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TheCountOfNowhere

Where's The Qe Money Gone....

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So, there we were, stock market below 5000...they printed lots of money, gave it to their friends and the stock market shot up to 6000.

Now the stock market is back to below 5000.

Where's the made up QE money gone ?

We certainly got inflation as a result and everyones standard of living is evaporating faster than a LCD tv in Tottenham.

But now it would appear we are all worse off and the money has disappeared.

Edited by TheCountOfNowhere

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The money has just devalued the rest of the money in existence, meaning that purchasing power has been eroded. Companies are not going to do any better if the purchasing power of customers has been reduced. It is a zero sum game, as the productive capacity of the economy does not increase just because extra money is printed.

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So, there we were, stock market below 5000...they printed lots of money, gave it to their friends and the stock market shot up to 6000.

Now the stock market is back to below 5000.

Where's the made up QE money gone ?

We certainly got inflation as a result and everyones standard of living is evaporating faster than a LCD tv in Tottenham.

But now it would appear we are all worse off and the money has disappeared.

Much of the QE money has gone into generating profits to try to fill the holes in the banks balance sheets. In the process, it has generated a commodities boom and inflation that has collectively impoverished the rest of us (the banksters are OK though, the massive profits that their free money generated earned them billions in bonuses).

Of course, now the money is spent and the enormous shortfalls still haven't been filled more money printing is needed to kick the can down the road a bit further.

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didn't 98% of the print go into the UK bond market ? ....so eventually its wound up funding our benefit system and disappeared into the NHS ...its all vanished into the social ether....

....printed out of thin air ...vanished into thin air .....utter synchronicity ...its like the ying and yang ...man !..................... a balance of nothingness

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Dear All,

Agree with Sour Mash on this one.

Banksters. I have one in the family! He is alright Jack!

I keep asking him to give back the money he owes me. For some reason he gets highly miffed?

Bonner

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didn't 98% of the print go into the UK bond market ? ....so eventually its wound up funding our benefit system and disappeared into the NHS ...its all vanished into the social ether....

....printed out of thin air ...vanished into thin air .....utter synchronicity ...its like the ying and yang ...man !..................... a balance of nothingness

Except we have and are having inflation created by the creation of money - is it dumb of me to say that now that the money + extra has all evaporated into thin air does this mean defaltion is on the way (if they dont print more money, which they will if deflation looks remotely likely)?

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Dear All,

Sorry I dont get the NHS / Benefits got it all line.

Remember, "Follow the Money" line in the Watergate?

Look at who is now holding the toy after the music has stopped. It is certainly not the NHS workers that I know.

Bonner

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So, there we were, stock market below 5000...they printed lots of money, gave it to their friends and the stock market shot up to 6000.

Now the stock market is back to below 5000.

Where's the made up QE money gone ?

We certainly got inflation as a result and everyones standard of living is evaporating faster than a LCD tv in Tottenham.

But now it would appear we are all worse off and the money has disappeared.

Nope. QE happened when the stock market was much lower: it was below 3500 when it was first announced.

QE has just filled part of the hole created by banks printing money in about 2001-7, which (had already) got sunk into pwopertee.

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Except we have and are having inflation created by the creation of money - is it dumb of me to say that now that the money + extra has all evaporated into thin air does this mean defaltion is on the way (if they dont print more money, which they will if deflation looks remotely likely)?

Yes - without more money printing we'll have some sharp deflation. But since we've seen that it won't be allowed at any cost, another huge print run is assured.

This should create some good opportunities to protect your wealth ... stocks should see another ramp like we saw after the last set of emergency measures (just make sure to get out before the next crash) and there will be a nice buying opportunity in Gold as it falls back after the threat of immediate implosion recedes.

Of course, the average pleb with no financial knowledge is screwed as their savings, pension and income are about to take an even bigger hit all to bail out the big boys at the top.

