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Banks, QE, and Money-Printing

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Re: Banks, QE, and Money-Printing

#91

Post by bsanr2 »

JumpCrisscross wrote: post #68
HourglassFR wrote: post #60

Earlier quoted context omitted.

> (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).

> the data we have suggest otherwise No [1]. They don’t [2]. > if you have ideas of how that decoupling between ressource extraction and growth could work The universe of digital goods and services, for one. A few grams of metal and silicon producing as much value today as a car’s worth of steel did a century ago. [1] https://www.eia.gov/todayinenergy/detail.php?id=10191 [2] https://www.wri.org/blog/2020/07/decouplin…

You forgot the electrons.

https://davidmytton.blog/how-much-energy-do-data-centers-use...

Re: Banks, QE, and Money-Printing

#92

Post by melenaboija »

It is funny this is from an Investment Strategy site where the strategies it is explaining are taking advantage of the system (how she/he manages the portfolio).

What a paradox is this capitalism, the system is supposedly trying to "help" people, but some people is trying to make money out of it while some others need it to be alive and nobody can live without the others. And loop.

Besides that as time goes by it seems more clear to me this is obviously non sustainable, although I might be wrong as I have been thinking this for years and keeps working :)

Re: Banks, QE, and Money-Printing

#93

Post by sleepysysadmin »

There isn't debate on what is money printing. If there is any money printing it is immediately can be discerned in high inflation. Which we don't have and therefore no money printing is occurring.

Flipside, bond rates serve 2 purposes. First, it's what the government borrows money at; the second is what everyone else borrows at. These are counter points, if the economy needs boosting you lower rates but at some point the giant pension funds stop buying. This almost always occurs right around where bonds real yields are negative or 0. That is to say the Inflation target of 2% is higher than the bond yields.

When those big funds stop buying, like they mostly have at the moment. The central bank is the last place for the government to fund itself. This is a strong sign the country has become bankrupt. https://tradingeconomics.com/united-states/central-bank-bala...

The US government is obviously bankrupt.

Inflation is a hidden tax on savings. The boomers did not save enough money, they wanted to retire based on debt given to later generations. Extreme inflation is coming and will be taxing their savings to pay off the debt.

Re: Banks, QE, and Money-Printing

#94

Post by alexmingoia »

francisofascii wrote: post #79
alexmingoia wrote: post #57

Earlier quoted context omitted.

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.

Sure, it is included, but underrepresented. When people with six figure salaries are paying 30-50% of their income on rent, the rent figure should be the primary driver of the CPI.

Underrepresented how? The percentage of income paid towards rent isn’t a measure of a change in rental cost.

In other words, prices can change at a different rate than the percentage of income paid to rent.

Re: Banks, QE, and Money-Printing

#95

Post by JumpCrisscross »

bsanr2 wrote: post #91
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> the data we have suggest otherwise No [1]. They don’t [2]. > if you have ideas of how that decoupling between ressource extraction and growth could work The universe of digital goods and services, for one. A few grams of metal and silicon producing as much value today as a car’s worth of steel did a century ago. [1] https://www.eia.gov/todayinenergy/detail.php?id=10191 [2] https://www.wri.org/blog/2020/07/decouplin…

You forgot the electrons. https://davidmytton.blog/how-much-energy-do-data-centers-use...

Taken into account in the first link [1].

[1] https://www.eia.gov/todayinenergy/detail.php?id=10191

Re: Banks, QE, and Money-Printing

#96

Post by OGWhales »

fmsf wrote: post #25
zelos wrote: post #22

Earlier quoted context omitted.

As someone who really doesn't understand economics: if the government prints money to build infrastructure, where does the value they've added come from? I can't follow the logic of it: the government makes some money and pays a load of workers to build a bridge. It seems like the bridge is 'free', paid for with bits of paper they printed. Is the real cost the increased price of bridge building for everyone else, bec…

The printed money is effectively diluting everyone's else's money. So technically you could think of it as an indirect tax, because the overall currency value drops. Similar to a company emitting new shares to pay employees. It's the shareholders who are paying the cost via dilution.

Not quite accurate, as it depends, this explains some of the other relevant variables in the equation: https://www.forbes.com/sites/johntharvey/2011/05/14/money-gr...

Re: Banks, QE, and Money-Printing

#97

Post by neilwilson »

VMG wrote: post #27
ChrisMarshallNY wrote: post #6

Earlier quoted context omitted.

Printing money is a bad idea. You think we had it bad, check out what happened here: https://alphahistory.com/weimarrepublic/great-depression/ I seem to remember something else, rather alarming, that happened after that...

MMT proponents will have a list of reasons why this will not happen with the USD (because it is a reserve currency etc) The arguments are unconvincing because the USD could lose that status.

Nothing to do with reserve status. Everything to do with a non-convertible floating rate currency.

The same applies to the UK, Japan, Canada, Australia and the Eurozone among others.

Re: Banks, QE, and Money-Printing

#99

Post by OGWhales »

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

This is an intentional misinterpretation of MMT.

Quite BS imo.

Re: Banks, QE, and Money-Printing

#100

Post by fuoqi »

auston wrote: post #66
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…

Yeah this part had me baffled: “ In other words, while it’s possible for an individual bank to boost its reserves by selling assets to raise capital, it’s mechanically impossible for the entire banking industry to collectively raise its reserves industry-wide.” Why not? I have confidence people would rally together to buy distressed bank assets at rock bottom prices.

It means that all banks will be distressed, thus destabilizing the whole system. Regulatory change plays here a role of an artificial shock (since banks have to increase their reserves), which gets smoothed by the QE. I guess an alternative could've been a gradual raise of the legal requirements, but probably such measure was too slow for the crisis conditions.
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