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Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

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Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#101

Post by _curious_ »

chrisco255 wrote: post #97
_curious_ wrote: post #13

Earlier quoted context omitted.

Sure but what does it matter if it's "monetary policy" or "political policy"? They work hand in glove and as @mywittyname aptly states above: "...I feel like the wealthy in this country have developed the perfect scheme for leeching the wealth from this country." The perfect scheme involves a bailout mechanisms without question. And too many Americans are falling for the scheme with hands out for a piece of welfare f…

Oh I agree with all your conclusions. However, I think politicians have leveraged monetary policy to gain political points for decades. Rather than tell people we have to cut programs and we have to live within our means, we've got an endless series of wars and unsustainable social programs that don't work in a world where a large chunk of the population is old (boomers), while the young population have inherited a c…

Spot on

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#102

Post by RobertoG »

eslaught wrote: post #84
RobertoG wrote: post #63

Earlier quoted context omitted.

It's the Bank of Japan who decide the borrowing rates, so, not problem in that regard.

Ok, but they don't control inflation. At some point, I think it's obvious that printing money becomes counterproductive. But where exactly is that line?

The Bank of Japan, can actually control inflation, because, as we have determined, they control the interest rate. Also, if necessary, the government could raise taxes and run a surplus to diminish inflationary pressures.

But those are moot points, because the problem of Japan for the last 20 years has been deflation, not inflation. Despise that, as you can see in the comments here, there are people that still predict inflation in the future.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#103

Post by colinmhayes »

mrlala wrote: post #83
mywittyname wrote: post #4

Earlier quoted context omitted.

A stock buyback is theoretically the same as a dividend, in that it should reduce market cap by roughly the amount of the buyback. I do agree with your sentiment though. I feel like the wealthy in this country have developed the perfect scheme for leeching the wealth from this country. We will only know how bad it was after the postmortem, at which point, we will be (figuratively) dead.

>A stock buyback is theoretically the same as a dividend I don't think that is true at all. A dividend is literally "We are paying out some amount of cash. If our stock price is $40 and we give $5 to each shareholder the shares should immediately go down to $35". Although since the stock price should be a NPV of the company's cash flow, they technically have even less working capital to create returns over the years,…

When companies do buybacks they don't control the shares they buyback, the shares disappear. The market cap of the company decreases because they know have less assets but the stock price doesn't because the cap is split over less shares. Either way, the market cap theoretically decreases by the amount paid out.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#104

Post by erentz »

yeldarb wrote: post #43
throwanem wrote: post #36

Earlier quoted context omitted.

I was about to make a joke that it looked like they could go about another 69.8%. Now I'm glad I waited. What does that even signify, a federal bank owning >100% of its attached country's GDP? Debt in excess of produced value, i.e., the country being underwater?

GDP is per year. Analogous to a person making $100k/yr with a $110k mortgage. Edit: Although perhaps not that analogous because is this even technically "debt"?

The US government doesn’t make 100% of GDP. GDP is $21 trillion. US government takes in $3.46 trillion.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#105

Post by godtoldmetodoit »

colinmhayes wrote: post #100
godtoldmetodoit wrote: post #65

Earlier quoted context omitted.

IBM may or may not be a good example, but I think the overall critique holds here. Stock buy backs weren't a thing until a SEC rule change in the 80's, this is a relatively new phenomenon and not intrinsic to a functioning market. Home Depot could have given their employees massive raises with the amount they've spent on buybacks (15 billion in buybacks in February 2019 alone). With ~400,000 employees, that could be…

>Stock buy backs weren't a thing until a SEC rule change in the 80's, this is a relatively new phenomenon and not intrinsic to a functioning market. Buybacks and dividends are essentially equivalent. This comment shows a distinct lack of understanding. Of course home depot could return their profits to employees, but then it wouldn't be a business. Home depot's sole reason for existing is to return money to sharehold…

Ahh the old "shareholders are the only thing that matters" argument.

Buybacks and dividends are not equivalent, buybacks are tax advantaged in ways that dividends are not.

