Federal Reserve Says It Can Print More Money If the Economy Keeps Sucking

If at first you don't succeed... you probably ought to try something new, not more of the same

Reason 24/7

The Federal Reserve indicated yesterday it will continue its program of bond-buying (quantitative easing), and could in fact ramp it up.

From Bloomberg News:

Facing the risk of a fourth straight summertime slowdown, Federal Reserve officials raised the prospect of increasing the monthly pace of bond buying above $85 billion to guard against any slump in growth or employment.

The Fed's statement yesterday that it's "prepared to increase or reduce the pace of its purchases" was a signal that its $3.32 trillion balance sheet is a flexible tool for monetary policy that can be adjusted up or down, like interest rates. The statement, released in Washington, countered discussion of the timing of a reduction in purchases at the Fed's March meeting.

The Philadelphia Federal Reserve chairman, Charles Plosser, has been a long-time critic of the quantitative easing money printing program, noting that the longer it continues the more difficult it will be to scale it back without disrupting the economy.

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Comments

[Lord Humungus]

…definition of insanity…

[Tony]

Continuing to do what works? Or are you talking about Congress?

[Lord Humungus]

so you have no problem giving more money to rich people? I thought you had principles.

[Sevo]

“I thought you had principles.”

Uh, this is shithead; none of those, and no brains, either.

[Lord Humungus]

oh, I know. He’s just a little sockpuppet fascist.

[Red Rocks Rockin]

You mean keeping the labor force participation rate at 30+ year lows?

[sarcasmic]

But, but, but that’s only because the evil rich are hoarding cash like Scrooge McDuck. If only the government would take that cash away from them and give it to the poor. Then we’ll all be rich!

[Gibsmedat]

Dude, what is wrong with you, the participation rate is in the shitter because all the rich boomers have retired to their private islands.

[Jordan]

And the savings rate.

[Tony]

Yeah, Congress is doing that by refusing to enact meaningful a meaningful legislative program to address that. Which is what Bernanke has been saying over and over. He’s just keeping things afloat while they sit on their asses and pretend the magic market fairy will make things better.

[Lord Humungus]

but I thought you were the champion of democracy.

[Corning]

just a few days ago he said he wanted to abolish the Senate because it was not enough like the House.

Tony is all over the map this week.

[Death Rock and Skull]

What the fuck do you know about anything? Because you just typed a lot of nothing.

[Scruffy Nerfherder]

pretend the magic market fairy will make things better

After they have beaten the fairy into submission

[sarcasmic]

I don’t know why Congress doesn’t simply make it a crime to be unemployed. That would fix everything!

[$park?]

Also, make it a crime to not spend money.

[Sevo]

Oops; beat me to it with your nimble fingers!

[Sevo]

Tony| 5.2.13 @ 12:12PM |#
“Yeah, Congress is doing that by refusing to enact meaningful a meaningful legislative program to address that.”

Right, shithead. They just need to pass a bill making unemployment illegal!
What an idiot!

[Red Rocks Rockin]

Yeah, Congress is doing that by refusing to enact meaningful a meaningful legislative program to address that.

That costs money, and the private sector isn’t making any right now that doesn’t have its origins in Bernanke’s magic printing press. Every single bit of “growth” in the GDP is due to deficit spending right now.

Which is what Bernanke has been saying over and over.

No, Bernanke has admitted that there’s NO spending cut that we would endorse in the short term because it would be depressive to GDP. Even he’s owning up to the fact that our economy’s built on a foundation of sand.

He’s just keeping things afloat while they sit on their asses and pretend the magic market fairy will make things better.

Without a strong private sector, the public sector is worthless.

[Scruffy Nerfherder]

Without a strong private sector, the public sector is worthless.

Fixed that for you.

[Red Rocks Rockin]

On a smaller scale, people tend to be pretty satisfied with their local governments, but that’s because they see more tangible benefits–ROADZ, libraries, parks, whether neighborhoods are reasonably safe, etc.

I realize Libertopia would have private sector versions of these things, but realistically that’s not going to happen. But it isn’t unrealistic that a low-scaled public sector can play a role in sustaining a stable community.

