Cinga Posted September 13, 2012 Share Posted September 13, 2012 (edited) Same reason a crack whore gets all happy when they find some free crack Ding-Ding!!! We have a winner Johnny!!! It's the market folks... The Federal Reserve just promised to print more money, and buy up mortgages... Since they're going to make money from thin air, I suggest you study up on quantitative easing, and the effect on inflation... Prior to this recession, yes, we're still in the one that started in 08, we had about 800 billion dollars, real money, in circulation but last I checked, which was about a year ago, we had almost 3 trillion. How does this effect inflation??? It doesn't right now, because we have too few people chasing those dollars... If the economy picks up?? Well, we have 3 times the amount of dollars to chase, causing a backlash that forces inflation to reflect that increase. 300% potentially, unless that money is sucked back in quickly... Obviously, the Fed has no plans for that... Now, a question for everyone... Who benefits from inflation and how???? And I'm not talking commodities... Edited September 13, 2012 by Cinga Link to comment Share on other sites More sharing options...
drinkTHEkoolaid Posted September 14, 2012 Share Posted September 14, 2012 Now, a question for everyone... Who benefits from inflation and how???? And I'm not talking commodities... The democrats. They will be able to enroll more people in social programs. They will be able to raise thresholds for qualifying for handouts due to inflation. The more people mooching off the gvt. The more the democrats can demagouge the issues to keep getting themselves re elected shifting the country closer to socialism since people won't want to loose their "free" programs. Just my ramblings.... Link to comment Share on other sites More sharing options...
PearlHowardman Posted September 14, 2012 Share Posted September 14, 2012 Who benefits from inflation and how???? Who: Nazis. How: Somehow. Link to comment Share on other sites More sharing options...
Cinga Posted September 14, 2012 Share Posted September 14, 2012 Who: Nazis. How: Somehow. and you must be one of Tom's "friends".... It happens slower than the effect... But.... People, because of inflation, make more money right??? Tax rates remain the same right??? Get where I'm going yet?? People move into higher tax brackets as they make more, right??? Let's go extreme... If someone today makes 50 grand, but a 300% inflation rate eventually pushes him to 150 grand... darn, he/she is now rich right?? and can pay their "fair" share... I'm not sure, but isn't the rate at 50 about 8% right now? And the rate at 150 about 20% ?? They have moved into a much higher tax bracket, bringing more into the federal revenue system right?? Helping to make up for the ridiculous spending of the past... Again.... who makes out if there is inflation??? unfortunately, it's circular, and doesn't work in real life because it then of course, forces the gubment to spend more to keep up... We'll see it again though, really, really, soon.... Link to comment Share on other sites More sharing options...
TPS Posted September 14, 2012 Share Posted September 14, 2012 No signs of inflation!?! Are you mad? Do you have any idea how much money has been made in commodities markets in the last 3 years? In 2010 alone commodities were up more than 27%. Historically the only thing quantitative easing has led to is more quantitative easing. A self-fulfilling prophecy. There's no where else to generate a decent yield; the Fed pursues QE1; investors pile into commodities on the belief QE will be inflationary causing commodity prices to rise, and therefore inflation. Commodity bubble bursts. Repeat with QE2., 3, etc. and you must be one of Tom's "friends".... It happens slower than the effect... But.... People, because of inflation, make more money right??? Tax rates remain the same right??? Get where I'm going yet?? People move into higher tax brackets as they make more, right??? Let's go extreme... If someone today makes 50 grand, but a 300% inflation rate eventually pushes him to 150 grand... darn, he/she is now rich right?? and can pay their "fair" share... I'm not sure, but isn't the rate at 50 about 8% right now? And the rate at 150 about 20% ?? They have moved into a much higher tax bracket, bringing more into the federal revenue system right?? Helping to make up for the ridiculous spending of the past... Again.... who makes out if there is inflation??? unfortunately, it's circular, and doesn't work in real life because it then of course, forces the gubment to spend more to keep up... We'll see it again though, really, really, soon.... Maybe you didn't read it, but real median income is down. That means most people don't have the ability to raise their income equivalent to inflation. Nominal incomes are stagnant, so real income is falling. Link to comment Share on other sites More sharing options...
