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How much QE is too much?

lewis20
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12/12/2012 11:50:54 PM
Posted: 3 years ago
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
YYW
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12/13/2012 12:46:43 AM
Posted: 3 years ago
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

Too much? Ha! It's never enough!
Tsar of DDO
malcolmxy
Posts: 2,855
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12/13/2012 1:49:15 AM
Posted: 3 years ago
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

I had read $40B. They're using it to buy T-Bills to fund deficit spending

OR

This is their plan to officially purchase our government (as if they don't unofficially own it already..."too big to fail" my @ss.)

The Founding Fathers (sans Hamilton, who spent his career in the pockets of bankers...a big reason Burr wanted to kill him so badly) warned about this. But, everybody thinks they're entitled to their own opinion these days, and nobody listens anymore.

Folks are also entitled to shove their heads up their @sses. I wish more would avail themselves of this entitlement and listen to people who know what they're talking about/STFU.
War is over, if you want it.

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Sidewalker
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12/13/2012 7:09:22 AM
Posted: 3 years ago
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

Zimbabwe proved the approach is sustainable, but there are consequences.

http://www.amazon.com...
"It is one of the commonest of mistakes to consider that the limit of our power of perception is also the limit of all there is to perceive." " C. W. Leadbeater
Greyparrot
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12/13/2012 7:47:08 AM
Posted: 3 years ago
At 12/13/2012 7:09:22 AM, Sidewalker wrote:
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

Zimbabwe proved the approach is sustainable, but there are consequences.

http://www.amazon.com...

You can get a used one for 3 dollas.
Ore_Ele
Posts: 25,980
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12/13/2012 8:38:02 AM
Posted: 3 years ago
At 12/13/2012 7:47:08 AM, Greyparrot wrote:
At 12/13/2012 7:09:22 AM, Sidewalker wrote:
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

Zimbabwe proved the approach is sustainable, but there are consequences.

http://www.amazon.com...

You can get a used one for 3 dollas.

Cheapest way to become a legit trillionaire.
"Wanting Red Rhino Pill to have gender"
darkkermit
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12/13/2012 9:25:04 AM
Posted: 3 years ago
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.
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lewis20
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12/13/2012 10:12:57 AM
Posted: 3 years ago
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
lewis20
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12/13/2012 10:13:57 AM
Posted: 3 years ago
At 12/13/2012 1:49:15 AM, malcolmxy wrote:
At 12/12/2012 11:50:54 PM, lewis20 wrote:
Today Bernanke announced QE4, or indefinite QE.
That is the fed will print 85 billion a month until unemployment falls below 6.5%
I know the circular flow is a bit slow but surely indefinite QE isn't sustainable.

I had read $40B. They're using it to buy T-Bills to fund deficit spending

40 billion a month was QE3, sheesh get with the times.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
lewis20
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12/13/2012 10:18:33 AM
Posted: 3 years ago
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?
I was going to say something about would the opposite happening being a point for austrians? but if we don't get on track in the next four years I don't think it will matter anymore.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
Ragnar_Rahl
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12/13/2012 1:17:15 PM
Posted: 3 years ago
A red cent.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Ragnar_Rahl
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12/13/2012 1:18:46 PM
Posted: 3 years ago
At 12/13/2012 10:18:33 AM, lewis20 wrote:
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?
I don't think even Keynesian economics assumes that full unemployment is attainable, let alone in conjunction with a booming economy. That would be crazy.

And no, because no controlled conditions etc.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
lewis20
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12/13/2012 1:59:25 PM
Posted: 3 years ago
At 12/13/2012 1:18:46 PM, Ragnar_Rahl wrote:
At 12/13/2012 10:18:33 AM, lewis20 wrote:
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?
I don't think even Keynesian economics assumes that full unemployment is attainable, let alone in conjunction with a booming economy. That would be crazy.

And no, because no controlled conditions etc.

obviously I meant full employment and this seems to be as controlled an experiment you could run on the worlds largest economy, that is printing and borrowing like there's no tomorrow sums which put everything else to shame.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
darkkermit
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12/13/2012 2:14:50 PM
Posted: 3 years ago
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply
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lewis20
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12/13/2012 3:05:30 PM
Posted: 3 years ago
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
darkkermit
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12/13/2012 4:46:08 PM
Posted: 3 years ago
At 12/13/2012 3:05:30 PM, lewis20 wrote:
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.

