economics at Florida Gulf Coast University's Lutgert College of Business. "It%E2%80%99s not off the table completely, because if we do have a double-dip, anything is on the table. But it's off the table for now."

Jones told The Huffington Post that QE2's opponents criticized the program so ardently -- both in the U.S., where analysts worried about inflation, and overseas, where the flood of new dollars was seen as tipping the international trade balance unfairly in America's favor -- that it's unlikely Federal Reserve Chairman Ben Bernanke will try a new round of bond-buying unless it's the only way to stave off disaster.

"The Fed is much better at pulling us back from the abyss -- like it did in the credit crisis of 2007-2008 -- than it is at trying to boost growth in a recovery," said Jones.

Even so, many economists believe QE3 is coming sooner or later. In a recent CNBC poll, 46 percent of economists surveyed said they expected the Fed to undertake a new round of easing, compared with just 37 percent who said it would not.

Earlier this week, Goldman Sachs researchers published a note saying that there is "no question" Bernanke will have enough votes on the Federal Open Market Committee to implement QE3, and that they "fully expect him to use these votes ... if he views it as necessary." Analysts from Harvard, Credit Suisse, Standard Life and a number of other institutions have also said that QE3 seems like a distinct possibility.

For its part, the Fed has said only that it plans to keep interest rates near zero through the middle of 2013, as a way to encourage corporate borrowing and investing. On Tuesday, a day after the Dow plunged more than 600 points in a single session, Bernanke said the Fed had "discussed the range of policy tools available to promote a stronger economic recovery" -- a phrase that many market participants have taken as a veiled reference to a new round of bond-buying coming up.

Drew Matus, a senior economist at UBS, says it would be a mistake to jump to that conclusion.

"In the context of a market that had been down very sharply the day before, that was them reassuring people that they still have ammunition," Matus told The Huffington Post.

The markets did seem placated after Bernanke%E2%80%99s remarks, rallying to finish up more than 400 points on the day.

But while Bernanke may have the power to move markets in the short term, there are doubts as to whether new easing efforts would even have the desired expansionary effect. Jones told The Huffington Post that the country is reaching a point of "diminishing returns" with its asset-purchasing programs, and inflation hawks have argued that QE3 would drive up the price of commodities like gas and oil, leaving consumers unable to spend money on anything but necessities.

QE3 speculation could rise to a fever pitch in the next couple of weeks, as many believe the Fed will save any major statements for its August 26 conference in Jackson Hole, Wyo. It was at this conference last year that Bernanke indicated that QE2 was on the way.

Matus, for one, doesn%E2%80%99t expect a similar announcement this time.

"UBS's view is that [QE3] is not going to happen," he said. "In my mind, Bernanke hasn%E2%80%99t got as much flexibility as a lot of people think he does."

by Anonymousreply 11501/13/2013

The reality is main street America never left the first "Recession" only Wall Street did. The term "double-dip" is a public relations term, because what America is really in right now, is a genuine Depression.

America did the same thing in the 1930s, the Government didn't realize that it was a depression until the USA was well into it.

by Anonymousreply 108/14/2011

Um. The Fed is the evil entity that causes this shit in the first place.

by Anonymousreply 208/14/2011

Paul Krugman said only this morning that it is not to late to pump in more $trillions$.

by Anonymousreply 308/14/2011

When the value of the USA dollar is falling, pumping in more money does nothing but speed it up.

by Anonymousreply 408/15/2011

Agreed R2. Abolish the FED, repeal legal tender laws and create competition in the currency markets. The gov could still coin money, but so could any state, city, bank or company in order to compete with it.

Merchants would be able to convert it into whatever currency they wanted at POS (via credit/debit card) and bills/coins could be accepted at their discretion.

There. I fixed it.

by Anonymousreply 508/15/2011

So, Sarkozy and Merkel said today that Eurobonds are OUT OF THE QUESTION!!!

Soooooooo...

How long before the Eurobond is introduced?

by Anonymousreply 608/16/2011

Um, R5? You've solved what, exactly? You think you solved the debt crisis by creating 50 separate mini-Feds? What the fuck are you smoking?

by Anonymousreply 708/17/2011

Barter economies are poor economies. Libertarians don't get that.%0D %0D The Fed did not cause this.%0D

by Anonymousreply 808/17/2011

R8-

Why do you think a libertarian economy would be barter? Gold and silver have been used as money- because they are rare and can't be counterfeited, unlike dollars- for thousands of years.

The FED, by printing TRILLIONS of new dollars to give to their bankster buddies, has made everyone else poorer.

And, you're 100% wrong- inflation is the creation of new money, PRICE inflation (which is now officially at 7.2% for the year, per data release today) is just the aftereffect.

by Anonymousreply 908/17/2011

Libertarians are such smug retards.%0D

by Anonymousreply 1008/18/2011

Are we out of the recession yet? Have they done enough to fix the infinitely complex and instantly changing nature of basic economics!

I can't believe that these brilliant men, with their Zegna suits and Foie Gras lunches and G4 jets from "summit" to "conference" lack the ability to plan, down to the 100th percentile, how money should function! That is an outrage!

Can't Obama or Congress pass a law fixing this!

by Anonymousreply 1204/19/2012

We've been out of recession for almost three years.

by Anonymousreply 1304/20/2012

I claim bullshit. Consumer spending has been trending upward, contrary to what was claimed in the article.

by Anonymousreply 1404/20/2012

Sadly, the only way we're going to get out of this mess is by inflating the currency. We might as well get it over with so we get the pain instead of our kids. Well, people's kids.

by Anonymousreply 1604/20/2012

True, R13, and there's an article on the Obama vs. Romney race in Ohio in The New York Times that points that out, but unfortunately Obama still doesn't get a lot of love.

by Anonymousreply 1704/20/2012

We will get out of this mess when we stop importing foreign workers to take American jobs and when we stop allowing companies to take tax breaks for sending jobs overseas.

