<< <i>We are in debt $10 trillion dollars - we HAVE to have inflation. Without inflation, the debt becomes even more staggering. Without inflation, Social Security bankrupts the nation. All hail inflation! >>
So, you're argument is to reduce the true value of government debt by reducing the true value of the American citizens' holdings? Drink more kool aid. >>
When inflation occurs, the value of the citizen's holdings increase proportionally. Still waiting on your alternate solution (grounded in reality of course).
<< <i>Note to tradedollarnut - we are bankrupt. The only thing keeping us afloat are the Treasuries (I.O.U.'s) being bought with money created out of thin air. Who do you think is on the hook for the I.O.U.'s? The very same people that ultimately pay all government debt. >>
Past decisions that have nothing to do w/ the Fed and QE2. Given the FACT that we owe all this money and have Social Security deficit looming, how about YOU come up w/ a different course of action for the Fed. What would YOU do given reality? No fantasies about not having borrowed in the 1st place - that wasn't the Fed. >>
The reality is this: the Fed is not a government agency. Their name is intentionally misleading. They are a private group of bankers working under the false image of a government agency that would normally answer to the American people. They are bankers taking care of bankers first, the economy second. Their only interest in the economy is how it affects their banking profits. Their past decisions are precisely why their current and future decisions should be questioned. The economic future of this country does not belong in the hands of people that insist we as individuals and as a nation continue to spend money on credit. They refuse to let true markets determine economic outcomes. They are self serving and their record shows this. I have no doubt that history will show the same for QE2, QE3 and all the QE's until there is nothing left.
You are assuming it is the Fed's responsibility to have a course of action. It is not the Fed's role to solve the government's economic and financial problems. That is the role of Congress and is supposed to be accomplished by responsible spending and by taxation. The fact that Congress has failed in this area does not justify turning to a group of private bankers for help. They will only use this opportunity to line their own pockets at the expense of the American people. They did it with TARP, bailouts and a whole bunch of other alphabet soup kinda stuff. Banks, inluding the Fed, created our economic demise. They are the last people we should be turning to to solve the problems they helped create.
If I was not able to completely abolish their existence and turn control of the money supply and interest rates over to an accountable government agency, I would certainly curtail their fairly unlimited operating procedures. I would make them more accountable to Congress and to the American people. I would cut their ties to the banking industry and would require they have congressional approval for their actions. They were intentionally set up to be independent so they would not have to answer for their actions. I believe they have proven to the American people that they need to be held accountable just as we hold our elected officials accountable.
To fix our immediate crisis I would turn to Paul Volker who got us out of a similar mess in earlier years. His medicine was tough, but effective. The sad thing is we did not learn from the mistakes that got us there including letting the Fed control markets with their artifically low interest rates. I would demand an instant reduction in the size of the Federal government and its spending. The government (the American people) has made some serious spending errors that include future entitlements such as social security. The government (the American people) need to bite the bullet one way or the other.
Past decisions and actions by the Fed have EVERYTHING to do with how we accept and deal with their current and future decisions.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>Note to tradedollarnut - we are bankrupt. The only thing keeping us afloat are the Treasuries (I.O.U.'s) being bought with money created out of thin air. Who do you think is on the hook for the I.O.U.'s? The very same people that ultimately pay all government debt. >>
Past decisions that have nothing to do w/ the Fed and QE2. Given the FACT that we owe all this money and have Social Security deficit looming, how about YOU come up w/ a different course of action for the Fed. What would YOU do given reality? No fantasies about not having borrowed in the 1st place - that wasn't the Fed. >>
The reality is this: the Fed is not a government agency. Their name is intentionally misleading. They are a private group of bankers working under the false image of a government agency that would normally answer to the American people. They are bankers taking care of bankers first, the economy second. Their only interest in the economy is how it affects their banking profits. Their past decisions are precisely why their current and future decisions should be questioned. The economic future of this country does not belong in the hands of people that insist we as individuals and as a nation continue to spend money on credit. They refuse to let true markets determine economic outcomes. They are self serving and their record shows this. I have no doubt that history will show the same for QE2, QE3 and all the QE's until there is nothing left.
You are assuming it is the Fed's responsibility to have a course of action. It is not the Fed's role to solve the government's economic and financial problems. That is the role of Congress and is supposed to be accomplished by responsible spending and by taxation. The fact that Congress has failed in this area does not justify turning to a group of private bankers for help. They will only use this opportunity to line their own pockets at the expense of the American people. They did it with TARP, bailouts and a whole bunch of other alphabet soup kinda stuff. Banks, inluding the Fed, created our economic demise. They are the last people we should be turning to to solve the problems they helped create.
