Federal Reserve today announces additional "stimulus" [Archive] - Glock Talk

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Atlas
12-12-2012, 14:47
Ben Bernanke today, following a regular meeting of the Federal Open Market Committee, was quoted as saying :chatter:...

... when asked specific questions regarding the state of the economy today, Bernanke responded :chatter:

... in response to concerns about inflation and unemployment, Bernanke replied :chatter:

The details are here:
http://www.reuters.com/article/2012/12/12/us-usa-fed-idUSBRE8BB08A20121212

Summary: You are enslaved to a system of uncontrolled government spending and inflated currency... get used to it.

QNman
12-12-2012, 14:54
So... More quantitative easing. Fantastic. Someone owes me $20 (not that $20 is worth much anymore).

cowboy1964
12-12-2012, 15:42
So basically the Fed is now pretty much covering the entire deficit.

The Fed's "portfolio" is now $3 trillion, going to $4 trillion by the end of next year. IOW, they are creating it out of thin air. Does the government even need to sell treasuries to the outside market any longer?? Maybe this is why inflation is not skyrocketing. There are no market forces at work.

Atlas
12-12-2012, 15:45
So basically the Fed is now pretty much covering the entire deficit.

The Fed's "portfolio" is now $3 trillion, going to $4 trillion by the end of next year. IOW, they are creating it out of thin air. Does the government even need to sell treasuries to the outside market any longer?? Maybe this is why inflation is not skyrocketing. There are no market forces at work.

= printing money

cowboy1964
12-12-2012, 15:52
I thought money printing was bad and caused inflation? Apparently if you do enough of it then market forces are irreievant. Wonder why Europe hasn't thought of this? :whistling:

beforeobamabans
12-12-2012, 15:52
Maybe this is why inflation is not skyrocketing.
The Fed is madly paddling the canoe upstream in a losing battle to stop deflation. That's why there is no inflation.

Vic Hays
12-12-2012, 15:54
So basically the Fed is now pretty much covering the entire deficit.

The Fed's "portfolio" is now $3 trillion, going to $4 trillion by the end of next year. IOW, they are creating it out of thin air. Does the government even need to sell treasuries to the outside market any longer?? Maybe this is why inflation is not skyrocketing. There are no market forces at work.

History tells us that printing money works until outside countries no longer accept that currency. This is what happened in Germany. Countries are now turning away from using the dollar as reserve currency. Runaway inflation is right around the corner as all those dollars flood the market and people quit stashing them.

Atlas
12-12-2012, 15:57
I thought money printing was bad and caused inflation? .


Quantitative Easing Explained - YouTube

Ruble Noon
12-12-2012, 16:09
http://bp0.blogger.com/_b6CLevEGCD0/RvHi01kG8cI/AAAAAAAAAHc/F6kwW2C_-nw/s400/bernanke_helicopter_gift.jpg

beforeobamabans
12-12-2012, 16:10
Runaway inflation is right around the corner as all those dollars flood the market and people quit stashing them.
Those dollars have been "flooding the market" for four years now in a vain attempt to reinflate the economy. No dice. Demand will not return to 2007 levels for a decade, if then. What the pols and talking heads aren't understanding is the effect of the retirement of largest demographic bulge in our country's history. We Baby Boomers are quitting the economy at a rate of 10,000 per day. This will continue for another 17 years! Consumer demand, which is 70% of our economy, will erode as this group saves and pays down accumulated debt rather than buy stuff. Our economy is frighteningly overbuilt for what's coming. As demand contracts, many plants will close, stores will close, companies will go out of business, people laid off, homes foreclosed. This generation has never seen deflation and they don't know how to deal with it. It's going to be a very rough next decade or so.

GAFinch
12-12-2012, 17:10
"Too big to fail" banks can't sell off their toxic mortgages, which the Dems forced banks to loan out. The Fed prints money to buy the mortgages. Every bank designated as "too big to fail" by TARP is a shareholder of the Fed. Treasury Department doesn't care because its leadership all either come from TBTF banks or want jobs at TBTF banks. TBTF banks send their people to run other countries' central banks, so that they're doing the same thing we're doing and don't make us look bad. See how this works?

QE4-ever...QE infinity...whatever you wanna call it, it's officially here to stay.

rj1939
12-12-2012, 17:36
Sooo, Bumbling Benji is going to keep creating funny money as long as unemployment is above 6.5% ..............(unless inflation takes off) ................but the gubment numbers show unemployment is falling and at the rate it is falling in a couple of months we will have full employment. (according to gubment numbers)

Will it not be in the Feds best interest now to report bad unemployment numbers? So the bumbler can justify more funny money.

