Quantitative Easing

[joepistole]

Ah yes!

Economic theory

The laws of supply and demand are ever-present in economics, and currency trading offers a prime example of this law in action. These are a few of the effects that supply and demand exert on the value of the dollar...

Increase in money supply: With every new dollar printed, each one is valued less than before. The more dollars there are in circulation, the less the currency is valued because the supply has been increased. In practice, this usually causes inflation, which directly eats into the value of the dollar. While this would seem difficult to measure, the Federal Reserve periodically publishes M2 and M3 data reports on the US money supply.

http://www.currencytrading.net/features/50-factors-that-affect-the-value-of-the-us-dollar/

Nice article, but not germane to the discussion at hand. I suggest you read the discussion in Cosmic's thread. And I suggest you look at the previously referenced money supply numbers published by the Fed.


http://www.sciforums.com/showthread....itative+Easing

 

[Mrs.Lucysnow]

Nice article, but not germane to the discussion at hand. I suggest you read the discussion in Cosmic's thread.

No sorry you didn't qualify your answer in any way, you simply dismissed Saints response which is in fact correct.

Or as Schiff puts it:

Schiff blames the Federal Reserve's loose monetary policy for the debasing of the U.S. dollar: rock-bottom interest rates coupled with QE1 and then QE2. If the Fed keeps this up, and continues to print money, he says the U.S. dollar could be worth less than toilet paper.

http://finance.yahoo.com/blogs/dail...th-less-toilet-paper-20110328-102419-726.html

 

[joepistole]

No sorry you didn't qualify your answer in any way, you simply dismissed Saints response which is in fact correct.

Or as Schiff puts it:

Schiff blames the Federal Reserve's loose monetary policy for the debasing of the U.S. dollar: rock-bottom interest rates coupled with QE1 and then QE2. If the Fed keeps this up, and continues to print money, he says the U.S. dollar could be worth less than toilet paper.

http://finance.yahoo.com/blogs/dail...th-less-toilet-paper-20110328-102419-726.html

I am not going to have a discussion in two places Lucy. If you want a serious discussion, then you need to read up and get up to speed on the subject. And I repeat, you should check the money supply numbers you referenced. It would be much more productive than reading right wing wing nut blogs.

 

[Mrs.Lucysnow]

I am not going to have a discussion in two places Lucy. If you want a serious discussion, then you need to read up and get up to speed on the subject.

Ha! Euphemism for not being able to admit when you're wrong. Oh yeah its not a partisan blog nor site. You just like to dismiss knowledge that doesn't fit into your fantasy economic reality. Typical.

 

[joepistole]

Ha! Euphemism for not being able to admit when you're wrong.

Beat on you chest if it makes you feel bettter. But those money supply numbers do not support you contention. I again suggest you look at them.

 

[Mrs.Lucysnow]

@Joe

Oh joe proving that you're busy living on fantasy island watching de-nile flow through your back yard always makes me feel better.

 

[joepistole]

@Joe

Oh joe proving that you're busy living on fantasy island watching de-nile flow through your back yard always makes me feel better.

LOL, and who is not checking the money supply numbers?

 

[Mrs.Lucysnow]

@Joe

And who's not paying attention to the real ill health of the economy? Who else but you defines inflation as a helium balloon.

 

[cosmictraveler]

The CPI is based on a breadbasket of goods and services purchased by individuals. It is not based on the prices of just a few commodities. And it is weighted to gauge the impact of prices on the average Joe and Jane.

http://en.wikipedia.org/wiki/Consumer_price_index

As I said previously, commodity prices vary wildy and are subject to price influences that are not related to monetary policy (e.g. supply, demand, balance of trade, etc.). In 2008, last year of the George II administration and before Quantative Easing, I paid $4 per gallon for gasoline. A few months ago, I paid $4 per gallon for gasoline. A few days ago I paid $3.40 per gallon for gasoline. What does that tell you? Since quantative easing, I have not paid more for gasoline than I did in 2008 before quantative easing, other Fed actions, bailouts and the Stimulus package.

