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rootX
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Good time to hide, IMO.rootX said:
Or a good time to sell them !rootX said:Good time to buy US dollars?
NobodySpecial said:Or a good time to sell them !
I'm only a humble physicist but can someone explain how it's good for a country to borrow $500Bn on top of $1.7Tn and hand it out to the people, who are going to have to pay it back one day, so that they can boost demand.
NobodySpecial said:Or a good time to sell them !
I'm only a humble physicist but can someone explain how it's good for a country to borrow $500Bn on top of $1.7Tn and hand it out to the people, who are going to have to pay it back one day, so that they can boost demand. Yet it's irresponsible to just give everyone a credit card with a $10,000 limit and tell them to enjoy themselves.
rootX said:
I'm only a humble physicist but can someone explain how it's good for a country to borrow $500Bn on top of $1.7Tn and hand it out to the people, who are going to have to pay it back one day, so that they can boost demand. Yet it's irresponsible to just give everyone a credit card with a $10,000 limit and tell them to enjoy themselves.
talk2glenn said:Your missing the point. The Fed isn't interested in inflation or exchange rates. It's concern is the yield curve (the interest rate). I'm guessing your English; the Federal Reserve is not like the ECB. It's mandate goes beyond inflation control - it is responsible for promoting long term economic growth while maintain a healthy inflation rate.
Ivan Seeking said:Yes, this isn't a math equation. It is a matter of momentum.
No stimulus program can buy our way out of a recession. Everyone knows that.
By your logic, no business would ever invest in itself.
talk2glenn said:Consumers are still saving. This pushes yields up, which is the worst possible scenario (a so-called unhealthy yield curve has historically been a very reliable indicator of recession). The Fed will do anything it can (including risking significant long term inflation) to keep the yield curves healthy. A healthy yield curve is one which is directly related to coupon term - longer term bonds should have higher yields than shorter term bonds. An unhealthy yield curve has no or an inverse relationship between rate and term. The American yield curve inverted in late 2006. A healthy yield curve returned in 2009, due as much to actions by the Fed as the market.
This is not how it works. The Federal Reserve is not borrowing money, it's creating it. It is not giving it away, it is selling it (and buying Treasuries). The people who buy those dollars don't have to give them back later
Indeed, I'm still regretting that I didn't sell my dollars 7 years ago in 2003. At the time I thought the dollar could rise again to the level of 2002. I also regret not selling them in June this year and taking my money. I'm thinking of getting rid of the dollars now before they devalue even more (I'm already too late), or just sit out the ride and maybe 20 years from now they'll be worth some money again.NobodySpecial said:Or a good time to sell them !
NobodySpecial said:Or a good time to sell them !
I'm only a humble physicist but can someone explain how it's good for a country to borrow $500Bn on top of $1.7Tn and hand it out to the people, who are going to have to pay it back one day, so that they can boost demand. Yet it's irresponsible to just give everyone a credit card with a $10,000 limit and tell them to enjoy themselves.
http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/February 25 said:"We're not going to monetize the debt," Mr. Bernanke declared flatly
mheslep said:The Ber-nanke has spoken on the topic:
http://www.washingtontimes.com/news/2010/feb/25/bernanke-delivers-warning-on-us-debt/
? There is no comment from Rep. Frank in the article.WhoWee said:Barney Frank (from your link) doesn't seem to like the idea of reduced spending?
mheslep said:? There is no comment from Rep. Frank in the article.
mheslep said:Whether the Fed directly buys existing or new debt is irrelevant, as when the Fed buys existing debt from some third party seller tomorrow at the beginning of QE2, that seller is then enabled to buy more new debt from the Treasury at the auction of new 10yrs next Thursday.
Yes I understand how the debt purchase places more money into circulation, but that will happen whether or not the Fed buys old or new debt, as the level of debt will remain the same. One can't uncouple the actions of the Fed and the Treasury here from the standpoint of an investor bank. The Treasury is scheduled to issue another $X billion in 10 yr notes two weeks from today no matter what the Fed does when it starts QE2 buys tomorrow. After that Treasury issue two weeks from now the level of debt will be exactly the same whether the Fed bought $600B from GS, or directly from the Treasury.loseyourname said:It's pretty relevant, man. Buying existing debt takes it off the hands of banks and gives them cash to lend, with the express purpose of putting more money into circulation and driving down bond yields. Issuing new debt adds debt and drives up bond yields since there is a larger supply without any added demand.
Geithner is absolutely right there, at least in word. So why the ?WhoWee said:It seems Mr. Geithner has an opinion.
http://finance.yahoo.com/news/Geithner-opposes-effort-to-apf-3043185814.html?x=0
"Geithner also warned Republicans about politicizing the Federal Reserve. A number of conservative economists and Republicans in Congress have attacked the central bank for its decision to launch a new round of $600 billion in purchases of Treasury securities as a way to lower long-term interest rates. They warn this effort runs the risk of weakening the value of the dollar and setting off higher inflation down the road.
Asked about this criticism, Geithner said, "It is very important to keep politics out of monetary policy, as Congress recognized when it established the Fed."
Geithner said it was essential that policymakers "respect and honor what the Congress did when it set up our independent central bank with a mandate to keep prices low and stable over time and to make sure ... they are promoting sustainable economic growth.""