If I was not able to completely abolish their existance and turn control of the money supply and interest rates over to an accountable government agency, I would certainly curtail their fairly unlimited operating procedures. I would make them more accountable to Congress and to the American people. I would cut their ties to the banking industry and would require they have congressional approval for their actions. They were intentionally set up to be independent so they would not have to answer for their actions. I believe they have proven to the American people that they need to be held accountable just as we hold our elected officials accountable.
Past decisions and actions by the Fed have EVERYTHING to do with how we accept and deal with their current and future decisions. >>
Is that a black helicopter landing behind you?
In the end, the cost to the American people will be substantially less than the cost of inaction. The devil here is DEFLATION, not inflation. In order of preference: Controlled inflation, out of control inflation, deflation. Only one of those destroys the country by forcing us into bankruptcy [and no - we're NOT bankrupt. Not even close - even tho the last 3 Republican presidents have tried really hard to put us there].
<< When inflation occurs, the value of the citizen's holdings increase proportionally. >>
When inflation occurs, the *price* of some citizens' holdings increase proportionately, but the *value* of their holdings does not, and the *value* of citizens' money decreases proportionately. And inflation discourages savings, because citizens can't earn any interest on their money because the Fed is keeping interest rates near zero. And replacement costs for citizens' holdings (such as food) keep rising.
<< <i><< When inflation occurs, the value of the citizen's holdings increase proportionally. >>
When inflation occurs, the *price* of some citizens' holdings increase proportionately, but the *value* of their holdings does not, and the *value* of citizens' money decreases proportionately. And inflation discourages savings, because citizens can't earn any interest on their money because the Fed is keeping interest rates near zero. And replacement costs for citizens' holdings (such as food) keep rising.
Inflation is not a good thing. >>
Your view is simplistic. Replacement costs for food? Come now, wages also inflate and food is purchased on a weekly basis. By far the largest asset for the citizens in general is their home. We just saw what happens when the value of homes deflate instead of inflate. Controlled inflation is a very good thing - look at what deflation has done to the Japanese economy!
So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise?
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I. 2. They refrain from using SS contributions for things other than SS payments. 3. They bite the bullet and raise the age or reduce the benefits or a combination of both. 4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year. 5. They quit borrowing from Peter to pay Paul. 6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so. 7. Completely abolish the system, give everyone back their contributions tax free and tell them "we failed you miserably. We squandered your money and failed to realize (like the housing industry) that money coming in would not always be greater than money going out. But hey, it's partly your fault because you kept re-electing us while we were doing this to you." 8. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program.
No Way Out: Stimulus and Money Printing Are the Only Path Left
The government borrows money in the past and gives IOU's in the form of Treasury Bonds. The government then buys those IOU's back for current cash - and some say the government is borrowing more money? What am I missing here?
Um, where is the government getting this cash? I thought they were just talking about issuing more bonds, not paying them off. They can't be doing both.
The act of the Treasury selling bonds to the Fed is Step One. The Fed prints money to pay for the bonds - that is Step Two. Important Note - Step Two is the creation of cash from air, and is called "monetizing the debt".
To respond to your question, you are missing the fact that the government has borrowed in the past and instead of paying it off, they are borrowing more. In both cases, the debt is being monetized by the creation of cash by the Fed.
So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise?
It can't. The interest on the existing debt is already unmanageable, and that doesn't even take into account that nasty little detail referred to as "unfunded liabilities".
Added - hey, this is almost as good as the pm forum.
Q: Are You Printing Money? Bernanke: Not Literally
<< So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food, fuel *and medical care* has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year.
<< <i><< So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
Why? So that each and every year the problem looming down the road becomes 3-4% more manageable, that's why!
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I. 2. They refrain from using SS contributions for things other than SS payments. 3. They bite the bullet and raise the age or reduce the benefits or a combination of both. 4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year. 5. They quit borrowing from Peter to pay Paul. 6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so. 7. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program. >>
Awesome plan - let me know when that's politically possible.
<< <i><< So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
Why? So that each and every year the problem looming down the road becomes 3-4% more manageable, that's why! >>
That's what Bernie Madoff assumed!
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I. 2. They refrain from using SS contributions for things other than SS payments. 3. They bite the bullet and raise the age or reduce the benefits or a combination of both. 4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year. 5. They quit borrowing from Peter to pay Paul. 6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so. 7. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program. >>
Awesome plan - let me know when that's politically possible. >>
Not possible as long as voters expect Washington and taxpayers to pay their bills for them.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year.