You really don't know much, your living in La LA land.

April 15, 2011 – 11:03 am
Corn price up 74% in one year, World Bank Warns For The Coming Poverty.

http://revolutionarypolitics.com/?p=5320


Prices of wheat-based products such as bread have remained on a relentless climb in the country since the start of the year.
A spot check by Business Daily yesterday showed the trend was not about to ease with some key players such as Bakers Inn raising the prices of some products by 25 per cent overnight.

http://in2eastafrica.net/rising-prices-of-wheat-products-linked-to-fuel-cost/


What's clear though is that while all soft commodities are higher, there's a lot of variation. In fact it's sugar, not wheat, that is really in historical nosebleed territory right now. Conversely, cocoa -- which gets tons of hype for being expensive and scarce thanks to the ructions in the Ivory Coast -- really haven't gone nearly as far.

Read more: http://www.businessinsider.com/chart-of-the-day-food-prices-2011-2#ixzz1SBmg9Lbo


So these are the FACTS not your opinions about costs of most things we use to make food with, the need commodities. This is where I get my FACTS from where can you show yours? :shrug:

 

[joepistole]

You really don't know much, your living in La LA land.

April 15, 2011 – 11:03 am
Corn price up 74% in one year, World Bank Warns For The Coming Poverty.

http://revolutionarypolitics.com/?p=5320


Prices of wheat-based products such as bread have remained on a relentless climb in the country since the start of the year.
A spot check by Business Daily yesterday showed the trend was not about to ease with some key players such as Bakers Inn raising the prices of some products by 25 per cent overnight.

http://in2eastafrica.net/rising-prices-of-wheat-products-linked-to-fuel-cost/


What's clear though is that while all soft commodities are higher, there's a lot of variation. In fact it's sugar, not wheat, that is really in historical nosebleed territory right now. Conversely, cocoa -- which gets tons of hype for being expensive and scarce thanks to the ructions in the Ivory Coast -- really haven't gone nearly as far.

Read more: http://www.businessinsider.com/chart-of-the-day-food-prices-2011-2#ixzz1SBmg9Lbo


So these are the FACTS not your opinions about costs of most things we use to make food with, the need commodities. This is where I get my FACTS from where can you show yours? :shrug:

No you have not been paying attention Cosmic. The real world shows that there is no signficant inflation. The real world shows that I am paying less per gallon of gasoline today than I was in 2008 before all of the stimulus, bailouts, and quantative easing.

As I have said a number of times, fluxuations in commodity prices are nothing new. I grew up on a farm, we lived it. There are global supply issues, not related to monetary policy, that drive commodity prices. So show all of commodity price fluxuations you want, it is not an endorsement of your views and opinions.

 

[joepistole]

Any economist here can explain QE?
The FEB uses what money to buy debt?

Read:

http://www.sciforums.com/showpost.php?p=2781233&postcount=14

 

[cosmictraveler]

So show all of commodity price fluxuations you want, it is not an endorsement of your views and opinions.

No, its an endorsement of FACTS that represents whats actually happening in the world today and shows that inflation is really happening because prices are rising, not falling during a recession.

 

[Mrs.Lucysnow]

@Cosmic

Just ask him to back up his delusions with actual evidence. Let him search through his fantasy files for a reliable paper indicating that there is no inflation and that food and gas prices have fallen. I really believe at this point that Joe suffers from a clinical kind of denial, I also think we'll see more cases of this as the economy worsens and people cannot relate nor align themselves to the new reality, in short it will lead to many a broken mind and people who cannot face reality like the two Edie's of Grey Gardens.

This week saw several developments on the inflation front. Producer prices in the U.S. climbed during January to their highest level in more than two years, as U.S. wholesale prices jumped 0.8 percent in January fueled by rising gasoline costs. Core producer prices, which exclude the volatile food and energy categories, rose 0.5 percent, marking the largest increase since October 2008.

http://www.washingtontimes.com/news/2011/feb/17/versace-inflation-signs-are-rising/

Here again:

NEW YORK — The price of oil is poised for another run at $100 a barrel after a global economic rebound sent it surging 34 percent since May. That could push gasoline prices to $4 a gallon by summer in some parts of the country, experts say.

