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Executive Sadman

Why Qe Will Defeat Itself

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So it seems that the recent rise in stock markets and the 'bounce' in the haliwide VI houseprice indices is not directly due to QE but rather the indirect effect it has had on prices by tempting those who have cash out of cash. The QE remains firmly docked in central banks vaults. This effect of tempting 'real' cash out of banks has actually made QE less likely to enter the economy as it has exacerbated the disconnect from price and value further. If it were to be injected into the economy it would get even less return than it initially would have done. Figures showing average deposits exceeding 50% have convinced me further of this.

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Theres nothing to get wages going again is the way i see it. The stimulus packages might help a bit, but we're going to have to get used to being China's equals.

I think this is a structural recession, rather than a cyclical one the politicians can kick start with their little schemes. We will move away from a retail/consumption based economy whether the politicians like it or not. What will we replace it with - who knows, maybe 20 men will do the job of one tractor as oil runs out.

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Guest The Relaxation Suite
Theres nothing to get wages going again is the way i see it. The stimulus packages might help a bit, but we're going to have to get used to being China's equals.

I think this is a structural recession, rather than a cyclical one the politicians can kick start with their little schemes. We will move away from a retail/consumption based economy whether the politicians like it or not. What will we replace it with - who knows, maybe 20 men will do the job of one tractor as oil runs out.

Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

Edited by D-503

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Guest Parry aka GOD
Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

+1 All true.

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Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

The process of adjustment is going to be very painful, the amount of debt we have been on future incomes was a very stupid thing to do.

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So it seems that the recent rise in stock markets and the 'bounce' in the haliwide VI houseprice indices is not directly due to QE but rather the indirect effect it has had on prices by tempting those who have cash out of cash. The QE remains firmly docked in central banks vaults. This effect of tempting 'real' cash out of banks has actually made QE less likely to enter the economy as it has exacerbated the disconnect from price and value further. If it were to be injected into the economy it would get even less return than it initially would have done. Figures showing average deposits exceeding 50% have convinced me further of this.

HPC Link Banks & 50% Deposits

What RBS's Results Say About QE

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Depends what you think the point of QE actually is. I see it as having two purposes, both of which have some chance of success:

1: To provide a float for banks and their ilk to speculate on commodities (such as food) and shares, hopefully rebuilding their balance sheets (at the expense of the common people/mugs who dont get out of their positions in time). Thus paying off Those Who Must Be Paid (if you are a politico).

2: To try to put off the inevitable Great Paying Of the Bill for the last 10+ years of financial Monsieur Creosote-ing until after the next election. Thus giving Broon and co slightly less of a chance of a complete electoral wipeout.

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Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

I don't disagree with you but all of this won't happen overnight. Most of us still have a very good standard of living here and should continue to do so providing you are not up to your eyeballs in debt.

Agree, our standing in the world along with the US is on the slide. To say the change we are seeing is similar to that of the industrial revolution is, IMHO, stretching it a little however.

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I doubt it's going to be as bad as people think. The thing about China and the others is that although they're fast catching up, they're unlikely to end up richer than the already-developed countries. The reason the developing countries are growing much faster than Britain ever did during the Industrial Revolution is that they're just installing the technology we already have, while we were inventing it as we went along. Once they've put everything in place that we already have, they have to join us on the much slower path of inventing new technology to enable economic growth. And yes, we are going to have to share primary resources such as oil, metals, food etc with them, but I think most of the pain can be avoided just by becoming more efficient in the way we use resources - everybody knows how wasteful Western society is and how unnecessary most of that waste is and how overconsumption never made anybody any happier. Basically, I think it's going to be okay.

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Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

The only problem is they are often falling for the same trap: credit expansion. China and Russia the prime culprits. Locals massively enjoying central banks cutting their rates etc. Thet are confident, but it breeds greed and overconfidence. On top of this, there is a long way to go institutionally. The set up is far from rigid there. Not saying the West is ideal, but institutions are less corrupt.

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So it seems that the recent rise in stock markets and the 'bounce' in the haliwide VI houseprice indices is not directly due to QE but rather the indirect effect it has had on prices by tempting those who have cash out of cash. The QE remains firmly docked in central banks vaults. This effect of tempting 'real' cash out of banks has actually made QE less likely to enter the economy as it has exacerbated the disconnect from price and value further. If it were to be injected into the economy it would get even less return than it initially would have done. Figures showing average deposits exceeding 50% have convinced me further of this.

You are over thinking the situation. Here is why QE (inflation) defeats itself.

Government prints money to pay for its expenses (because it can no longer raise the money from taxes + borrowing)

Prices go up.

Government needs to print even more money next year to keep pace.

etc, etc.

Currency eventually becomes worthless.

Edited by Where is my pen?

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Correct. People in the West need to understand and accept that in real terms they will never live as well as they just have. The credit is gone, the wages are gone, the jobs are going. It's not just about China, either. Countries like Malaysia, Singapore, Brazil, etc., are gearing up for the future now. We are witnessing a structural change not seen since the industrial revolution.

We are seeing the end of the industrial revolution, due to the depletion of cheap energy resources.

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It's simply the birth pangs of a New World Order.

It's either them or us. It can't be both. Currently it's tending more towards them with our government's blessing.

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It's simply the birth pangs of a New World Order.

It's either them or us. It can't be both. Currently it's tending more towards them with our government's blessing.

New world order eh? What's that then?

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Yep, just more of the same Ponzi! :lol:

You are over thinking the situation. Here is why QE (inflation) defeats itself.

Government prints money to pay for its expenses (because it can no longer raise the money from taxes + borrowing)

Prices go up.

Government needs to print even more money next year to keep pace.

etc, etc.

Currency eventually becomes worthless.

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