poll: QE3 in June?

Discussion in 'Business & Economics' started by Michael, Mar 2, 2011.

?

Will we see QE3 in June?

  1. Hell Yeah - print me sum moenay! Momma needs a new ring!

    50.0%
  2. No way you f-ing tosser, we're the best! USA USA USA!

    50.0%
  1. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    Simple poll, two choices, QE3 happens in June or it doesn't. What says you?


    Note: QE3 means more money printing, if the Fed comes up with some newfangled term like HI1 (hyperinflation1) we'll know it's actually QE3 - and thus, vote accordingly

    Please Register or Log in to view the hidden image!

     
  2. Google AdSense Guest Advertisement



    to hide all adverts.
  3. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
  4. Google AdSense Guest Advertisement



    to hide all adverts.
  5. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    I was under the impression that QE2 (the Fed's $600 billion program to buy Treasurys) ends in June.

    Your link says QE2 ...The second round, which began in November 2010, has also pushed up stock prices.


    Count Down To Quantitative Easing Removal


    Joe or BillyT,
    Would anyone like to take a look and see if it actually is June or November. I seem to think it's June. I keep reading the Fed stops buying Treasuries in June.

    I should think this might be important?!?!?

    Are they (the Fed) going to then raise interest rate to pay off the debt from June? Pay by QE3? Not pay?
    What happens next?
    What does this mean for the stock market - will it remain high? Begin to lower? Stay the same? Seems like an important issue that's being missed.
     
  6. Google AdSense Guest Advertisement



    to hide all adverts.
  7. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    You are correct, it was June. But that doesn't change the story. The fed will only do QE2 if it has economic reason to do so. And the only way I see that happening is if there is a budget crisis in the US or we get hit with major oil supply disruptions. A budget crisis would mean failure to pass a budget or a budget with excessive spending cut backs (e.g. the budget proposed by the Republican House).

    http://money.cnn.com/2010/11/03/news/economy/fed_decision/index.htm
     
    Last edited: Mar 2, 2011
  8. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    You mean QE3?

    What I want to know is what happens to interest rates if QE3 happens or does not happen? If QE3 happens and another 600Billion - 1Trillion+ is pumped into the economy, what does that mean? Where does the wealth of QE3 come from?

    What happens to interest rates - they stay low? Go high?
    What happens to interert rates if we do not have QE3?
    What about silver and gold? I thought when interest rates go up, gold and silver go down.

    If I'm going to have a better idea of what is going to happen in the future, I need to understand the cause and effect relationships that may or may not happen with or without a QE3.

    What happens to oil? food?

    What happens to the stock market?
     
  9. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    A lot of good questions. No one knows what will happen with absolute certianty. Because there are too many variables. However, in my view silver and gold will continue to rise because of increased demand driven my increasing wealth accumulation in Arabia, China and India. There is a cultural thing going on driving demand for silver and gold that is seperate and apart from its perceived value as an inflation hedge. That is why you see gold and silver rise along with the stock markets.

    There are three drivers of inflation demand pull, cost push, and built in inflaiton (inflation expectations based on history). Demand push is what I just described. Inflation that we are now seeing in the oil industy, silver and gold industries. It is inflation caused by changes in the supply demand set up.

    "Demand-pull theory states that the rate of inflation accelerates whenever aggregate demand is increased beyond the ability of the economy to produce (its potential output). Hence, any factor that increases aggregate demand can cause inflation.[44] However, in the long run, aggregate demand can be held above productive capacity only by increasing the quantity of money in circulation faster than the real growth rate of the economy. Another (although much less common) cause can be a rapid decline in the demand for money, as happened in Europe during the Black Death, or in the Japanese occupied territories just before the defeat of Japan in 1945." - Wikipedia

    http://en.wikipedia.org/wiki/Inflation#Keynesian_view

    The fed is doing exactly what it should be doing at this point in time.

    As the economy recovers, the price for money will move up because the demand for money increases. And the price of money is the interest rate on money.

    Because of the actions of the fed the US is not experiencing problems with inflation at this time. The CPI (consumer Price Index) has been very stable over the course of the last few years and US money supply has remained very stable as well. For all the talk of unwarranted expansions of the US money supply, they money supply has remained quite stable. Year over year, the US money supply has increased at a whopping rate of 3.4 percent (rounding upward). That is a far cry from the Zimbabwe senarios one hears from the American right wing.

    http://www.federalreserve.gov/releases/h6/current/

    As I look into my crystal ball, assuming the US government manages the fiscal side of the house (that means congress) and there are no further major threats to the world oil supply, I see the stock markets continuing to recover and advance this year. Based on what I just said, I think the equity markets will be up about 20 percent this year. And I see food prices relatively stable in the US. But food prices in other inflation prone areas (China, India, and the other BRIC countries) will continue to be an issue for them.
     
    Last edited: Mar 4, 2011
  10. jmpet Valued Senior Member

    Messages:
    1,891
    As I look into my crystal ball I see inflation going up higher and faster than people's income. QE3 would be another nail in the coffin.
     
  11. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    OK, that is your feeling. Where is your rationale for that feeling. Where is the evidence that supports that conclusion? What makes you think a 3 percent raise in the money supply is going kick off hyper inflation?
     