We still have a major problem with immigration and not from the South American countries. I'm talking about immigration from China and India. It must stop, immediately. We must rescind H1B Visas and halt this program immediately. We must charge major tariffs for companies that want to send their work overseas but make their money here.

These are things that healthy societies do to ensure their existence.

by Anonymousreply 1904/20/2012

Buy American. Treat companies which outsourced their workforce overseas like traitors and boycott their products. Don't vote for political representatives who have a voting record that favors company rights over human / citizen rights.

by Anonymousreply 2004/20/2012

One of the problems is the electoral system itself. It doesn't give the President enough time to clean up the mess left by his Predecessor.

People expect everything fixed in a couple of years and before you know it, he has to campaign for re-election and face the ungrateful SOB's that want to know why the smoldering remains he inherited from Bush haven't been turned into gold yet.

by Anonymousreply 2104/20/2012

I am starting to think that Obama's and the Democracts' lack of reaction to the smear tactics of the Conservatives and the Republicans will in the end work in their favor, because the smear tactics have become so agressive, disrespectful, vile, racist, outlandish, and downright comical that the voters will not vote for them at the coming election.

And all the Republicans can rely on are those voting fraud approved vote machines created by Diebold (which changed to a new company name).

by Anonymousreply 2204/20/2012

Adjusted for inflation the stock market is lower than it was in 1999, before the bull run of the 00s.

To say we are out of this Depression (recession lost meaning 2 years ago) is ludicrous.

The stock market, housing and manufacturing biz is starting to heat up (in places like DC, NYC and Cali) where a lot of the money Bernanke created over the last few years is starting to fund the next boom. This boom will be far shorter than the 00s (why do we still have no name- the aughts?) but the next leg down will just be the natural reaction of an economy that has too much debt to service and can only be fixed by "deleveraging" and "renegotiation".

The current boom won't pick up the average person, because it will be shorter and therefore the "trickle down" effect will be negligible for many on the lower end of the economic spectrum. But the elites will get even richer while it goes on.

Obama and Romeny are both pledged, heart and soul, to the Banksters. Therefore, despite any superficial differences in policy, they are the same person.

by Anonymousreply 2304/21/2012

Of course DC is booming- its the capital of The Empire. All the monopoly money they've printed in the last 5 years to keep their charade convincing is going to fund pet projects for their donors at below-market costs. It bankrupts the taxpayers but provides a nice return for the owners and their pet politicians.

Out in the real world the results of 40 years of non-stop counterfeiting by the Feds has resulted in a dying society. When the people of the world wake up one day and decide that dollar bills are just worthless pieces of paper (which is, fundamentally true) and refuse to sell us anything, the vermin and coprophages that inhabit DC (and London, and Bruxelles, and Beijing) will scatter to St Barths while the rest of us watch all of our earnings disappear.

We don't have the kind of society (except in small town USA) that will survive that kind of "reversal of fortune" without calling for the criminals to that did it to them to now come save them. The parasites of Mordor on the Potomac will

-craft laws and pass resolutions to "fix the problem, and stop the troublemakers" which means that anyone that points out badly the government has managed the economy you will probably be "rendered" to Gitmo- or just killed in cold blood under the provisions of the NDAA.

-Whistleblowers will be imprisoned,

-travel will be further restricted, -

the propaganda machine will parrot the press release from the White House or Pentagon or Fed,

-and things will get even worse for the average person- just not bad enough that they openly revolt.

People will tolerate a LOT if it comes slowly. We are already conditioned to accept their authority, right or wrong.

Think about it- can you imagine 12 years ago, before the "War of Terror", that our civil liberties were respected worldwide, and now we rank just above North Korea and China when it comes to dissidents and freedom from propaganda (and if you don't think MSNBCNNPR - or worse, FOX- are propaganda...) but we all go along with it.

(from another thread, but appropriate here)

by Anonymousreply 2404/21/2012

R24 provides some interesting insight beyond what the average political pundit out there will ever tell you.

by Anonymousreply 2504/21/2012

The economy, though not great, is much better than it was 2 years ago. It is dramatically better than it was 3 years ago. We're gaining jobs. It's taking a long time tonget back all the jobs tgatvwe lost, but the direction is positive. The stock market has doubled since March '09.

by Anonymousreply 2604/21/2012

The stock market is not the economy. The stock market is nowadays the 1%.

by Anonymousreply 2704/21/2012

Nationalizing oil would accomplish it.

by Anonymousreply 2804/21/2012

Again, bullshit, R27. The stock market is also very much the 99% - pension plans, benefits packages, investment capital, state and local government funding, the list goes on and on. The money that's come back into the market is real wealth belonging to a majority of Americans in one way or another.

You can't have it both ways. If a crashing stock market is bad for the 99%, a bull market has to be good for the same 99%.

by Anonymousreply 2904/21/2012

nobody has a pension anymore and 401Ks are such a pitiful percent of what most people have as to be laughable. Only the 1% own stocks anymore, and that's the way they like it. They just want occasional dollops of money from the hoi polloi to boost prices. They have no interest in control from the masses, or a misidentification of the stock market with the nation.

by Anonymousreply 3004/21/2012

"The stock market is not the economy. The stock market is nowadays the 1%."

