Comments on: Quantitative easing has begun Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Peter L. Griffiths Fri, 06 Nov 2009 16:22:09 +0000 Quantitative easing whereby newly printed notes are handed over to banks in the expectation that bank lending will be revived does nothing to solve the main problem of banking namely defaulting borrowers. The fiscal solution to defaulting borrowers involves giving an annual $1500 housing benefit to all United States citizens in reduction of their toxic bank overdrafts where appropriate, these toxic debts will then cease to be toxic.

By: Donal Jackson Sat, 25 Apr 2009 11:25:18 +0000 How far are the FED prepared to go with the value of the Dollar? Have they any contingency plan if there is a sale on the Dollar? What do they determine to be long enough at this ploy and how long will the pullback period be. Are they going to indicate when this will start? They have to outline the precautions.

By: lucivaldo Sat, 11 Apr 2009 03:01:03 +0000 So let me get this straight…using credit card to pay up another credit card is insanity, but borrowing more money to pay up for the excess of printed money which caused inflation is an asnwer? I am so confused that i don’t even know where to go to clear my mind anymore. The fed, the central banks, and all its staff members are already free people because they have the power to decide to make money out of nothing, but we don’t? I think that’s a double standard. It’s like, canadian or american soldiers can go to war and kill innocent people and not be condemned for it, but if they kill an innocent person or a lying devious politician, banker, economist one gets the maximum sentence, lmfao!!! This is just hilarious

By: John Peasnall Fri, 20 Feb 2009 21:39:23 +0000 If my memory serves me correctly the words ‘resort to’ and ‘printing money’ have an historic liaison somewhere in thirties Germany.

By: rbblum Sun, 11 Jan 2009 04:52:48 +0000 I’m confused.

The whole issue of quantitative easing appears to be nothing other than inflating the money supply as well as manipulating the manner in which finanancial/monetary accounting is presented by the Feds and the Central Banking system . . . all for the sake of putting Humpty Dumpty (the former US economic lifestyle)
back together again; the way it was before deleveraging appeared within the global economy.

Observation and commentaries reflect quantitative easing in Japan did not jubilantly yield the desired outcome. But it could be argued the strategy did work in the manner it was designed . . . resulting in the large economic component of Japanese end users, the masses, continuing their customary frugal way of life . . . being ‘savers’, not spenders.

Understandably, the anxious, opinionated jury is not even close in accurately determining whether quantitative easing will provide a desirable end result in the US because the strategy is just beginning to being implemented. But the projected outcome could be successful – assuming, of course, the desired outcome is having the abundant supply of newly created monies being efficiently and effectively channeled to the large economic component of American end users, the masses, going back to their habitual lifestyle of spending for immediate gratification and committing to long term debt with a fair number of bankruptcy filings.

What a huge bet our financial power players are making by implementing such a game plan strategy; for not only is the outcome dependent upon the path of newly printed money, from beginning to end, they (the financial power players) will be hampered to affectively control the end result of implementing quantitative easing due to the inevitable, usually counterproductive wild card being injected along the way by the unmeasureable participation of the political class..

Maybe I’m not so confused after all . . . not only is change inevitable, life IS a gamble.

By: Ralph Musgrave Sat, 20 Dec 2008 16:49:42 +0000 Several commentators below make the over-simple assumption that printing money necessarily results in inflation. First, the evidence: Japan engaged in quantitative easing with printed money, and big time. Result? Practically nothing. No effect on inflation and no effect on anything else. Second, the theory.

One theoretical reason why Q.E. has little effect is that securities are viewed by their owners as savings (i.e. stuff they have no intention of spending). If government induces savers to convert part of their savings from securities to cash, the cash will not get spent: it will get dumped in a deposit account. Indeed, a proportion of Japanese security owners ran out and bought foreign securities when their own (Japanese) securities were converted to cash.

Q.E. seems justifiable if its purpose is to relieve banks of enough of their toxic assets to prevent a banking collapse. As to using Q.E. to drive down long term interest rates, this seems questionable. We all know that if governments’ attempts to rectify the recession result in excess inflation in two years time, governments will take a variety of deflationary measures, like RAISING interest rates. If I were offered a variable rate mortgage starting at around 0%, I wouldn’t run out and buy a mansion. And if I were a banker, I wouldn’t offer anyone a loan for 10 years at 0%.

By: Jonness Sat, 20 Dec 2008 01:55:39 +0000 How about letting the wildly inflated asset prices correct to historical levels of affordability before we prime the pump? Along the way, let the banks with good business models take the place of those with bad.

Bernanke spent his entire life studying books on how to prevent deflation. He lived in a splendid fantasy land and was validated beyond belief for his efforts. But when it came to real life, he proved that he hasn’t a clue on how to prevent deflation.

Internet bloggers without a formal education in economics had been screaming for years that we were headed for a massive housing correction accompanied by economic contraction. Meanwhile, Bernanke was confidently stating we didn’t have anything to be concerned about. Now that it’s too late to provide any real preventative measures, Bernanke is treating the symptoms instead of the cause. But the rat sheep just close their eyes and say, “he’s an expert, let him be.” IMO, to be an expert on something, you have to have “real life” experience. Reading books and writing papers reciting historical events is meaningless when it comes to acting in the real world. Einstein correctly pointed out that “imagination is more important than knowledge.”

Bernanke has a great deal of knowledge, and very little imagination. So what good is he?

By: Al Gallant Mon, 15 Dec 2008 22:39:47 +0000 Quantitive Easying is a term that distorts the truth.
Inflation = Money Supply. The higher the inflation, the less our money is worth.

How in the world, can we solve the problems of inflation (the increase in the supply of money) with more inflation? The “Fed” wants to print more money, because more money means more loans. More loans means more interest. More interest causes us to borrower more money to repay the existing loans. It is a game of monopoly and we(tax payers) are losing! Under the Federal Reserve System, perpetual debt is garunteed! Give the issuing power back to congress where it rightfully belongs!

By: JC Sat, 13 Dec 2008 00:48:03 +0000 Whatever. Theory is theory and practice is practice. Greenspan, with his blind belief in Ayn Randian nonsense, created this crisis. Bernanke, with his academic theoretical nonsense, is going to drive this down much farther.

I ask two basic questions: (1) Who would the banks lend to? and (2) What will be the money used for, i.e., to what productive means?

If we can’t answer these two questions, no amount money would ease the problem. On the other hand, it may lead to hyperinflation and treasury might need to print new $100 Billion dollar currency notes like Zimbabwe.

By: david moore Tue, 02 Dec 2008 20:05:41 +0000 They will replace a deflationary depression with an inflationary depression. If I was out of work I would rather have prices going down. If they are “successful” the next down turn will be harder. With our current political and monetary system there is no way the real economy can escape a down turn with a normal market correction. The Fed and the government created the problem with easy money and loose lending. Can they escape doing the same thing?