Zandi is the darling of NPR and Marketplace broadcasts. Hopefully his record will eventually put a stake through his popularity.Astronuc said:Interesting reading here -
http://www.economy.com/mark-zandi/default.asp
See toward the bottom of the page - Fiscal Stimulus Fades
It seems the stimulus (from two years ago) isn't working as predicted. Unemployment was supposed to be falling through 2010 - but it obviously hasn't. Several sectors of our local economy are more or less frozen (no growth, zero activity) and in some cases in decline. Local development has essentially stopped, and one company, which has been around for decades just closed. On our Main Street business is down about 30% +/- from two years ago.
More recently
http://www.csmonitor.com/USA/Politi...-John-Boehner-just-wrong-about-Obama-stimulus
Well the could be because the Fed is playing politics itself, or because the QE2 seems to contractict Bernanke's statement earlier this year when he "declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt." [quote attributed to Washington time article cited above]mheslep said:Geithner is absolutely right there, at least in word. So why the ?
mheslep said:Geithner is absolutely right there, at least in word. So why the ?
How? Why? Bernanke doesn't have to win any elections.Astronuc said:Well the could be because the Fed is playing politics itself,
Maybe slightly. But then the Fed has two mandates, not one, as Geitner mentioned in the quote. The current Fed dual charter may indeed be a mistake, but for the moment there it is. Even so I don't know how that runs counter to what Geitner said.or because the QE2 seems to contractict Bernanke's statement earlier this year when he "declared that the central bank will not help legislators by printing money to pay for the ballooning federal debt." [quote attributed to Washington time article cited above]
So the Fed is monitizing the debt(?).
? The whole developed economic world is pressing China over there low currency.WhoWee said:The Fed is isolated from politics under Obama?
http://www.nytimes.com/2010/11/19/business/economy/19fed.html?src=me
"Echoing Obama, Bernanke Presses China on Imbalances"
Even though Bush appointed him?I would say they are inseparable...
mheslep said:? The whole developed economic world is pressing China over there low currency.
Even though Bush appointed him?
Your links don't make your point, which is annoying.
You said, "The Fed is isolated from politics under Obama?", implying Bernanke actions somehow favor or are under the influence of Obama's politics. That doesn't make much sense given he's a Bush appointee.WhoWee said:What does Bush have to do with anything?
mheslep said:? The whole developed economic world is pressing China over there low currency.
Even though Bush appointed him?
Your links don't make your point, which is annoying.
mheslep said:How? Why? Bernanke doesn't have to win any elections.
Maybe slightly. But then the Fed has two mandates, not one, as Geitner mentioned in the quote. The current Fed dual charter may indeed be a mistake, but for the moment there it is. Even so I don't know how that runs counter to what Geitner said.
http://en.wikipedia.org/wiki/PoliticsPolitics . . . . is a process by which groups of people make collective decisions. The term is generally applied to behavior within civil governments, but politics has been observed in other group interactions, including corporate, academic, and religious institutions. It consists of "social relations involving authority or power" . . . .
And he has a beard and where's dark suits. Of course he gives speeches. He does not, however, give baby kissing vote for me speeches. He's the chairman of the US central bank, and he should be out there explaining his actions everyday.WhoWee said:My point was that the Fed is eyeball deep in politics. Bernanke is all over the planet giving speeches.
Which means the President is political, not Bernanke. This is also basically what every President says, all the time - stay with the Fed chair do give the markets confidence in some stability.I guess you didn't get a chance to open either of these links I posted?
http://business.timesonline.co.uk/tol/business/economics/article7000881.ece
"Obama urges Senate to stand by Ben Bernanke"
Because you made the point about Bush - and
Many countries have a problem with QE. So what, in this context about politics? They don't get a vote.http://www.moneynews.com/StreetTalk/ChinaUrgesBernanketoStopthePrintingPresses/2010/10/28/id/375187
"China Urges Bernanke: Stop Printing Dollars!"
then you made the point the entire world having a problem with China manipulating currency - who in turn has a problem with the US actions (that will also devalue currency).
That Bernanke is relatively isolated from politics as compared to, a politician, and should stay that way as Geitner suggests. You don't like the Fed actions, I get it. I'm not sure I do either wrt QE, and I think I'd like to see the Fed charter changed. That doesn't mean we should all go and conflate that opinion with some conspiracy theory about Bernanke's politics.What is your point - other than to find fault with my post?
Yes, there is evidence that Ben Bernanke faced political pressure during his time as Fed Chair. In particular, during the financial crisis of 2008, there were several instances where politicians publicly criticized the decisions made by the Federal Reserve under Bernanke's leadership.
Ben Bernanke is known for being a skilled communicator and for his ability to navigate through difficult political situations. He often emphasized the importance of the Fed's independence and made decisions based on economic data and analysis rather than political considerations.
While there were instances where political pressure was present, the Federal Reserve under Ben Bernanke's leadership maintained its independence and continued to make decisions based on its mandate to promote maximum employment and stable prices. However, it is difficult to determine the exact extent to which political pressure may have influenced certain decisions.
The public's perception of Ben Bernanke's handling of political pressure was generally positive. Many viewed him as a steady and competent leader during a time of economic turmoil. However, there were also criticisms from some who felt that the Fed should have taken a more aggressive stance in response to the financial crisis.
The Federal Reserve maintains its independence through a number of measures. First, the Fed's Board of Governors is appointed by the President and confirmed by the Senate, ensuring a degree of political neutrality. Additionally, the Fed is subject to regular audits and oversight by Congress. Finally, the Fed's mandate to promote maximum employment and stable prices is enshrined in law, providing a clear framework for decision-making that is not influenced by political considerations.