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Fed, worried about recovery, will buy US debt

finance.yahoo.com

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Re: Fed, worried about recovery, will buy US debt

#11

Post by ww520 »

nerfhammer wrote: post #7
startuprules wrote: post #6

Earlier quoted context omitted.

Deflation is dangerous only for the entities that own large amounts of real estate/stocks. For normal people, deflation allows their buying power to increase. The government printing is akin to stealing from your labor right then and there.

Deflation allows personal buying power to increase holding income constant. Deflation is defined as a decrease in prices. You know what else counts as a price? The price of labor. I.e., wages. Average wages decreases under deflation, just like any other price. Deflation is not a magical money machine that makes us all richer.

But the real average wage adjusted for inflation has decreased for a long time. Deflation has in fact happened in labor cost. Now it's the time to bring the rest in line. It's unsustainable to have ever increasing asset price but lower labor cost. No one can afford to buy them at the end.

Re: Fed, worried about recovery, will buy US debt

#12

Post by stretchwithme »

startuprules wrote: post #4
gte910h wrote: post #3

Earlier quoted context omitted.

Cause that's really dangerous when you're suffering deflation....you know, when you take actions to correct this situation.

dangerous only for the banks.

oh, no, we're paying less for things. help!

the massive housing bubble and it inflationary effects HAD to collapse. those who waited out the insanity deserve lower prices. those who were foolish do not deserve to have the rest of us prop up their property values, although our government is foolishly backing every bad bet out there.

Re: Fed, worried about recovery, will buy US debt

#13

Post by startuprules »

The US government is printing/robbing you of your savings. Don't believe it for a second it will trickle down to you; the last batch of printing/bailout went to banks and shareholders.

On a side note, man, there's alot of sheeples on this board. Do you all like get up early in the morning to go to work and get robbed?

Re: Fed, worried about recovery, will buy US debt

#14

Post by ww520 »

startuprules wrote: post #4
gte910h wrote: post #3

Earlier quoted context omitted.

Cause that's really dangerous when you're suffering deflation....you know, when you take actions to correct this situation.

dangerous only for the banks.

Deflation is bad for debt issuers. Guess who's holding the biggest amount of debt?

Re: Fed, worried about recovery, will buy US debt

#15

Post by startuprules »

stretchwithme wrote: post #10

i suppose it makes more sense to print money and lend it to itself than lending it to banks to lend to itself

Why waste all that paper/electronic bits? Just enact a large tax increase...it's the same thing. Oh, but then the American sheeples will notice.

Re: Fed, worried about recovery, will buy US debt

#16

Post by fuzzmeister »

startuprules wrote: post #2

massive printing of dollars, here we go!

"The decision to buy government debt, using proceeds from Fed investments in mortgage bonds..."

If the money is coming from mortgage investments, I don't believe this action is actually increasing the money supply. Knowing the complexities of the Fed, though, I could certainly be wrong.

Re: Fed, worried about recovery, will buy US debt

#17

Post by itsgoats »

stretchwithme wrote: post #12
startuprules wrote: post #4

Earlier quoted context omitted.

dangerous only for the banks.

oh, no, we're paying less for things. help! the massive housing bubble and it inflationary effects HAD to collapse. those who waited out the insanity deserve lower prices. those who were foolish do not deserve to have the rest of us prop up their property values, although our government is foolishly backing every bad bet out there.

I'd like to say thank you, stretchwithme, for all of us who saved enough to buy a house, responsibly, in what just happened to be the middle of last decade and now have cause to sell (moving jobs because the economy stinks). We so deserve to seriously be screwed over because of our timing. Thank you US government. Thank you stretchwithme, your sentiments help the situation tremendously.

Surprisingly, there were actually many people who bought a house in 2003-2005 because they had a down payment at that time and they had jobs and they bought what they could afford.

Re: Fed, worried about recovery, will buy US debt

#18

Post by WiseWeasel »

stretchwithme wrote: post #12
startuprules wrote: post #4

Earlier quoted context omitted.

dangerous only for the banks.

oh, no, we're paying less for things. help! the massive housing bubble and it inflationary effects HAD to collapse. those who waited out the insanity deserve lower prices. those who were foolish do not deserve to have the rest of us prop up their property values, although our government is foolishly backing every bad bet out there.

Deflation also pushes people with large home mortgages closer to the brink, as their debt increases in value, and their banks feel pressure to lower their risk exposure by refusing to refinance or renew loans and pushing loan holders to pay down their debts. It has the potential of making the housing crisis much worse for everyone. That's not even getting into what it would do to the commercial real estate market, which is currently in a tailspin.

Re: Fed, worried about recovery, will buy US debt

#19

Post by startuprules »

itsgoats wrote: post #17
stretchwithme wrote: post #12

Earlier quoted context omitted.

oh, no, we're paying less for things. help! the massive housing bubble and it inflationary effects HAD to collapse. those who waited out the insanity deserve lower prices. those who were foolish do not deserve to have the rest of us prop up their property values, although our government is foolishly backing every bad bet out there.

I'd like to say thank you, stretchwithme, for all of us who saved enough to buy a house, responsibly, in what just happened to be the middle of last decade and now have cause to sell (moving jobs because the economy stinks). We so deserve to seriously be screwed over because of our timing. Thank you US government. Thank you stretchwithme, your sentiments help the situation tremendously. Surprisingly, there were actua…

Should we feel sorry for you because you don't have the patience to wait? Because you weren't smart enough to realize that maybe housing prices doubling in 1-2 years don't equate? Did someone make you buy a house at gunpoint?
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