[Tony]

Without a strong public sector, the private sector is worthless. Unless you think bartering seashells and fending off rape gangs is your idea of a robust private sector.

There’s plenty of private money, trillions of dollars worth, sitting in tax havens. Yeah if we go by Republicans’ preference and soak the film off the poor while ignoring that, we won’t get anywhere.

[Scruffy Nerfherder]

Without a strong public sector, the private sector is worthless.

How did we ever survive without bureaucrats?

[Lord Humungus]

damn tax havens, stealing from the people!

Kulaks! Hoarders!

[Red Rocks Rockin]

Without a strong public sector, the private sector is worthless.

Wrong–this ain’t a chicken-or-egg concept here.

There’s plenty of private money, trillions of dollars worth, sitting in tax havens.

You really should listen to yourself. Maybe if the government wasn’t so dysfunctional and so grossly out of scale, people would be less willing to sock it away in those havens.

As I mentioned above, plenty of people in this country are satisfied with their local governments, and think the federal government sucks ass. Your big solution is, instead of taking a clue that the government needs to be de-scaled to a level that is more sustainable and less complex, is to simply keep increasing the already-over-burdened infrastructure further. Ask the Romans how that turned out.

Your obsession with ever-complex managerial systems is precisely why advanced societies eventually collapse.

[Tony]

People will save whatever money they can by whatever means are legal and available. I thought you people treated humans as economically rational beings.

Plenty of people hate the federal government but can’t think of hardly anything they want it to stop doing.

[Red Rocks Rockin]

People will save whatever money they can by whatever means are legal and available. I thought you people treated humans as economically rational beings.

Economic rationality isn’t limited to the “save/spend” dynamic.

Plenty of people hate the federal government but can’t think of hardly anything they want it to stop doing

I can think of plenty of things. Then maybe the federal government will be able to go back to only costing about $4500 a year per capita, inflation-adjusted, instead of $12,000 like it does now.

There’s consequences to scale. You just don’t think they should apply to everyone.

[Anonymous Coward]

Congress is doing that by refusing to enact meaningful a meaningful legislative program to address that.

Would you care to be a little more vague? I almost interpreted actual thought from that sentence.

[Corning]

He means Obama’s budget which didn’t even pass the democrat controlled Senate….but yeah he wants to blame House republicans for that.

[CatoTheElder]

Hair of the dog that bit ya.

[fish]

QE:To Infinity and Beyond!

/buzz lightyear

[Aresen]

Buzz Lightyear has a much firmer grasp of reality than the Fed.

[LTC(ret) John]

The Economy is mine!

/Zurg

[Ken Shultz]

They’ll keep going until it blows up in their faces.

Just like the people who were buying mortgage backed securities.

[An0nB0t]

The idea is that when they watch it blow up in their faces, they will be sunning themselves on a beach in retirement, while their will be the luckless next administration. From what I can tell, that’s the whole point of electoral politics: strip mine the economy in the hopes that you can nurse it through your term, then to hell with it.

Murphy’s Law and all, I fully expect Rand to win the 2016 election and then have the economy completely blow up on Day 1 thanks to the trickle-down effect of tripling M0 and Obama’s general incompetence as a human being. How perverse that I’m hoping the economy melts down in the next three years so that Obama gets the blame rather than whatever luckless sap follows him into office.

[Rasilio]

“They’ll keep going until it blows up in their faces.”

So they’re like a cheerleader on prom night?

[Live Free or Diet]

No, the guy the cheerleader is quantitatively easing is enjoying the inflationary effects.

[WTF]

We are so fucking doomed.

[sarcasmic]

Yup.
If there is anything to be learned from history it is that nothing is learned from history.

[The Late P Brooks]

The Philadelphia Federal Reserve chairman, Charles Plosser, has been a long-time critic of the quantitative easing money printing program, noting that the longer it continues the more difficult it will be to scale it back without disrupting the economy.

Fucking WINGNUT CHRISTFAGZ!!

[The Late P Brooks]

Those fucking dummies at Bloomberg would like you to think the entire country would look like dustbowl Oklahoma (with roving gangs of cannibals!) if it weren’t for Bennay PBUH!.