Big time.
And more...
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>You have totally failed to show how printing new money to buy old debt is forcing the national debt upon the American people. All it does is increase liquidity. Yes, its lowering the dollar but so what? That's good for jobs, good for corporate profits - and yes, good for inflation. We are in debt $10 trillion dollars - we HAVE to have inflation. Without inflation, the debt becomes even more staggering. Without inflation, Social Security bankrupts the nation. All hail inflation! >>
<< <i> Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food, fuel *and medical care* has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
I think senior citizens are still better than the younger generation because they can still get their benefit, albeit their pay checks haven't gone up as fast as the real inflation. The younger generation like most of us who are working, the social security benefit will suffer more severely by the time we retire. Thats what a Ponzi scheme does: the people get in early in the game get rewarded, but the people get in late have to pay for the price.
Back to the topic. Because QE2 will reduce the purchasing power of the dollar, the price for rare coins should increases. However, I think the price increase will lag behind the bullion prices and commodities because the general population still don't feel their dollar is losing value.
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year.
Big time.
The price of the vast majority of what we actually buy to live on is managed through long term hedge contracts. Big price changes are for the marginal production that isn't tied up in contract and doesn't affect the price of finished products.
Just as in the stock market, any appreciation due to QE2 in the coin market is an "artificial price manipulation." The value in the market is not "worth" more, rather it takes more of a devalued unit of currency to purchase the same unit of product.
Why would the Fed sell? Just hold til maturity - that's the advantage the Fed has over the banks. It's not like the assets have no value...especially the T-Bills.
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
If inflation is the "solution" for our economic and monetary woes, then the future for PM's is even brighter than I could have ever imagined. So instead of people carrying around "Whip Inflation Now" (WIN) buttons like many did in the late 1970's, we should start seeing "Want Inflation Now" buttons. Once the WIN buttons are overrun by hyperinflation, then we can break out the WHINe buttons, "whip hyperinflation now."
<< <i>Why would the Fed sell? Just hold til maturity - that's the advantage the Fed has over the banks. It's not like the assets have no value...especially the T-Bills.
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
roadrunner >>
My understanding is that QE2 is just T-Bills. Am I incorrect in that?
<< <i>Why would the Fed sell? Just hold til maturity - that's the advantage the Fed has over the banks. It's not like the assets have no value...especially the T-Bills.
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
roadrunner >>
My understanding is that QE2 is just T-Bills. Am I incorrect in that? >>
They are buying long term bonds to lower long term rates
My understanding is that QE2 is just T-Bills. Am I incorrect in that?
Whatever QE was produced during the past 2 yrs was not limited to just TBonds. So why should this be any different going forward as the stakes only get higher and larger?
The FED/Treasury are saying one thing publically and then charting a much different course in private. I've seen numbers posted that had QE1 listed anywhere from $10TRILL to $20 TRILL. Those kinds of numbers do not show up in TBond and Monetary aggregate changes. Anyone looking at just TBonds and M1,M2,M3 would come to the conclusion that no excessive stimulus has been injected.
They don't need to purchase bonds to lower long term rates. They can just add on more highly leveraged interest rate swaps to further manage the long end of the curve. The entire interest rate curve is already skewed by some $500 TRILL in world wide interest rate derivatives ($180 TRILL owned by our top 5 banks). That's a much bigger issue than whipping inflation or deflation as the incorrect handling of those products could immediately result in catastrophic economic fallout. That is why they are all still sitting locked in bank vaults marked to model at maturity.
<< <i>... price increases are real enough for people on fixed incomes. >>
This is the part that always seems to get overlooked.
If I'm 25 and go to the market to buy a loaf of bread and want to pick up a second one to save for when I'm older, I can't because bread won't keep for 40 years. So instead, I stick the money I would have used today in my safe to buy that loaf when I'm 65. Except that when I'm 65, the money I saved to buy that loaf of bread might only barely be enough to buy a single slice.
TDN is suggesting that my price chart for commodities isn't valid, but I am suggesting that it is.
My take is that the rare coin market will be affected just like any other market for discretionary income spending will be affected. The people at the margins won't make as many purchases, and the market will notice. The degree to which this happens probably depends on the severity of the economic slump.
Q: Are You Printing Money? Bernanke: Not Literally
<< If I'm 25 and go to the market to buy a loaf of bread and want to pick up a second one to save for when I'm older, I can't because bread won't keep for 40 years. >>
Try fruitcake instead.
I think if you buy a rare coin today and save it for 40 years, you will likely have to sell it for less than you paid for it, in terms of actual purchasing power. Your chances are better with a bullion coin bought at a bullion price.