Cinga Posted September 14, 2012 Share Posted September 14, 2012 A self-fulfilling prophecy. There's no where else to generate a decent yield; the Fed pursues QE1; investors pile into commodities on the belief QE will be inflationary causing commodity prices to rise, and therefore inflation. Commodity bubble bursts. Repeat with QE2., 3, etc. Maybe you didn't read it, but real median income is down. That means most people don't have the ability to raise their income equivalent to inflation. Nominal incomes are stagnant, so real income is falling. I know real income is down, but that doesn't relieve the fact that inflationary pressure will push it up again... It's quatitative easing, and the inflationary effect that it always has on the economy I'm discussing here... Funny though you mention income down... isn't that the definition of deflation?? I know... bad word we won't mention.. just wondering??? Link to comment Share on other sites More sharing options...
TPS Posted September 14, 2012 Share Posted September 14, 2012 I know real income is down, but that doesn't relieve the fact that inflationary pressure will push it up again... It's quatitative easing, and the inflationary effect that it always has on the economy I'm discussing here... Funny though you mention income down... isn't that the definition of deflation?? I know... bad word we won't mention.. just wondering??? As someone else stated, if your numbers are correct about the money supply, why hasn't there been higher inflation? How long will it take? All Ben has done is stimulate more speculation by swapping reserves for assets. What will the holders of those mortgages sold to the Fed do with the cash? It's a portfolio impact, so what assets will they buy to replace the mortgages? And if it's a bank, what will they do with the excess reserves? No, falling income is not the definition of deflation, falling prices is the definition. Link to comment Share on other sites More sharing options...
birdog1960 Posted September 14, 2012 Share Posted September 14, 2012 i don't pretend to understand the ramifications of this especially re commodities. but one i've observed is that several coal stocks jumped 10% today ( i thought i had caught a falling knife but now it's not looking too bad at all). they were going up anyway with china's statement about infrastructure spending but why did this turbocharge the bounce? how does inflation cause commodity profits to increase? as ex treasury guy, reagan said , the stock market's become a big casino with the fed as a major player. that's not good if you want to hold mutual funds and rebalance (like much of american 401k's), right? Link to comment Share on other sites More sharing options...
Cinga Posted September 14, 2012 Share Posted September 14, 2012 As someone else stated, if your numbers are correct about the money supply, why hasn't there been higher inflation? How long will it take? All Ben has done is stimulate more speculation by swapping reserves for assets. What will the holders of those mortgages sold to the Fed do with the cash? It's a portfolio impact, so what assets will they buy to replace the mortgages? And if it's a bank, what will they do with the excess reserves? No, falling income is not the definition of deflation, falling prices is the definition. good question... I'm proud of you..... Because of the depressed market. Yes, there is too much money available out there right now, but no one wants it. That is why rates are so low, trying to intice people to "buy"... But business especially, don't want that ticket, without knowing things are really good again. So, the Fed decides what to invest that extra money they printed in to. In the past, buy American debt... Now, buy mortgage bonds, to try to excite the housing market again.... See the circular starting again though? Wasn't it the fannie mae and fredy mac crap that started this whole mess? And now, the Fed is going to join the party?? Make sense to you?? Link to comment Share on other sites More sharing options...
Fastback Posted September 14, 2012 Share Posted September 14, 2012 The Fed just shot their FPF- Final Protective Fire. They literally have no bullets left in their magazine after this. They'd better hope this works, but why would it? The last two rounds didn't. The Ben Bernank is a gold bugs best friend! Link to comment Share on other sites More sharing options...
Duck_dodgers007 Posted September 14, 2012 Share Posted September 14, 2012 China launched a massive infrastructure program, something most Americans would support. Could never get that through the House today. The Republican House is only concerned with keeping the super wealthy's taxes really low. Period No signs of inflation!?! Are you mad? Do you have any idea how much money has been made in commodities markets in the last 3 years? In 2010 alone commodities were up more than 27%. Historically the only thing quantitative easing has led to is more quantitative easing. Money being made in the commodities market means that we are experiencing hyper inflation? What, are you retarded? Higher population means inflation, draught means inflation, but inspire of all that consumers are not being crushed by inflation. Hell, gas in no higher than in the Bush era Some inflation is better than long range unemployment Link to comment Share on other sites More sharing options...
