Does quantitative easing really work?

pure ignorance!! Hoover and FDR both liberals with same programs!! See list above!!!!

"We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started."

Rexford Guy Tugwell, Roosevelt Advisor

 

How much is in the FDIC account?
Do you know?

 

The 5 largest US banks are sitting on about $200 trillion in dollar based derivatives with only $10 trillion in assets.
Check the office of the comptroller of the currency.
There has been no time on this planet where that much money was at stake and large numbers of people didn't end up casualties

 

Could you explain just a little bit more what that means? Aren't derivatives indirectly composed of assets?

 

Quantitative Easing works to resolve recessionary economies. It is not necessary when a country is demonstrating economic expansion (and the Money Supply is adequate), which is what the US had been doing since 2010 onward. The growth rate has been wavering between an upside of 4% and downside of -2%. More on the upside than downside.

If there are still a lot of people looking for good jobs it is NOT because of a mediocre growth-rate.

It is because the "good-paying industrial" jobs have left the US (for the Far East) where labor costs are cheaper - and has been doing so since the Bamboo Curtain came crashing down in 1991. Wakey, wakey!

What remains are either jobs requiring advanced post-graduate credentials, some of which teach people how to run robots that replaced the lower-grade industrial jobs!

If you have no credentials, then get some! And all I have been promoting on this forum for years is that it is TIME that post-secondary degrees be as free as are secondary-schooling diplomas* ...

*Which is how Europe has tackled the problem by governments financing them. In the US, the problem is TRULY PROBLEMATIC because we have a DoD-expenditure that swallows whole about half the total Discretionary Budget !!! (And BigBucks is hopelessly in love with those juicy contracts. A nice little war, anyone ... ?)

 

That's what many economists believe, but is it actually true?

If the automatic go-to whenever there are economic problems is quantitative easing, then whoever's advocating that is brain dead and stupid.
Of course it's not so simple as that.

To really have a good grasp on what quantitative easing will do to/for an economy you really have to understand what quantitative easing is.

In the case of the U.S. housing crisis, the idea behind quantitative easing was that a lot money in accounts had been "erased" as loans went bad, so the Fed "needed" to fill in the gaps. The Fed basically bought the toxic assets and socialized the losses in the form of inflation, or rather counteracted the deflation of so much mortgage equity in the economy disappearing (if you remember that a lot of these loans had been turned into money in bank accounts).

In other words, if you want to see it this way, the whole housing bubble had led to inflation, but after that bubble burst the Fed did not want to let the dollar deflate back down.

Was this really a good thing? That depends on your point of view. The housing bubble led to inflation because people thought they had more wealth than they did, so they spent more.

 

REPETITIVE FREQUENCY

True enough for me, and quite a few others. For instance:
From WikiPedia, an annotated review of QE-quality:

Seems good enough a rebuttal to me ...

The housing bubble WAS inflation, which is never a "good thing". And this time around, it brought about the Great Recession. Rampant house-pricing inflation (along with awesomely bad banksters) was had with a disastrous consequence: Massive Unemployment that reached 10% of the population by 2010 having been sparked by the SubPrime Mess.

So let's do a history search on the US unemployment and see how many times it reached that level. Once before in 1980 it spiked at 10.4%.

Let's take a look at "long-term" unemployment rate as designated here. That infographic, which I cannot show here, indicates a long-term increase somewhere between 5 and 6% from post-war to nowadays. What is worth noting on the info-graphic is that the Great Recession was actually no greater than other recessions in history. Many got up beyond the level of 6%.

In fact, it happened so often I think we should call it "normal". Which does not mean "acceptable". But does provoke this question, "Must we have such a repetitively high variance in a key parameter of our Market Economy?" One that - this last time around - threw people out of work sometimes for months on end if not years*.

And, if we do - as the infographic shows - why the hell is it happening with such a deliberate frequency! After all, this question is no longer "academic" when such a key variable seems "endemically repetitive" ...

*And here again I must indicate that part of the problem lies aside that of wild inflation. It is what I call the change of ages - from Industrial to Informational - that is wreaking havoc on job-opportunities. Because a whole new set-of-skills has become the "bottom-line" for truly gainful employment.

 

a fifteen dollar an hour minimum wage and unemployment compensation simply for being unemployed, can solve for that.

 

It's been working for a donkey's age. You have got the wrong picture.

What's effing-awful in the US-economy is upper income taxation that induces profiteers* to oligopolize markets, thus concentrating profits - and feeding into their fortunes. But screwing Jack 'n Jill America in the wallet (aka "Disposable Income")!

Wakey, wakey ... !

*Aint nuthin wrong with profits. Except in America were they go to uniquely a specific class of 0.1Percenters. And the Replicant Party (under Reagan) designed upper-income taxation precisely for that purpose. (You've seen this research-infographic here before, but YOU ARE NOT GIVING IT ENOUGH ATTENTION!

 

enough to insure that no little guy has ever lost a penny or his savings thanks to liberal monetary mismanagement in Washington

 

wow a brainless great prediction. Tell me when I should sell my house and short the bank stocks.

 

it means you should sell your house and use the money to short bank stocks!!

 

Please don't tell us obvious untruths .
Europe has chronically high unemployment, low economic growth, and the per capita income of Akansas, about our poorest state, thanks to libcommie freebies that destroy the incentive to work. Even Krugman says that European economies have Eurosclerous. Do you understand?

 

what you are trying to say is the Fed did not want a worldwide Depression.

 

absurd of course. IBM became the biggest tech company in the world long before schools ever heard of computer science. A company trains the people it needs or goes bankrupt. Guess which they choose? Isn't thinking fun?

 

total BS of course which is why you are so afraid to tell us the best example of an oligopolized market!! Wakey wakey!!!

 

If you had two synapses firing simultaneously you'd realize my post was directed to another poster commenting on the probability of ever doing away with fractional reserve banking. But you decided to comment like a mouthy punk instead.

 

And you pretend to be a capitalist despite your desire to have government save everybody from their capitalistic failures

 

Yep, working to create bank runs and booms and busts.

So you have a theory, and based on that theory, you want the government to take the property of upper income people. Got it.

 

It works; but it should work much better; and, the money has already been printed!

A fifteen dollar an hour minimum wage and unemployment compensation simply for being unemployed in our at-will employment States.

 

what failures are you talking about??

 

Over leveraging on crap and blowing up your bank for one.

Buying homes at insane prices because some banker who is going to blow up his bank was willing to lend you the money

 

housing crisis worked out very well. lots of banks went under and lots of home owners too. Lesson learned without a long depression.

 

Jamie and Lloyd were insolvent as well.
Suspended GAAP and mark to market for them. Granted a zero percent reserve ratio.
Billions in bailout money, $1.3T in QE per year over four years from the FED.
Funny how you love government to hand a few specific folks vast sums of money to save everyone from their own failures.

Nobody but the people turned the US economy into a sad state of failed debt based consumerism. Nobody made them turn their homes into ATMs. Nobody caused them to drive the average price of a car to over $30k, and homes to over $275k.
Nobody made them believe that they could stick a few dollars in the stock market every month and safely retire while spending their salaries on vacations and 4 wheelers, and simultaneously racking up huge sums of personal debt.
Nobody made the big banks leverage up to hundreds of trillion$ in derivatives that collapsed in a heap of ****.
The people earned a depression, and the big wall street banks earned liquidation.
You cry for big nanny government to save you and your investments, and call yourself capitalist. Sad really

 

so??? there were lots of programs to avoid a depression that would have bankrupted millions and millions of small businesses and people. As it was there still was a ton a bankruptcy. And??????