<< <i>With the dollar falling and other hard assets making big moves up seems rare coins should follow.
But they don't seem to be.....except for occasional pieces that have not been on the market for a long time and the appear at auction.
It seems more should be happening, for example, should we expect another wave of foregn buying of our rarest coins because of the exchange rate?
A prominent dealer told me that most of US proof gold is owned by the Japanese.
Or is the hobby of rare coin collecting really an outlier that cannot be compared to other bonafide hard asset investments affected by the dollar?
It seems if really rare coins were going to make a move....this is the time period to do so.
Your thoughts? >>
My thoght is based upon the FUN show reports and auction prices realized recently , the move may have begun again for rare and desirable coins.... >>
Truly special coins usually command special prices, so the FUN show and auction prices for such coins were nothing particularly unusual.
But the vast majority of coins aren't truly special. And typically, they don't bring special prices, the FUN show and auctions being no exception in that regard.
Since QE2 was announced many commodities, ( both hard and soft, ie ag....have made big moves.......so is it happening with rare coins yet?
First, I don't think you can assume that there's a strong connection between QE2 and rising commodity prices. But to answer your question, no, not yet.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Yep, you are one of the few who asks for a post to be deleted when you are in over your head. Perhaps you should do a little more reading a little less posting MsMorrisine. Then you won't have to request for a post to be deleted.
There is no "AT" or "NT". We only have "market acceptable" or "not market acceptable.
QE2 is scheduled to end around June 30th.....perhaps a few weeks after that at latest.
And unless the fed decides to do anther round of easing.......my prediction is the bond vigilantes will be selling treasuries before or soon after the end of QE2.....which will make a big move down in value and forcing rates higher....thus strengthening the dollar.
And that my friends will be the end of the bull market in silver and gold........can you say SELL!
I manage money. I earn money. I save money . I give away money. I collect money. I don’t love money . I do love the Lord God.
<< <i>QE2 is scheduled to end around June 30th.....perhaps a few weeks after that at latest.
And unless the fed decides to do anther round of easing.......my prediction is the bond vigilantes will be selling treasuries before or soon after the end of QE2.....which will make a big move down in value and forcing rates higher....thus strengthening the dollar.
And that my friends will be the end of the bull market in silver and gold........can you say SELL! >>
Well, we are also supposed to hit the statutory debt limit (16 tril.) before all that, so what will that do to PMs? Seems like the panic over no more borrowing capacity could send PMs up like a rocket?
Yes....the more money they print and spend or give to banks, the higher rare coin prices will climb....eventually we will reach the point of no return which is now referred to by MBA types as a "tipping point".
So some of you don't like how a Princeton economics professor is running monetary policy. Who would you prefer - - - an Ob-Gyn?; - - - - - - -the former Mayor of Wasilla?
<< <i>So some of you don't like how a Princeton economics professor is running monetary policy. Who would you prefer - - - an Ob-Gyn?; - - - - - - -the former Mayor of Wasilla? >>
Just about anyone whose view of monetary policy does not involve helicopters.
Comments
<< <i>
<< <i>We are in debt $10 trillion dollars - we HAVE to have inflation. Without inflation, the debt becomes even more staggering. Without inflation, Social Security bankrupts the nation. All hail inflation! >>
So, you're argument is to reduce the true value of government debt by reducing the true value of the American citizens' holdings? Drink more kool aid. >>
When inflation occurs, the value of the citizen's holdings increase proportionally. Still waiting on your alternate solution (grounded in reality of course).
No, but Brillo Pads will affect generic ones.
``https://ebay.us/m/KxolR5
<< <i>
<< <i>Note to tradedollarnut - we are bankrupt. The only thing keeping us afloat are the Treasuries (I.O.U.'s) being bought with money created out of thin air. Who do you think is on the hook for the I.O.U.'s? The very same people that ultimately pay all government debt. >>
Past decisions that have nothing to do w/ the Fed and QE2. Given the FACT that we owe all this money and have Social Security deficit looming, how about YOU come up w/ a different course of action for the Fed. What would YOU do given reality? No fantasies about not having borrowed in the 1st place - that wasn't the Fed. >>
The reality is this: the Fed is not a government agency. Their name is intentionally misleading. They are a private group of bankers working under the false image of a government agency that would normally answer to the American people. They are bankers taking care of bankers first, the economy second. Their only interest in the economy is how it affects their banking profits. Their past decisions are precisely why their current and future decisions should be questioned. The economic future of this country does not belong in the hands of people that insist we as individuals and as a nation continue to spend money on credit. They refuse to let true markets determine economic outcomes. They are self serving and their record shows this. I have no doubt that history will show the same for QE2, QE3 and all the QE's until there is nothing left.