Flying, shipping a package and ordering a pizza all likely would get more expensive in the new year if that happens and companies pass along higher energy costs. Some economists say rising energy prices will slow economic growth.

http://www.huffingtonpost.com/2011/01/01/gas-prices-rising-2011_n_803151.html

And still more headlines like this:

NEW YORK (CNNMoney) -- Gas prices continue to rise for the eighth day in a row, as the effect of high oil prices trickles down to the pump.

http://money.cnn.com/2011/03/02/news/economy/gas_prices/index.htm

That is reality yet Joe is still convinced there is no inflation. So I suggest you ask him to prove his claims with some form of reliable evidence and I'm sure his little Tattoo will say 'Ok boss' and twaddle off mumbling something about de plane. It would resemble a world like this where nothing bad every happens and miracles really do come true: http://www.youtube.com/watch?v=l3w9AfC5Ms0&feature=related

Kind of like the defunct american dream. Yes Cosmic IT IS that bad. Just thought I would warn you less you are left bemused.

 

[joepistole]

No, its an endorsement of FACTS that represents whats actually happening in the world today and shows that inflation is really happening because prices are rising, not falling during a recession.

No it says a commodity price rose, but one of the facts that you want to ignore is that it also went down. You can selectively pick data (cherry picking) to support your position. But when you put all the data together your cherry picked data just does not work.

The fact is the CPI has been flat. That is why for the last three years Social Security reciepients have had a zero inflation adjustment in their payments. That is why government employees have had zero inflation adjustments in their paychecks.

And the CPI (Consumer Price Index) is the standard measure of inflation in thsi country. As perviously referenced it is based on a standard set of goods commonly purchased by the average Joe and Jane and weighted to represent the amounts consumed by the average Joe an Jane. Because in the end, how much silver does the average Joe and Jane consume in the course of a year? Not much.

 

[Mrs.Lucysnow]

@Joe

You're still dreaming. Show us the data!!! Every time you simply produce your fantasy someone uses a link to show you that what you're saying is wrong. Show us where oil prices have dropped and something that tells us there is no inflation because the NYTimes among Reuters and others don't seem to agree with you:


Consumers continued to feel the pinch at grocery stores and gasoline stations in April as a widely used index of inflation rose at the fastest 12-month rate since the later part of 2008, according to government figures released on Friday.

The Labor Department said in its monthly report that the Consumer Price Index, the most widely used measure of inflation, was up 0.4 percent in April from March, and up 3.2 percent from a year earlier. The 12-month figure represents the biggest increase in the index in any 12-month period since October 2008.

Analysts had forecast the same monthly rise but a slightly smaller increase for the year, at 3.1 percent.

Food and gasoline price rises accounted for most of the increases, with gasoline accounting for almost half of the month-to-month rise.


Gasoline prices were up 3.3 percent in April. According to the report, energy prices have now risen 19 percent over the last 12 months, with gasoline prices up 33.1 percent.

Consumers are “painfully aware” that if high energy and food costs continue, “the cost of living is going to go up,” said Stuart Hoffman, the chief economist at the PNC Financial Services Group.

Inflation as measured by the core C.P.I., which strips out volatile prices for energy and food, edged up 0.2 percent in April, making it the third increase of that size in the last four months, the department’s Bureau of Labor Statistics said.

http://www.nytimes.com/2011/05/14/business/economy/14econ.html?_r=1&ref=consumerpriceindex

 

[joepistole]

@Cosmic

Just ask him to back up his delusions with actual evidence.

I have backed up my claims many times before. As I have suggested many times before, I suggest you do some reading to get up to speed on the subject rather than me repeating myself ad nauseum just to have it go over your head.

http://www.sciforums.com/showpost.php?p=2781207&postcount=10
http://www.sciforums.com/showpost.php?p=2778763&postcount=13


By the way, have you looked at those money supply numbers I suggested you look at or do I need to repost my Fed data again?

