Qe3...

[ALNative]

'Democracy in America' by Alexis de Tocqueville

"A Democracy cannot exit as a permanent form of government. It can only exist until the voters discover that they can vote themselves larges from the public treasury. From that moment on the majority always votes for the candidate promising the most benefits from the public treasury. with the result that a democracy always collapses over lose fiscal policy always followed by a dictatorship."

 

[washunut]

Oh man, that was funny. Thanks for posting. What an idiot.

This one makes me laff also Fat Kid With Creepy Laugh - YouTube

Care to elaborate on why you think he is an idiot?

 

[Fisher]

I save bicentennial quarters, but otherwise I pay debt off ahead of time or invest in things independent of the stock market. If the government gave me $10,000.00, I would put it toward mortgage principle. If it gave me $50K, I'd do the same thing.

Devaluing the dollar is actually good for the economy in the long run abstractly (just as long as you do not plan on flying to France and stocking up on French wine) because it encourages the inflow of capital and the increase in exports which could create more US manufacturing jobs.

QE3 won't do much. Wall Street and Banks have cash--lots and lots of it--but they are hoarding it. I am not sure why they are hoarding it, but market analyst say they are hoarding it. Banks have trouble letting go because of strict underwriting requirements by the government and, at least according to the VP of Sitting Around Talking About Sports at a local bank to me, there is so much uncertainty about what banking regulations will be 6 months from now as there are rumors floating about that scare them, that they tread very lightly. It is the corporations I cannot figure out.

 

[PirateMk1]

I save bicentennial quarters, but otherwise I pay debt off ahead of time or invest in things independent of the stock market. If the government gave me $10,000.00, I would put it toward mortgage principle. If it gave me $50K, I'd do the same thing.

Devaluing the dollar is actually good for the economy in the long run abstractly (just as long as you do not plan on flying to France and stocking up on French wine) because it encourages the inflow of capital and the increase in exports which could create more US manufacturing jobs.

QE3 won't do much. Wall Street and Banks have cash--lots and lots of it--but they are hoarding it. I am not sure why they are hoarding it, but market analyst say they are hoarding it. Banks have trouble letting go because of strict underwriting requirements by the government and, at least according to the VP of Sitting Around Talking About Sports at a local bank to me, there is so much uncertainty about what banking regulations will be 6 months from now as there are rumors floating about that scare them, that they tread very lightly. It is the corporations I cannot figure out.

Devaluing the dollor detstoyes the value of your savings. Its not good for saving in the long run. Its a short term solution at best. Value stability is the best solution.

 

[Fisher]

Devaluing the dollor detstoyes the value of your savings. Its not good for saving in the long run. Its a short term solution at best. Value stability is the best solution.

I did use the word "abstractly". People have unrealistic expectation of the market. They want full employment and high 401(k) values when those 401(k)'s largely only maintain growth by investing in companies that move jobs overseas on the manufacturing jobs. We have unusually low interest rates and corporations are not spending the money they have but we are not seeing much of any effort for businesses putting on bricks and mortar or retooling or anything indicating that this market is going to create US jobs. Reigniting an economy now structured on consumerism as opposed to equity in poor employment requires infusing Main Street with spendable cash, not debt. The expiring tax cuts did not put a lot of extra cash into mom's hands to spend at Christmas or groceries or on new cars, and there simply is no way to infuse consumers with cash without creating a political hailstorm that would significantly drive up the debt. We are stuck in the mud right now and will be regardless of who wins.

 

[PirateMk1]

I did use the word "abstractly". People have unrealistic expectation of the market. They want full employment and high 401(k) values when those 401(k)'s largely only maintain growth by investing in companies that move jobs overseas on the manufacturing jobs. We have unusually low interest rates and corporations are not spending the money they have but we are not seeing much of any effort for businesses putting on bricks and mortar or retooling or anything indicating that this market is going to create US jobs. Reigniting an economy now structured on consumerism as opposed to equity in poor employment requires infusing Main Street with spendable cash, not debt. The expiring tax cuts did not put a lot of extra cash into mom's hands to spend at Christmas or groceries or on new cars, and there simply is no way to infuse consumers with cash without creating a political hailstorm that would significantly drive up the debt. We are stuck in the mud right now and will be regardless of who wins.

Thats what 16 trilion dollors of debt will do. Sucks.

 

[cannuck]

That's not entirely correct, this round of easing is designed with the intent to free up capital within financial institutions so as to encourage lending to the individuals who actually posses the capacity to invest in the current market. Hardly wasteful by any means.

There is no need to "free up capital" within financial institutions, because it will all go EXACTLY where you state: to "the market". You can pump a trillion dollars a week into "the market" and, unless that money is used for POs or IPOs, it will create not one red cent of wealth. Oh, it will make more deadbeats on Wall Streets more wealthy, but doing so by just inflating the money supply continues EXACTLY what has killled the US economy: move more money OUT of capital markets and sequester it in Casino Capital markets.

Until people learn the difference between what creates wealth and what merely re-distributes it, the US is bound to keep on going faster and faster and faster down the road to total economic obliteration.

For example: someone recommended that the QE3 money be given to consumers to spend. Well, since the vast majority of that money would end up in WalMart or one of the other of the vast majority of Chinese product retailers, it would just make things WORSE, as the only beneficiaries would be those in China who actualy PRODUCED things - while the US economy has its miniscule productive sector further dilluted by exactly the QE3 amount.

Come on, guys and gals: remove cranium from rectum and get a clue.

 

[cannuck]

Thats what 16 trilion dollors of debt will do. Sucks.

Sorry, I should have picked up on this earlier: What few people seem to appreciate is that the "money supply" is essentially another debt to the taxpayer. Every penny in circulation is subject to "redemption" when presented for payment, and each one of those government bonds that initiate another half tril into the money supply are a liability to the taxpayer. Since they will not all likely be redeemed at one time, their very existence dilutes the value of every dollar that exists at the time (in other words, an inflationary force - whether realized or potential).

 

[Fisher]

If consumers have more money in their pocket, they would not just go to Walmart. They could go out to eat, see movies, consume services, buy GM cars, etc, but QE3 wouldn't make that happen. Increasing money to banks does not change the underwriting requirements and other regulatory issues that are holding up lending now. It is just dumb all the way around.

 

[rikoshaprl]

QE3's intentions are :1. to lower mortgage rates to prop up home prices (mortgage rates are already at record lows; what will another 1/4 point do?). 2. increase the value of stocks so there is a wealth effect to induce spending (most people realize that the stock market prices are artificially inflated which does not make them feel wealthy).
Half the people in the country do not own stocks and 40% don't own homes. How does QE3 help them? Those on fixed incomes are getting killed by the FED's actions that have lowered interest rates. They can not get a decent return for income. Inflation will be stoked by QE3, especially since the Bernank says he will keep it going even IF the economy recovers. That will hurt the middle class with higher food heating oil and gasoline prices.
So if QE3 is bad all around why is it being done? Is it for political purposes?

 

[Fisher]

As I posted somewhere on this site, maintaining artificially low interest rates, is Russian Roulette. A 3.5 30 year fixed isn't going to yield enough revenue 10 years from now to keep up with wages and expenses for the entity holding it. They are growing the swamp, not draining it. If I recall what I read correctly, it was the efforts to reign in costs, particularly gas, by holding prices low or frozen prior to Carter's presidency that was a big factor in the insane interest that came when Carter unleashed prices to the free market that was already primed for inflation. I am not sure what would happen if the opposite happened and we maintained prices artificially high and then unleashed housing to the free market beyond the declines and number of people who may end up underwater again. My gut instinct is we would come sliding back to where we are now.