You are assuming it is the Fed's responsibility to have a course of action. It is not the Fed's role to solve the government's economic and financial problems. That is the role of Congress and is supposed to be accomplished by responsible spending and by taxation. The fact that Congress has failed in this area does not justify turning to a group of private bankers for help. They will only use this opportunity to line their own pockets at the expense of the American people. They did it with TARP, bailouts and a whole bunch of other alphabet soup kinda stuff. Banks, inluding the Fed, created our economic demise. They are the last people we should be turning to to solve the problems they helped create.
If I was not able to completely abolish their existence and turn control of the money supply and interest rates over to an accountable government agency, I would certainly curtail their fairly unlimited operating procedures. I would make them more accountable to Congress and to the American people. I would cut their ties to the banking industry and would require they have congressional approval for their actions. They were intentionally set up to be independent so they would not have to answer for their actions. I believe they have proven to the American people that they need to be held accountable just as we hold our elected officials accountable.
To fix our immediate crisis I would turn to Paul Volker who got us out of a similar mess in earlier years. His medicine was tough, but effective. The sad thing is we did not learn from the mistakes that got us there including letting the Fed control markets with their artifically low interest rates. I would demand an instant reduction in the size of the Federal government and its spending. The government (the American people) has made some serious spending errors that include future entitlements such as social security. The government (the American people) need to bite the bullet one way or the other.
Past decisions and actions by the Fed have EVERYTHING to do with how we accept and deal with their current and future decisions.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>
<< <i>
<< <i>Note to tradedollarnut - we are bankrupt. The only thing keeping us afloat are the Treasuries (I.O.U.'s) being bought with money created out of thin air. Who do you think is on the hook for the I.O.U.'s? The very same people that ultimately pay all government debt. >>
Past decisions that have nothing to do w/ the Fed and QE2. Given the FACT that we owe all this money and have Social Security deficit looming, how about YOU come up w/ a different course of action for the Fed. What would YOU do given reality? No fantasies about not having borrowed in the 1st place - that wasn't the Fed. >>
The reality is this: the Fed is not a government agency. Their name is intentionally misleading. They are a private group of bankers working under the false image of a government agency that would normally answer to the American people. They are bankers taking care of bankers first, the economy second. Their only interest in the economy is how it affects their banking profits. Their past decisions are precisely why their current and future decisions should be questioned. The economic future of this country does not belong in the hands of people that insist we as individuals and as a nation continue to spend money on credit. They refuse to let true markets determine economic outcomes. They are self serving and their record shows this. I have no doubt that history will show the same for QE2, QE3 and all the QE's until there is nothing left.
You are assuming it is the Fed's responsibility to have a course of action. It is not the Fed's role to solve the government's economic and financial problems. That is the role of Congress and is supposed to be accomplished by responsible spending and by taxation. The fact that Congress has failed in this area does not justify turning to a group of private bankers for help. They will only use this opportunity to line their own pockets at the expense of the American people. They did it with TARP, bailouts and a whole bunch of other alphabet soup kinda stuff. Banks, inluding the Fed, created our economic demise. They are the last people we should be turning to to solve the problems they helped create.
If I was not able to completely abolish their existance and turn control of the money supply and interest rates over to an accountable government agency, I would certainly curtail their fairly unlimited operating procedures. I would make them more accountable to Congress and to the American people. I would cut their ties to the banking industry and would require they have congressional approval for their actions. They were intentionally set up to be independent so they would not have to answer for their actions. I believe they have proven to the American people that they need to be held accountable just as we hold our elected officials accountable.
Past decisions and actions by the Fed have EVERYTHING to do with how we accept and deal with their current and future decisions. >>
Is that a black helicopter landing behind you?
In the end, the cost to the American people will be substantially less than the cost of inaction. The devil here is DEFLATION, not inflation. In order of preference: Controlled inflation, out of control inflation, deflation. Only one of those destroys the country by forcing us into bankruptcy [and no - we're NOT bankrupt. Not even close - even tho the last 3 Republican presidents have tried really hard to put us there].
When inflation occurs, the *price* of some citizens' holdings increase proportionately, but the *value* of their holdings does not, and the *value* of citizens' money decreases proportionately. And inflation discourages savings, because citizens can't earn any interest on their money because the Fed is keeping interest rates near zero. And replacement costs for citizens' holdings (such as food) keep rising.
