Posted on 05/02/2011 4:05:12 PM PDT by Kaslin
When people in Washington start creating fancy new phrases, instead of using plain English, you know they are doing something they don't want us to understand.
It was an act of war when we started bombing Libya. But the administration chose to call it "kinetic military action." When the Federal Reserve System started creating hundreds of billions of dollars out of thin air, they called it "quantitative easing" of the money supply.
When that didn't work, they created more money and called it "quantitative easing 2," or QE2, instead of saying:
"We are going to print more dollars — and hope it works this time."
But there is already plenty of money sitting around idle in banks and businesses.
The policies of this administration make it risky to lend money, with Washington politicians coming up with one reason after another why borrowers shouldn't have to pay it back when it is due, or perhaps not pay it all back at all. That's called "loan modification" or various other fancy names for welshing on debts. Is it surprising that lenders have become reluctant to lend?
Private businesses have amassed record amounts of cash, which they could use to hire more people — if this administration were not generating vast amounts of uncertainty about what the costs are going to be for ObamaCare, among other unpredictable employer costs, from a government heedless or hostile toward business.
As a result, it is often cheaper or less risky for employers to work the existing employees overtime, or to hire temporary workers who are not eligible for employee benefits. But lack of money is not the problem.
(Excerpt) Read more at investors.com ...
The Federal Reserve is PAYING banks to hold cash reserves! Why lend to unknowns when you have “guaranteed” money?
To guide those few newbies who do not recognize the name, the man, and the brilliance.
Exactly.
Look at the banking reserve charts in the FRED database. They go straight up.
Ping
My pleasure
Exactly. One thing I wish more people would realize is that there aren't a whole lot of fundamental ways wealth is created; most of them boil down to actions which cause resources to be used more efficiently than they otherwise would be. If a financial wizard shoves around a bunch of paper assets around in such a way as to increase their apparent value, but there's no mechanism by which such actions are improving the efficiency of using real resources, the apparent value of those paper assets is nothing but an illusion.
The layers upon layers of obfuscation employed by some financial wizards make it difficult to discern the essence of what they're doing. This is not accidental. Often times, if one were to cut out the obfuscation it would be really apparent that what the wizards are doing is an obvious scam. The "where is wealth actually being generated" question, though, cuts through a lot of that. Giving someone who makes $30,000/year a mortgage to buy a $300,000 home is clearly not economically efficient, but it increases people's apparent net asset value; what that shows is that the apparent net asset value is an illusion.
You’re very welcome
This is a serious problem...even if there is no QE3, inflation will continue as the money in those banks works its way into them economy.
Yeah....I didn’y have to wait too long ;-)
hopey changey hoover boom x 10...
It works its way into the overinflated stock market.
Private businesses have amassed record amounts of cash, which they could use to hire more people — if this administration were not generating vast amounts of uncertainty about what the costs are going to be for ObamaCare, among other unpredictable employer costs, from a government heedless or hostile toward business.
As a result, it is often cheaper or less risky for employers to work the existing employees overtime, or to hire temporary workers who are not eligible for employee benefits. But lack of money is not the problem.
Exactly. Liberals and statists have a hard time understanding it because they don't want to understand it.
And thanks for the ping, Jaz!
“When that didn’t work, they created more money and called it “quantitative easing 2,” or QE2”
Perhaps “Titanic” would have been an apter moniker.
| Bernanke said 2011 growth has slowed to less than a 2 percent in the first three months of this year. The Fed chairman said: ''most of the factors that account for the slower growth in the first quarter appear to us to be transitory.'' Right Mr. Chairman, 'transitory' in the same way the current administration is 'transitory'. The first won't end until the other ends. And I guess if we enter the worldwide socialism club, we'll never have to worry about growth again. All I know is that if they tell us we had 1.8% growth, it really means we had no growth or negative growth. Trillions of dollars worth of unsustainable debt is signaling that more QE is inevitable regardless of the rhetoric of Ben Bernanke who up until last week refused to admit that inflation even existed. For the guy who cranks out new dollars on the Treasury's printing press, he spends a lot of time insisting the value of the dollar is someone else's responsibility. So the Fed's inaugural 'meet the press' moment was in fact preparing the ground for the start of QE3. Bernanke has his 'tools' you know. It's all fiat money now, meaning that it has value only because the Fed says it does! So we have an unstable economy wobbling atop unsound money. Money that the government takes from taxpayers, or borrows with no intention of paying it back, or prints without end. The Fed will have printed about $1.8 trillion from the end of 2008 to the end of June, 2011 - partly to finance staggering federal government deficits of nearly $4.5 trillion over the three years. So the Fed's actions are undermining the dollar precisely because that's what the White House wants Countdown until Obama leaves Office: 628 days as of May 2, 2011.
------------------------------ Welcome to the 1970s: low growth, high inflation. And the Keynesians argued this can't happen. The whole QE2 pump-priming hasn't stimulated economic growth, but has stimulated inflation. It's all virtual money now! Hope and Change.... Tragic. |
Spot on, professor.
Thanks for the ping jaz. Dr. Sowell once again on the mark. Leave the economy alone. Get the government the “H” outta the way, and let ‘er rip.
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