Sounds like they are laying the groundwork for bad unemployment numbers.

barbedwiresmile
12-12-2012, 18:49
Those dollars have been "flooding the market" for four years now in a vain attempt to reinflate the economy. No dice. Demand will not return to 2007 levels for a decade, if then. What the pols and talking heads aren't understanding is the effect of the retirement of largest demographic bulge in our country's history. We Baby Boomers are quitting the economy at a rate of 10,000 per day. This will continue for another 17 years! Consumer demand, which is 70% of our economy, will erode as this group saves and pays down accumulated debt rather than buy stuff. Our economy is frighteningly overbuilt for what's coming. As demand contracts, many plants will close, stores will close, companies will go out of business, people laid off, homes foreclosed. This generation has never seen deflation and they don't know how to deal with it. It's going to be a very rough next decade or so.
Very good post. Few people seem to understand the economic dynamics in play.

cowboy1964
12-12-2012, 20:26
I don't understand why Congress doesn't call The Ben Bernank back and make him swear under oath AGAIN that the Fed is not monetizing the debt.

rj1939
12-13-2012, 05:05
I don't understand why Congress doesn't call The Ben Bernank back and make him swear under oath AGAIN that the Fed is not monetizing the debt.

Congress is perfectly content with Benji's schemes, otherwise THEY might actually have to do something.............instead of extend and pretend.

cowboy1964
12-13-2012, 05:58
Congress is perfectly content with Benji's schemes, otherwise THEY might actually have to do something.............instead of extend and pretend.

Well, instead of Congress I should have said Ron Paul. He was chairman of the Domestic Monetary Policy Subcommittee.

Cavalry Doc
12-13-2012, 06:10
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

Skyhook
12-13-2012, 06:31
Quantitative Easing Explained - YouTube (http://www.youtube.com/watch?v=PTUY16CkS-k)

That was outstanding.. sent the link out to my more curious contacts.

Thanks. :beer:

Skyhook
12-13-2012, 06:34
Congress is perfectly content with Benji's schemes, otherwise THEY might actually have to do something.............instead of extend and pretend.

I also find myself wondering if our lifers in congress have a shred of understanding what the _____ Bernanke is doing..

:shakehead:

rj1939
12-13-2012, 06:45
Well, Bumbling Benji has pushed the EU into the "the race to debase"...........or at least upped the anty.

Britain was a glimmer of hope, saying that QE wasn't giving the desired results and had suspended it, but now Government Sux has their boy in the top spot now in Britain, they will be printing like there is no tomorrow.

PocketProtector
12-13-2012, 07:04
The perception of how the economy is doing well is based on stock market performance.
Propping up the stock market with worthless dollars gives the "perception" that all is well.
It's a house of cards that will, when the time is right, or wrong depending on your perspective, collapse this whole country.....by design.
Khruschev was right, we will be destroyed from within.....The fire was set many years ago and the OMao is the accelerant.

Atlas
12-13-2012, 07:31
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

Doc,

Quoting (repeating) myself from a response to you in a previous thread:

Why would you think it dishonest to borrow with the expectation of paying that debt in devalued dollars?
I wouldn't consider it at all dishonest.

Banks and consumer credit companies take that risk willingly.
They understand the money markets and inflation better than most.

They contract with you to loan you money in a particular currency (dollars for you and I) and to be paid back in that same currency.

If they don't want the risk that the currency you will use to pay your debt will be devalued in the future then they can choose to not loan the money.

They factor that risk into their calculation of the interest to be charged.

It would be quite a different thing if you accrued debt with the intent to default in bankruptcy. That would be dishonest without question.

The trick of course is same as anything else in the marketplace... timing.

cowboy1964
12-13-2012, 08:14
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

Too much risk of it NOT happening soon enough.

I don't believe the U.S. will see hyperinflation ala Weimar, though we certainly may see 5-10% annualized inflation (and we already are, and have been in certain areas.... health care, tuition, etc)

JFrame
12-13-2012, 08:37
That was outstanding.. sent the link out to my more curious contacts.

Thanks. :beer:

+1

That video made my distribution list. http://www.kolobok.us/smiles/standart/good3.gif


.

beforeobamabans
12-13-2012, 14:29
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

You've misdiagnosed the patient and are killing him with the wrong treatment. Get rid of debt, hoard cash-it will buy more in the years to come. Think about what's happened in the housing market. This will spread to all industries.

G19G20
12-13-2012, 18:45
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

In theory it's a nice plan. I have thought about similar plans, though they usually include lots of precious metals, ammunition and other assets that will rise in value as hedges against inflation and deteriorating economy. In practical terms, it's foolish to try to time something like hyperinflation since you'd still have to make minimum payments on those cards/loans for an undetermined length of time, which could easily break you before hyperinflation takes hold.

beforeobamabans
12-13-2012, 19:36
Yup, that hyperinflation in the most important market in the economy-housing-is making me rich. Watch commodities follow suit in 2013. Gold has seen it's high, oil is heading for $50/bbl, all manufactured goods will see inventories will get jammed up. No need to worry about ammo. If you have cash, youll have no trouble finding plenty of cheap ammo (barring government manipulation). You guys that know nothing but inflation are blind to the catastrophe that we are already engulfed in.

akroguy
12-13-2012, 20:14
Yup, that hyperinflation in the most important market in the economy-housing-is making me rich.

