35 replies to this topic

[MikeyG]

[dcengr]

I've read a few arguments about this. Since they are 'buying assets', technically it is true that he is not printing. Buying assets converts the assets into cash. He did not increase total amount of 'value' in the system. Its not like he printed a bunch of money and gave it to people for free. He thinks by forcing people into cash, it means more money in the pocket and will force people to spend it instead of shoving it into assets that have low rate of return, which has basically been the same as shoving it under a mattress. Money is all funny. Animals don't need it. The ecology doesn't need it. Trees still grow even if there's no money. Farmers can still grow food, etc. Money is a mechanism for an economy, but not really necessary for one. It is all in our heads about how money and economy works. We are in a cycle where we 'believe' everything is bad and government is doing harm more than good. Thus everything he tries, we just continue to interpret as bad. Even more so the harder he tries.

[MikeyG]

Where does the money come from to buy those assets???

[dcengr]

Where does the money come from to buy those assets???

Chicken and the egg. What came first? Money or the assets?

[MikeyG]

Where does the money come from to buy those assets???

Chicken and the egg. What came first? Money or the assets?

The government has an out of control budget in which they spend a bunch of money...

Ben is lending his support by printing money and then buying some of those government bonds issued by the treasury...

[dcengr]

simple thought experiment.. Paul owns a $100 bill. Tim owns a piece of paper he says is worth $100. Total amount of 'value' in the world is $200. Tim sells Paul the piece of paper for $100. Paul now owns the piece of paper and Tim the $100 bill. Total amount of 'value' in the world is $200. Ben is a central banker and says he will buy Paul's paper for $100, which Paul accepts. Now Ben holds the piece of paper but there is still $200 in the world, but all in cash. Ben holds the piece of paper. It seems like Ben made the world have $300 in the world, but this is not the case unless someone else can create money and buy that paper off Ben. No one else can, so there is only $200 in the world. Unless Ben decides to give it to Paul or Tim for free.

Edited by dcengr, 05 December 2010 - 07:58 PM.

[arbman]

He is not printing money, he is borrowing from future!

[Islander]

Ben B is printing money or he would not do this. It is unsterilized money too, that is the Fed takes nothing from the banks when it purchases assets from them, chiefly thru the 12 POMO bankers. The pushes more money into the system but not 100% of it. BB knows the banks are not using all the money in the markets, but keeping some for their own internal problems: They are technically bankrupt. Makes a man nervous to know what. Bothers the hell out BB too. Obama does not get it. We put out a lot of bum dope here some times. Sometimes I help, but this is something I am very familiar with and believe me BB is desperate simply because his banks are technically insolvent and can take gas any time when they are forced to recognize the debt they hold is not priced to market. BUT! The outsiders who hold our national debt can act on this fact any time they like without noticing what the banks or BB do. They can just say, NO Thanks. It would be a little like suicide to do so, but miscalculations are not unknown. Things are more precarious that must of us know. Me? I own some beans and physical gold. I just hope the natives will remember what it is, or like the color. Best, Islander.

[arbman]

Islander, the outsiders would sink just as fast if they dare to say NO Thanks. US almost let China be what it is today, US corporations took their knowhow to Chinese labor as well. China breaks the ties and they go down just as bad, there is no need for any of that, but they all have to be balanced. US cannot just print either. China cannot just continue to devalue either, this entire slump in US manufacturing is due to the cheap labor all around the world, but mainly from China. China exported the deflation in labor prices, no wonder the economic growth in US has been unsustainable with the real estate boom...

[dhroz]

Islander, the outsiders would sink just as fast if they dare to say NO Thanks. US almost let China be what it is today, US corporations took their knowhow to Chinese labor as well. China breaks the ties and they go down just as bad, there is no need for any of that, but they all have to be balanced. US cannot just print either. China cannot just continue to devalue either, this entire slump in US manufacturing is due to the cheap labor all around the world, but mainly from China. China exported the deflation in labor prices, no wonder the economic growth in US has been unsustainable with the real estate boom...

Manufacturing sector will not get any better. US auto manufaturers will be resourcing components to Laos, Thailand, and Vietnam very soon to obtain even cheaper products w/out the Chinese government intervention. South Korea is trying to work out a deal with China to have North Korea complete heavy machining tasks at very reduced cost also. The only reason South Korea has not retalliated against N. Korea, $$$

Hired a PHD from India to take over the FEA department for 38K annual. The previous engineer was making 124K and complaining about having to do any travel. People from India and China are very educated and will travel cheaply.

Sign of the times but every business owner will need to follow suit or lose competitiveness

Edited by dhroz, 05 December 2010 - 09:02 PM.