Bitcoin

[jrb5783]

I almost bought couple in early november when all the buzz started i believe they were $100 USD each. could have made a few thousand.

coulda shoulda woulda applies here

[OkieJoe]

Im buying rubles like they are going out of style!

[DrunkenMonkey]

Seriously. It's insane the way these people fetishize shiny pebbles while simultaneously writing off the value of everything a country makes and does.

I think it's not so much that I write off the value of what America does, as a country, but I question the commitment of the country's leaders to maintaining the integrity of the currency. If you can look at the whole QE process and still feel any confidence in the people charged with looking after our money, then good for you. I'm not there.

[fookite]

I think it's not so much that I write off the value of what America does, as a country, but I question the commitment of the country's leaders to maintaining the integrity of the currency. If you can look at the whole QE process and still feel any confidence in the people charged with looking after our money, then good for you. I'm not there.

I don't have any problem with the whole QE process, in general. It could have been handled a bit better, but so could everything.There's a certain school of thought -- and I'm not saying that this is how you think -- that says that inflation is this great theft from savers, and I don't buy it at all. A certain amount of inflation is desirable in my mind; it should be more profitable to put money to productive work than to just hoard it. When interest rates bottom out, the next step in fighting deflation is increasing the money supply, hence the QE.

[DrunkenMonkey]

I don't have any problem with the whole QE process, in general. It could have been handled a bit better, but so could everything.There's a certain school of thought -- and I'm not saying that this is how you think -- that says that inflation is this great theft from savers, and I don't buy it at all. A certain amount of inflation is desirable in my mind; it should be more profitable to put money to productive work than to just hoard it. When interest rates bottom out, the next step in fighting deflation is increasing the money supply, hence the QE.

We disagree fundamentally. I am one of those crazy people who thinks that inflation is a theft from savers, and that individuals' saving is not bad for an economy, and that policies that encourage huge levels of debt are damaging int the long term.

Just curious, but you don't happen to work for an investment bank, do you?

[Orion21]

Yes QE has done a wonderful job artificially inflating the stock market, housing prices and suppressing interest rates. But what happens when this artificial support disappears and the market can't support the valuation? It's been great for those in the business, but mid-long term normal people will be hurt. . . Again. This type of economic manipulation fails every single times. It's just hard to accept when it feels so good now.

[PigFish]

… when the US bond bubble breaks, heaven help us! The worst hit will be those most dependent. If you look at the US entitlement system it is funded with bonds based on record high valuations. When we stop buying our own bonds and there is no longer a market for them, their price will plummet. These 'lockboxes' will go bust!

Like it or not there are a lot of old and sick people dependent on those bonds… WTF happens to them???

Governments cannot manage anything with any level of expertise!

The difference in the T-bond and the Bitcoin is that the issuer of the T-bond can put you in prison and seize all your assists. I see no other difference… They are both otherwise based on slight of hand and thin air…

[DrunkenMonkey]

The difference in the T-bond and the Bitcoin is that the issuer of the T-bond can put you in prison and seize all your assists. I see no other difference… They are both otherwise based on slight of hand and thin air…

This is an incorrect understanding. The fed decides how many dollars to create and with a few keystrokes they exist. Bitcoin doesn't work that way.

[aes8]

Smh at this thread. So much misinformation.

First off The Treasury through the Bureau of Printing and Engraving produces US Dollars, not The Fed.

Second The Federal Reserve (the bank of the US) has three main objectives for monetary policy. They are Maximum employment, stable prices, and moderate long-term interest rates. The Fed has used asset purchases of T Bills to drive down, and keep down interest rates thus injecting money into the economy.

Banks don't print money.

[DrunkenMonkey]

The fed, when it purchases T-bills, Is creating dollars.

[aes8]

If the Treasury owns 200 worth of T bills and the Fed has 200 in its account and the Fed bank spends its 200 on the Treasuries T bills and now the bank owns 200 in T bills and the Treasury has 200 in cash how is ANYTHING CREATED???

[mk05]

If the Treasury owns 200 worth of T bills and the Fed has 200 in its account and the Fed bank spends its 200 on the Treasuries T bills and now the bank owns 200 in T bills and the Treasury has 200 in cash how is ANYTHING CREATED???

The conversation here looks like when an economics student, a jaded financial analyst, and a politician is arguing about money creation. (Joke)

To put generally, investment banks buy the bills and loan x times the reserves (cash asset) that is interpreted as money creation.

[DrunkenMonkey]

If the Treasury owns 200 worth of T bills and the Fed has 200 in its account and the Fed bank spends its 200 on the Treasuries T bills and now the bank owns 200 in T bills and the Treasury has 200 in cash how is ANYTHING CREATED???

That's not how it works.

[aes8]

The conversation here looks like when an economics student, a jaded financial analyst, and a politician is arguing about money creation. (Joke)

To put generally, investment banks buy the bills and loan x times the reserves (cash asset) that is interpreted as money creation.

Yes this in a nut shell. Money is CREATED when the investment bank is paid back at a higher interest rate. NOT when the Fed buys treasury assets.

[aes8]

That's not how it works.

Are saying that the Fed did not/ does currently not have a Treasury Asset purchase program? Yes or no?

Please answer this directly.

[DrunkenMonkey]

Are saying that the Fed did not/ does currently not have a Treasury Asset purchase program? Yes or no?

Please answer this directly.

No

[DrunkenMonkey]

If the fed doesn't create money, then why does QE expand the supply of money?

[aes8]

No

Wow, that about says it all. Thanks for coming. I'm done.

[DrunkenMonkey]

Wow, that about says it all. Thanks for coming. I'm done.

I think you misunderstood your own question. Please read what you asked again.

[aes8]

If the fed doesn't create money, then why does QE expand the supply of money?

It artificially suppresses interest rates which makes everything cheaper because bond sales , like everything else in the free market world are subject to the laws of supply and demand. Higher demand equals higher price equals lower yield (interest rate). Everyone else bases their interest rate off the US 10 yr (usually)

What you have to be concerned about with an easy supply of money is high or run away inflation. Now inflation is good, much much better than deflation. The reason you have not seen inflation is because the velocity of money is still relatively low.

Hope that helps

[fookite]

[...] individuals' saving is not bad for an economy [...]

The most cursory of thoughts should convince you that this is wrong. Hell, it's basically wrong by definition. An economy is the sum of all of the billions of transactions that all of its members are making. The act of saving is choosing to not make any transactions.

[DrunkenMonkey]

So you're saying that fed policy increases the supply of money, but fed policy doesn't create money.

[aes8]

I think you misunderstood your own question. Please read what you asked again.

If I understand your answer correctly you do not believe that the Fed purchases assets from the Treasury. Is that correct?

[aes8]

So you're saying that fed policy increases the supply of money, but fed policy doesn't create money.

Yes the Fed sets Monetary policy only.

[DrunkenMonkey]

If I understand your answer correctly you do not believe that the Fed purchases assets from the Treasury. Is that correct?

No, on the contrary, your question was, "Are [you] saying that the Fed did not/ does currently not have a Treasury Asset purchase program? Yes or no?

To answer no to that question means that that was not what I was saying.