    Last edited: Mar 3, 2011
  12. jmpet Valued Senior Member

    Messages:
    1,891
    Math. If you have X dollars in circulation and you add Y% more, you now have Z% dollars in circulation. And X>Z. Economic devaluation.

    I am amazed we survived QE2 (although we still have yet to feel the impact from it)... I am amazed the dollar is still worth a dollar considering how many dollars we put into circulation. Amazing how far a dollar can go... I see vaults all over the world full of US one hundred dollar notes as the basis of their economy.

    Funny part is- the more you print up and the more they put in their vaults, the more you will have to pay through the nose when they all decide to sell those Benjamins.
     
  13. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    Again, why are you fearing inflation when the broad measure of money supply is only showing an increase of 3 percent? It is not rational. QE1 has been mostly repaid with a profit (shrinking the money supply). QE2 is very modest in size.

    I was listening to the Chairman and founder of Blackrock Larry Fink this morning. He is the one of the biggest buyers of US Treasuries and most successful investors in the world and he's buying Treasuries if they go over 4 percent. He sees potential short term inflation but no signficant long term inflation for the US.
     
    Last edited: Mar 3, 2011
  14. jmpet Valued Senior Member

    Messages:
    1,891
    I fear our current state. A state where we are printing and circulating more money than is warranted- with the excess billions going to certain "too big to fail" companies.

    These dollars trickle down and affect the value of a dollar. And with the more dollars out there, the less each dollar is worth!

    I have seen it with tulips, stamps, comic books, Beanie Babies. Furbys, Yugi-Oh and so on... once the demand for dollars is met, the demand shrinks. And once it shrinks, it drags everything down with it.

    I fear a point where the world no longer will aceept our dollar on face value- because it's no longer worth a dollar.

    The clearest indicator of this is the rise of the US dollar for gold and silver while other commoties only saw it go up a fraction... the US dollar is losing traction.
     
  15. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    You are very old if you saw it with tulips.

    Please Register or Log in to view the hidden image!

    Because that was in the 17th century.
    When you measure the value of the dollar by other currencies, it is pretty stable. If fact the dollar has been gaining value in comparison to other countries. The rise in gold and silver prices is good old supply and demand. It is not related to an expansion in the money supply. Because in the official money supply numbers which I previously posted, it has been very stable. There is nothing in the money supply numbers to indicate there will be hyper inflation now or in the future.

    Now I will grant you, if the Congress is not able to put the nations fiscal house in order for the long term there will be economic troubles. I think a lot of Americans share your concern. Unfortunately, I think that speaks more to the state of our news services than it does our true economic state. I cannot believe some of the garbage that comes from some of these talking heads in our media. It seems to me they find the dumbest people to fill news anchor positions...even knowledgable business anchors are quite rare.
     
    Last edited: Mar 3, 2011
  16. Pinwheel Banned Banned

    Messages:
    2,424
    Ben has no option but to drive through QE3. And QE4. In fact God knows how much more, this is such a mess.
     
  17. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    These are from ShadowStats:

    Please Register or Log in to view the hidden image!



    Please Register or Log in to view the hidden image!




    It seems to suggest inflation is running at 10%?
     
  18. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    You do know there is a reason why the CPI is used and the Shadow Stats number is not used by industry.
     
    Last edited: Mar 4, 2011
  19. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    It seems odd NOT counting food and energy when determining inflation - everyone needs food and energy.

    It seems odd NOT counting people who have given up looking, or counting people who are part time or employed for a week, as employed.


    Things MAY turn around in the long run, or not, no one knows - but what I do know is when push came to shove people we willing to give up some freedoms in order to feel safe. This bodes ill for Americans long term prosperity.
     
  20. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    The top line CPI number which is the number commonly reported and used by the government for cost of living and other changes does include gasoline and food costs.

    The core CPI number which you have not referenced does exclude energy and food costs. Those costs are not reported in the core CPI number because their prices are extremely variable due to supply and demand issues rather than monetary policy.

    Please see Common Myths published by the Bureau of Labor Statistics:

    http://www.bls.gov/cpi/cpiqa.htm#Question_1
     
  21. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    ?!?!?

    That is not what the graphs say - take a look again. There are no wild swings or fluctuations in the ShadowStats graph, it's just higher when food and energy is factored in. Other than that the graphs are almost perfect copies of one another moving up and down in pretty much the same direction and rate of change.

    So I don't buy it and neither should you. Math doesn't lie.

    Governments on the other hand do - all the time. It seems to me that the government (not just Obama but all of them) always try to pick the rosiest stat and now people no longer trust the government - people know how bad things are. You don't need a governmental stat to tell you shit is splattering through the fan as we speak

    Please Register or Log in to view the hidden image!

     
  22. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    Like I said Michael, there is a reason why people in the business world do not use shadow numbers and use the government numbers instead. And the government numbers are compiled by civil servants year after year in the same way it has always been done regardless of the political winds.
     
  23. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    I would assume that the meaning would be in the change and rate of change. So, why use the graph that has the Y axis adjusted downward?

    IOWs, why?


    Also, ShadowStats, as I understand, uses the Governments traditional method of calculating inflation and unemployment. Which was changed .... maybe by Carter or Reagan?
     
    Last edited: Mar 4, 2011

Share This Page