Inflation is not a good thing.
My Adolph A. Weinman signature
<< <i>Is that a black helicopter landing behind you?
Nah, that's Uncle Ben dropping off another bundle of 100 dollar bills.
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i><< When inflation occurs, the value of the citizen's holdings increase proportionally. >>
When inflation occurs, the *price* of some citizens' holdings increase proportionately, but the *value* of their holdings does not, and the *value* of citizens' money decreases proportionately. And inflation discourages savings, because citizens can't earn any interest on their money because the Fed is keeping interest rates near zero. And replacement costs for citizens' holdings (such as food) keep rising.
Inflation is not a good thing. >>
Your view is simplistic. Replacement costs for food? Come now, wages also inflate and food is purchased on a weekly basis. By far the largest asset for the citizens in general is their home. We just saw what happens when the value of homes deflate instead of inflate. Controlled inflation is a very good thing - look at what deflation has done to the Japanese economy!
So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise?
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I.
2. They refrain from using SS contributions for things other than SS payments.
3. They bite the bullet and raise the age or reduce the benefits or a combination of both.
4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year.
5. They quit borrowing from Peter to pay Paul.
6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so.
7. Completely abolish the system, give everyone back their contributions tax free and tell them "we failed you miserably. We squandered your money and failed to realize (like the housing industry) that money coming in would not always be greater than money going out. But hey, it's partly your fault because you kept re-electing us while we were doing this to you."
8. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Um, where is the government getting this cash? I thought they were just talking about issuing more bonds, not paying them off. They can't be doing both.
The act of the Treasury selling bonds to the Fed is Step One. The Fed prints money to pay for the bonds - that is Step Two. Important Note - Step Two is the creation of cash from air, and is called "monetizing the debt".
To respond to your question, you are missing the fact that the government has borrowed in the past and instead of paying it off, they are borrowing more. In both cases, the debt is being monetized by the creation of cash by the Fed.
So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise?
It can't. The interest on the existing debt is already unmanageable, and that doesn't even take into account that nasty little detail referred to as "unfunded liabilities".
Added - hey, this is almost as good as the pm forum.
I knew it would happen.
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food, fuel *and medical care* has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year.
My Adolph A. Weinman signature
<< <i><< So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
Why? So that each and every year the problem looming down the road becomes 3-4% more manageable, that's why!
<< <i>
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I.
2. They refrain from using SS contributions for things other than SS payments.
3. They bite the bullet and raise the age or reduce the benefits or a combination of both.
4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year.
5. They quit borrowing from Peter to pay Paul.
6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so.
7. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program. >>
Awesome plan - let me know when that's politically possible.
<< <i>
<< <i><< So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
Inflation is a sneaky way for the government to underpay Social Security and every other "entitlement" program. If inflation is such a good thing, why does the government manipulate its statistics to show lower inflation than is actually the case?
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food and fuel has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
Why? So that each and every year the problem looming down the road becomes 3-4% more manageable, that's why! >>
That's what Bernie Madoff assumed!
No Way Out: Stimulus and Money Printing Are the Only Path Left
<< <i>
<< <i>
<< <i>So you tell me - without inflation, how does the country afford to pay for the Social Security entitlement promise? >>
1. They quit making promises they can't honor. It's nothing more than what is expected of you and I.
2. They refrain from using SS contributions for things other than SS payments.
3. They bite the bullet and raise the age or reduce the benefits or a combination of both.
4. They become fiscally responsible and quit depending on a Ponzi scheme to see them through another year.
5. They quit borrowing from Peter to pay Paul.
6. They abolish future social security programs and let people plan for their own retirement and let them suffer the consequences for failing to do so.
7. etc., etc., . . . .
For the record, did you know that the majority of money paid out by Social Security Administration does NOT go to retirees? Most of the money goes to survivors and children of retirees. Not that they don't deserve help but this is nothing short of welfare. Why not remove these people from social security benefits and enroll them in valid welfare programs? This would leave the social security program with a surplus.
Social security was not set up to be a retirement program. It was set up to SUPPLEMENT a private retirement program. >>
Awesome plan - let me know when that's politically possible. >>
Not possible as long as voters expect Washington and taxpayers to pay their bills for them.
No Way Out: Stimulus and Money Printing Are the Only Path Left
Big time.
And more...
I knew it would happen.
<< <i>You have totally failed to show how printing new money to buy old debt is forcing the national debt upon the American people. All it does is increase liquidity. Yes, its lowering the dollar but so what? That's good for jobs, good for corporate profits - and yes, good for inflation. We are in debt $10 trillion dollars - we HAVE to have inflation. Without inflation, the debt becomes even more staggering. Without inflation, Social Security bankrupts the nation. All hail inflation!
