Skip to comments.ROUBINI: QE3 Has Begun (Are we zimbabwe yet? More money printing)
Posted on 08/04/2011 6:55:32 AM PDT by Halfmanhalfamazing
On Twitter, Nouriel Roubini declares that the latest currency interventions from Switzerland and Japan represent the start of QE3, ultimately ending in more Fed easing.
(Excerpt) Read more at businessinsider.com ...
at least something is happening.
I’d rather that nothing happen. Weimar, here we come.
Well, it isn’t helping the DJIA this morning.
... there are times when doing nothing is the best choice.
I would prefer something else.
is that a loaf of bread, or just kindling for the woodstove ???
I don't buy the Weimar thesis, but wdik?
Nour was right...once. His time is done now.
QE3 won’t work this time.
NOW do you folks understand why it was SO IMPORTANT that they pass ANY bill allowing FED borrowing, so the FED could prop up the Stock Markets to prevent Obama looking bad, like they did at the close of business yesterday?
What’s a few trillion in taxpayers dollars, compared to THE GLORY OF OBAMA? Eat Your Peas!!!
I was wondering how they were able to come up with $240 billion in a single day. That’s more than we borrowed in all of 2006.
I’d say government and Fed Reserve actions are certainly pointing us toward that ultimate outcome. Of course they will swear that they can prevent it.......just like all those other governments said in countries that suffered the results.
That was last month. This month, you can get half an egg for that amount.
DJIA off 187 as I post.
Of course, this was inevitable.
Roubini has been very accurate.
100 TRILLION DOLLARS!?
We have to stop them from doing this to our children!
When Germany couldn't pay its war debt...it printed money. Our only way out is to intentionally crash the world system. This will lead to war...they are hoping for debt forgiveness. Silly liberals.
WE will need very, very strong leaders in 2013. Let us pray for wisdom in our nation's elections.
We won’t. Our time for stopping them is long past.
It is time to go through what is being laid before us.
They are doing this to their children as well.
really evil people.
The Fed doesn't borrow money -- it prints it.
Then, the government borrows that and pays interest to the Fed for its trouble. It's easy once you get the hang of it.
AT the time of this post, DOW is down 184 and gold is in record territory once again.
I too doubt there will be a jubilee (Old Testament word - debt forgiveness), thus the other opinion is left.
Since June Timmy has been “borrowing” money from federal/military retirement savings
See, when the debt bill was signed we were actually already over $14.5 TRILLION in debt
I should be relieved he put back the $200 Billion in our savings accounts.......I hope
Not to mention Europe is very close to imploding worse than 2008, and guess who has to ride in to salvage the system?
We US taxpayers may be looking at the increase in our debt ceiling actually being TARP 2/3 and 4
The Weimar thesis is absolutely correct. The Weimar Republic’s turbo-inflation was a direct result of the German financing of World War I. Whereas the British were able to externalize their war debt (and also bundle the debt of their allies France and Russia) by selling bonds on the New York market, the Germans were frozen out of that market. The Germans wound up “selling” their staggering war debt to themselves, mostly in the form of short-term two to five year notes. Having lost the war, there was nobody around who wanted to buy their notes and as a result, the Weimar Republic had to monetize the notes as they came due in the early 1920’s. And so they inflated the currency to write it off the books; signs of this inflation were apparent in the German economy as early as 1916.
When our average annual deficit was around $400 billion, there was enough excess capital on the world markets to absorb that much debt, and China, Japan and Saudi Arabia were purchasers. However, when 0bama’s congress quadrupled the annual deficit to $1.6 Trillion, there wasn’t enough money in the world to absorb the debt. Thus, we had to “sell” it to ourselves, thus internalizing and now monetizing it.
In other words, over the last five years we went from the British model of finance to the German one. And it is no coincidence that we have QE2 ending shortly before we reached the debt limit, and it’s no coincidence that QE3 is beginning as we begin another round of “borrowing” now that the government has several trillion dollars more to play with. Also, if you look at the amounts of money involved in the various QE versions, it happens to coincide with the amount of money needed to cover the deficits that the foreign markets won’t or can’t absorb.