Didn't say it was, R27. Jobs are way up. The last month report was 120K. That was considered disappointing because the previous months were above 200K. Three years ago, the economy was losing 700K Any gain then - even a small loss - would be considered good news. Exports are also up - about 35% higher in the last two years.

by Anonymousreply 3104/21/2012

We don't make anything anymore.

Billionaires don't care; they are world-money men, not America-money men.

by Anonymousreply 3204/21/2012

R54 - That's bullshit. Manufacturing output is up - it's jobs that have disappeared.

"We're making more things today than almost ever before. Even adjusted for inflation, manufacturing output is near an all-time high. In real terms, we're making more than twice as much today as we were in the early 1970s.

Why such a disconnect between perception and reality?

When people bewail manufacturing's decline, what they really mean is manufacturing employment:"

by Anonymousreply 3304/21/2012

Congress just kicked the Depression down the road. Everyone said this in 2008-09. Why does it surprise people?

by Anonymousreply 3404/21/2012

Companies will begin to move their production out of Europe and closer to the US market - like other third world countries.

by Anonymousreply 3504/21/2012

Fine. "Manufacturing employment," then.

Maybe you'd think differently if you lived in the shadow of the defunct Bethlehem Steel.

by Anonymousreply 3604/21/2012

Bethlehem Steel? That was declining 30 years ago (see Billy Joel's Allentown).

Yes, we are living through tough times, but things are a lot better now then they were in 2009 or when this thread was started.

by Anonymousreply 3704/21/2012

I think many of you can't see the proverbial forest for the trees.

The "financialization" of America started 150+ years ago, took hold 100 years ago and metastasized 40 years ago. By giving a private corporation controlled by handful of powerful banks the power to print money (and making sure every other country did the same- no gold for you!) we have terminally wounded the current USA. Until we reject the Banksters and embraced a sound fiscal policy things will continue to get worse.

When a handful of powerful people control the money, it doesn't matter where what is made- they make money either way.

If #OWS understood this simple fact then their efforts wouldn't be ineffective and futile.

by Anonymousreply 3804/21/2012

R38 - Banks can't print money. The Fed Reserve can print money, but that ability is NOT the reason why the US is in trouble. In fact, the Fed should be printing more money.

by Anonymousreply 3904/21/2012

Why should they print more, R39?

Logically, if there were only 1,000 dollar bills in the world, and some private company could print 500 more to pass to their friends as long as they lent most of it to the government, then the value of every dollar would drop by 33% as more dollars competed for the same goods. Not all at once, and some people would be richer than others as they got the new dollars first, but eventually all goods and services would rise by 50% as the new dollars flow.

Creating more debt is not going to solve the current debt crisis (even though the US media is sure not to use that phrase) because debt cant be solved by incurring more debt! That is the "logic" the "print more money" crowd uses.

Bonkers, the lot of them.

by Anonymousreply 4004/21/2012

The argument for printing more is that a little more inflation would be good for the overall economy - say 3-4 percent.

by Anonymousreply 4104/21/2012

[quote]R24 provides some interesting insight beyond what the average political pundit out there will ever tell you.

Actually, R24 doesn't know what the fuck he's talking about as most of the drivel he's been spewing on this thread is laughably false.

by Anonymousreply 4204/21/2012

[quote]I think many of you can't see the proverbial forest for the trees.

Actually, we can, which is why we know you're full of shit, particularly with statements like:

[quote]Obama and Romeny are both pledged, heart and soul, to the Banksters. Therefore, despite any superficial differences in policy, they are the same person.

Which is one of the silliest statements I've read in the past month.

by Anonymousreply 4304/21/2012

[quote]then the value of every dollar would drop by 33%

See, out here in the real world, that's not the way it works. Sorry. Maybe you can join us here someday?

by Anonymousreply 4404/21/2012

Uh, r37? I don't need a song by Billy Joel; I lived the song, precise locale and all. I'm well aware of the history.

From coal-mines to steel companies, now we have casinos and minor-minor athletics.

Yay.

by Anonymousreply 4504/22/2012

If you are going to criticize other points, you have to include your rebuttal. You can not issue a blanket critique and expect credibility.

by Anonymousreply 4604/22/2012

R26: True, R26, but what types of jobs have been added? I'll tell you: Part-time positions in retail and hospitality. How many of these jobs pay over $35,000 a year? Sorry, but we have not created any significant number of GOOD jobs.

For some reason, I think, at first, the corporate bastards refuse to hire in order to punish us for voting for Obama. Now, they fucks realize how much shit we will put up with just to keep our jobs. Basically, they know we will overwork ourselves to death for peanuts. The elite have no intentions of reversing the current status quo. My answer: UNIONIZE, UNIONIZE, UNIONIZE!!!

by Anonymousreply 4704/22/2012

Not necessarily buying a double dip. Anyone can write anything on HuffPo anymore and if they think it will get clicks, they publish it.

by Anonymousreply 4804/22/2012

R49 - It ended the summer of 2009. We've had GDP growth for three years, just not enough job growth to counteract the job losses from the 2007-9 recession.

by Anonymousreply 5005/28/2012

r12, you bumped an old thread and made it look current.

The recovery is going fine. It is slow but steady, there is no threat of a double dip

NO MATTER HOW MUCH THE KOCH-SUCKING SOCK PUPPETS KEEP RECYCLING OLD THREADS.

How about resurrecting a Bush Era classic like:

Worst President EVAH!

by Anonymousreply 5105/28/2012

To clarify R51's point. This thread was started in August 2011 and no recession has been encountered.

by Anonymousreply 5205/31/2012

Let's be realistic here - if Wall Street and the 1% think it's in their interests to precipitate another recession, they will do so.

