Lol, QE3? Try raising wages and giving something back to people to SPEND

[Mrmagoo]

Minimum wages in the USA were far too low. Plus a range of other issues.

They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.

Suddenly the economy would then fix itself.

Discuss.

 

[clowboy]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Minimum wages in the USA were far too low. Plus a range of other issues.

They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.

Suddenly the economy would then fix itself.

Discuss.

In theory they are, just at an interest rate of between 1.5-4% depending on what exactly u want to use it for.

 

[notting]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Minimum wages in the USA were far too low. Plus a range of other issues.

They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.

Suddenly the economy would then fix itself.

Discuss.

Rubbish.
You can't offer working people employment and quality of life whilst competing with China slave labour and manipulated low Yaun. Both Europ or USA have to print to preserve an employed society.
Of course it's far from ideal, as nothing in economics is.
Simple!

 

[white_goodman]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Minimum wages in the USA were far too low. Plus a range of other issues.

They should use 40 billion a month to employ people to build things or work in and build state owned and run hospitals.

Suddenly the economy would then fix itself.

Discuss.

its not fiscal policy its Fed policy, even in its unconventional stance of buying the long end of the curve and buying MBS, i hardly think theyll ever get into buying/planning infrastructure projects....

raising minimum wages in the US will reduce employment, there is no economic debate on this whatsoever

the Keynesian method of digging up ditches filled with cash is moronic in creating real wealth, akin to the 'economic growth' via an earthquake..

 

[skc]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

What's the talk about QE4 now?

 

[tech/a]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

They are printing money to pay out the bonds which guarentee the
money printed to pay off the bonds,which is used to pay off the cost of debt
which leads to more debt and more money being printed and more bonds to guarentee the debt.

The Greatest PONZI scheme on the planet.

 

[baby_swallow]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

The biggest problem of America is they have lost a substantial part of their manufacturing base. Most of the large companies who employs millions of Americans have shipped their factories abroad in the last 30 years or so, because of rising local wages and to maintain high profit levels.
The goods are then imported back to the country with American brand labels on them, fooling the majority consumers in thinking that they are still buying "American made products".
(I am amazed that no politicians or economists wanted to talk about this issue. I think because they are all drinking the same Kool-Aid).

On this basis, I say "No amount of QE will save American jobs"

Any QE or stimulus will just flow to the stock market (further inflating stock prices), and further fatten the wallets of Ben's banskster mates. We've seen it before and it will just go on and on.

In the old days, economic stimulus solution used to work because low-cost foreign labour were not accessible yet.

USA will follow Japan footsteps - already racked up a public debt more than 200% of their GDP and still no significant economic improvement

- My 2 cents

 

[CanOz]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

I really don't know what all the fuss is about...the markets have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?

CanOz

 

[tinhat]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

I don't know much about monetary economics. I wonder if anyone does? If you were to argue that economic growth requires growth in the money supply then if the financial sector is not growing the money supply then the central bank can step in to grow the money supply.

The problem is that you can't trust people to implement balanced economic policies. I always laugh when people argue that Keynesianism is responsible for the massive public debts in much of the developed world. Yet Keynes didn't argue that governments should run defecits throughout the entire business cycle - quite the opposite. Same with monetarism. Theoretically, when money supply over-inflates, the Fed will need to absorb money and hike up interest rates again. But will that happen and can it happen politically if we end up back in the stagflation of the 1970s - high unemployment and high inflation?

 

[white_goodman]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

I really don't know what all the fuss is about...the markets were have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?

CanOz

overlay the gold chart with the balance sheets of the combined Fed/ECB, gold has priced it in ..

my question which was the same question I posed to my RBA advising lecturer, what do they do when theyve amassed all this 'assets' on their balance sheet, what happens to the price when they try and get out... I cant imagine another TARP situation where they make money/scratch... his response was that CB's are willing to take a loss for the better of the economy...

 

[Joules MM1]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

I really don't know what all the fuss is about...the markets have probably been pricing this latest round of printing in already. The next week or so will tell I would think. The gold price has been pricing it in yeah?

CanOz

sounds like a reasonable call.....ya think there's more that can be rung out of the upside, yeah, suspect so......

http://blogs.wsj.com/economics/2012/09/13/a-look-inside-the-feds-balance-sheet-15/
the us fed's balance sheet

i always enjoy the way people talk about this stuff and swing from vague economics to vague politics and think theyre the same thing.....lulz

 

[white_goodman]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

I don't know much about monetary economics. I wonder if anyone does? If you were to argue that economic growth requires growth in the money supply then if the financial sector is not growing the money supply then the central bank can step in to grow the money supply.

