Quantitative Easing

[tabnloz]

ECB just announced negative deposit rates for commercial banks as a measure to fight deflation.

[Coinsera]

Quantitative Easing is to Inflation as Non-Consensual Sexual Intercourse is to Rape! Either way you're getting fucked.

https://twitter.com/CoinMobs/statuses/471474742898094080

http://www.dcclothesline.com/wp-content/uploads/2014/05/federal-reserve-printing-money.jpg

Why the hell govts are still printing this currency and wasting paper<<Trees<<Environment.

thanks

[Trading]

Actually, most of the "printing" money is just numbers in a computer. The FED or ECB just credit the account of a bank.

They don't even have to waste paper. No one can use it as toilet paper.

[Gargulan]

Actually, most of the "printing" money is just numbers in a computer. The FED or ECB just credit the account of a bank.

They don't even have to waste paper. No one can use it as toilet paper.

That is because rarely do anyone demand large sum of fiat dollar.

When regional major bank branch run out of paper money, they can request the regional federal reserve to deliver fiat money to serve their need.

After the major bank branch received the fiat, they can proceed with wiping their ass with the paper.

[jjc326]

In other news the ECB (European bank) just changed to negative interest rates.  This will be interesting.  Are banks actually going to charge you money for them holding your money?  Or will they go no lower than 0% interest?  In any case it's all messed up - and we're going to have another recession soon too, this is just crazy, what will central banks do then?

[twiifm]

In other news the ECB (European bank) just changed to negative interest rates.  This will be interesting.  Are banks actually going to charge you money for them holding your money?  Or will they go no lower than 0% interest?  In any case it's all messed up - and we're going to have another recession soon too, this is just crazy, what will central banks do then?

They're trying to stimulate inflation.  The Central Banks only have monetary policies as tools.  If nothing works then the politicians need to step in.

The negative interest rates are bank rates its supposed to incentivize banks to lend money and people to borrow.  However, if nobody is willing to borrow (because of negative outlook).  The money will probably end up in the equities markets or somewhere banks seek return

[CurbsideProphet]

Therefore, no inflation happens.

There are plenty of arguments suggesting that the way inflation is calculated has been changed in order to keep the 'publicly announced' inflation rate palatable to the gen pop.

The other way we have seen inflation is this; retail products, especially food related have maintained their prices however their net weight in grams has fallen.

Packets of crisps that go for $4.50 for 180g now only give 165g.

Deodorant gives less mls.

In the UK you've also seen horse meat substituted for beef in lasagne.

It goes on and on.

You can also use a website like Shadowstats, which calculates inflation under the old methods along with the new.





http://www.shadowstats.com/alternate_data/inflation-charts

[blackhathasher]

"but but but... user: "Trading" said there was no inflation...

so i believe him..."


-said no one ever!

[twiifm]

You can also use a website like Shadowstats, which calculates inflation under the old methods along with the new.





http://www.shadowstats.com/alternate_data/inflation-charts

Oh please don't post graphs from shadowstats.  The website is not legit and the guy has been debunked by many people

http://voxrationalis.wordpress.com/2011/05/15/the-absurdity-of-shadowstats-inflation-estimates/
http://azizonomics.com/2013/06/01/the-trouble-with-shadowstats/
http://blog.jparsons.net/2011/03/shadow-stats-debunked-part-i.html
http://blog.jparsons.net/2011/06/shadow-stats-debunked-part-ii.html


Please refer to MIT's "billion Prices Project"  which show similar stats to CPI

http://bpp.mit.edu/usa/

[Ron~Popeil]

In other news the ECB (European bank) just changed to negative interest rates.  This will be interesting.  Are banks actually going to charge you money for them holding your money?  Or will they go no lower than 0% interest?  In any case it's all messed up - and we're going to have another recession soon too, this is just crazy, what will central banks do then?

They're trying to stimulate inflation.  The Central Banks only have monetary policies as tools.  If nothing works then the politicians need to step in.

The negative interest rates are bank rates its supposed to incentivize banks to lend money and people to borrow.  However, if nobody is willing to borrow (because of negative outlook).  The money will probably end up in the equities markets or somewhere banks seek return

The theory is that if people don't get rewarded for saving they will spend more and stimulate the economy. Like anything this kind of stimulus has a pretty steep law of diminishing returns curve.

[Gargulan]

The theory is that if people don't get rewarded for saving they will spend more and stimulate the economy. Like anything this kind of stimulus has a pretty steep law of diminishing returns curve.

They assume people have saving and not loaded with debt. What this will do is encouraging more debt at the expense of saver.

