Iowa Drops Four Sports

[Ree4]

Yeah, but the shit the Fed has done to date isn't about protecting those sorts of industries, it is about protecting the bankers who have extended loans.

Sounds about right, the two trillion the Fed injected into Wall Street at the start of the pandemic - did anyone ask how we're going to pay for it?

 

[okeefe4prez]

Sounds about right, the two trillion the Fed injected into Wall Street at the start of the pandemic - did anyone ask how we're going to pay for it?

No one and everyone pays for it. Those sorts of quantitative easing moves are purely money creation. So not a penny of that ends up on the taxpayers, but then again, everyone with a dollar theoretically pays for it with inflation. But on the flip side, the velocity of money collapsed, so maybe they won't be very inflationary.

The transaction is that the Fed literally created new money and used it to buy existing bonds to try to juice the money supply. When the bonds mature, the borrower has to cut a check back to the Fed and then the Fed retires the money. It's just a round trip.

The worst thing that has happened to America in the past 20-ish years is the monstrous politicization of the Fed. They held rates insanely low for Obama. Trump browbeat them and they cut rates for him during a period of pretty sizable economic expansion, which is completely unheard of. And then JPow basically would do anything Trump asked when The Germ hit. The Fed has become a total fucking joke. But as the US debt gets bigger and bigger, the Fed will have to keep rates insanely low because raising them will lead to even bigger federal deficits.

 

[Ree4]

No one and everyone pays for it. Those sorts of quantitative easing moves are purely money creation. So not a penny of that ends up on the taxpayers, but then again, everyone with a dollar theoretically pays for it with inflation. But on the flip side, the velocity of money collapsed, so maybe they won't be very inflationary.

The transaction is that the Fed literally created new money and used it to buy existing bonds to try to juice the money supply. When the bonds mature, the borrower has to cut a check back to the Fed and then the Fed retires the money. It's just a round trip.

The worst thing that has happened to America in the past 20-ish years is the monstrous politicization of the Fed. They held rates insanely low for Obama. Trump browbeat them and they cut rates for him during a period of pretty sizable economic expansion, which is completely unheard of. And then JPow basically would do anything Trump asked when The Germ hit. The Fed has become a total fucking joke. But as the US debt gets bigger and bigger, the Fed will have to keep rates insanely low because raising them will lead to even bigger federal deficits.

Sorry, that was more of a rhetorical question. I know how money supply functions, have my Masters in economic policy from UI (I'll admit I don't follow US policy as much as I used to because it's a fking joke as you mentioned)

If you agree with Keynesian economics then it makes sense for post '08/Obama to have low interest rates to try to recover from the recession, but I agree - not for so long. It was ridiculous to keep them low after such a continued economic expansion - although in the last year of Obama's term they were increased until mid 2019. What's really silly is that in an expanding economy we implemented a huge tax cut in 2018 and cut rates significantly starting in mid 2019 - effectively eliminating the "real" weapons we have against a recession. I will be the first to admit I'm not a huge fan of Keynesian Theory but since that's basically the model the US follows, it's what we have - and the people in charge have to clue how to do it properly because, as you said, it's become more about politics than economic benefit.

 

[okeefe4prez]

have my Masters in economic policy from UI

I don't know what that means. It used to be that if a gentleman had a degree with "economics" in the name one could assume a certain level of IQ, logical reasoning and analytical ability, but sadly many schools have watered it down so much that one need not even have a rudimentary understanding of differential equations or statistics to graduate with some sort of "economics" degree now.

Agree with the rest of your post, though. The politburos realize the importance of the monetary policy levers and the country has basically turned into an opium den that gets high on loose money. The simultaneous bubbles in equities, fixed income and real estate are absolutely unprecedented.

 

[Ree4]

I don't know what that means. It used to be that if a gentleman had a degree with "economics" in the name one could assume a certain level of IQ, logical reasoning and analytical ability, but sadly many schools have watered it down so much that one need not even have a rudimentary understanding of differential equations or statistics to graduate with some sort of "economics" degree now.

Agree with the rest of your post, though. The politburos realize the importance of the monetary policy levers and the country has basically turned into an opium den that gets high on loose money. The simultaneous bubbles in equities, fixed income and real estate are absolutely unprecedented.

Yeah I took diff eq, vector calc and a lot of stats - decades ago - thought about being an actuary but I'm pretty sure you have to be an extreme introvert to do that