Not sure I see that connection. I have two rental homes and the grand plan was to hold them until retirement, then sell, and pay off my home. That is, IF they are above water at that time.

Syclone538
12-13-2012, 20:44
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

FerFal kind of talked a little about that at one time, though didn't make any recommendations one way or the other. He said people with savings were screwed while people with debt made out great.

beforeobamabans
12-13-2012, 21:03
Not sure I see that connection. I have two rental homes and the grand plan was to hold them until retirement, then sell, and pay off my home. That is, IF they are above water at that time.

I guess my sarcasm wasn't obvious enough. Sometimes, people refuse to see what's right in front of their eyes.

GAFinch
12-13-2012, 21:20
In theory it's a nice plan. I have thought about similar plans, though they usually include lots of precious metals, ammunition and other assets that will rise in value as hedges against inflation and deteriorating economy. In practical terms, it's foolish to try to time something like hyperinflation since you'd still have to make minimum payments on those cards/loans for an undetermined length of time, which could easily break you before hyperinflation takes hold.

Same here.

1. Every time we think the Fed has reached the limits of its insanity, they do something crazier and investors don't seem to care. Part of that may be computer algorithms manipulating the stock market to make them feel like other investors are still okay with policy.
2. Nationalizing private investments could provide trillions in new money to stay afloat.
3. Goldman Sachs just took over the Bank of England, so there's a couple more trillion that can be used to keep various countries afloat for awhile.

akroguy
12-13-2012, 21:42
I guess my sarcasm wasn't obvious enough. Sometimes, people refuse to see what's right in front of their eyes.

Need to send out my sarcasm meter for calibration.

I was hoping you had an angle on it (real estate future) I hadn't yet realized!

holesinpaper
12-13-2012, 22:47
Try to own as much stuff as you can before the hyperinflation kicks in.

The only moral dilemma I have, is should I open up a couple hundred thousand dollars worth of credit cards and max them out, Buy some fancy new cars and a huge house on a lot more land than I have now, and just wait for hyperinflation to shrink the debt for me?


I'll probably just go the honest route and not do that, but it's something to think about.

When the boomers are in retirement and need to downsize, what happens to all the property they no longer need? What does that do to the real estate market? Generational realestate bubble anyone?

beforeobamabans
12-14-2012, 02:10
Need to send out my sarcasm meter for calibration.

I was hoping you had an angle on it (real estate future) I hadn't yet realized!

If you are renting out as a landlord, and you have tenants, you should be OK, at least for a while. Demand for rentals will increase as fewer can afford to own, but rental rates will fall. My real estate outlook is more flavored by the number of upside down borrowers who won't be able to hold their breath any longer. 2013 is a big year for resetting of variable mortgages, especially in California. If interest rates back up a point or two, there will be much wailing and gnashing of teeth. A lot of it depends where you are.

One method of looking at your future is to follow markets that are in the same trend but ahead of you. The Spanish market gives good insight as to what could happen here if we don't get our act together (which obviously isn't going to happen under this president). So I believe you can extend and accelerate the current trends another four plus years. You may find some value in these charts:

http://www.google.com/search?q=spain+home+prices&ie=UTF-8&oe=UTF-8&hl=en&client=safari#biv=i|0;d|cv6YAjDpZmW9cM:

The only "silver lining" I can find in these charts for the U.S. Is that our housing bubble was not as severe as Europe's and it seems to have already corrected more. The problem is, this trend is not bottoming yet, so there is more pain to come. How anyone can look at this situation and think there is any kind of inflation on the horizon is beyond me. When this deflationary spiral inevitably spreads across the rest of the economy, unemployment will spike. Spain is at 25% unemployment today for the general population and 50% for youth. When you look at "real" unemployment in the U.S., it's really about 16%. It will get worse. The question is, "How fast?" This is where I do give the Fed some credit. Remember, Bernacke is a student of the deflation of the 30's. He won't talk about it in public but, he is scared to death of deflation. He is paddling the boat in the opposite direction (desperately trying to inflate) as fast as he can but it isnt working. The Fed's massive purchase of U.S. debt is delaying and slowing the inevitable but, inevitably, we too will pay the piper. It isn't going to be pretty. Do you think the average person (or GTPI'er for that matter) has any clue how bad things truly are today and where we are headed? Have I scared you sufficiently yet? It's pretty simple what individuals need to do: preserve capital. Eliminate debt. Triple or quadruple your cash reserves. Move toward eliminating ownership of any commodity that can fluctuate in price. If it doesn't get as bad as it seems it's going to, you at least won't have lost any ground. Don't be fooled by temporary rallies in this bear market. Bear market rallies are usually the most severe of any type.