91–100 of 131 posts
Not enough people are trying risky entrepreneurial things; the market is begging us to quit our jobs and try more startups.
In other words, productivity gains are meaning that the world is saving too much money, and we need fewer workers and more explorers.
Alternate: Wages should be raised across the board.
Earlier quoted context omitted.
whatever that means I believe the notion of artificially low/high rates actually does have a precise meaning. If banks freely set rates as players in a competitive market based on prevailing inflation rates, demand for money, etc, that would be the "market rate" of money. "Artificially low" rates would be those rates set centrally which are lower than what the market rate would be in a competitive rate market. Now it…
> If banks freely set rates as players in a competitive market based on prevailing inflation rates, demand for money, etc, that would be the "market rate" of money. But, they do. Of course, "inflation rate" is in large part a product of monetary policy. > Now it very well may be that zero would be the market rate of money, and the Fed is doing a great job of estimating it. The Fed sets interest rate targets , and the…
Exactly. The Fed has very few mechanisms by which to inject money in the economy. Nothing they do dictates interest rates, but they can influence specific rates through open market operations. But you (and the banks) are free to charge whatever rate you want.
The financial problems originated with excess debt, but debts that are so large that they cannot be paid back - will not be paid back. Inflating assets via QE doesn't really address the real underlying problem. The only long-term solution I have seen is Debt for Equity swaps. It won't work everywhere, but it does help. For example, when the Banks were technically insolvent then the opportunity should have been taken…
So in other words, you believe that financial problems are caused by too many assets? Because that's how a balance sheet works.
The financial problems originated with excess debt, but debts that are so large that they cannot be paid back - will not be paid back. Inflating assets via QE doesn't really address the real underlying problem. The only long-term solution I have seen is Debt for Equity swaps. It won't work everywhere, but it does help. For example, when the Banks were technically insolvent then the opportunity should have been taken…
banks issued equity and preferred equity to the tune of many many tens of billions during the crisis. revisionist class warfare stuff i strange (as a first hand participant): the bailout of wall street banks was critical for the economic well-being of EVERYBODY not just "the rich", and it's the main reason obama and democrats (who wanted it as opposed to the republicans who didn't) swept the elections.
Earlier quoted context omitted.
another way to think about high asset prices is fear of owning currency. it's not irrational given the willingness of central banks to debase money.
If that were the case (central banks debasing money), you'd see high interest rates. You'd also see inflation in goods, not just high prices in financial assets. When people talk about central banks "debasing" currency because of QE, they miss one thing: Something in the neighborhood of one trillion dollars evaporated in 2008. That's the kind of thing that can lead to a significant deflationary mess. The central bank…
not sure what the rest of your post is addressing. i'm familiar with deflation.
Like all bubbles, it will eventually correct. It could be soon, it could be years away. We may be stuck in secular stagnation with high asset inflation for a long time. Who really knows? That there has been so much intervention from central banks, with ZIRP and NIRP policy being the new norm, should make everyone a bit nervous. We are in uncharted waters.
So, the article says dotcoms caused first bubble in 2000, houses in 2008, but this one is driven by central banks printing money. And there is no way they will stop printing so this is an infinite bubble There is sooo much wrong with that. As @rtpg says, that s stops not when Fed stops printing money but when market realises that the high asset prices "globally" become obviously unsustainable. The issue is that when…
Why would the Central Bank stop printing money? As long as inflation is in control, can you point to the harm?
According to the OP, we have a global "central-bank-led cash bubble" powered by "an ever flowing money hose." If you believe interest rates are being kept "artificially low" (whatever that means) by the "money printing" of central banks like the Federal Reserve and the Bank of Japan, then you will agree with the OP. In this view of the world, central banks are contributing to our current economic malaise: by keeping…
I believe this is a generation thing. Generation Y grew up with so many crisis and terror attacks, its just naturally everyone is hording their cash. Also a lot of people want to stay independent and mobile so they are not (yet) settling down.
Earlier quoted context omitted.
If that were the case (central banks debasing money), you'd see high interest rates. You'd also see inflation in goods, not just high prices in financial assets. When people talk about central banks "debasing" currency because of QE, they miss one thing: Something in the neighborhood of one trillion dollars evaporated in 2008. That's the kind of thing that can lead to a significant deflationary mess. The central bank…
you don't see high interest rates because the banks are undermining the currency by buying their own debt (lowering their interest rates). not sure what the rest of your post is addressing. i'm familiar with deflation.
True - or at least, it was true. Currently the Fed is not buying additional debt. The amount that they hold might distort the market, but at least they aren't adding any additional distortion to it.
> not sure what the rest of your post is addressing. i'm familiar with deflation.
It's addressing the term "debase". If a trillion dollars evaporated, creating a new trillion dollars isn't debasing the currency, it's restoring the status quo ante.
Vancouver and London are examples that I've heard of.
Sounds like a big clue to me!