QE4Ever!

[pknopp]

The OP is "QE4ever!" That is the topic. My response was to G5000, although obviously its an open board. Nevertheless, money supply is not an antiquated topic. QE affects money supply, although with some differences of money supply as increased by the Treasury. QE includes direct expansion of dollars via govt purchases of bonds, and as practiced by Powell to placate Trump, that means purchase of US debt. Along with letting the govt run historic deficits, this helps keep interest rates down, since the Fed is not like a "real investor" who wants as high a return on capital as possible. The Fed doesn't really care because any interest it earns, it must rebate to the Treasury.

QE can also be lowering the cost of borrowing money by private investors. That was what the Bernank originally went towards, although he si directly purchase bonds. He proposed letting those drop off the feds balance sheet as they matured, which in effect LOWERED money supply, but Powell reversed that course.

The question I proposed was … What will this cause? We've never tried it before. Japan hasn't, not really. Trump contemplates, apparently, permanent economic stimulus via the Fed, whose purpose for fifty some years has been to guard against inflation. Although for the past twenty years or so, some have been asking "what inflation?" It actually seems difficult for the Fed to achieve the inflation it wants.

But what are the other effects? Some warn that when the next recession happens, the Fed may not be able to just gobble up more debt because that will kill the dollar, and possibly end the US dollar as the reserve currency.

Some warn that by depressing interest rates despite historic debt, the Fed will find for investors no longer want US debt, which has been seen as the safest place to put actual money (not QE increases)

And lastly "net worth" has no application in terms of nations. "Financial position" is a similar concept, but that is related to, but not directly, what I asked about. But obviously if the econ crashed due to inflation or lack of demand for US debt, that would affect the US financial position.

Happy New Year.

What will this cause? It's going to make the rest of the world ditch the dollar.

It's going to make the rest of the world ditch the dollar.

In favor of what alternative?

It's hard to tell. It's already started. We bitch when other countries try and manipulate their money supply. We start wars to keep it on top. Other countries are growing tired.

China-Iran Oil Deal Undermines the Dollar

China Seeks To Undermine U.S. Dollar, Introduce Yuan Into Pakistan - The Media Line

The Dollar Underpins American Power. Rivals Are Building Workarounds.

Nobody wants to hold Chinese Yuan.
Or Iranian Rial. Or Pakistani Rupee.

It's going to happen. We can't continue to be hypocritical about this and starting wars.

 

[g5000]

QE4ever update:

Dow and S&P 500 post back-to-back losses, but Nasdaq closes above 10,000 for the first time

The Dow fell as investors awaited an update from the Fed on the state of the economy and status of further stimulus from the central bank.

www.cnbc.com

The Federal Reserve kept interest rates unchanged on Wednesday and indicated it does not expect to raise them through 2022.

In a statement, the Fed said it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The committee added it will increase its bond holdings by buying $80 billion per month in Treasurys and $40 billion per month in mortgage backed securities.

The Fed also expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021.

 

[Tumblin Tumbleweed]

QE1, 2, and 3 added $2 trillion to the money supply.

As for depreciation of the dollar, nope. In fact, Trump was recently whining about how strong the dollar is and was tantrum demanding the Fed weaken it.

So...he should be tweeting a thank you to the Fed right about now...

Want to make a billion dollar bet on that....Of course Obama needed to chum up to all those billionaires who just got a lot richer while Obama put the most in poverty since the war on poverty started.

Obama orchestrated a massive transfer of wealth to the 1 percent

During that time, the greatest transfer of wealth in the history of the world occurred. Some $4.5 trillion was given to Wall Street banks through its Quantitative Easing program, with the American people picking up the IOU.

This is why i think you are just another liberal idiot.

You really should read my Fed bond bubble doomsday machine topic.

No thanks, I have studied the failings of the last admin, and it is still taking a while to bring America back from that ugly time.

Funny way of saying this administration has failed and sucks out loud...

 

[CrusaderFrank]

QE4ever update:

Dow and S&P 500 post back-to-back losses, but Nasdaq closes above 10,000 for the first time

The Dow fell as investors awaited an update from the Fed on the state of the economy and status of further stimulus from the central bank.

www.cnbc.com

The Federal Reserve kept interest rates unchanged on Wednesday and indicated it does not expect to raise them through 2022.

In a statement, the Fed said it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The committee added it will increase its bond holdings by buying $80 billion per month in Treasurys and $40 billion per month in mortgage backed securities.

The Fed also expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021.

Thanks. Obama!

 

[g5000]

QE4ever update:

Dow and S&P 500 post back-to-back losses, but Nasdaq closes above 10,000 for the first time

The Dow fell as investors awaited an update from the Fed on the state of the economy and status of further stimulus from the central bank.

www.cnbc.com

The Federal Reserve kept interest rates unchanged on Wednesday and indicated it does not expect to raise them through 2022.

In a statement, the Fed said it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The committee added it will increase its bond holdings by buying $80 billion per month in Treasurys and $40 billion per month in mortgage backed securities.

