Home » Posts tagged 'quantitative easing' (Page 2)

Tag Archives: quantitative easing

Gold Down for the Long Run?

Posted on by | 11 Comments

“The long run is a misleading guide to current affairs.  In the long run we are all dead.”
– John Maynard Keynes

A step back can be very illuminating, especially in economics.  History teaches us an awful lot when we are willing to pay attention to what it says to us (which is almost never).  The long run is also a good way to get away from current fashions, trends, and all the ways that everyone can fool themselves.  Of course, as Keynes tells us, you run the risk of making a completely different mistake in the process.  At least no two economists ever agree on anything, so there’s plenty of wiggle room.

It’s the bigger version of your typical financial reporting – “Stocks fell today on news that blah blah blah …”  when in fact it was just a drippy grey April day in New York and everyone felt lousy.

A decade-plus trend, the increasing price of gold, is coming to a spectacular end.  This may mean something very important – if it’s not the last gasp of the last bubble to work its way through our system.

Continue reading →

Jubilee – Cancel Debt!

Posted on by | 22 Comments

There has been a lot of good economic news lately, at least compared to the very bad news of a few years ago.  But that doesn’t mean that there aren’t bad things worth keeping a close eye on – especially those that predict future action by the Federal Reserve.

The velocity of the US Dollar – the number of times per year that money turns over through the economy – continues to drop without an end in sight.  This is a worrying sign because it suggests that most of the economic growth we are seeing comes from money that is being more or less printed by the Fed.  It also suggests that there will be another round of quantitative easing, or even more money printed.  There has to be a better way – and this wouldn’t be Barataria if we didn’t take a stab at how.

Continue reading →

QE3

Posted on by | 15 Comments

What’s a few more billion dollars a month in today’s money?  On Thursday, the Federal Reserve announced that they were going to purchase $40B more mortgage backed securities every month, a total of $85B, with money they more or less print themselves.  It’s the third round of Quantitative Easing, or QE3, but this time they left the dollar amount open ended.  We can guess that by the time they stop the total amount printed will be around $2T.  That’s more like the insane numbers we’ve gotten used to the last four years.

They are doing this because unemployment remains stubbornly high in a weak economy.  Why they picked mortgages and what affect it will really have is another long story, but the bottom line is that election year or not the Fed is on the case and doing whatever it can.  But is it too much?  And what comes after all this money is printed?  There are a lot of questions.  Let’s work our way through them.

Continue reading →