[UnCivilServant]

Are we allowed to shoot the roving cannibal gangs? I think in their version, you’d also have to face it unarmed.

[T]

So America started in cannibalism and it’ll end in cannibalism? Seems fitting.

[Auric Demonocles]

How much more money is in circulation than it was before the recession started?

[some guy]

Doesn’t that depend on how you define “circulation”?

[John Galt]

Money Supply- M0 M1 and M2?

[robc]

They all are.

M2 is the best available measure, for terms of stuff like measuring inflation.

Monetary Base is best for measuring QE.

[CatoTheElder]

Here’s the monetary base:

http://research.stlouisfed.org/fred2/series/BASE

2000 – $500 B
2008 – $800 B
Latest – $3000 B

Here’s M1:

http://research.stlouisfed.org/fred2/series/M1SL

2000 – $1100 B
2008 – $1300 B
Latest – $2400 B

The huge growth in the monetary base has the potential of sparking much more rapid M1 growth in the future unless the Fed winds it down. Of course, the Fed can’t wind it down without Volcker style interest rate increases, which would wreck havoc in GDP and government deficits.

[robc]

Yep. This is why I predicted a dodecadip recession back in 2008 lasting until at least 2020.

I look more at M2, but same thing applies as your M1. If the economy picks up, the velocity of money picks up and all that extra M0 becomes huge inflation, which kills the economy which etc etc etc.

We are Japan.

[some guy]

I think Nouriel Roubini just predicted pretty much the same thing today.

[robc]

I did it in 2008 when they were debating TARP. If it passed…blah blah blah, was my prediction. He is running slow.

[some guy]

But he also has an international forum, whereas you have… H&R. He may be running slow, but he’s running big. Not that anyone who matters will listen to him.

[Houkt Un Fanixs]

Looking forward to 30 yr old chicks who live with their mothers and old ladies working at McDonalds. Being Japan is gonna be so awesome…

[CatoTheElder]

I prefer the old M3, but the Fed is too embarrassed to compute it.

[Sevo]

There’s another one now; M0.5?
Its the amount that Ben is paying the banks to keep as reserve.

[Corning]

Yeah the government borrows money from itself to pay of its debt too itself that it borrowed from itself to pay off the debt it owed to itself…

What is insane is that this somehow tricks all the banks of the world into thinking interest rates are low.

[sarcasmic]

The value of money is subjective. So doubling the amount in circulation doesn’t necessarily half its purchasing power.
That’s why when hyperinflation sets in, it can’t be stopped as it spirals much faster than the amount of money being printed, since most of the damage has already been done.

[some guy]

Wasn’t Shrike in here last week displaying his schadenfreude as the dollar rose 10% against gold and claiming that he was going to enjoy watching it rise even further? Has anyone seen him since?

[Torontonian]

Currency in Circulation has grown around 45% to $1178 billion.

However, the Monetary Base has grown more than 350% to nearly $3 trillion.

[Auric Demonocles]

Daaaaamn.

[robc]

Ive been posting that M0 graph for years now. Very few people grasp it.

It freakin scared me the first time I saw it and most people just dont see the problem.

[CatoTheElder]

An even spookier chart is excess reserves:

http://research.stlouisfed.org…..s/EXCRESNS

1960 -0-
1970 -0-
1980 -0-
1990 -0-
2000 -0-
2008 $800 B
Latest $1600 B

[Torontonian]

Excess reserves are the portion of the deposits that banks (e.g. Wells Fargo) have at the Fed (e.g. Federal Reserve Bank of San Francisco) over and above the minimum reserve requirement (~10% of Wells Fargo’s customers deposits).

Up until 2008, the Fed paid 0% on reserve deposits. So banks sensibly kept the bare minimum on reserve at the Fed.

In Oct 2008, the Fed started paying 0.25% on reserves. The chart tells the rest of the story.

[CatoTheElder]

It also explains why the growth in the Fed’s balance sheet has not caused much inflation … yet.