>>
Read this by Jeremy Grantham ....
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
Senior citizens are paying the price for the government's economic mismanagement. Even though the cost of basic items such as food, fuel *and medical care* has continued to go up, there was no cost-of-living increase for Social Security recipients this year, and there will be none for next year. >>
I think senior citizens are still better than the younger generation because they can still get their benefit, albeit their pay checks haven't gone up as fast as the real inflation. The younger generation like most of us who are working, the social security benefit will suffer more severely by the time we retire. Thats what a Ponzi scheme does: the people get in early in the game get rewarded, but the people get in late have to pay for the price.
Back to the topic. Because QE2 will reduce the purchasing power of the dollar, the price for rare coins should increases. However, I think the price increase will lag behind the bullion prices and commodities because the general population still don't feel their dollar is losing value.
Big time.
The price of the vast majority of what we actually buy to live on is managed through long term hedge contracts. Big price changes are for the marginal production that isn't tied up in contract and doesn't affect the price of finished products.
No Way Out: Stimulus and Money Printing Are the Only Path Left
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
If inflation is the "solution" for our economic and monetary woes, then the future for PM's is even brighter than I could have ever imagined. So instead of people carrying around "Whip Inflation Now" (WIN) buttons like many did in the late 1970's, we should start seeing "Want Inflation Now" buttons. Once the WIN buttons are overrun by hyperinflation, then we can break out the WHINe buttons, "whip hyperinflation now."
roadrunner
<< <i>Why would the Fed sell? Just hold til maturity - that's the advantage the Fed has over the banks. It's not like the assets have no value...especially the T-Bills.
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
roadrunner >>
My understanding is that QE2 is just T-Bills. Am I incorrect in that?
Today's marginal price is most likely tomorrow's current price, no? Year over year isn't simply a spot price, is it?
I know that I paid $1.25 for a medium tomato yesterday. Does that count?
Hey TDN, price increases are real enough for people on fixed incomes.
I knew it would happen.
<< <i>
<< <i>Why would the Fed sell? Just hold til maturity - that's the advantage the Fed has over the banks. It's not like the assets have no value...especially the T-Bills.
The FED can't "sell" the assets, esp. the MBS's, at least not to any entity that would require due diligence in determining their FMV. They'd only get a fraction of what they paid, plus the big banks don't want them. It's these same type of overvalued assets that have been taking down banks on the FDIC weekly shuttered list for the past 2 yrs. If your regional and smaller banks have been seeing losses of 30-80% on these assets when the FDIC takes them over, why would one think that the assets the FED and Big Banks still own are worth a higher percentage? So the FED's only recourse is to dump them into Fannie and Freddie where a market price is not needed...nor desired by govt bean counters. Just mark them to model per FASB 157 and drop them in the slot. The FED wants these off their balance sheets precisely because they are worth but a fraction of what they (ie us taxpayer) paid for them. Once safely put away in Fannie or Freddie they will have saved themselves hundreds of billions of dollars in potential losses. And the FED bought them in the first place to take the big banks off the hook of losing hundreds of billions. Once with the US taxpayer, everyone that counts is home free. Sometime after 2012 it will be discovered that these "assets" are worth pennies on the dollars. The FED's TBonds are not the issue, those are worth something and quite liquid. They will be happy to trade illiquid mortgage backed securities for TBonds. The FED can't afford to wait until maturity. This F&F unlimited "dumping window" created by Secretary Geithner is only open until 2012.
roadrunner >>
My understanding is that QE2 is just T-Bills. Am I incorrect in that? >>
They are buying long term bonds to lower long term rates
Whatever QE was produced during the past 2 yrs was not limited to just TBonds. So why should this be any different going forward as the stakes only get higher and larger?
The FED/Treasury are saying one thing publically and then charting a much different course in private. I've seen numbers posted that had QE1 listed anywhere from $10TRILL to $20 TRILL. Those kinds of numbers do not show up in TBond and Monetary aggregate changes. Anyone looking at just TBonds and M1,M2,M3 would come to the conclusion that no excessive stimulus has been injected.
They don't need to purchase bonds to lower long term rates. They can just add on more highly leveraged interest rate swaps to further manage the long end of the curve. The entire interest rate curve is already skewed by some $500 TRILL in world wide interest rate derivatives ($180 TRILL owned by our top 5 banks). That's a much bigger issue than whipping inflation or deflation as the incorrect handling of those products could immediately result in catastrophic economic fallout. That is why they are all still sitting locked in bank vaults marked to model at maturity.
roadrunner
<< <i>... price increases are real enough for people on fixed incomes. >>
This is the part that always seems to get overlooked.