[Swordsoffreedom]

The theory is that if people don't get rewarded for saving they will spend more and stimulate the economy. Like anything this kind of stimulus has a pretty steep law of diminishing returns curve.

They assume people have saving and not loaded with debt. What this will do is encouraging more debt at the expense of saver.

I assume that debt will come back to bite the economy in the long run
It's sort of like binge drinking makes the user feel good in the short run and then you get that massive hangover the next day

[Ron~Popeil]

The theory is that if people don't get rewarded for saving they will spend more and stimulate the economy. Like anything this kind of stimulus has a pretty steep law of diminishing returns curve.

They assume people have saving and not loaded with debt. What this will do is encouraging more debt at the expense of saver.

That was one of the reasons the US recovery has been so stalled. People actually started paying off debt instead of adding more. If average people get that you tighten your belt and reduce your debt burden in a down economy why can't the politicians?

[Swordsoffreedom]

The theory is that if people don't get rewarded for saving they will spend more and stimulate the economy. Like anything this kind of stimulus has a pretty steep law of diminishing returns curve.

They assume people have saving and not loaded with debt. What this will do is encouraging more debt at the expense of saver.

That was one of the reasons the US recovery has been so stalled. People actually started paying off debt instead of adding more. If average people get that you tighten your belt and reduce your debt burden in a down economy why can't the politicians?

A culture of self entitlement, that's why when they say certain congress members are paying for expensive wine hotels and cheese the public scrutinizes their lifestyle.
Also if you have a lot of money on the taxpayer dollar and not your own I can't see them economizing.

Although the counterarguement for that is that it prevents corruption and bribery and them getting jobs in industry afterwards as lobbyists but I am not so certain on the effect of that relationship.

[tabnloz]

In other news the ECB (European bank) just changed to negative interest rates.  This will be interesting.  Are banks actually going to charge you money for them holding your money?  Or will they go no lower than 0% interest?  In any case it's all messed up - and we're going to have another recession soon too, this is just crazy, what will central banks do then?

They're trying to stimulate inflation.  The Central Banks only have monetary policies as tools.  If nothing works then the politicians need to step in.

The negative interest rates are bank rates its supposed to incentivize banks to lend money and people to borrow.  However, if nobody is willing to borrow (because of negative outlook).  The money will probably end up in the equities markets or somewhere banks seek return

It tries to force commercial banks into lending because at the moment they can deposit money with central banks and make a gain with zero risk. Now they'll have to invest and face risk.

I think something similar was noted that in the US they were getting money at 0% and lending it back to the govt at 3%. No reason reason to lend it out to the public.

[Trading]

The ECB negative rate it's also an incentive for banks to lend money to each other. In Europe, there are still some banks that don't trust others, so the ECB is forcing them to remove their money from their ECB accounts and start to lend it to other banks more willing to lend it to individuals and corporations.

[Ron~Popeil]

The ECB negative rate it's also an incentive for banks to lend money to each other. In Europe, there are still some banks that don't trust others, so the ECB is forcing them to remove their money from their ECB accounts and start to lend it to other banks more willing to lend it to individuals and corporations.

It would be so much simpler just to fix the currency, but a strong currency is bad for business when your business is stealing purchasing power.

[makebitcoin]

Omg you're such an ass...lol


I'll look for your interview on bloomberg tv where you rebut

You can actually buy an interview on Bloomberg if you'd like. Many interviews are simply ads for the business.

[AZwarel]

That is your notion of inflation, not the one you will read in most textbooks on economics.

"In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.[1] When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time.[4"

Sir, this is the worst, manipulative post i have ever seen. The above quote is from Wikipedia, BUT you have intentionally erased a line from the definition. The original looks like this:

"In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.[1] It can be defined as too much money chasing too few goods.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy."

Money in the above sentence is what QE pours into the economy, issued by the FED.
Source: http://en.wikipedia.org/wiki/Inflation

If money is nothing more, than the numerical expression of scarcity and supply-demand relations, than if we suddenly print 2x money, the prices will just adjust to 2x respectively with time.
An 8 year old kid understands inflation... 10 apples, 10 chocolate, 1 apple = 1 chocolate given they have the same marginal demand (their marginal utility, aka. diminishing return in demand are the same). If suddenly you bring 10 more apples in to the system, and demand remained the same, 2 apples= 1 chocolate.

Fed creating more "apples" than economy creates "chocolates" will result that 1 apple will loose its value in par to 1 chocolate -> inflation.

[tinof]

ECB just announced negative deposit rates for commercial banks as a measure to fight deflation.

Strength of the currency should be view as a good sign as there is demand of the currency at the world stage.

Artificially pushing down the rate will cause import and export imbalance as well as wages distortion.