Money Supply Increase Needed?

[rexdutchman]

Read FED UP , the feds are wrong 99.99 % of the time

[friendly fred]

Originally Posted by Chung Tran

Ha!

well, your Real Estate has a price increase squeeze-point, that will shut out buyers at some level. but yeah, as long as the Dollar is the King of the Mountain, might as well keep playing the game until it stops working..

If I need to sell it just below the squeeze point, as long as adequate liquidity is available for dealmaking I should be OK.

[Jackie S]

Originally Posted by friendly fred

I would much rather print money than have higher taxes, plus my real estate would benefit from inflation.

We are never paying the debt down anyway so who gives a shit? As long as suckers value the USD we still have a country, such as it is.

Such as it is, still the best.

I agree with what you have said. 99% of the populas don't give a crap about the "debt". It's just a number with a shit load of zeros.

[lustylad]

Originally Posted by Chung Tran

https://www.marketwatch.com/story/th...ney-2019-08-21

article makes some good points, but the key argument seems to center around the inflation rate, which is never stated in the body.. 2% inflation or more, the Author says, is necessary to beat back deflation.

but what is inflation now? maybe the "official" rate is under 2%, but prices we actually pay is up well over that, the past year.

and pumping in more money would likely trim interest rates "naturally", as opposed to the Fed enacting lower rates by decree, but there is already gobs of money in the system. what is needed is a business demand for the already large amount of money sitting, waiting for utilization.

I agree. What's this pompous "open letter to Jerome Powell" bullshit? The author's historical analogy to Volker's actions back in 1979-83 is facile. The Fed's ability to rein in high inflation is much stronger than its ability to stoke low inflation (which is not part of its job description, nor the appropriate role of any central bank).

What is a return to QE supposed to achieve? Faster inflation? Stronger real growth? Bad match of policy tool to policy goals. Like pushing on a string. We're at full employment already. If the Fed wants to pause the unwinding of its balance sheet (now $3.8 trillion, down from $4.5 trillion peak 4 years ago) I'm not going to object. But there's no point in pumping it back up again.

And trumpy needs to stfu and stop trying to pin the next recession on Powell before it even starts. Here's an update on the Fed's balance sheet:

https://www.bankrate.com/banking/fed...balance-sheet/

[lustylad]

Originally Posted by Unique_Carpenter

The article author is a wall street financial guy with vested interest in financial market transactions. Thus, a paid "forecaster" of financial interests. If he really was an independent economist, he wouldn't be bringing up 1970s economic stories as comparatives (sic) to today's quite fluid worldwide economics. There is no valid comparitive (sic) and if he can't eco model today's world using today's various eco models, he should be getting ready for retirement instead of embarrassing himself.

There are so-called "Fed watchers" all over Wall Street. Just because they're paid by a financial company doesn't make them less than objective. If they don't make reasonably accurate forecasts more often than not, they lose their jobs and reputations quickly.

As I mentioned, the comparison (not "comparitive") to the Volker era is not very instructive or illuminating so I agree with you on that point.

[themystic]

Originally Posted by lustylad

I agree. What's this pompous "open letter to Jerome Powell" bullshit? The author's historical analogy to Volker's actions back in 1979-83 is facile. The Fed's ability to rein in high inflation is much stronger than its ability to stoke low inflation (which is not part of its job description, nor the appropriate role of any central bank).

What is a return to QE supposed to achieve? Faster inflation? Stronger real growth? Bad match of policy tool to policy goals. Like pushing on a string. We're at full employment already. If the Fed wants to pause the unwinding of its balance sheet (now $3.8 trillion, down from $4.5 trillion peak 4 years ago) I'm not going to object. But there's no point in pumping it back up again.

And trumpy needs to stfu and stop trying to pin the next recession on Powell before it even starts. Here's an update on the Fed's balance sheet:

https://www.bankrate.com/banking/fed...balance-sheet/

I agree lusty. Well said

[lustylad]

Originally Posted by Tiny

Negative rates are bizarre, like bitcoin. I don't understand why someone would pay the German government 0.7% per year for the privilege of loaning them your money. Why not just put your Euros in a safety deposit box?

The big pools of money are held by institutions - banks, insurers, pension funds, etc. Way too much for them to convert to physical currency and stuff into safety deposit boxes. It's mostly electronic data points anyway. IMO negative interest rates on traditional currencies may lead to greater use of crypto/blockchain currencies if their prices ever settle down.

[gnadfly]

A friend of mine was taking a graduate class from Milton Friedman at the U of Chicago, and after a late night of drinking fell asleep in his class. This sent Friedman into a little tizzy. Professor Friedman posed a complicated 5 minute economic scenario. He then came over and pounded on the table, awakening my friend and demanding an answer to the question he had just posed. My friend, shaken but now awake said “ I’m sorry Dr Friedman, I missed the question but the answer is increase the M1 money supply.”

[Chung Tran]

Originally Posted by gnadfly

A friend of mine was taking a graduate class from Milton Friedman at the U of Chicago, and after a late night of drinking fell asleep in his class. This sent Friedman into a little tizzy. Professor Friedman posed a complicated 5 minute economic scenario. He then came over and pounded on the table, awakening my friend and demanding an answer to the question he had just posed. My friend, shaken but now awake said “ I’m sorry Dr Friedman, I missed the question but the answer is increase the M1 money supply.”

classic!