I don't know how to better explain this to you. I feel like I'm talking passed you. Money is created when banks loan out money. The fed plays a passive role in the formation of new money.
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lewis20
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12/13/2012 5:04:40 PM
Posted: 3 years ago
At 12/13/2012 4:46:08 PM, darkkermit wrote:
At 12/13/2012 3:05:30 PM, lewis20 wrote:
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.

I don't know how to better explain this to you. I feel like I'm talking passed you. Money is created when banks loan out money. The fed plays a passive role in the formation of new money.

So the fed is buying all these treasuries and securities with monopoly money? and then when the banks hand out credit they turn this monopoly money into federal reserve notes? I've taken 300 level macro and micro you aren't talking past me.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
darkkermit
Posts: 11,204
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12/13/2012 6:05:56 PM
Posted: 3 years ago
At 12/13/2012 5:04:40 PM, lewis20 wrote:
At 12/13/2012 4:46:08 PM, darkkermit wrote:
At 12/13/2012 3:05:30 PM, lewis20 wrote:
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.

I don't know how to better explain this to you. I feel like I'm talking passed you. Money is created when banks loan out money. The fed plays a passive role in the formation of new money.

So the fed is buying all these treasuries and securities with monopoly money? and then when the banks hand out credit they turn this monopoly money into federal reserve notes? I've taken 300 level macro and micro you aren't talking past me.

Have you really? You're an economics major?
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lewis20
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12/13/2012 7:09:40 PM
Posted: 3 years ago
At 12/13/2012 6:05:56 PM, darkkermit wrote:
At 12/13/2012 5:04:40 PM, lewis20 wrote:
At 12/13/2012 4:46:08 PM, darkkermit wrote:
At 12/13/2012 3:05:30 PM, lewis20 wrote:
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.

I don't know how to better explain this to you. I feel like I'm talking passed you. Money is created when banks loan out money. The fed plays a passive role in the formation of new money.

So the fed is buying all these treasuries and securities with monopoly money? and then when the banks hand out credit they turn this monopoly money into federal reserve notes? I've taken 300 level macro and micro you aren't talking past me.

Have you really? You're an economics major?

Took them for a possible minor
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
darkkermit
Posts: 11,204
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12/13/2012 7:17:24 PM
Posted: 3 years ago
At 12/13/2012 7:09:40 PM, lewis20 wrote:
At 12/13/2012 6:05:56 PM, darkkermit wrote:
At 12/13/2012 5:04:40 PM, lewis20 wrote:
At 12/13/2012 4:46:08 PM, darkkermit wrote:
At 12/13/2012 3:05:30 PM, lewis20 wrote:
At 12/13/2012 2:14:50 PM, darkkermit wrote:
At 12/13/2012 10:12:57 AM, lewis20 wrote:
At 12/13/2012 9:25:04 AM, darkkermit wrote:
well once unemployment falls below 6.5%, they'll stop the QE. Should be noted that M2 hasn't been increasing that much despite the amount of QE that has occurred.

But the money is still there, even if the banks are sitting on it and it's not being spent.

Except its not increasing the money supply by much. ITs only increasing the monetary base

monetary base =/= Money supply

But the money is still there, even if the banks are sitting on it and it's not being spent.

I don't know how to better explain this to you. I feel like I'm talking passed you. Money is created when banks loan out money. The fed plays a passive role in the formation of new money.

So the fed is buying all these treasuries and securities with monopoly money? and then when the banks hand out credit they turn this monopoly money into federal reserve notes? I've taken 300 level macro and micro you aren't talking past me.

Have you really? You're an economics major?

Took them for a possible minor

What have you taken in economics? I've taken microeconomics and economics and the law. I also watched the Yale lectures for the game theory course. However a lot of my knowledge, especially in monetary and Keynesian economics is self-learned.
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lewis20
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12/13/2012 7:19:33 PM
Posted: 3 years ago
At 12/13/2012 7:17:24 PM, darkkermit wrote:

What have you taken in economics? I've taken microeconomics and economics and the law. I also watched the Yale lectures for the game theory course. However a lot of my knowledge, especially in monetary and Keynesian economics is self-learned.