The only advantage we have over Weimar is that with the advent of electronic transactions, we don’t actually use the paper anymore so you can keep the wheelbarrow in the garage and not take it to the bank.
We're in deep trouble here as a nation, and need to stop this spending and borrowing binge NOW. Congress will have to cut 40% from the federal budget, and the president will have to take the lead here. Entitlements will need to be reformed sooner rather than later. It will be bitter medicine, to be sure, but the country will survive and be much stronger in the end.
We also need to find out where all this money is really going. The fact that the deficit has gone from $400 billion to $1.6 trillion in only three years is just plain crazy.
Who got that money? Where did it go?
“I don’t buy the Weimar thesis”
A major instigator of WWII and “Weimar” hyperinflation was that Germany owed more than it could sanely repay. We’re setting up for the same situation, with no alternatives.
Consider that near-100% taxation would _still_ require deep (>30%) spending cuts across the board just to stop the hemorrhaging and begin long-term debt elimination, we may be able to tread water for a while but there is no satisfactory exit strategy. Reality is: we can’t raise taxes enough to pay the bills, we can’t cut spending enough to balance the budget without the peasants revolting, and there is no viable combination/compromise of both.
The solution for such a situation, as Weimar found out and we’re about to, is:
1. Hyperinflation: satisfy all commitments in letter (if not spirit) by just printing money. We owe $15T and rising fast, so the only letter-of-law-and-contract solution is to print more currency. The gov’t owes you a dollar? here’s a dollar; it won’t buy a loaf of bread like you expected when we made the contract, it will only buy a slice now, but that’s your loss for agreeing to fiat currency instead of X-backed currency.
2. War: the “have not” creditors and entitlees will revolt for the agreed-on currency being devalued, and the “haves” will resist the confiscation of their wealth. War is the only outcome. Either the government dissolves, leaving creditors & welfare recipients unpaid and anarchy ensues until “might makes right” & “by right of conquest” ensues, or the government entrenches and kills creditors & confiscates existing wealth by force.
Anything wrong with this thesis? I hope so.
Far more crazy: the debt went up $400 billion yesterday. $0.4T, one day flat.
Anyone that has been shopping in the last month have seen prices skyrocketing. Gas is back up. The economy is stalled. UE continues with no end in sight.
Obamageddon is upon us.
Right. But that can be said about more than Germany. Simple analogies are probably a little too much so.
It's probably more often the case than not. Adam Smith wrote this in the 18th century (posted here):
when national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid... ...the liberation of the public revenue, if it has ever been brought about all, has always been brought about by a bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretended payment.
Yes, that can be said about more than Germany.
Greece is on that verge.
Zimbabwe went that route.
Numerous other countries have done the same: facing overwhelming debts and insufficient revenue, inflate the currency, confiscate wealth, and kill creditors.
Please show me how I’m wrong here.
Please. I don’t want to go down that path, but don’t see any other way, as the most mundane sufficient tax-and-cut will instigate revolt from all corners, and short of that the growing interest will soon overwhelm all possible revenue.
weimar’s been done already. think progressive! AntiChrist?
Most folk do not realize that the debacle is already accelerating; and from a point where the present dollar is worth only a tad more than a 1930 penny. (See Gold & Money In America, II.)
I think you’re confusing your “FED’s”.
“Obamageddon is upon us.”
Yes, it’s a global economic Barackolypse.
Soros has gotta be lovin’ this
When ever millions of American citizens are losing millions of $ with the stock market, he is making billions.
QE has never worked, as has been predicted.
“Hey, bartender, another round of QE for everyone in the joint!”
It will be done on a much larger scale, and much more nuanced, than Weimar.
This is why I’ve been suggesting the Obama might sell (*cough*) Taiwan to China in lieu of debt repayment. Maybe the Korean peninsula too. We’ll have to make massive cuts to Defense, you see, so the Navy will be scaled back and herded into the Pacific, and the world’s most heavily guarded border won’t be...and what’s a few trillion dollars between friends...