A Wall Street trader even admitted on the BBC last year that the financial elite profit during a recession when other people suffer.

by Anonymousreply 5305/31/2012

Call this one the Made in China Depression.

by Anonymousreply 5405/31/2012

[quote]A Wall Street trader even admitted on the BBC last year that the financial elite profit during a recession when other people suffer.

Did he mean buy low?

by Anonymousreply 5505/31/2012

This should be the Fed is running out of options, without pissing off the 1 percenters. Because if the Fed stops kissing Wall Streets ass, it has many options available.

by Anonymousreply 5606/01/2012

Amen, R56.

However, Wall Street and the big banks have Obama (and Romney, and Clinton, and Bernanke, etc.) in their back pockets, so no meaningful reform will happen until they eventually destroy the fiat money system.

Hyperinflation- in Germany in the 30s, Argentina, Zimbabwe, wherever- has never happened in to all of the major players at once, and the current economic system of massive debts, derivatives and money printing coupled with a systemically corrupt and incompetent (by design?) regulatory system does not bode well for the future.

I've heard gold is doing fairly well.

by Anonymousreply 5706/02/2012

President Romney

by Anonymousreply 5806/02/2012

Gasoline at or above the $4.00/gallon mark seems like a trigger/tipping point for slowing the economy. Several months back the call was for gasoline reaching the $5.00 mark by summer and those fears were not good for a fragile recovery and the average person spending for "extras." Fortunately that did not happen and prices have eased a bit in the past month. It will be interesting to see what happens now.

by Anonymousreply 5906/02/2012

Over a year later and the depression (not recession) is even worse.

by Anonymousreply 6009/28/2012

The depression isn't even a recession. We have sluggish growth (GDP around 1-2 percent), sluggish but sustained job growth, and a recovery in housing. It's not a boom, but it's not a depression.

Depression like numbers were occurring end of '08 and early '09!when we were losing half a million jobs or more every month and GDP was falling at a 8 or 9 percent annual rate. Then the Dow was 8000 and falling to 6500, now it's moving toward 14.000.

Depression? I do not think you know what that word means.

by Anonymousreply 6109/28/2012

R61, the numbers put out by DC are massaged to death. Inflation is in the 5-6% range (look at your grocery and gas bills from 5 years ago) which means a 2% increase in GDP is actually a 3% loss. U6 numbers (meaning all work eligible people) are higher than they have been in 60 years. Add to that the fact that the bottom 90% have actually lost purchasing power since 1970 and you have a depression.

by Anonymousreply 6209/28/2012

Yeah, I agree purchasing power for the bottom 90 percent is down since 1970 - but Romney is only going to accelerate that trend.

Food and fuel are only two of the components of inflations, ones that fluctuate a great deal and that are largely out of the hands of US policy makers. Prices of other things have not gone up by 5 or 6 percent, Clothing is down, housing is down, electronics down, etc.

You are creating your own reality. I don't know whether you are deluded or just lying to us, but you aren't showing the real world.

by Anonymousreply 6309/28/2012

Is the recession over?

by Anonymousreply 6412/08/2012

R64 - been over for three years.

by Anonymousreply 6512/08/2012

Oh, no freeper sock puppets wringing the last twenty-five cents out of the Koch brothers funding bumping an anti-administration headline thread before the Cliff-magedon!

Give it a rest.

by Anonymousreply 6612/08/2012

tIn early 2008, the only hope for the American economy had been service jobs, but that sector shriveled since many no longer had the money to eat out, employ yardmen, have their cars serviced, or pay for daycare. So the stock market also shriveled despite the cuts in interest and the stimulus bill.

by Anonymousreply 6712/08/2012

[quote]Oh, no freeper sock puppets wringing the last twenty-five cents out of the Koch brothers funding bumping an anti-administration headline thread before the Cliff-magedon!

Nah, this isn't a freeper. It's a Rondroid, gold-bug, libertarian, delusional idiot.

by Anonymousreply 6812/08/2012

[quote]Inflation is in the 5-6% range

Q.E.D.

by Anonymousreply 6912/08/2012

I have what I'm sure is a dumb question. If the fed can buy all these bonds is there any way they can buy bonds that pay for infrastructure projects?

by Anonymousreply 7012/08/2012

I LOVELOVELOVE the epic break with reality block quote poster!

She has posted at R68/69

Her similar posts on other threads are just as priceless in their ignorance and economic confusion.

Such a fundamental inability to grasp basic economics requires a PhD! Bravo!

Since most people only know reality based economics, let me explain. Since 2008 the Federal Reserve has purchased all long term debt. They sell all of their short term (1-3yr) debt while purchasing ALL of the long term (10-30yr) debt which has allowed them to keep interest rates low. They have very little short term debt left, and soon they will be unable to monetize without the market (that "invisible handed beast") forcing interest rates higher.

(as an aside, the charter for the Federal Reserve forbids outright purchases, so the TBTF banks get to buy the debt and sell it at a profit right back to the Federal Reserve. How goddamn convenient!)

Once they run out of short term debt, they will lose any ability to affect the interest rates, and they will go higher than the moon. The only reason the debt they have monetized (4 Trillion and counting) is not causing inflation is because they decided (for the first time in history) to pay interest to the TBTF banks to keep it from getting to "the little people". As interest rates rise, these banks will be forced to either A) loan it out, or B) go bankrupt.