took intro to econ, macro, micro, intermediate macro, intermediate micro and have read the austrian stuff on the side. They don't teach it all straight out of keynes general theory.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
darkkermit
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12/13/2012 7:19:52 PM
Posted: 3 years ago
I also suppose my plant design count as sort of economics since they were considered "plant design and economics". The economics being doing net present value analysis, and calculating profitability. Also the chemical process was optimized to minimize costs based on operating and capital cost.
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darkkermit
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12/13/2012 7:21:37 PM
Posted: 3 years ago
At 12/13/2012 7:19:33 PM, lewis20 wrote:
At 12/13/2012 7:17:24 PM, darkkermit wrote:

What have you taken in economics? I've taken microeconomics and economics and the law. I also watched the Yale lectures for the game theory course. However a lot of my knowledge, especially in monetary and Keynesian economics is self-learned.

took intro to econ, macro, micro, intermediate macro, intermediate micro and have read the austrian stuff on the side. They don't teach it all straight out of keynes general theory.

nice.
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Ore_Ele
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12/13/2012 7:24:54 PM
Posted: 3 years ago
At 12/13/2012 10:18:33 AM, lewis20 wrote:
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?

No, because that is only a small part of Keynesian economics, which hasn't been properly done in the US in decades. KE is not simply deficit spending, it is deficit spending in tough economic times followed by building a surplus (or at least coming back to balanced) once the economic downturn has passed.

I was going to say something about would the opposite happening being a point for austrians? but if we don't get on track in the next four years I don't think it will matter anymore.

Not really, the short comings of one do not show the other to be correct, since it is not a dichotomy issue.
"Wanting Red Rhino Pill to have gender"
lewis20
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12/13/2012 8:05:23 PM
Posted: 3 years ago
At 12/13/2012 7:24:54 PM, Ore_Ele wrote:
Not really, the short comings of one do not show the other to be correct, since it is not a dichotomy issue.

Austrian position is that Keynesian strategies won't work, so they would be absolutely correct if it turns out keynesian thinking fails us.
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
lewis20
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12/13/2012 8:06:59 PM
Posted: 3 years ago
At 12/13/2012 7:24:54 PM, Ore_Ele wrote:
At 12/13/2012 10:18:33 AM, lewis20 wrote:
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?

No, because that is only a small part of Keynesian economics, which hasn't been properly done in the US in decades. KE is not simply deficit spending, it is deficit spending in tough economic times followed by building a surplus (or at least coming back to balanced) once the economic downturn has passed.

isn't that part of human action? Is there any merit in believing politicians will pay down the debt during times of economic prosperity?
"If you are a racist I will attack you with the north"- Abraham Lincoln

"Do not wear clothing woven of two kinds of material" - Leviticus 19 19

"War is a racket" - Smedley Butler
Ore_Ele
Posts: 25,980
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12/13/2012 9:24:04 PM
Posted: 3 years ago
At 12/13/2012 8:06:59 PM, lewis20 wrote:
At 12/13/2012 7:24:54 PM, Ore_Ele wrote:
At 12/13/2012 10:18:33 AM, lewis20 wrote:
So if this works and we somehow get back to full unemployment and a booming economy within, lets say the next four years, is that a vindication of Keynesian economics, deficit spending and printing money?

No, because that is only a small part of Keynesian economics, which hasn't been properly done in the US in decades. KE is not simply deficit spending, it is deficit spending in tough economic times followed by building a surplus (or at least coming back to balanced) once the economic downturn has passed.

isn't that part of human action? Is there any merit in believing politicians will pay down the debt during times of economic prosperity?

Yes, politicians are people and are subject to human nature, and there are humans that will pay off their debt, so it is only logical that there may be politicians that will pay off debt in good times. There are, after all, politicians that actually want to cut spending and lower taxes.
"Wanting Red Rhino Pill to have gender"
Ore_Ele
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12/13/2012 9:25:52 PM
Posted: 3 years ago
At 12/13/2012 8:05:23 PM, lewis20 wrote:
At 12/13/2012 7:24:54 PM, Ore_Ele wrote:
Not really, the short comings of one do not show the other to be correct, since it is not a dichotomy issue.

Austrian position is that Keynesian strategies won't work, so they would be absolutely correct if it turns out keynesian thinking fails us.

Austrian is its own school of thought, it is not merely "opposite of Keynesian" After all, Keynesian supports paying down the debt in good economic times. You're surely not saying that Austrian is the opposite in that they suggest raising the debt in good economic times.
"Wanting Red Rhino Pill to have gender"