The Fed also expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021.

Thanks. Obama!

BWA-HA-HA-HA-HA-HA!

Priceless.

 

[CrusaderFrank]

QE4ever update:

Dow and S&P 500 post back-to-back losses, but Nasdaq closes above 10,000 for the first time

The Dow fell as investors awaited an update from the Fed on the state of the economy and status of further stimulus from the central bank.

www.cnbc.com

The Federal Reserve kept interest rates unchanged on Wednesday and indicated it does not expect to raise them through 2022.

In a statement, the Fed said it “expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.” The committee added it will increase its bond holdings by buying $80 billion per month in Treasurys and $40 billion per month in mortgage backed securities.

The Fed also expects the U.S. economy to contract by 6.5% in 2020 before expanding by 5% in 2021.

Thanks. Obama!

BWA-HA-HA-HA-HA-HA!

Priceless.

"Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history," Obama , Feb 2020

BWA-HA-HA-HA-HA-HA!

Thanks, Obama!

 

[Mac1958]

We have a new toy - a hyper-aggressive Fed that will save our asses by buying up trillions in shit assets whenever we need it to.

This ain't your father's capitalism. We'll see.

 

[Sun Devil 92]

The New York Fed has been pumping Tens of Billions of dollars into the banking system for several weeks now. And they are re-expanding their balance sheet.

All part of the fallout from trillion dollar deficits. Not enough liquidity in the system.

I hope Deficit Donald has the courage to at least tweet a thank you to the Fed!

New York Fed Injects $104.15 Billion in Short-Term Liquidity

The Federal Reserve Bank of New York injected $104.15 billion in temporary liquidity into financial markets Thursday.

The intervention came in two parts. One was via a term-repurchase-agreement operation that will last for 15 days that added $30.65 billion. The other was via a one-day repo operation that totaled $73.5 billion.

Fed repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a loan of central bank cash, collateralized by dealer-owned bonds. Last month, the Fed ramped up its repo operations for the first time in over a decade to help tame spiking short-term borrowing costs.

<snip>

On Wednesday, the Fed also began buying large amounts of Treasury bills to help expand the size of its balance sheet as part of a longer-term solution for money-market volatility.

A bit scary.

But it is a strange time.

 

[g5000]

We have a new toy - a hyper-aggressive Fed that will save our asses by buying up trillions in shit assets whenever we need it to.

This ain't your father's capitalism. We'll see.

Yep. It's a pretend economy now. A hologram. A phantasm. An illusion.

 

[Mikeoxenormous]

QE1, 2, and 3 added $2 trillion to the money supply.

As for depreciation of the dollar, nope. In fact, Trump was recently whining about how strong the dollar is and was tantrum demanding the Fed weaken it.

So...he should be tweeting a thank you to the Fed right about now...

Want to make a billion dollar bet on that....Of course Obama needed to chum up to all those billionaires who just got a lot richer while Obama put the most in poverty since the war on poverty started.

Obama orchestrated a massive transfer of wealth to the 1 percent

During that time, the greatest transfer of wealth in the history of the world occurred. Some $4.5 trillion was given to Wall Street banks through its Quantitative Easing program, with the American people picking up the IOU.

This is why i think you are just another liberal idiot.

You really should read my Fed bond bubble doomsday machine topic.

No thanks, I have studied the failings of the last admin, and it is still taking a while to bring America back from that ugly time.

Funny way of saying this administration has failed and sucks out loud...

Failed? Yeah, the Russian Collusion failed. Stormy Daniels failed. Brett Kavanaugh failed. Now the Wuhan virus has failed. So now the liberals are resorting to their last chance by putting a criminal on a pedestal and rioting and looting while burning cities. It also will fail as more civilized citizens will vote for the President.

 

[Tumblin Tumbleweed]

QE1, 2, and 3 added $2 trillion to the money supply.

As for depreciation of the dollar, nope. In fact, Trump was recently whining about how strong the dollar is and was tantrum demanding the Fed weaken it.

So...he should be tweeting a thank you to the Fed right about now...

Want to make a billion dollar bet on that....Of course Obama needed to chum up to all those billionaires who just got a lot richer while Obama put the most in poverty since the war on poverty started.

Obama orchestrated a massive transfer of wealth to the 1 percent

During that time, the greatest transfer of wealth in the history of the world occurred. Some $4.5 trillion was given to Wall Street banks through its Quantitative Easing program, with the American people picking up the IOU.

This is why i think you are just another liberal idiot.

You really should read my Fed bond bubble doomsday machine topic.

No thanks, I have studied the failings of the last admin, and it is still taking a while to bring America back from that ugly time.

Funny way of saying this administration has failed and sucks out loud...

Failed? Yeah, the Russian Collusion failed. Stormy Daniels failed. Brett Kavanaugh failed. Now the Wuhan virus has failed. So now the liberals are resorting to their last chance by putting a criminal on a pedestal and rioting and looting while burning cities. It also will fail as more civilized citizens will vote for the President.

Best of luck.