Those loans...well, it won't be pretty. They have "contained" inflation for nearly 5 years, but at the cost of a much bigger disaster in the future.

Those interested can start here.

by Anonymousreply 7112/09/2012

[quote]If the fed can buy all these bonds is there any way they can buy bonds that pay for infrastructure projects?

Technically, I think they could but there is one thing that gets in the way. Section 14(b) of the Federal Reserve Act only allows the Fed to purchase municipal bonds that mature in six months or less and there just aren't any infrastructure bonds that will mature in that timeframe.

by Anonymousreply 7212/09/2012

R70, that's like borrowing money from the mafia to get out of debt.

You cannot borrow your way out of debt!

by Anonymousreply 7312/09/2012

Ooppssssy- left the link out.

Want to understand how the Federal Reserve is screwing us over...read the link.

by Anonymousreply 7412/09/2012

[quote]You cannot borrow your way out of debt!

You really should stop posting here before you expose your ignorance any further, since countries routinely borrow during economic downturns, using the money to stimulate the economy, thus reducing both the duration and the seriousness of the downturn. And returning the economy to full employment does what again? Wait for it.... it reduces the debt!

by Anonymousreply 7512/09/2012

Moron, posting the same post on multiple threads doesn't make the post any more accurate.

[quote]I LOVELOVELOVE the epic break with reality block quote poster!

ROFL.... Trust me, the feeling is mutual, particularly since I've been able to back up everything I've written and you haven't been able to back up a single assertion of yours, mostly because they're all false. Do let us know when gold prices increase tenfold, won't you?

[quote]You're good! Krugman would be proud.

This is basic Econ 101 and basic finance, idiot. It doesn't take a doctorate; just someone willing to face reality.

[quote]Her similar posts on other threads are just as priceless in their ignorance and economic confusion.

ROFLMAO.... Oh, the irony....

[quote]Such a fundamental inability to grasp basic economics requires a PhD! Bravo!

Dear heart, were you planning to get to the point anytime soon? I've had better insults on an elementary school playground.

[quote]Since most people only know reality based economics, let me explain.

Oh, this should be good....

[quote]Since 2008 the Federal Reserve has purchased all long term debt. ...

*Yawn* Sadly, it wasn't. Good, that is. It's just more of the usual panic and fearmongering from the usual suspects. I was fully prepared to debunk this crap but the trouble is that there wasn't anything to debunk! Not one shred of evidence. Not one bit of data. Not one sign that the site he's quoting (which employs anonymous blog posters) has the foggiest idea what it's talking about.

What the Federal Reserve is doing is unusual only in that the size and duration of the economic downturn has increased the scope of their intervention. As the economy recovers, the Fed will unwind its intervention, just as it has done dozens of times in the past. This isn't rocket science.

[quote]Once they run out of short term debt, they will lose any ability to affect the interest rates, and they will go higher than the moon.

Q.E.D. These idiots have been predicting massive interest rates and massive hyperinflation for years. Sadly for them, since we're in a liquidity trap, neither of these things can happen. Our dear little friend will be back here next year, and the next, and the next, and the next, with the same old predictions of doom and gloom, just as he's been doing for years. The fact that his predictions never come true doesn't bother him in the least. Pity him, my friends.

by Anonymousreply 7612/09/2012

R71 is a conspiracy nut.

by Anonymousreply 7712/09/2012

Yup, and a gold nut, and an anti-Fed nut, and a Ron Paul nut, and an Austrian economic nut. Oh, and an idiot.

by Anonymousreply 7812/09/2012

On the other hand, R77, he's hilarious as hell, since he's stunningly ignorant, blissfully unaware of his ignorance, and totally convinced of the superiority of his economic and financial prowess. His posts are among the funniest on DL.

by Anonymousreply 7912/09/2012

Fuck the rest of you. We have tons of money.

by Anonymousreply 8012/09/2012

Why the fuck is this old article being bumped?

by Anonymousreply 8112/09/2012

Because we have a fanatical Rondroid here who routinely resurrects his old posts every few months to bless us with his wisdom.

by Anonymousreply 8212/09/2012

By now we should have had a triple dip with nuts.

Wait, wait, we're in a Sundae Economy!

by Anonymousreply 8312/10/2012

The slowest, and weakest, "recovery" (which isn't a recovery at all once you look at the numbers) since 1929...but I'm the bad guy?

Not the banks. Not the big corporations. Not the politicians. Me, I'm the bad guy.

Brilliant.

by Anonymousreply 8412/10/2012

Look at this DL thread, where morons accuse me of supporting big biz, big oil, big banks and corporate welfare.

Nothing could be further from the truth.

I just know, as a person smart enough to recognize that once the accumulation of debt reaches parabolic levels it will end in ruin. Spending more than you earn, even if you can do it for 100 years, will eventually cause chaos.

by Anonymousreply 8512/10/2012

[quote]The slowest, and weakest, "recovery" (which isn't a recovery at all once you look at the numbers) since 1929...but I'm the bad guy?

No, just a moron, since a) your proposals would make things worse, and b) the economic recovery after a financial meltdown is always slower than recoveries from normal recessions. The fact that your numbers don't add up, your predictions never come true, and you don't have the foggiest idea what you're talking about is why you get laughed at.

[quote]Not the banks. Not the big corporations. Not the politicians. Me, I'm the bad guy.

And again, no. Obviously, we have to add your inability to comprehend what you read to our list. You're not "the bad guy," since you obviously lack any knowledge or any power. You're simply ignorant.

[quote]Brilliant.

