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WTF is QE?; Does Stimulus Stimulate?
Topic Started: 4 Sep 2015, 07:28 AM (7,637 Views)
Terry
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Andrew Judd
9 Sep 2015, 01:36 AM
the point of view I have tried explained to you is a very well known one, and one that is assumed to be correct by people who are known to be amongst the best minds in central banking.

I love this kind of stuff. It gives me images of knitted beanies and roll your own ciggies.
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Andrew Judd
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Terry
9 Sep 2015, 02:22 AM
I love this kind of stuff. It gives me images of knitted beanies and roll your own ciggies.
No idea what that means but i am assuming you mean it gives you something to look down upon from your almighty height.

QE is more or less zero sum. It cannot possibly alter bank behaviour in the way people in the suburbs believe it can.
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Loki
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Andrew Judd
9 Sep 2015, 01:36 AM
Even though you constantly feel the need to be abusive, the point of view I have tried explained to you is a very well known one, and one that is assumed to be correct by people who are known to be amongst the best minds in central banking.
Ah, the best minds in central banking. Why didn't you just say so in the first place? Discussion over.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Andrew Judd
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Loki
9 Sep 2015, 08:52 AM
Ah, the best minds in central banking. Why didn't you just say so in the first place? Discussion over.
How does QE introduce new purchasing power into an economy?

It appears the only answer you have for that question is one full of abuse, misdirection or petulance
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Loki
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Andrew Judd
9 Sep 2015, 02:48 PM
How does QE introduce new purchasing power into an economy?
I don't know what you mean by "purchasing power". I know the generally accepted definition, but as that appears not to be your definition, I can't answer the question in your terms.
Quote:
 
It appears the only answer you have for that question is one full of abuse, misdirection or petulance
You are either a superb troll beyond measure, or just plain mad as batshit.

Here is something from your hero, Ben Bernanke, one of the finest minds in central banking from a press conference in June of 2013.
Quote:
 
ROBIN HARDING : Robin Harding from the Financial Times. Mr. Chairman, you’ve always argued that it’s the stock of assets that the Federal Reserve holds which affects long-term interest rates. How do you reconcile that with a very sharp rise in real interest rates that we’ve seen in recent weeks? And do you think the market is correctly interpreting what you think is most likely to be the future path of theFederal Reserve’s stock of assets?
Thank you.

CHAIRMAN BERNANKE: Well, we were a little puzzled by that. It was bigger than can be explained I think by changes in the ultimate stock of asset purchases within reasonable ranges. So I think we have to conclude that there are other factors at work as well,including,again, some optimism about the economy, maybe some uncertainty arising. So, I’m agreeing with you that it seems larger than can be explained by a changing view of monetary policy.



And why was the finest mind in central banking puzzled by a sharp rise in real interest rates when the Fed's balance sheet was so large? Because the assumption in those fine minds was that the QE transmission mechanism was STOCK not the FLOW. An assumption that the bond market has shown again and again to be completely and utterly wrong.
Edited by Loki, 9 Sep 2015, 08:06 PM.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Andrew Judd
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Loki
9 Sep 2015, 08:05 PM
I don't know what you mean by "purchasing power". I know the generally accepted definition, but as that appears not to be your definition, I can't answer the question in your terms.

You are either a superb troll beyond measure, or just plain mad as batshit.

Here is something from your hero, Ben Bernanke, one of the finest minds in central banking from a press conference in June of 2013.



And why was the finest mind in central banking puzzled by a sharp rise in real interest rates when the Fed's balance sheet was so large? Because the assumption in those fine minds was that the QE transmission mechanism was STOCK not the FLOW. An assumption that the bond market has shown again and again to be completely and utterly wrong.
If you are familiar with the stock and flow discussion you should have no problems understanding the language which suggests QE has no direct ability to alter the ability of actors in the economy to buy things

I am not a troll. And since my view is common knowledge, and must be known to you already in one flavour or another, i cannot be as mad as badshit.

How about you make a tiny wheeny little bit of an effort here.



Edited by Andrew Judd, 9 Sep 2015, 08:53 PM.
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Loki
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Andrew Judd
9 Sep 2015, 08:51 PM
If you are familiar with the stock and flow discussion you should have no problems understanding the language which suggests QE has no direct ability to alter the ability of actors in the economy to buy things


OK. Lets say you have $2000 to put towards a mortgage each month. Assume a 30 year loan.

How much can you borrow @ 3.5% mortgage rate ?

How much can you borrow @ 7% mortgage rate ?

Do you consider a house to be a thing? And if yes, does a change in interest rates affect the ability of people to "buy things"?





















.
.


Super secret answer:
$450,000 @ 3.5 %
$300,000 @ 7 %


“Talk sense to a fool and he calls you foolish.” - Euripides
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createdby
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QE for the people is the solution to the current malaise.

I don't think it hasn't been tried in the modern age apart from Rudd checks.

It used to be that when societies went into depressions, people went to the mines and dug up gold.

Estimates of the gold dug up during the 19th and early 20th gold rushes were in the 20 trillion adjusted for inflation and per capita.
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Andrew Judd
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Loki
9 Sep 2015, 09:32 PM
OK. Lets say you have $2000 to put towards a mortgage each month. Assume a 30 year loan.

How much can you borrow @ 3.5% mortgage rate ?

How much can you borrow @ 7% mortgage rate ?

Do you consider a house to be a thing? And if yes, does a change in interest rates affect the ability of people to "buy things"?]
Super secret answer:
$450,000 @ 3.5 %
$300,000 @ 7 %
Changing interest rates is an indirect consequence of QE.

Possibly we agree on QE and our difficulties together are caused by misunderstandings.
Edited by Andrew Judd, 9 Sep 2015, 09:47 PM.
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Loki
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Andrew Judd
9 Sep 2015, 09:43 PM
Changing interest rates is an indirect consequence of QE.


:bl: :bl: :bl:
https://en.wikipedia.org/wiki/Quantitative_easing

Maybe you can explain the mechanism to me ....

Quote:
 
Possibly we agree on QE and our difficulties together are caused by a misunderstanding.
Anything is possible. I await your explanation with great anticipation.


“Talk sense to a fool and he calls you foolish.” - Euripides
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