If I'm 25 and go to the market to buy a loaf of bread and want to pick up a second one to save for when I'm older, I can't because bread won't keep for 40 years. So instead, I stick the money I would have used today in my safe to buy that loaf when I'm 65. Except that when I'm 65, the money I saved to buy that loaf of bread might only barely be enough to buy a single slice.
Yet somehow, this is a good thing?
My take is that the rare coin market will be affected just like any other market for discretionary income spending will be affected. The people at the margins won't make as many purchases, and the market will notice. The degree to which this happens probably depends on the severity of the economic slump.
I knew it would happen.
Try fruitcake instead.
I think if you buy a rare coin today and save it for 40 years, you will likely have to sell it for less than you paid for it, in terms of actual purchasing power. Your chances are better with a bullion coin bought at a bullion price.
My Adolph A. Weinman signature
<< <i>With the dollar falling and other hard assets making big moves up seems rare coins should follow.
But they don't seem to be.....except for occasional pieces that have not been on the market for a long time and the appear at auction.
It seems more should be happening, for example, should we expect another wave of foregn buying of our rarest coins because of the exchange rate?
A prominent dealer told me that most of US proof gold is owned by the Japanese.
Or is the hobby of rare coin collecting really an outlier that cannot be compared to other bonafide hard asset investments affected by the dollar?
It seems if really rare coins were going to make a move....this is the time period to do so.
Your thoughts? >>
My thought is based upon the FUN show reports and auction prices realized recently , the move may have begun again for rare and desirable coins....
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>
<< <i>With the dollar falling and other hard assets making big moves up seems rare coins should follow.
But they don't seem to be.....except for occasional pieces that have not been on the market for a long time and the appear at auction.
It seems more should be happening, for example, should we expect another wave of foregn buying of our rarest coins because of the exchange rate?
A prominent dealer told me that most of US proof gold is owned by the Japanese.
Or is the hobby of rare coin collecting really an outlier that cannot be compared to other bonafide hard asset investments affected by the dollar?
It seems if really rare coins were going to make a move....this is the time period to do so.
Your thoughts? >>
My thoght is based upon the FUN show reports and auction prices realized recently , the move may have begun again for rare and desirable coins.... >>
Truly special coins usually command special prices, so the FUN show and auction prices for such coins were nothing particularly unusual.
But the vast majority of coins aren't truly special. And typically, they don't bring special prices, the FUN show and auctions being no exception in that regard.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
First, I don't think you can assume that there's a strong connection between QE2 and rising commodity prices. But to answer your question, no, not yet.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
You mean like with this 1908 Saint Gaudens die trial?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>
Yep, you are one of the few who asks for a post to be deleted when you are in over your head. Perhaps you should do a little more reading a little less posting MsMorrisine. Then you won't have to request for a post to be deleted.
And unless the fed decides to do anther round of easing.......my prediction is the bond vigilantes will be selling treasuries before or soon after
the end of QE2.....which will make a big move down in value and forcing rates higher....thus strengthening the dollar.
And that my friends will be the end of the bull market in silver and gold........can you say SELL!
I give away money. I collect money.
I don’t love money . I do love the Lord God.
Barrytrot(2),Stupid,Savoyspecial,docq,ecoinquest, halfhunter,snman,Coll3ctor.
wondercoin. Blue594. internetjunky.
keepdachange. Scrapman1077.Ahrensdad, mrmom, mygrandeoso, blu62vette, Clackamas,giorgio11, adriana, cucamongacoin,
<< <i>QE2 is scheduled to end around June 30th.....perhaps a few weeks after that at latest.
And unless the fed decides to do anther round of easing.......my prediction is the bond vigilantes will be selling treasuries before or soon after
the end of QE2.....which will make a big move down in value and forcing rates higher....thus strengthening the dollar.
And that my friends will be the end of the bull market in silver and gold........can you say SELL! >>
Well, we are also supposed to hit the statutory debt limit (16 tril.) before all that, so what will that do to PMs? Seems like the panic over no more borrowing capacity could send PMs up like a rocket?
<< <i>So some of you don't like how a Princeton economics professor is running monetary policy. Who would you prefer - - - an Ob-Gyn?; - - - - - - -the former Mayor of Wasilla? >>
Just about anyone whose view of monetary policy does not involve helicopters.
My Adolph A. Weinman signature
