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Banks, QE, and Money-Printing

lynalden.com

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Re: Banks, QE, and Money-Printing

#51

Post by a3camero »

netfl0 wrote: post #31
kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

Excellent summary of reality. Why do you think people seem to ignore or not understand these basic facts?

Because everyone in charge owns a house.

Re: Banks, QE, and Money-Printing

#52

Post by atmosx »

kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

> They deprive everyone else of investment income.

Who that “everyone else” might be and what percentage of the population does “everyone else” represent in this context?

Keep in mind that there are other reasons they economy works the way it does. The end goal of a central bank or a government is not (contrary to popular belief) make investors rich, the end goal is stability and possibly prosperity for the society at large.

Re: Banks, QE, and Money-Printing

#53

Post by [deleted] »

siwatanejo wrote: post #3
UncleSlacky wrote: post #2

I recommend Stephanie Kelton's "The Deficit Myth" for more background on MMT: https://www.amazon.com/Deficit-Myth-Monetary-Peoples-Economy...

The point of that woman is simply: let the deficit go up ad infinitum (in USD value), it doesn't matter because as the central bank keeps printing money, the value of the deficit actually goes down (because the USD value goes down), so the value of the deficit is stable even if we don't perceive it to be this way. Quite BS imo

[deleted]

Re: Banks, QE, and Money-Printing

#54

Post by mmm_grayons »

arethuza wrote: post #35
JumpCrisscross wrote: post #21

Earlier quoted context omitted.

MMT is a neat theory. The mathematics are quite elegant. Unfortunately, like a lot of beautiful macroeconomics, it isn’t a policy prescription. (Though it provides ivory tower cover for bad policy.) Reserve currency status does afford increased deficit-spending capacity. But it isn’t an immutable, environmental variable. Deficits and reserve currency status interact. If a country runs up large deficits in the name of…

Presumably for the USD to lose reserve currency status some other currency would have to become more attractive as a long term bet? Are there any obvious candidates at the moment?

Red China and her policies of debt-trap diplomacy are making increased use of her currency more attractive.

Re: Banks, QE, and Money-Printing

#55

Post by syshum »

JumpCrisscross wrote: post #30
syshum wrote: post #16

Earlier quoted context omitted.

It is also a Tax on Saving, Retirements, and responsible behavior It encourages irresponsibility and debt, and discourages people from saving, planning for their future, and over all acting in a way that is not filled with instant gratification, or extremely leveraging themselves That provides good short term growth, but then you have recessions and depressions because at some point those balance sheets have to be ba…

> It is also a Tax on Saving, Retirements, and responsible behavior Unexpected inflation is. Predictable inflation is easy to account for. I live in New York. My basket of goods included until recently rapidly-increasing real estate prices. That is the benchmark against which my money managers are judged. It is true that this forces them to invest more riskily. But that is a systemic lever inflation and interest rate…

A healthy economy needs both savers and risk takers,

What is happening today, the marginal rate @ or below zero there are no savers, that is equally as bad as high interest rates where no one was taking any risks

Re: Banks, QE, and Money-Printing

#56

Post by pvsukale3 »

Aside: I am new to a lot of the economic terms mentioned in the article but I am curious about its content.

Can someone please share some good primer articles about monetary policy, QE and how central banks work? Thanks!

Re: Banks, QE, and Money-Printing

#57

Post by alexmingoia »

kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

Housing is included in CPI. Housing is included as rent, and owner-adjusted rent (what rent would be if a house was rented).

Housing purchase prices aren’t included because a house isn’t consumed within a year. The price of a house represents both current and future housing consumption. It’s not some conspiracy to hide inflation.

Re: Banks, QE, and Money-Printing

#59

Post by atmosx »

JumpCrisscross wrote: post #45
newdude116 wrote: post #29

Earlier quoted context omitted.

" Yet for academics and central bankers the only answer to growth is more debt." The uttermost definition of capitalism. "Our economies and culture have a skills crisis not a growth crisis." Capitalism can't survive without growth by definition. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...

> Capitalism can't survive without growth by definition Capitalism prefers growth. It causes growth, which is good. (Growth does not have to mean resource intensity.) It does not require growth. Zero-grow and shrinking economies can allocate resources well through markets.

You mean intellectual growth then?

Because for everything else someone somewhere will need very tangible resources e.g. raw materials to build that phone you are using do X or Y.

Re: Banks, QE, and Money-Printing

#60

Post by HourglassFR »

JumpCrisscross wrote: post #45
newdude116 wrote: post #29

Earlier quoted context omitted.

" Yet for academics and central bankers the only answer to growth is more debt." The uttermost definition of capitalism. "Our economies and culture have a skills crisis not a growth crisis." Capitalism can't survive without growth by definition. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...

> Capitalism can't survive without growth by definition Capitalism prefers growth. It causes growth, which is good. (Growth does not have to mean resource intensity.) It does not require growth. Zero-grow and shrinking economies can allocate resources well through markets.

> (Growth does not have to mean resource intensity.)

That would be wonderful, alas the data we have suggest otherwise. But if you have ideas of how that decoupling between ressource extraction and growth could work I would glad to hear/read them (for real, I would like to be more positive on those matters).

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