If QE Was Withdrawn....

JohnRo

The problem I have with all this QE smoke and mirrors is that we are now seeing on a scale never before seen that private for profit banksters via captured central banking trickery are making blatant moves to take substantial control and drive stock markets.

Maybe I'm just barking up the wrong tree, but all I see here is privileged bankster access being used for vast short term profit and bonuses as recent history of similar involvement in other markets has shown, and everyone else is, at some point, going to have to pay the price for it all.

lvader

The interesting thing about QE is that the effects apear to be short term, it doesn't seen to matter that the money base has increased. I believe this is because QE has simply sustituted cheap cunsumer credit which was available befre the crisis. The question is how can we have true gowth without fake money being introduced in greater snd greater amounts. Maybe we should adjust to the idea that low growth isn't a bad thing to aim for.

Glen_Clark

cepheus wrote: »

Through the prolonged failed recovery, unemployment, an investment crisis, the Fukushima crisis and the EU debacle, Wall street, still the market all else look to, has doubled in value..

value is the wrong word. Its like saying your house has doubled in value - its the same house so the value is the same, Its just doubled in price.
Would be more accurate to say cash has fallen in value (as they dilute it by printing more)

lvader

Inflation is very low in the US, without QE the US would be in deep depression.

JohnRo

lvader wrote: »

The interesting thing about QE is that the effects apear to be short term, it doesn't seen to matter that the money base has increased. I believe this is because QE has simply sustituted cheap cunsumer credit which was available befre the crisis. The question is how can we have true gowth without fake money being introduced in greater snd greater amounts. Maybe we should adjust to the idea that low growth isn't a bad thing to aim for.

The money base has certainly increased and the negative effects are increasingly being felt by many, but the distribution of both is anything but uniform.
For many it's changed nothing in a positive way, most people are worse off than they were in 2005. Talk about lost decade..

Were it not for the vast wealth transfers being directed in to mortgage welfare, riding on the coat tails of bankster handouts and financial repression, which have all come at great expense to pensioners, savers and future generations, things would undoubtedly be a whole lot worse than they are for smug suburbanites everywhere.

lvader

Lots of wealthy people have been badly affected by the crisis, many are reliant on the interest from cash savings and have been badly affected by low inteset rates.

dktreesea

pqrdef wrote: »

But consumers aren't spending, because the stimulus isn't reaching them.

If you want more money pumping round the economy, it's absurd to be having pay freezes and benefit cuts at the same time.

Only the UK is doing this.

If the government really wanted to stimulate local consumer spending, they would cut income tax rates instead of lifting wages or increasing benefits. The fact is the vast majority of people in Britain who are working receive very little, if anything, in benefits.

dktreesea

lvader wrote: »

The interesting thing about QE is that the effects apear to be short term, it doesn't seen to matter that the money base has increased. I believe this is because QE has simply sustituted cheap cunsumer credit which was available befre the crisis. The question is how can we have true gowth without fake money being introduced in greater snd greater amounts. Maybe we should adjust to the idea that low growth isn't a bad thing to aim for.

But we don't have true growth in the value of our assets. QE causes the currency to depreciate. The price of imports rises, our cost of living falls, and the value of our assets in terms of what the money could now buy if we liquidated those assets, has also fallen.

dktreesea

lvader wrote: »

Inflation is very low in the US, without QE the US would be in deep depression.

Even so, look how the USD has tanked in value against other major currencies of exporting nations like the yen (120JPY to 1USD prior to the recession, now hovering around 100JPY to 1USD) and the Australian dollar (AUD1.65 to USD1 at the beginning of the recession to AUD1.08 to USD1 now.

Sooner or later, given that the US is a net importer of items from both countries (recognising the amount of exports Australia makes to China or raw materials, which get converted into exports to the USA), the inflationary impact of the QE is going to hit home.

dktreesea

Glen_Clark wrote: »

value is the wrong word. Its like saying your house has doubled in value - its the same house so the value is the same, Its just doubled in price.
Would be more accurate to say cash has fallen in value (as they dilute it by printing more)

Yes, exactly. Doubled in price but when you factor in the fall in the value of the currency vis a vis other major currencies, housing has fallen in real terms. In spite of all the efforts by the current government to keep prices artificially high.