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According to Doomberg, the banks are awash with the stuff...Bank of some American silly name is now charging for people to deposit cash.

course, Bernanke is coming to the rescue with incentives for the banks to lend this out....which was what they were supposed to do with QE1, 2, etc etc.

They didnt, cos no-one wants their loans....so bankers bought commodities and shares, and here we are today...QE, created no wealth whatsoever.

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According to Doomberg, the banks are awash with the stuff...Bank of some American silly name is now charging for people to deposit cash.

course, Bernanke is coming to the rescue with incentives for the banks to lend this out....which was what they were supposed to do with QE1, 2, etc etc.

They didnt, cos no-one wants their loans....so bankers bought commodities and shares, and here we are today...QE, created no wealth whatsoever.

Fact is QE created no wage inflation whatsoever (bar Banksters) and that's a fact that all these inflationistas blithely ignore. Without wage inflation there won't be any 'recovereh'. Bob Prechter reckons it's the deflationary collapse no matter how much money is printed as the vast majority of debt is in Dollars and can never be paid back.

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So, there we were, stock market below 5000...they printed lots of money, gave it to their friends and the stock market shot up to 6000.

Now the stock market is back to below 5000.

Where's the made up QE money gone ?

We certainly got inflation as a result and everyones standard of living is evaporating faster than a LCD tv in Tottenham.

But now it would appear we are all worse off and the money has disappeared.

The bankers, spivs and specs got it.

It enabled the banks to hide their losses so the bonuses could keep flowing.

It pushed stocks up so our pensions funds bought, then the spivs and specs sold just before they started this downward slide to force more QE.

It's there in black and white in our pension valuations. They will have rose a little with QE but now dropped a lot more.

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Much of the QE money has gone into generating profits to try to fill the holes in the banks balance sheets. In the process, it has generated a commodities boom and inflation that has collectively impoverished the rest of us (the banksters are OK though, the massive profits that their free money generated earned them billions in bonuses).

Of course, now the money is spent and the enormous shortfalls still haven't been filled more money printing is needed to kick the can down the road a bit further.

Oh obviously the printing was in no way enough! If we had simply borrowed..erhmm printed about 3 x as much the recovery would have taken root and we'd have all been saved. And I guess we all need to invest in wheelbarrow manufacturers because going shopping with cash will become very heavy otherwise. Only problem might be that the wheelbarrow manufacturers are all in the far east.

I do believe the govt should apply for one of those 0% interest credit cards while the offer is still on. The ECB says they haven't yet received an application from Mr Osborne and wondered if he was away or something?

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Where's the made up QE money gone ?

We certainly got inflation as a result and everyones standard of living is evaporating faster than a LCD tv in Tottenham.

No; the price rises we see today are due to the inflation of the money supply earlier in the century slowly leaking out of the assets that new money was used to buy (property of all types, private equity takeovers, etc.) into the rest of the economy.

There is no inflation today; money supply growth is flat on its back. I expect the relatively small amount of QE money has just replaced some of the money written off in defaults. In any case, its not likely to be that significant one way or the other.

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No; the price rises we see today are due to the inflation of the money supply earlier in the century slowly leaking out of the assets that new money was used to buy (property of all types, private equity takeovers, etc.) into the rest of the economy.

There is no inflation today; money supply growth is flat on its back. I expect the relatively small amount of QE money has just replaced some of the money written off in defaults. In any case, its not likely to be that significant one way or the other.

Money supply is flat, hey........... 2.3 trillion of QE dollars over the pond, and likely more to come, how can money supply be flat, this affects our inflation, as many things are priced in dollars.

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The money has just devalued the rest of the money in existence, meaning that purchasing power has been eroded. Companies are not going to do any better if the purchasing power of customers has been reduced. It is a zero sum game, as the productive capacity of the economy does not increase just because extra money is printed.

I have to agree with you totally.

Likewise an economy that seems to be doing amazing well because of the rising 'value' of, say houses, is only appearing to be doing well. No increase in productive capacity is brought about by a bubble so overall the economy is not improving.