The problem is that you can't trust people to implement balanced economic policies. I always laugh when people argue that Keynesian-ism is responsible for the massive public debts in much of the developed world. Yet Keynes didn't argue that governments should run deficits throughout the entire business cycle - quite the opposite. Same with monetarism. Theoretically, when money supply over-inflates, the Fed will need to absorb money and hike up interest rates again. But will that happen and can it happen politically if we end up back in the stagflation of the 1970s - high unemployment and high inflation?

what happens is they will rework the new Phillips curve again similar to Ptolemy's universe. Allegedly many of the 'Keynesian' models are in fact Hicksian in the name of Keynes, my reading on this is still in amazon transit. My main gripe with 'Keynesian' policies is that its not very conducive to the democratic political realm in which we live, France has been running deficits for 3 decades, surely the Great Moderation was time to go into surplus, in effect populations expectations,living standards,addiction to living above our means are ratcheted, with politicians looking to getting re-elected as the nations caretakers/lessee's.

Regarding money supply and output growth. Just looking at a basic ISLM model, they are having issues with ZIRP and the LM curve hitting the 'zero bound' (the indifference to money and bonds as bonds earn no return), so the recipe, according to the model which im not sold on, but that is there understanding is for the IS curve to shift.. so basically they are trying to game the economy into shifting which is a nightmare in a private deleveraging environment... great for markets tho

 

[lusk]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it or do they want to fix it

 

[white_goodman]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it or do they want to fix it

they obviously need to "Hope" more

 

[Joules MM1]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

The Fed's QE3: how does it work and what are the risks?



CHICAGO | Thu Sep 13, 2012 4:05pm EDT

excerpt

(Reuters) - The U.S. central bank on Thursday said it will launch a fresh round of bond-buying to stimulate the economy, purchasing $40 billion of mortgage debt each month until the outlook for jobs improves substantially.

http://www.reuters.com/article/2012/09/13/us-usa-fed-easing-idUSBRE88C1CT20120913

 

[Knobby22]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Pretty hard to fix a problem when you vote in a president to "change" things and he employs the same turkeys that created it or do they want to fix it

Very, very true. Neo classical economists whose theories have been proved wrong stimulating the economy through debt to try and do something without attacking the crux of te problem. No idea. Why don't they hire someone with different viewpoints - Neo Keynsians and Austrian economists. Istead we get the same robots from the same universities.

If the economie was truly run in a Keynsian fashion then instead of debts there would have been reserves and government would have been reducing spending during the good times (reducing the bubble) instead of increasing. If they then had the reserves instead of the debt they could have been building infrastructure now to make the economy more competitive as well as reducing unemployment.

Unfortunately this is against politicians interests.

 

[white_goodman]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Very, very true. Neo classical economists whose theories have been proved wrong stimulating the economy through debt to try and do something without attacking the crux of te problem. No idea. Why don't they hire someone with different viewpoints - Neo Keynsians and Austrian economists. Istead we get the same robots from the same universities.

If the economie was truly run in a Keynsian fashion then instead of debts there would have been reserves and government would have been reducing spending during the good times (reducing the bubble) instead of increasing. If they then had the reserves instead of the debt they could have been building infrastructure now to make the economy more competitive as well as reducing unemployment.

Unfortunately this is against politicians interests.

largely agree with an asterisk next to infrastructure (ie what types),

they dont hire people with different orthodoxy cos basically they are constantly at war, how would you go seeing a Steve Keen at the RBA (I wouldnt be over-joyed tbh) or a Jim Grant in the Fed. "The sate of macro is good" (blanchard 08), they see crises as an aberration to their econometric modelling (like modelling works well - LCTM, climate models et al), and dont wanna throw the baby out with the bathwater...

 

[sammy84]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Seems like a no-brainer to me. Announce QE3 which in turn devalues the USD. A low USD helps for the US to become a net exporter of goods. Only this way no other countries can say the US is artificially trying to keep the USD low, they are merely stimulating their economy.

 

[Knobby22]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

largely agree with an asterisk next to infrastructure (ie what types),

they dont hire people with different orthodoxy cos basically they are constantly at war, how would you go seeing a Steve Keen at the RBA (I wouldnt be over-joyed tbh) or a Jim Grant in the Fed. "The sate of macro is good" (blanchard 08), they see crises as an aberration to their econometric modelling (like modelling works well - LCTM, climate models et al), and dont wanna throw the baby out with the bathwater...

Good point. Reminds me of a joke.

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."

 

[McLovin]

Re: Lol, QE 3? Try raising wages and giving something back to people to SPEND

Good point. Reminds me of a joke.

A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."

I like it!

What about..

Three economists were out mountain climbing. After getting terribly lost they stopped to study the map they had with them. One of them poured over the details with a compass, every now and then referring to the position of the Sun. Finally he said to his companions, "see that mountain over there" and pointed far off into the distance. "Yes" they all replied. To which he knowingly informed them "Well according to the map, we're standing on top of it."