[gaijin]

I wonder how much of the increase in Monetary Base can be found in the increase in stock market value (as measured by the holy trinity of DOW, S&P, NASDAQ)?

[some guy]

I think it’s even scarier when you plot the ratio M1/MB. It’s under 1. So a lot of money is sitting at the Fed… doing what exactly?

[CatoTheElder]

M1 Money multiplier

http://research.stlouisfed.org/fred2/series/MULT

1990 2.7
2000 1.7
2007 1.6
2008 1.0
latest 0.8

Friedman was right about a lot of things, but he was dead wrong in asserting that monetary velocity is stable in the long term.

[Ruckus]

What is M0?

This is how I understand it:

M1 is money that is liquid; ie cash and checking deposits.

M2 is M1 + savings, CDs, other cashed based savings assets.

Is M0 just M2 + bank reserves?

[robc]

M0 is notes and coins in circulation (outside Fed Reserve Banks and vaults of depository institutions)

MB (base) is M0 + vault cash + Fed Reserve credit

M1 is M0 + travelers checks + demand deposits + other checkable deposits

M2 is M1 + savings deposit + money market accts

[Ruckus]

Thanks.

I had M0 and MB confused a little in my head.

[robc]

I may have got some of that kinda wrong, here is form wikipedia how they are defined in the US:

M0: The total of all physical currency including coinage. M0 = Federal Reserve Notes + US Notes + Coins. It is not relevant whether the currency is held inside or outside of the private banking system as reserves.
MB: The total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed). MB = Coins + US Notes + Federal Reserve Notes + Federal Reserve Deposits
M1: The total amount of M0 (cash/coin) outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits
M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).

[CatoTheElder]

MB includes both vault cash and cash in circulation.

[BakedPenguin]

The monetary base has more than tripled under the Big 0.

[John Galt]

In the good ole days “Big O” was the pet name the ladies gave to their elusive sought after orgasm.

[Auric Demonocles]

For a lot of liberals those terms mean the same thing.

[BakedPenguin]

Agreed. I actually used a zero to avoid having any positive connotations whatsoever.

[John Galt]

There was another politician once whose followers entwined their sexual feelings with their worship of him.

[Archduke Pantsfan]

Bubba?

[LTC(ret) John]

Huey Long?

“…all the ladies was fish, and I was the King Fish”.

[AlexInCT]

Taste like chicken?

[LTC(ret) John]

Yeeeeah.

/Oscar Robertson

[Jordan]

Someday, our descendants will look back on Keynesian and Monetarist clowns the way we look back on Medieval physicians. This is absolute madness.

[Tony]

You mean the way Austrians are currently seen?

[sarcasmic]

You can lead a Tony to knowledge, but you can’t make it learn.

[CatoTheElder]

The Keynesian and Monetarist clowns said the economy was in a Great Moderation, that Greenspan was the Maestro, and that the US could never suffer a systemic collapse of housing prices. The Keynesian and many Monetarist clowns predict that the Fed will maintain price stability, and that it can moderate any adverse effect of QE.

The Austrians predicted the 2000 stock market collapse, the 2007 housing market collapse, the 2008 mortgage market collapse, and the resulting recessions. Of course, the Austrians now predict price inflation will be the consequence of monetary inflation, but that has not happened. Many Monetarist clowns are concerned about the potential of inflation following the rapid expansion of the Fed’s balance sheet.

Obviously, the Keynesian clowns are right.

[Red Rocks Rockin]

You mean you still can’t do basic math?

[John Galt]

A pessimist would say: “Someday, our descendants will be living in the ruins of our civilization and will have no idea had it not been for the Keynesian and Monetarist clowns their world could have been a wonderful and prosperous one.”

And a Tony would say: “Herp-derp.”

[Live Free or Diet]

Someday, our descendants will look back on Keynesian and Monetarist clowns the way we look back on Medieval physicians.

By the time the Keynesians and Monetarists are finished, our descendants are liable to look back on them are say, “Burn magic pictures outside cave mouth!”

[John Galt]

If they keep printing more money there’s no doubt the economy will keep sucking.

[An0nB0t]

Mr. Galt seems to be suffering from a bad case of insufficient demand.