fjl2nd Posted September 14, 2012 Share Posted September 14, 2012 No, this is 4ever Stupid's homework assignment. You don't get to rescue him by trying to now get me to explain it. So, there are no signs of inflation? Just to name a couple, try food and fuel prices. How do they compare to late 2008? There is a reason fuel and food prices are not always taken into consideration. I'm talking core inflation here. Fuel/food is affected by many outside factors such as weather and middle eastern conflicts. Ok Krugman. Not everyone believes in the multiplier effect. How has previous stimulus worked so far? There is plenty evidence it worked to an extent, but the package was not put together well. It had to be scaled back for political reasons. Our economy's GDP was $14 Trillion, of course $787 Billion wasn't going to be enough alone to get the economy going again. Included in that $787B was plenty of tax cuts that weren't as stimulative as direct spending. No signs of inflation!?! Are you mad? Do you have any idea how much money has been made in commodities markets in the last 3 years? In 2010 alone commodities were up more than 27%. Historically the only thing quantitative easing has led to is more quantitative easing. Again, oil and food are in different categories. Ding-Ding!!! We have a winner Johnny!!! It's the market folks... The Federal Reserve just promised to print more money, and buy up mortgages... Since they're going to make money from thin air, I suggest you study up on quantitative easing, and the effect on inflation... Prior to this recession, yes, we're still in the one that started in 08, we had about 800 billion dollars, real money, in circulation but last I checked, which was about a year ago, we had almost 3 trillion. How does this effect inflation??? It doesn't right now, because we have too few people chasing those dollars... If the economy picks up?? Well, we have 3 times the amount of dollars to chase, causing a backlash that forces inflation to reflect that increase. 300% potentially, unless that money is sucked back in quickly... Obviously, the Fed has no plans for that... Now, a question for everyone... Who benefits from inflation and how???? And I'm not talking commodities... Debtors benefit. Private debt, which is a huge obstacle holding back consumer spending will fall. Suddenly, debt becomes easier to handle because the dollar is worth a little less. Obviously, it's not this simple but it has an effect in the short run. Hopefully this link works: http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=CPIAUCSL&scale=Left&range=5yrs&cosd=2007-07-01&coed=2012-07-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Monthly&fam=avg&fgst=lin&transformation=pc1&vintage_date=2012-09-14&revision_date=2012-09-14 Graph of CPI over the last 5 years which included food and gas. WHERE IS THE MASS INFLATION?? Link to comment Share on other sites More sharing options...
/dev/null Posted September 14, 2012 Author Share Posted September 14, 2012 China launched a massive infrastructure program, something most Americans would support China also isn't broke If you're $100k in debt and your neighbor has $100k in the bank, and your neighbor renovates his kitchen, does that mean you should too? Link to comment Share on other sites More sharing options...
BillsFan-4-Ever Posted September 14, 2012 Share Posted September 14, 2012 (edited) Why do libs have to make things so personal? Anything critical of the benevolent policies of our Dear Leader is pure Racist® hatred, right? It's not that people want Obama to fail. It's that he is failing and people are getting a little perturbed at the Epic Fail of this Adminsitration so many had high hopes for But...but...but...A dollar is worth a dollar, so a dollar in 2007 is the same as a dollar in 2012! I am not a liberal. You assume too much becasue I pick on Myth Romney and the crazy Republicans. Why is it your side can blame Obama for the market crash and the employment rate when he inherited a FAILED economy caused by YOUR party. ---------- Big business is raking in the $$$, they don't pay their employees to keep up with inflation (for well over the last decade) and it's all Obama's fault. How do they do it? they cut YOUR benifits leaving you to PAY for it yourself wiht your lower wages. and it's all Obama's fault http://en.wikipedia....e-class_squeeze Edited September 14, 2012 by BillsFan-4-Ever Link to comment Share on other sites More sharing options...
TPS Posted September 14, 2012 Share Posted September 14, 2012 The Fed just shot their FPF- Final Protective Fire. They literally have no bullets left in their magazine after this. They'd better hope this works, but why would it? The last two rounds didn't. The Ben Bernank is a gold bugs best friend! Not true. They have the one bullet that would actually work (stimulate demand directly): purchase T-bills/bonds from the Treasury. Technically, they aren't allowed to do this. In practice they are doing it to a degree. The reaction by investors to QE3 is the same as it was for the other QEs, buy commodity investments and foreign securities (bet against the $). Their reaction to the Fed's policy creates what they believe will happen, higher commodity prices leading to higher measured inflation. As the higher cost of gas and food chokes off consumption and growth for the majority of households, the bubble bursts, setting the stage for the next round of QE... As I've argued here for the last 5 years or so, since the commodity markets have been financialized (financial interests dominate commercial), expansionary Fed policy can be counteracted by the actions of investors. Previously, investors could only push up asset prices; now they can directly impact inflation. Bills 31 KC 17 Link to comment Share on other sites More sharing options...