I can pretty much guarantee nobody will ever use that word in referencing you.

by Anonymousreply 8612/10/2012

[quote]Look at this DL thread, where morons accuse me of supporting big biz, big oil, big banks and corporate welfare.

So, let's see... your inability to muster a coherent argument and actually write anything that makes sense is our problem now? Interesting....

[quote]I just know, as a person smart enough to recognize....

And another phrase that I guarantee will never be used about you. Sorry.

[quote]that once the accumulation of debt reaches parabolic levels it will end in ruin.

Let us know when we get there, won't you? Out here in the real world, we're nowhere close to that. And, of course, there's this teensy weensy little problem that your proposed solutions would actually make things worse, so I'm not sure what point you think you're making.

by Anonymousreply 8712/10/2012

Zombi thread resurrected after the election.

Hey, fucks, you LOST!

by Anonymousreply 8812/11/2012

Ah, I knew you were the ignorant cunt on the other thread. You ever respond to actual facts, or just spout off like Krugman?

by Anonymousreply 8912/11/2012

Though lots of people grumble about the government bailing out banks in the financial crisis, we have at least taken some comfort in the idea that the government has turned a profit on that bailout.

Only problem is, that profit comes from taxpayer money -- money that was meant to spur banks to develop communities and help small businesses. Instead they've used it to develop and help themselves.

All told, including dividend, interest and other payments, U.S. banks have repaid the government $211.5 billion under the Capital Purchase Program (CPP), the first phase of the government's Troubled Asset Relief Program (TARP), according to a report Thursday by the Government Accountability Office, a congressional watchdog. That's more than the $204.9 billion the banks initially got under TARP.

$211.5 billion minus $204.9 billion equals profit, right?

But 48 percent of the banks that have repaid the CPP used money they'd gotten from other federal programs, according to the GAO report. Those programs include the Community Development Capital Initiative -- another TARP program -- and the Small Business Lending Fund, a program designed to encourage lending to small businesses. Both of those programs have more favorable borrowing terms for the banks than the original CPP.

This isn't a new issue -- The Wall Street Journal reported last October that banks were repaying TARP funds with cash earmarked for small-business loans, after the Independent Community Bankers of America lobbied for the ability to switch money "from one Treasury program to the other."

by Anonymousreply 9012/11/2012

charlie-

I assume you read these threads.

You do realize that each month the US Federal Reserve buys $85 BILLION of debt from private banks (but just "Primary Dealers" who get a sweet profit from the sale) and that without that "flow" they would collapse?

You do realize that they are selling short dated securities, mostly 1-3 years, to buy this long dated (30 year) debt in order to keep interest rates (artificially) low and that soon they will run out of this short date debt?

You do realize that as soon as these Primary Dealers (because Japan and China ain't buying our bullshit no interest debt) can't sell back to the Federal Reserve (at a nice profit) that interest rates will rise, and rise faster than my dick in front of a naked Joe ManJello and Jon Hamm double dicking Zac Efron right in front of me, and that rise will destroy the bond market?

Do you get that?

R88

Fuck Romney. I'm glad Obama won- at least he can be blamed the death of the US economy. They both sucked dog dick.

by Anonymousreply 9112/11/2012

[quote]Ah, I knew you were the ignorant cunt on the other thread. You ever respond to actual facts, or just spout off like Krugman?

LOL.... I don't know. Were you planning on posting any actual facts? Considering that every single one of your posts here is riddled with inaccuracies, I don't think you'd know a "fact" if it bit you in the ass.

[quote]Though lots of people grumble about the government bailing out banks in the financial crisis, we have at least taken some comfort in the idea that the government has turned a profit on that bailout.

What's missing from that rant are two things:

1. Exactly how much of the money came from other payments? Conveniently missing from your link are the actual details.

2. What difference does it make? In case you hadn't noticed, at the time that the TARP was passed, the economy was in free fall and banks were hemorrhaging. We had already seen one major failure and it damn near brought down the entire financial system.

Of course, I wouldn't expect you to know about, or acknowledge, either point, since you can't even bring yourself to acknowledge that the economy is recovering.

by Anonymousreply 9212/11/2012

[quoteYou do realize that each month the US Federal Reserve buys $85 BILLION of debt from private banks

*Shrug* So? In case it has escaped your notice, the economy still needs stimulus. This is basic Econ 101.

[quote]and that without that "flow" they would collapse?

Not really. Some would be in trouble but most of them would be just fine. In any case, this is nothing new. The only thing different these days is the scale, and that is caused by the severity of the downturn.

[quote]You do realize that they are selling short dated securities, mostly 1-3 years, to buy this long dated (30 year) debt in order to keep interest rates (artificially) low and that soon they will run out of this short date debt?

No, actually, they won't, which is why you can't support that bit of nonsense. And if they did run out, they'd simply change strategy again, just as they've done in the past. This isn't intended to be a long-term plan; it's a short-term stimulus, intended to last for 3-6 months.

[quote]You do realize that as soon as these Primary Dealers (because Japan and China ain't buying our bullshit no interest debt) can't sell back to the Federal Reserve (at a nice profit) that interest rates will rise, ... and that rise will destroy the bond market?

ROFL.... No, actually, the rates won't rise that fast and the bond market will be just fine. Again, you can't support this bit of nonsense, either, which is why these discussions are so much fun. You insist on "serious discussions" and "facts" but don't ever provide anything of the sort. Just mindless, unfocused rantings that you found on some website somewhere. And since you don't know what you're talking about, you can't actually have a "serious discussion" on these points.

[quote]Do you get that?

We do but, sadly, you don't.