We've allowed numerous companies to get to a size where they are "too big to fail". They know they are too big to fail, and they get to take advantage of this position. They get to go into near unlimited amounts of debt to finance buybacks to enrich shareholders and C levels, and when times are good this all works out. When the economy enters a downturn and they don't have cash on hand to weather the storm, they know the Fed will be there to bail them out.

Something is fundamentally broken here. You can reasonably argue whether it is with the buybacks, or the bailout, but this system is fucked.

For more in depth reporting on this, I highly recommend checking out Matt Taibbi. https://taibbi.substack.com/p/resetting-the-bomb

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#106

Post by ackbar03 »

vzidex wrote: post #53
alistairSH wrote: post #23

Earlier quoted context omitted.

https://brrr.money

Is the song that plays on this website commonly known? The only other time I've heard it is in the video that the New Zealand mass shooter recorded, and it makes me uncomfortable that it's the same song if it is indeed not common.

I think it's some eurobeat song from the Manga initial D. It's quite common in memes. Go search it up on YouTube, might help wash that stigma away

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#107

Post by bawana »

k3oni wrote: post #85
shse wrote: post #56

Earlier quoted context omitted.

Real state prices will explode. That’s what happened after 2009 due to QE.

I have a hard time believing that real estate prices will explode. From what i can see the prices are expected to go down, mostly due to the fact that there's less ppl able to buy due to many being out of work(some for a good while probably as i doubt some jobs/positions will be immediately re-filled). This same thing will cause many to go into foreclosure, this adding new supply to the real estate market. Also banks…

Agree. It turns out that jumbo mortgage rates are higher than regular mortgages. Banks cannot find buyers for the jumbos because of the anticipated drop in real estate value from the COVID freeze. No one wants to lend to people who might find themselves underwater on a mortgage. AGAIN.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#108

Post by aeternum »

cheald wrote: post #81
aeternum wrote: post #50

Earlier quoted context omitted.

Why is printing money a bad thing at this point in time? I see two strong reasons that printing money is the right move: 1) Wealth inequality is high relative to recent history. Printing money is a very effective way to even some of that out. Possibly the only form of 'wealth tax' that can actually be executed successfully. 2) The US debt / GDP fraction is still relatively low compared to many other countries.

> Printing money is a very effective way to even some of that out. Possibly the only form of 'wealth tax' that can actually be executed successfully. This only holds if the wealthy are holding their wealth as USD, not assets. This is not the case. The wealthy do not typically have Scrooge McDuck-style vaults of cash laying around waiting to be inflated away.

The wealthy do not typically have vaults of cash, but they do invest most of their money in companies which often do have large USD reserves. The vast majority of their wealth is greatly impacted by the relative value of USD.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#109

Post by aeternum »

criddell wrote: post #69
aeternum wrote: post #50

Earlier quoted context omitted.

Why is printing money a bad thing at this point in time? I see two strong reasons that printing money is the right move: 1) Wealth inequality is high relative to recent history. Printing money is a very effective way to even some of that out. Possibly the only form of 'wealth tax' that can actually be executed successfully. 2) The US debt / GDP fraction is still relatively low compared to many other countries.

> The US debt / GDP fraction is still relatively low compared to many other countries. Is the relative ratio a good way to evaluate it? Does it mean anything to talk about the debt:GDP ratio in isolation?

GDP is somewhat close to a nation's income. Those with higher incomes can typically safely afford larger loans.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#110

Post by Loughla »

sixQuarks wrote: post #40
Loughla wrote: post #15

Earlier quoted context omitted.

I think it's more subtle now, though, and harder to be aware of. Back in the day, robber-barons simply exploited the working class through substandard working conditions, and outright theft of money or property [citation needed]. Now, though, you need a deep understanding of global monetary policy, tax law, and labor laws to be able to connect the dots. So I would argue that now is different from earlier times in his…

That's the craziest part of all of this. The exploited actively support the politicians who cause maximum exploitation and vilify those who would actually help them. It's insane.

Honestly, it just doesn't make sense. And my experience, when you sit down with, and I'm going to say extremely conservative people because they are the ones I would put in this category, and explain it to them using facts, they just dig in their heels and ignore you. Humans. What weird things.

Source: I talk politics with family all the time; I'm vilified as the weirdo, brainwashed, college liberal in a family of conservatives.

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