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Good question and one that no doubt many will be asking because the evidence we see doesn't square with the widely held belief in the quantity of money theory.

If you assume for a moment MV=PT is a valid equation describing price levels then we could hypothesise that as M has been increased V has fallen. And indeed this is in fact a tautology if we do in fact find that price levels in oil and so on and consumer goods drop to pre QE levels.

Let me lay out my view of how a fiat credit economy actually works and see if it fits with the facts.

Rule1: An economy below peak debt and employing deposit insurance will automatically increase debt levels by bidding up asset prices which are suppressed from their maximum potential by interest rates. This happens because in this situation its easier to make money by bidding up asset prices than do any real work. Attempts to prevent this by using high interest rates will fail because V will rise to counteract the fall in M.

Rule 2:An economy above peak debt and employing deposit insurance will automatically decrease debt levels by bidding down asset prices which are elevated above their maximum potential by overshoot of credit expansion. Attempts to maintain asset prices above maximum potential by printing money (M) will simply result in a fall in velocity V.

Rule3: it is not possible to use information held in a computer or in a ledger (fiat money) to create a simulation of a scarce good because the attempt creates arbitrages which are too easily worked around by financial markets. Only a scarce good could possibly attract a nominal (let alone real) rate of return. Only at zero nominal interest rates is this rule satisfied.

Rule4: An economy having zero interest rates and a stable money supply must be at peak debt. The fact that the fiat money has zero rate of return and therefore zero nominal value at this equilibrium is counter-balanced by the fact that the value of fiat denominated debt is now at a maximum.

Rule5: Fiat debt issued by the same entity that issues the fiat money is not debt, although for a while it may be possible to sustain this illusion in the same way that for a while it is possible to sustain an illusion of a scarce fiat commodity that is in fact pure information. In the end it (fiat money and fiat government debt) will be found to be pure information with no distinguishing features to tell one from the other, and furthermore that this data is only meaningful when associated with debt relations in the private sector.

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Good question and one that no doubt many will be asking because the evidence we see doesn't square with the widely held belief in the quantity of money theory.

If you assume for a moment MV=PT is a valid equation describing price levels then we could hypothesise that as M has been increased V has fallen. And indeed this is in fact a tautology if we do in fact find that price levels in oil and so on and consumer goods drop to pre QE levels.

Let me lay out my view of how a fiat credit economy actually works and see if it fits with the facts.

Rule1: An economy below peak debt and employing deposit insurance will automatically increase debt levels by bidding up asset prices which are suppressed from their maximum potential by interest rates. This happens because in this situation its easier to make money by bidding up asset prices than do any real work. Attempts to prevent this by using high interest rates will fail because V will rise to counteract the fall in M.

Rule 2:An economy above peak debt and employing deposit insurance will automatically decrease debt levels by bidding down asset prices which are elevated above their maximum potential by overshoot of credit expansion. Attempts to maintain asset prices above maximum potential by printing money (M) will simply result in a fall in velocity V.

Rule3: it is not possible to use information held in a computer or in a ledger (fiat money) to create a simulation of a scarce good because the attempt creates arbitrages which are too easily worked around by financial markets. Only a scarce good could possibly attract a nominal (let alone real) rate of return. Only at zero nominal interest rates is this rule satisfied.

Rule4: An economy having zero interest rates and a stable money supply must be at peak debt. The fact that the fiat money has zero rate of return and therefore zero nominal value at this equilibrium is counter-balanced by the fact that the value of fiat denominated debt is now at a maximum.

Rule5: Fiat debt issued by the same entity that issues the fiat money is not debt, although for a while it may be possible to sustain this illusion in the same way that for a while it is possible to sustain an illusion of a scarce fiat commodity that is in fact pure information. In the end it (fiat money and fiat government debt) will be found to be pure information with no distinguishing features to tell one from the other, and furthermore that this data is only meaningful when associated with debt relations in the private sector.

nice description of a ponzi scheme.

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  • 333 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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