[quote]Fuck Romney. I'm glad Obama won- at least he can be blamed the death of the US economy.

LOL... Has it really escaped your notice that none of your predictions ever come true? I mean, seriously... five years you've been predicting this stuff and it's just never happened. Does it really never occur to you to wonder why?

by Anonymousreply 9312/11/2012

R93, you tire me. But just to show how stupid you are, I will quote you.

"No, actually, they won't, which is why you can't support that bit of nonsense."

So, you think there is an infinite supply of short term debt? No, you can't continue to tell creditors "pay me this much today, and I'll pay you this much next week" forever. How ignorant. You really don't understand economics at all, do you?

"And if they did run out, they'd simply change strategy again, just as they've done in the past."

And at what point does this "beggar thy neighbor" strategy begin to fail? And when it does, what does it do to your credit rating? And when you've been financing everything on short term loans, and suddenly your credit rating is shit and the interest rate goes from zero (where it is now, due to the Federal Reserve buying all the bonds) to 2%. Or 5%. Or, more likely, 20%. You're fucked. And what about the people (aka all the insurance companies and retirement funds and pension plans) that are FUCKED because all the US debt they own is worth 10 cents on the dollar?

"This isn't intended to be a long-term plan; it's a short-term stimulus, intended to last for 3-6 months."

Bernanke has said, explicitly and repeatedly, that it will continue until 2015. That's not 3-6 months you sub moron. The fact that it has been going on for 5 fucking years should give you a clue.

by Anonymousreply 9412/11/2012

[quote]You tire me. But just to show how stupid you are, I will quote you.

LOL.... Oh, this should be good.

[quote]So, you think there is an infinite supply of short term debt?

Yup, I was right. These discussions would go ever so much better if you would actually read what you claimed, read what I replied, and then respond. Instead, we get absurd misdirection like this that has nothing to do with the debate we're having. Since I never claimed what you say I did, forgive me if I refuse to play this game.

The Fed is employing a short-term strategy, one that they will have no problem with over the length of time that they are employing it. Hence, your original point was false.

[quote]How ignorant. You really don't understand economics at all, do you?

LOL.... Oh, the irony....

[quote]And at what point does this "beggar thy neighbor" strategy begin to fail?

I dunno. As soon as the Fed starts a "beggar thy neighbor" strategy, I'll let you know. Until then, I'll pass on your little fantasy discussion. The Fed certainly has the tools for what they have in mind.

[quote]And when it does, what does it do to your credit rating?

Nothing, actually. We've been down this road before, moron, quite a few times. As I noted, none of this is new, unusual, or strange. This is still just basic economics, which is why you're struggling so much with it.

[quote]And when you've been financing everything on short term loans, and suddenly your credit rating is shit and the interest rate goes from zero (where it is now, due to the Federal Reserve buying all the bonds) to 2%. Or 5%. Or, more likely, 20%. You're fucked.

LOL... You really don't know anything about economics or history, do you? Sorry, dear, but like your confident predictions of hyperinflation (for the past five years), none of that little fantasy of yours is going to come true. The Fed is going to continue to hold rates low until the economy gets closer to recovery, at which point they will let the rates rise, just as they have done dozens of times in past years.

[quote]And what about the people (aka all the insurance companies and retirement funds and pension plans) that are FUCKED because all the US debt they own is worth 10 cents on the dollar?

Nothing, since that's not going to happen. Any other little fantasies you'd care to share with us?

[quote]Bernanke has said, explicitly and repeatedly, that it will continue until 2015.

Um, no, actually he hasn't, not at that level. If you actually read the news stories of the past few days, what you would have read is that the Fed is engaging in that policy for the next 3-6 months, after which they will re-evaluate. Again, just as they have done many times before.

[quote]That's not 3-6 months you sub moron. The fact that it has been going on for 5 fucking years should give you a clue.

ROFL.... Wow, you really are ignorant, aren't you? The Fed has engaged in various discrete actions over the past five years, all of them for various reasons. It isn't one single five-year policy, just as it isn't today.

You do realize that you posted not one single fact, not one single supporting bit of data, not one shred of logic or reason, right? And that not one word you wrote was accurate or displayed even a basic knowledge of history, finance, or economics? Just checking...

by Anonymousreply 9512/11/2012

It will take the market some time to figure it out, but there were two main parts to the Fed's announcement: the actual breakdown of the $85 billion/month QE4EVA which were priced in as far back as the day QE3 was announced and were not a surprise at all; and the employment and inflation hard-targeting part, the so-called Evans Rule, which is, or at least should be, a shock to the market, only it hasn't quite realized it yet. Why shock? Because starting today, every incremental economic data point that is materially better, brings us closer to an explicit end of Fed intervention. Because at least before the Fed's calendar target was as soft as it gets; now the Fed will have no choice but to terminate its monetization once the unemployment rate plunges (be it entirely due to part-time jobs or 68 year old workers, as has been the case lately). It also means that as the economy continues along an "improving" glideslope, whether real, manufactured or doctored, the market will start pricing in its own "flow"-based demise. Because once the Fed's $85 billion/month in new Flows ends, it's game over.

