Seriously is pointing to a newspaper article the only ability you have.
Tell me how will a rise in US rates affect us and how much difference do you think it will make. (hint - it will make some difference when US rates rise)
How about you tell US how Rising Rates in the US will not affect the Cost of money Globally?
I'm not talking physical cash here. I'm talking QE as per the USA, UK and ECB.
If (as you and Rufus assert), sovereign nations can never go bankrupt, why not simply give up on collecting taxes and just print the money needed for road building and hospitals?
Why bother to issue bonds when all you have to do is print some money?
It simply doesn't add up mate.
And you know it.
Another complete straw man argument. For a start, QE is a specific mechanism of money supply and interest rate management - it's not "money printing" in a generic sense. QE is about influencing the longer end of the rate curve vs just the short end, and it's really an asset swap - ESA balances in exchange for government bonds, which are just another form of money anyway. In fact as b_b has argued in the past, QE may ultimately prove to be slightly dis-inflationary, and it certainly hasn't been inflationary - with the later being the solid expectation of the all the "1+1=2" crowd like yourself when QE programs were first started nearly a decade ago now - so what happened? Why no inflation?
More generally, taxes are levied, and bonds issued, as a mechanism for government to appropriate productive capacity and resources from the private sector, without interfering directly in the mechanism of managing growth of the money supply.
It does add up - perfectly in fact. So much so that there has never been a failed commonwealth bond issue in Australia, nor in the US, in the modern monetary era.
Another complete straw man argument. For a start, QE is a specific mechanism of money supply and interest rate management - it's not "money printing" in a generic sense. QE is about influencing the longer end of the rate curve vs just the short end, and it's really an asset swap - ESA balances in exchange for government bonds, which are just another form of money anyway.
More generally, taxes are levied, and bonds issued, as a mechanism for government to appropriate productive capacity and resources from the private sector, without interfering directly in the mechanism of managing growth of the money supply.
It does add up - perfectly in fact. So much so that there has never been a failed commonwealth bond issue in Australia, nor in the US, in the modern monetary era.
Smoke and mirrors mate.
If QE works, then more QE will work "morer".
The logical extension being that that we all just QE ourselves to prosperity.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
The logical extension being that that we all just QE ourselves to prosperity.
Ummm - except all the QE programs in the UK and the US stopped years ago now??? And I ask again - where's the inflation???
QE was initially more about heading off a confidence / liquidity crisis *inside* the banking system anyway - ie a bandage to stop an open wound bleeding. It was never about "QE'ing ourselves to prosperity"..... So yet another bullshit straw-man from you Jimbo
Ummm - except all the QE programs in the UK and the US stopped years ago now???
I take it you mean stopped as in unwound?
Has US and UK QE been unwound?
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
More generally, taxes are levied, and bonds issued, as a mechanism for government to appropriate productive capacity and resources from the private sector, without interfering directly in the mechanism of managing growth of the money supply.
No, that is just handwaving after the fact. Money issuance was taken out of government hands after the US Civil War to prevent hyperinflation. By issuing money as debt, it forced the government to limit the amount of money it could issue. Unfortunately, it also spawned the philosophy of eternal, infinite growth, as money issued as debt to pay back money issued as debt can never be repaid, unless there is a reset of the financial system.
The debt-money system cannot work in a deflationary world without the government eternally and infinitely increasing debt that it will never repay. But if you put unlimited money issuance back into government hands, what is to stop the sudden and total debasement of the currency?
Sydneyite
20 Nov 2016, 04:04 PM
Why do they need to be unwound?? The CBs can hold the bonds through to maturity if they wish and it will all naturally unwind.
Except that the Fed uses the coupons from the bonds it owns to purchase new bonds. So, they are not unwinding at all.
Except that the Fed uses the coupons from the bonds it owns to purchase new bonds. So, they are not unwinding at all.
That's just standard open market operations - ie overnight repo's. It's probably being done to try and avoid the dis-inflationary impact that would otherwise occur if the fed kept the coupon payments as cash instead of using it as a "source" of money for normal operations (ie instead of printing new money as would otherwise happen). Ie what would be the point of keeping the coupon payments as cash, and then issuing extra "new" money instead? Form the fed's perspective, it may as well use the coupon cash instead, if it has any.
Why do they need to be unwound?? The CBs can hold the bonds through to maturity if they wish and it will all naturally unwind.
More smoke and mirrors mate.
Every single bond in existence is someones pension or rainy day fund.
Each bond will be exchanged for time and energy at some point in the future,
Most of that time and energy will be expended by people under 65 years off age.
As a proportion of population, there have never been fewer people under the age of 65 in the history of mankind.
Printing more obligations is not the answer.
And you know it.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
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