The cure to Mr. Galt’s woefully deficient animal spirits, of course, is to give more cash to Bank of America.

[John Galt]

NEEDZ MOAR ANERMAL SPIRUTS!

[Death Rock and Skull]

I only buy artisanal animal spirits of endangered species. My monocle is made of ivory.

[UnCivilServant]

So is it a monocle for a blind eye, or are you simply rich enough that you don’t need to see out of that eye?

[Death Rock and Skull]

Well, the frame is made of ivory. The lens is made from the retinas of my enemies.

[UnCivilServant]

Ooo shiny and reflective. You still can’t see a thing through it. Unless you meant corneas or some other part of the eye where the light normally passes through.

[generic Brand]

Fuck you, cut spending

[sarcasmic]

When will people learn that money is not wealth, and that creating money does not create wealth?

Never?

[robc]

Didnt the spanish learn that back when they were shipping gold and silver from the new world home?

Or maybe they didnt.

[Sevo]

“Or maybe they didnt.”

I think this.

[Live Free or Diet]

I would put that as, “Didn’t we learn that from back when the Spanish were shipping gold and silver home from the New World?”

The Spanish (27% unemployment rate) didn’t learn a thing.

[Bardas Phocas]

They have windmills! [rusting on the plain in Spain]

[Lord Humungus]

commence tilting.

[Archduke Pantsfan]

ask the Inca.

[Matrix]

they may never understand. A million dollars today is a lot (relatively), but not a whole lot. A million dollars 100 years ago, and you were almost like an emperor. They are destroying wealth with money. Idiot progs assume the rich are like Scrooge McDuck, with giant money bins that they can jump into and swim around in. No, most of their wealth is not in actual cash, but assets.

[sarcasmic]

Inflation benefits debtors, since the money used to pay off the debt is worth less than the money that was borrowed. Especially when interest rates are kept artificially low.

What is the biggest debtor in the world? The government.

[LTC(ret) John]

Specifically the US government. Ugh.

[some guy]

Debtors only benefit if they can keep a job with pay raises that match inflation. What’s the true unemployment again? It’s going to suck when all this printed money finally makes it out in the open.

[Red Rocks Rockin]

Right, and those assets are of a value that’s completely arbitrary. It may not even necessarily be what the market says it should be.

[Houkt Un Fanixs]

Ducktales still paying dividends from my childhood:

http://www.youtube.com/watch?v=z1OUQYdR9Hc

[The Late P Brooks]

The Federal Reserve indicated yesterday it will continue its program of bond-buying (quantitative easing), and could in fact ramp it up.

And the Mortgage Bankers Association weep with gratitude.

[An0nB0t]

I’m considering quitting my job to paint big red squares on canvas and then selling them to NYC bankers who’re flush with legal counterfeit. Big red squares are what rich people with taste buy, right?

[$park?]

Big red squares or blue lines.

[Hugh Akston]

By all means, print more. I’ve tried other brands, but none of them has the huggably-soft absorbancy of a stack of Thomas Jeffersons.

[John Galt]

That’s what she Richie Rich said.

[Hyperion]

It’s all good, because inflation is an evil lie made up by Rethuglicans.

[Somalian Road Corporation]

I have several $100 trillion Zimbabwe dollar bills that I like to use as bookmarks so that when I (all too frequently) run into somebody who is unable to understand that running the currency printing presses nonstop can have consequences, I can whip one out as a visual aid.

I still get a lot of denial (which is painfully silly to me in this age when the person I’m talking to probably has a smartphone that can access the Internet and verify my claim anywhere in cell range) but it actually makes a few stop and think.

[An0nB0t]

I do the same thing (minus the proselytizing–more gold or silver for me) with a pile of $100T Zimbabwes I bought off ebay. Up until this moment, I thought I was being witty and unique.

[Fatty Bolger]

We need to raise taxes on you filthy trillionaires.

[Ruckus]

I almost bought a half dozen or so assorted Zimbabwes notes, of different face value, at Christmas time. I was going to frame/display a few at work, and give the rest out as Christmas presents to people who I know could use the eye opener.