Indicatively, using a simple forecast, based on LTM trends across all key employment metrics reveals something very troubling, for the Fed and stocks that is: the 6.5% unemployment rate will be breached in July 2013! Now granted that is simply idiotic, and there is no way that the US economy could possibly recover that fast, but that is precisely what is implied based on the ongoing collapse in the Labor Force Participation, and the concurrent plunge in the Labor Force Participation rate, which has been the biggest marginal driver for the unemployment rate, far more than the number of people who have jobs, or are unemployed (readers can recreate our calculation on their own in 10 minutes with excel).

by Anonymousreply 9612/13/2012

Is it really so difficult for you to provide a link, idiot? And why did you stop quoting there? The idiot who wrote that post went on to say:

[quote]Which then brings up the question: will the participation rate mysteriously start soaring beginning with the December data, as mysteriously all those people who had left the work force - supposedly all of the retirees if one listens to the "expert pundits" - start rushing back into the work force?

If you're going to quote somebody, can you at least quote someone who knows what the hell they're talking about instead of quoting some random anonymous nutcase conspiracy theorist?

by Anonymousreply 9712/13/2012

Hall monitor @ R97

Sorry I missed the link. You are the nutcase- this isn't a conspiracy theory, any more than Gulf of Tonkin, or "Fast and Furious". It's just an inconvenient fact for your worship of government power.

by Anonymousreply 9812/14/2012

[quote]You are the nutcase- this isn't a conspiracy theory, any more than Gulf of Tonkin, or "Fast and Furious". It's just an inconvenient fact for your worship of government power.

LOL... Sorry, but it is, in fact, a conspiracy theory, which is why your favorite site can't support it any more than you can. And, of course, it's why you stopped quoting where you did, since you know that that particular sentence revealed just how nutty the guy is you're quoting.

It was a really stupid blog post, one that doesn't even pass the giggle test. And did you notice that the line he drew didn't match the slope of the line that it is supposedly projected from? Does it never occur to you to actually *think* about what you post here before you post it?

by Anonymousreply 9912/14/2012

Why can't they just print the money!

by Anonymousreply 10001/12/2013

Because, dear, that would be stupid. Trying to get the rest of your threads deleted, I see.

by Anonymousreply 10101/12/2013

DEAD THREAD CLOSED.

by Anonymousreply 10201/12/2013

This is just our usual libertarian/anarchist/gold bug/anti-Fed/Ron Paul devotee/conspiracy theorist troll reactivating a lot of his old threads. He does this periodically.

by Anonymousreply 10301/12/2013

Credit expansion is the governments foremost tool in their struggle against the market economy. In their hands it is the magic wand designed to conjure away the scarcity of capital goods, to lower the rate of interest or to abolish it altogether, to finance lavish government spending, to expropriate the capitalists, to contrive everlasting booms, and to make everybody prosperous.

"There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved."

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.

But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

It was this that happened with the Continental currency in America in 1781, with the French mandats territoriaux in 1796, and with the German mark in 1923. It will happen again whenever the same conditions appear. If a thing has to be used as a medium of exchange, public opinion must not believe that the quantity of this thing will increase beyond all bounds. Inflation is a policy that cannot last.

by Anonymousreply 10401/12/2013

18 months later: no recession, no inflation.

by Anonymousreply 10501/12/2013

R105-

The last year is off the mark. The total breakdown resulted in some deflation. Now, heavy inflation will happen.

Go back 10-15 years, and compare the cost of beef, or sugar, or Cars, or education, or gas, or any number of items...then compare them to 2013. The inflation rate is over 10%. Just because computers, TVs, phones and "Boom Boxes" (that you can carry in your pocket) have dropped in cost is misleading.

Computers, iPods, TVs- all of them are created with virtually ZERO government regulation and interference, are WAY cheaper.

Compare that to food, or medicine or cars. All of them are subject to a hundred government agencies. They are far more expensive.

Which one is getting cheaper, and which one is getting ridiculously expensive, so that the poor cannot afford even the basics?

by Anonymousreply 10601/12/2013

R106 - Prices for some things have increased, prices for other things have decreased, overall, inflation has been low, under two percent.

by Anonymousreply 10701/12/2013

R107-

Randomly pick 50 items-

Food, gas, electric, clothing, health care (all HEAVILY REGULATED by the Gov) but ignore anything like TVs, smartphones or cosmetic surgery (which is virtually unregulated)

You will see how the latter has become much more expensive but the former is cheaper.

Inflation is killing us.

by Anonymousreply 10801/13/2013

Inflation has been lower in the last ten years than it was in the previous ten years than it was in the previous ten years.

Natural gas is a good deal cheaper than it was ten years ago. Food and oil have gone up because of worldwide demand is much higher.

by Anonymousreply 10901/13/2013

And here it is years later and it's yet to happen.

And the Euro hasn't collapsed either.

Thank God for Obama's sound economic policies.

by Anonymousreply 11001/13/2013

R108, the rise or fall in prices of a commodity over time is much more complicated than whether the industry is regulated or not. Cost of production, labor, transportation, competition, etc. are all significant and can (and usually do) dwarf regulatory costs. Pull your head out.

by Anonymousreply 11101/13/2013

R108 would rather get poisoned by unregulated food while driving a Chinese made car with no brakes.

by Anonymousreply 11201/13/2013

R112 believes daddy government will always save her, and is too ignorant to see that the market would never tolerate cars without brakes and tainted food would find no buyer, no government needed.

by Anonymousreply 11301/13/2013

You seriously believe that, R113? OMG, my sides!! I can't stop laughing! Particularly at how ignorant you are. You think the market gives a shit about safety at the expense of profits? You think Monsanto cares about how healthy we are? You think natural gas exploration has been great for people in the Midwest whose water supplies have been contaminated? You'd seriously buy or drive a Chinese built automobile? Regulations are put in place to protect dumb people from making bad choices, which ultimately cost society a lot more.

by Anonymousreply 11401/13/2013

T

by Anonymousreply 11501/13/2013
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