Let him search through his fantasy files for a reliable paper indicating that there is no inflation and that food and gas prices have fallen. I really believe at this point that Joe suffers from a clinical kind of denial, I also think we'll see more cases of this as the economy worsens and people cannot relate nor align themselves to the new reality, in short it will lead to many a broken mind and people who cannot face reality like the two Edie's of Grey Gardens.

If you read the previous link you will note that I never said there was zero inflation. That was you creating a straw man again. Now please tell me what I said the inflation rate was for the last 12 months or do you want me to cut and past again?

This week saw several developments on the inflation front. Producer prices in the U.S. climbed during January to their highest level in more than two years, as U.S. wholesale prices jumped 0.8 percent in January fueled by rising gasoline costs. Core producer prices, which exclude the volatile food and energy categories, rose 0.5 percent, marking the largest increase since October 2008.

http://www.washingtontimes.com/news/2011/feb/17/versace-inflation-signs-are-rising/

Here again:

NEW YORK — The price of oil is poised for another run at $100 a barrel after a global economic rebound sent it surging 34 percent since May. That could push gasoline prices to $4 a gallon by summer in some parts of the country, experts say.

Flying, shipping a package and ordering a pizza all likely would get more expensive in the new year if that happens and companies pass along higher energy costs. Some economists say rising energy prices will slow economic growth.

Again, more facination with the pricing of a select few commodities. The price of oil imparticular varys widely based on factors other than monetary policy. CPI is a broad measure of inflation and its impact on the average Joe and Jane. Some prices go up and some go down. The CPI is the average and reflects the impact to the consumers pocket book. This is a clear example of not being able to see the forrest for the trees.

 

[cosmictraveler]

@joepistole

You do a wonderful magic act with numbers, smoke and mirrors, just like everything the government tell us. People see the costs are rising, I just got my auto insurance, its up 15 percent from January of this year! I've done nothing to increase the costs and now my car is even older which should usually lower insurance prices on cars, but not this time. So you go right ahead and do your numbers hocus pocus for everyone but we all know what the real story is.

 

[Mrs.Lucysnow]

@Joe

This was what you said Joe:"The real world shows that there is no signficant inflation. The real world shows that I am paying less per gallon of gasoline today than I was in 2008 before all of the stimulus, bailouts, and quantative easing."

And yet you haven't shown one set of evidence that this is true, all evidence points to this not being true which is why its being said that:

"The Labor Department said in its monthly report that the Consumer Price Index, the most widely used measure of inflation, was up 0.4 percent in April from March, and up 3.2 percent from a year earlier. The 12-month figure represents the biggest increase in the index in any 12-month period since October 2008.

Since 2008, that means you are paying MORE for food and gas since 2008 not less. So again I asked you to back up your claim with hard evidence. Show me a link that claims there is no significant inflation and that people are paying less for gas. Don't post a link of more of your deluded opinions I want an objective opinion that mirrors your own. And I doubt you will find it because...

Chairman Bernanke had long advanced the notion that even if overnight interest rates reach the zero bound, a central bank still has substantial weapons in its arsenal to stimulate a flagging economy.

The Great Crisis offered him the chance to try a real world experiment. Since the financial collapse began over two years ago, the Fed expanded its balance sheet to $2 trillion by lending or “auctioning” reserves, through open market purchases of government bonds, and by buying the toxic waste banks wanted to unload. In the process, the Fed competed with private markets that were running to safe government debt, driving down returns on longer term US sovereign debt. This distorted yields, crushing savers who cannot find decent returns. And it has not generated any lending or recovery.


Read more: http://www.businessinsider.com/bernanke-quantitative-easing-2010-10#ixzz1SDaDGfzE

Or this:

Monetary policy has failed alone to lift the U.S. economy, because the private sector is obsessed with minimizing debt, according to Nomura Chief Economist Richard Ko.
Speaking this weekend at George Soros' Institute for New Economic Thinking conference at Bretton Woods, Koo outlined why the U.S. and Europe have missed the lessons of the Japanese experience.

