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If QE Was Withdrawn....
Comments
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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.
QE hasn't caused the USD to depecriate, or are you talking of UK QE? In that case what does that have to do with the DOW? UK QE and US QE are very different. US QE has global effects and it is being used to provide big tax rebates to help consumer spending which is 70% of their economy. UK QE is being used to pay government bills, the alternative is huge spending cuts.0 -
From what i've read US consumer spending, like most western economies, is flat lining save a few bumps either direction.
All the various money printing schemes and back handers to banksters by banksters with political collusion, whether QE or any of the many other schemes being used, are all about market manipulation and transferring private liability and loss to the public.
It's been said before, QE is about preserving private sector profits and socialising their losses. A form of corporate socialism being engineered by banking crooks.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
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.
The seriously wealthy don't keep a big proportion of their wealth in cash!!
Its in assets - like Agricultural Land which has tripled in price since QE began.
The people with most of their 'wealth' in cash are relatively poor, and they lose the most through QE.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
What is the alternative?0
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QE hasn't caused the USD to depecriate, or are you talking of UK QE? In that case what does that have to do with the DOW? UK QE and US QE are very different. US QE has global effects and it is being used to provide big tax rebates to help consumer spending which is 70% of their economy. UK QE is being used to pay government bills, the alternative is huge spending cuts.
Any expansion of the money supply, all things being equal, should cause the currency to depreciate. That effect is muted in the USD case because it is also the global currency of choice. A lot of currencies are directly linked to it, so QE by the US has no effect, because the currency twinned to it depreciates by exactly the same rate.
Also, the US is less reliant on the rest of the world for resources, e.g. compared with Britain. So, with both QE-ing, the pound has depreciated relative to the dollar because we are more dependent on imports.0 -
If what you are saying is true, we should have high inflation. Inflation is very low in the US and around the world in general. The price of commodities is falling, not going up. Most are at prices below 2007 levels. Stock markets are also well below pre crisis levels once inflation is taken into account.0
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The relationship between essentials inflation and average income is what matters to most people in their daily lives, in other words paying the bills. According to tullet prebon essentials inflation has outpaced average income by a factor of two over the last ten years and a factor of three over the last five years. That indicates an acceleration towards poverty for an increasing number of people.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0
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If what you are saying is true, we should have high inflation.
We do have high inflation, in everyday items like food, fuel, rents.
The inflation figures are skewed by introducing things like DVD players when they were£800, keep them till they fall to £25, then introduce the updated version - blu ray disc or whatever, and start the cycle again.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Thats it DVD players skew the figures! How about the fact you can buy a pair of Jeans now cheaper than 20 years ago. A lot of the increeases in petrol prices are extra taxes rather than true inflation. Yes food prices have gone up a lot but I dont think this is down to QE. If you take a long term view on food prices then the average inflation isn't that high.0
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The relationship between essentials inflation and average income is what matters to most people in their daily lives, in other words paying the bills. According to tullet prebon essentials inflation has outpaced average income by a factor of two over the last ten years and a factor of three over the last five years. That indicates an acceleration towards poverty for an increasing number of people.
This I can agree with, this is the consequence of binge credit, once it stopped this was always going to happen.0
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