[sarcasmic]

Whenever I’ve tried to explain to a libtard that money is not wealth, their response is invariably something like “Well why don’t you give me all your money if it’s not wealth?”

You can lead a libtard to knowledge, but you can’t make it learn.

[BakedPenguin]

Get some of those Zim $100T notes and ask them if they’d sell their car for $100 trillion.

I wonder if the Zimbabwean government was smart enough to hold some of those notes to sell to foreigners as novelties.

[Red Rocks Rockin]

I saw a bunch in an antique shop in Gruene, Texas a couple years ago. I wanted to buy a few but I was too cheap to actually drop $10 for a couple $1 trillion bills, if you can believe that.

[John Galt]

Here in the USA where the possession of ten thousand plus dollars cash is a crime there’s little use for trillion dollar bills.

[Hyperion]

Not sure if this has been covered here, didn’t see it, but this is what I would call a disaster waiting to happen:

Turn in those pesky neighbors, nothing could possibly go wrong

[LTC(ret) John]

“He said he met with Bradshaw about the program and “got assurances from the sheriff that this is going to be done in a way that respects people’s autonomy and privacy, and that he makes sure to protect against people making false claims.””

HAHAHAHAHAHAHA! Really?

[John Galt]

But this is different. Last time they violated the citizenry’s natural rights en masse it was for the children. This time it’s for the public’s safety. Surely the end result won’t be nearly as horrible.

[John Galt]

Scary stuff.

[The Late P Brooks]

I have several $100 trillion Zimbabwe dollar bills

That could never happen here; this is America, you wingnut!

[Archduke Pantsfan]

drink!

[Scruffy Nerfherder]

Wait, I thought we were turning into Somalia.

[UnCivilServant]

Better – a dystopic hybrid.

[The Late P Brooks]

Big red squares are what rich people with taste buy, right?

You could also do silkscreen images of Campbell’s Soup cans. They seem to like those, too.

[DJF]

The printing presses are at Ridiculous Speed now, but Ludicrous Speed is still available.

[$park?]

Will the money be plaid?

[John Galt]

Plaid money could help encourage Scotch thriftiness.

[Jordan]

Do they go up to 11?

[UnCivilServant]

But then wouldn’t the money come out plaid?

[UnCivilServant]

🙁 Symbolman beat me to the joke.

[The Late P Brooks]

their response is invariably something like “Well why don’t you give me all your money if it’s not wealth?”

[The Late P Brooks]

Gack

their response is invariably something like “Well why don’t you give me all your money if it’s not wealth?”

Try drawing dollar signs on squares of toilet paper. Just be sure to mumble something about “full faith and credit”.

[Archduke Pantsfan]

tell them that money is like having stock options in a company that’s sinking

[sarcasmic]

But those pieces of paper didn’t come from government so they’re not magic.

Government paper is magic. It is wealth and value all in one!

[$park?]

Who would have thought that giving a bunch of power seeking scumbags the power they seek would ever come to this?

[John Galt]

Thomas Jefferson?

[Death Rock and Skull]

Fuck shrike.

[mad libertarian guy]

If only we ease harder, it’ll work this time!

[Fatty Bolger]

Coming Soon:
Quantitative Easing 5: Ease Harder Starring Ben Bernanke as Helicopter Ben.

[The Late P Brooks]

Of course, the Fed can’t wind it down without Volcker style interest rate increases, which would wreck havoc in GDP and government deficits.

Let’s not forget the enormous capital losses in the Fed’s portfolio; what’s a ten year Treasury which pays 1.67% going to be worth when rates return to historical average?

But let’s all pretend everything is going according to plan. Tinkerbell will be fine, children, just don’t stop clapping.

[robc]

Tinkerbell will be fine, children, just don’t stop clapping.

I can see a great twist on this to be performed in front of an audience of small children.

Tinkerbell comes back to life due to the children clapping. But she only stays alive as long as they continue clapping.

[robc]

Keep clapping or YOU will kill Tinkerbell.

[UnCivilServant]

We need to autopsy such a bizarre creature FOR SCIENCE! so, I refuse to clap.

