Thursday, Sep 23, 2010
Things are different this time *LOL*! QE3, 4, 5 anyone?
Bloomberg: Central Banks Have Tough Time Finding Exit as Recovery Weakens
The world’s major central banks are having a tough time exiting crisis mode, prolonging aid or raising the prospect of reviving unconventional stimulus tools as the global recovery loses momentum.
Posted by estrader @ 08:15 AM (685 views) Add Comment
11 Comments
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1. hpwatcher said...
The problem the banks have - and this is true of the western economies generally - is that they have lots of money, but very little wealth.
2. Crunchy said...
"Things are different this time *LOL*! QE3, 4, 5 anyone?"
After QE2 the others will be covert.
Whenever we see a spike in the gold and silver price, we will know where the banks have parked it.
All in the taxpayers interest of course.
3. techieman said...
ok so we have backed red. it won! great.. ok now we have played some other numbers, sh1t they lost.
Right i know back to playing red.. but we will start with a bit less, first spin black.. no prob lets double up.... next spin black ... no problem lets double up again... black again ...sh1t.... and so on... until 12th consecutive black spin.... right well history tells us you never get 13 consecutive spins of the same colour.
BLACK!!!! - wtf, ok lets double up again - "sorry sir you have reached the casino limit".......
4. Taffy62 said...
Has it occured to them they are ALL doing the wrong thing?
QE .... WTF is that. Moving financial assets from one account to another. It is doing next to nothing. Banks aren't constrained by lack of reserves they can lend to anybody they think can afford the payments.
They have invented a mythical problem called public debt. How can you be in debt when you can issue your own currency? Ask Argentina.
Tax more and spend less.... Great idea, that will build confidence and increase economic activity....NOT
Too many people have a misguided belief the free market solution is the only solution. Couple that with a one eyed addiction to inflation control. Don't even talk about big government and global elite myths. We are in a pickle aren't we.
If a child was taught how the monetary system really works. They would quickly realise the government needs to start spending. Fast and big. It's going to take a long time for the brainwashed adults to figure this one out. Believe me or not .... Inflation will not be a problem as people save excess income.
I'm not even a fecking economist and I can figure this out. It's even in the history books. Government back to work schemes ended the great depression. It wasn't a dreamworld of confidence inspired by tax cuts. Btw. The war came later.
5. techieman said...
Taffy havent we already spent fast and big? So its faster and bigger? Spending is ok to do exactly what you have said IF during the boom times you put something aside for that rainy day. You have to have something underpining the economic activity. We already have the loosest monetary policy ever, you now want the loosest fiscal policy too?
In your world we would just be mortgaging the mythical childs future inperpetuity. So whenever there is a contraction you advocate budget deficit spending and whenever there is an expansion you advocate spending all of that wealth also? When we lose our jobs (productive wealth) do we not have a responsibility to cut back? or should we just go to the bank and say look i know i have lost my job but to keep the economy running i need to borrow exactly what i was paid before so i can still buy the things i bought before? Of course i can do that - without recourse to the bank - if during the boom time i put something aside for a rainy day. We - as a country didnt because Gordy had abolished boom bust right? yeah right!
6. estrader said...
"Taffy havent we already spent fast and big?"
Obviously not Techie. I think Taffy wants the Government to print another £1 or 2 trillion, after all, it's the U.K's money isn't it!? I say, print £100 trillion, trillion, trillion, trillion....trillion (just to be sure) and give everyone in the U.K £1 million each, problem solved... Nobody will ever have to work again AND we will be out of recession! This printing stuff, brilliant!
7. techieman said...
"I say, print £100 trillion, trillion, trillion, trillion....trillion (just to be sure) and give everyone in the U.K £1 million each, problem solved... Nobody will ever have to work again AND we will be out of recession! "
EST : As i said above at some point (and maybe we are already there?) it will be "sorry sir you have reached the casino limit".......
Generally there are 2 schools of thought re the FDR new deal - either you agree with Taffy OR you say yes it did work but because all of the pain had already been endured. It worked because of where we were at that time. That is why it hasnt sustained a prolonged recovery now, because we have not had the deleveraging needed so that the economy can be lean and mean and respond to any stimulus with the confidence required. At the end of the day its just cycles - and no thats not meant to sound uncaring its just what it is. Of course Taffy and everyone else has the right to express and think the former.
its a bit like either feeding someone who is ready to work is all muscle and sinew but is about to be malnourished, against feeding someone who is obese but has lost half a stone. I am not against stimulus or the welfare state per se, its just we need to lose some weight before such a stimulus will do any long term good. Otherwise we just become more and more obese.
8. estrader said...
Techie, there is only one thing I hope for after all this and it is that Keynesian economics is relegated to the dustbin, where it belongs!
9. techieman said...
EST - i think you mean the bastardisation of the Keynesian economics :). if you have time and want to steve keens excellent book debunking economics tells it how it is imo. mind you its not the easiest thing to read!
Good luck in the markets mate.
10. techieman said...
EST - if you have chance have a look at this : http://www.bearishnews.com/post/2730
11. Taffy62 said...
estrader
"I say, print £100 trillion, trillion, trillion, trillion....trillion (just to be sure) and give everyone in the U.K £1 million each, problem solved... Nobody will ever have to work again AND we will be out of recession! This printing stuff, brilliant!"
I should have been more explicit. You've jumped to an erroneous conclusion. The government should use it's powers as the monopoly issuer of currency to invest in the jobs and the infrastructure. This is the quickest and easiest way to stimulate the economy and it works. Granted there are many misguided ideological opinions against the idea. But that is only ideology, no substance.
You may have grand dreams of the economy becoming lean and efficient at some unstated point in time, then a fabulous free market economy will race ahead pulling everybody into a period of untold wealth. But that's all it is, a fantasy idea. By the time the UK economy is lean and efficient. There is nothing left. Ranks of unemployed available to work at low wages and low base to crawl up from. Brilliant!
techieman
"its a bit like either feeding someone who is ready to work is all muscle and sinew but is about to be malnourished, against feeding someone who is obese but has lost half a stone. I am not against stimulus or the welfare state per se, its just we need to lose some weight before such a stimulus will do any long term good. Otherwise we just become more and more obese."
You said it. The economy was in an ok working condition. Viable companies, reasonable public services, all ready to be fed and ready to grow. This was a financial crash that is destroying real meat and bones economy. The solution is not a monetary solution QE and budget surpluses will not work. That concept is a race to the bottom, who will work for least food.
The UK playing into the hands of those holding financial assets and large stable productive assets. When the economy is duly thin and weak the asset grab will happen. Then the economists will start telling you it's time for stimulus. Why not now? go figure. Who are the lackeys thinking they are smart grasping the coat tails of their betters, aping their actions? Are the crumbs from the masters table good?
Come back and talk like grown up's when you understand something.