The End of the Beginning for QE in the US...?

sabretoothtigger

how far the US economy has to go before it can be considered fixed.

There is a presumption that continuing QE is helping the fix, what if QE was preventing a fix
A bit like me waiting till I can count my eleven fingers, problem is there will never be a right time to end QE because it was never correct or correctional in its ongoing program.

Eventually I might start from the beginning and realise my mistake and I will never get to 11 and the only end to QE is that we do similar and conclude its effects negative

chucky

wotsthat wrote: »

I like a conspiracy theory.

Don't expect a direct response to your post from Thrugertroll.

His reply will be a random reply to a different post.

armour

Truth is always strange.
Quote:
Originally Posted by Thrugelmir
Wait for the book to come out in a few years time. Then you'll comprehend what's been going on. The picture is far bigger and certainly more complex. Than you are suggesting.
The bugbear is that what we've missed will be so bleeding obvious as well.
..._

3 or 4 years ago, what Digger is saying in this thread would be accepted as 'bleeding obvious'. There's got to be a price to pay.

DiggerUK

As QE is just a concentrated form of government stimulus, it makes me wonder how many major projects, such as High Speed 2 etc., it would require to replace QE, here in the UK.
Come up with a realistic scenario and I will be the first to acknowledge that QE can be ended.

We are also closer to election year, so the more voter friendly any crazy ideas are, the better. Don't let such silly thoughts as austerity get in the way of a vote winner either.
..._

purch

purch wrote: »

The Fed will not substantially reduce it's asset purchase program until the unemployment rate falls below 7%

.......................

Masomnia

DiggerUK wrote: »

Come up with a realistic scenario and I will be the first to acknowledge that QE can be ended.

Economy continues to grow, jobs created, confidence returns.

Banks recapitalise, begin to lend more, money supply begins to grow.

Inflation takes off. Bank begins to raise rates by raising the base rate and by selling assets.

How is that not realistic?

DiggerUK

Masomnia wrote: »

Economy continues to grow, jobs created, confidence returns. Banks recapitalise, begin to lend more, money supply begins to grow.Inflation takes off. Bank begins to raise rates by raising the base rate and by selling assets.How is that not realistic?

A very, very, nice plan. I love the idea.
..._

sabretoothtigger

Masomnia wrote: »

Bank begins to raise rates by raising the base rate and by selling assets.

How is that not realistic?

The bank will have to sell at a loss. The QE deal is the same as the whale trade they fined JPM 1bn for, they have become the market.

If there is no justification for low rates then neither can the bonds at low rates be profitable. The treasury must pay for the BOE to balance its books which is a reversal of the profits taken away previously

Masomnia

Yeah I've said before I reckon the tax payer will make a potentially massive loss on QE.