[Torontonian]

“…what’s a ten year Treasury which pays 1.67% going to be worth when rates return to historical average?

For each $100 of face value, a 10 year, 1.67% coupon bond will be worth:

$100.00 @ 1.67% interest (obviously)
$97.04 @ 2.0%
$92.74 @ 2.5%
$88.65 @ 3.0%
$84.78 @ 3.5%
$81.10 @ 4.0%
$77.61 @ 4.5%
$74.29 @ 5.0%
$71.13 @ 5.5%
$68.13 @ 6.0%

I knew the money I spent on this financial calculator would eventually be well spent.

[CatoTheElder]

Who says the Fed has to mark-to-market?

[The Late P Brooks]

Keep clapping or YOU will kill Tinkerbell.

THIS IS WHAT TONY ACTUALLY BELIEVES.

Get to work, you murderers.

[John Galt]

Poor Tony, he’s been having a very difficult time since his unicorn fell ill.

[#HOLO YOLO]

This ad was on here yesterday.

All 8 of them?

[OldMexican]

Re: Tony,

Continuing to do what works [printing money]? Or are you talking about Congress?

You really don’t understand economics at all, do you Tony?

Who gets the new money first? The banks. The government.
Who gets dibs on products and services while prices are still low? Government. The Wall Street rich. Banks.

Who gets the new money LAST? Workers. Suckers.
Who gets to pay inflated prices as demand for goods and services goes artificially high? Workers. Suckers.

So NO, what the Fed and Bernanke are doing is NOT working. It is making their buddies at Wall Street richer, that’s for sure. It’s helping the government to continue being profligate, that’s for sure. But it is NOT helping the ecomomy.

But thank you for showing yourself as the unprincipled fool you really are.

[Scruffy Nerfherder]

You’re speaking German to a French monkey. Give up.

[Pro Libertate]

And taxes are increasing on the poor–more payroll deductions, higher cigarette taxes, possible sales taxes for all on-line and catalog sales, etc., etc. Not to mention an inflationary economy, unsustainable spending, and, through massive deficits, financially damaging people’s future income and savings.

[The Late P Brooks]

I knew the money I spent on this financial calculator would eventually be well spent.

Nice work.

If somebody put a gun to my head, I *might* be able to remember how to use a “present/future value of a dollar” table.

[OldMexican]

The Philadelphia Federal Reserve chairman, Charles Plosser, has been a long-time critic of the quantitative easing money printing program, noting that the longer it continues the more difficult it will be to scale it back without disrupting the economy.

No shit. The problem is that the Fed’s policies have been postponing the recession under the impression that avoiding the recession is the goal, when in fact the recession is the necessary cure to liquidate bad debt and malinvestments. Instead, postponing the (inevitable) correction will only make the size of it much greater than it needed to be.

Besides this, Mr. Plosser is being naive by believing that the size of the stimulus can be scaled back in a fashion that will NOT disrupt the economy. It’s too late for that! People (investors, consumers, etc.) have grown accustomed to the stimulus so much that ANY news that it could be scaled back will produce a panic among the economics illiterate, the nervous and those that did not provide themselves with savings.

The Fed has dug itself into a big hole without rope or ladder. Unfortunately, we’re right there holding the bucket.

[Matrix]

It’s like an alcoholic that keeps drinking to avoid a hangover. The CURE is not more alcohol. It is letting the alcohol flush out of your system.

So the answer is not more government spending and more printing money… it is allowing the system to fix itself.

Avoiding the hangover by drinking more will lead to death.

[Tony]

Faulty analogy, of course. It’s best not to make analogies when talking about macroeconomics.

[Matrix]

It’s best that you just not talk at all, because the only thing that spews forth from your mouth is bullshit

[Cytotoxic]

Truly it is best to have total faith in the Top Men that got us in this mess.

[CatoTheElder]

But your gurus use all sorts of analogies. Keynes’ explanations for economic behavior involved “animal spirits” and beauty contests. His disciples incessantly speak of “pump-priming”. And their favorite model for QE relies on baby-sitting coupons.

[Warty]

“Turn those machines back on! Turn those machines back on!”