Koo's presentation explains how the U.S and Europe have expanded their monetary base, but that this flood of cash isn't driving economic growth because banks, businesses, and people are paying down debt. Koo says that only the government can step in to spend the excess savings in the market.


Read more: http://www.businessinsider.com/richard-koo-quantitative-easing-2011-4?op=1#ixzz1SDbiwfY1

These are facts not strawmen arguments. All you are doing is saying over and over that the financial health of the nation is getting better when everyone out there claims it is not, that makes you simply delusional.

So show us evidence that doesn't come from your own mind or stop telling everyone else that they are wrong. Just go out and find one article or one economist who agrees with you and isn't a fictional resident of Fantasy Island. Please!

 

[joepistole]

@Joe

This was what you said Joe:"The real world shows that there is no signficant inflation. The real world shows that I am paying less per gallon of gasoline today than I was in 2008 before all of the stimulus, bailouts, and quantative easing."

That is right, I said no signficant inflation. That is not the same thing as saying there is no inflation.

@
And yet you haven't shown one set of evidence that this is true, all evidence points to this not being true which is why its being said that:

"The Labor Department said in its monthly report that the Consumer Price Index, the most widely used measure of inflation, was up 0.4 percent in April from March, and up 3.2 percent from a year earlier. The 12-month figure represents the biggest increase in the index in any 12-month period since October 2008.

These are period to period comparisons and are really not that important in and of themselves. Prior periods are starting from a very low base.

@
Since 2008, that means you are paying MORE for food and gas since 2008 not less. So again I asked you to back up your claim with hard evidence. Show me a link that claims there is no significant inflation and that people are paying less for gas. Don't post a link of more of your deluded opinions I want an objective opinion that mirrors your own. And I doubt you will find it because...

The inflation rate we have to day is lower than the inflation rate we saw under the Reagan administration. Inflation under the Reagan administation was in the 5-6 percent neighborhood versus the current 3.6 or less percent.

And as I previously said, this is normal to see commodity price varations that are due to issues other than monetary policy. Now if you had proof that core inflation was up signficantly that would be a feather in your cap to blame the Fed for fiscal mismanagement. But that is not the case.

@
Chairman Bernanke had long advanced the notion that even if overnight interest rates reach the zero bound, a central bank still has substantial weapons in its arsenal to stimulate a flagging economy.

I don't see how this is germane.

@
The Great Crisis offered him the chance to try a real world experiment. Since the financial collapse began over two years ago, the Fed expanded its balance sheet to $2 trillion by lending or “auctioning” reserves, through open market purchases of government bonds, and by buying the toxic waste banks wanted to unload. In the process, the Fed competed with private markets that were running to safe government debt, driving down returns on longer term US sovereign debt. This distorted yields, crushing savers who cannot find decent returns. And it has not generated any lending or recovery.

Read more: http://www.businessinsider.com/bernanke-quantitative-easing-2010-10#ixzz1SDaDGfzE

These are facts not strawmen arguments.

No this is not a straw man arguement. But I never said this was a straw man. Bernanke did what the text books said he should do in response the the Crisis of 2008.

@
All you are doing is saying over and over that the financial health of the nation is fine when everyone out there claims it is not, that makes you simply delusional.

So show us evidence that doesn't come from your own mind or stop telling everyone else that they are wrong.

Well this is a straw man. I am saying that the health of the nation's economy is better. I did not say everything was fine because clearly it is not. The economy still faces a number of challenges some domestic and some foriegn (e.g. European contagen, US default, US political risk - the advance of right wing extremist politics in the US, etc.). American right wing politics are taking the nation down the road to catastrophe. So yes there is very signficant risk and US right wing politics is hampering recovery.

 

[Mrs.Lucysnow]

@Joe

I told you to go out there and show me evidence, not simply your deluded opinion. Surely if you are correct there are a wealth of experts who would agree with you. If so go and find them. Go and find one who agrees that there has been no significant inflation, that QE has worked and gas prices are actually cheaper than it was in 2008. Go and back up your claims or prove yourself a quack locked into your own delusional mind.