GG Posted September 14, 2012 Share Posted September 14, 2012 I am not a liberal. You assume too much becasue I pick on Myth Romney and the crazy Republicans. Why is it your side can blame Obama for the market crash and the employment rate when he inherited a FAILED economy caused by YOUR party. The epitaph of the financial crisis is getting clearer that the messes at Fannie/Freddie were major contributors to the buildup of the real estate bubble, because the agencies turned out to be major buyers of subprime mortgage securitizations. So when you have insatiable artificial demand for the paper, Wall Street will keep pimping out the paper because the evil bankers know that the taxpayers will foot the bill. The balance sheet risk at Fan/Fred was well known for about a decade, including accounting chicanery which would have put any private executive in jail for decades. Yet, who was it that stonewalled any efforts to reign in Fan/Fred? Link to comment Share on other sites More sharing options...
3rdnlng Posted September 14, 2012 Share Posted September 14, 2012 There is a reason fuel and food prices are not always taken into consideration. I'm talking core inflation here. Fuel/food is affected by many outside factors such as weather and middle eastern conflicts. There is plenty evidence it worked to an extent, but the package was not put together well. It had to be scaled back for political reasons. Our economy's GDP was $14 Trillion, of course $787 Billion wasn't going to be enough alone to get the economy going again. Included in that $787B was plenty of tax cuts that weren't as stimulative as direct spending. Again, oil and food are in different categories. Debtors benefit. Private debt, which is a huge obstacle holding back consumer spending will fall. Suddenly, debt becomes easier to handle because the dollar is worth a little less. Obviously, it's not this simple but it has an effect in the short run. Hopefully this link works: http://research.stlo...date=2012-09-14 Graph of CPI over the last 5 years which included food and gas. WHERE IS THE MASS INFLATION?? Why are food & fuel so much higher now than they were in 2008? Gas has more than doubled. Chuck roast costs per pound what a ribeye did then. Why do we burn corn in our cars and make food prices more expensive when we are sitting on the world's largest known energy reserves? Link to comment Share on other sites More sharing options...
TPS Posted September 14, 2012 Share Posted September 14, 2012 The epitaph of the financial crisis is getting clearer that the messes at Fannie/Freddie were major contributors to the buildup of the real estate bubble, because the agencies turned out to be major buyers of subprime mortgage securitizations. So when you have insatiable artificial demand for the paper, Wall Street will keep pimping out the paper because the evil bankers know that the taxpayers will foot the bill. The balance sheet risk at Fan/Fred was well known for about a decade, including accounting chicanery which would have put any private executive in jail for decades. Yet, who was it that stonewalled any efforts to reign in Fan/Fred? That leaves out all of the fraud that occured at the origination level. One can point to the Bush admin castrating state regulators who were trying to pursue the "epidemic of mortgage fraud" the FBI had identified in 2005/06. Let's not try to politicize something that was so broad in scope. There is enough blame to go around for both parties. Link to comment Share on other sites More sharing options...
/dev/null Posted September 14, 2012 Author Share Posted September 14, 2012 I am not a liberal. You assume too much becasue I pick on Myth Romney and the crazy Republicans. You sure aren't a moderate or conservative Why is it your side can blame Obama for the market crash and the employment rate when he inherited a FAILED economy caused by YOUR party. My party? I am unaffiliated. You assume too much because I don't drink your Kool-Aid® Link to comment Share on other sites More sharing options...
GG Posted September 14, 2012 Share Posted September 14, 2012 That leaves out all of the fraud that occured at the origination level. One can point to the Bush admin castrating state regulators who were trying to pursue the "epidemic of mortgage fraud" the FBI had identified in 2005/06. Let's not try to politicize something that was so broad in scope. There is enough blame to go around for both parties. When you aggregate all the alleged and proven fraud, it still amounts to a fraction of the subprime RMBS market. There's definitely blame to go around to every single entity that had a hand in borrowed money over the last decade or so. It just rankles me that people fall hook line & sinker for the failed policies of the Bush administration, when the data doesn't support it. Link to comment Share on other sites More sharing options...
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