Can someone explain QE3 to me?
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The problem with RC's argument is that just about everyone with a pulse was ALREADY in real estate before the collapse. Prices have declined significantly THROUGHOUT every iteration of QE. The supporters of this can point to a few hot spots and say "look here". There are plenty of areas throughout this country that have collapsed IN SPITE OF every single monetary trick unleashed upon the markets.
Meanwhile, the homeowner is still underwater, probably has higher property taxes to boot and an increased cost of living across the board (to pay for the many rounds of QE). It's also played a significant part in reducing demand for real estate as consumers still have to cover these increased living costs (Nevermind all the underwater debt serfs just out of college...the housing and auto industry will be feeling the effects for years).
exactly. i have said it before but the usual losers scoff at it. housing in florida, arizona, california where the crash started has had a nice bounce in price.
And let's not forget the housing stocks. Pick anyone and it is one smooth tight rising channel over the past year.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=tol&insttype=&freq=&show=&x=34&y=16
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=tol&insttype=&freq=&show=&x=34&y=16
Bringing down the rates even more...hmm...does that make banks more hesitant to lend out for mortgage, cars, boy toys, etc...due to the potential for incessant [maybe not hyper] inflation down the road?
Than how can it help with US GDP if 2/3 is based on consumer spending?
Ok...actually banks are getting free money from the FED and lend to Joe public at those bottom rates for some profit I guess...Does that imply that the FED's balance sheet must be increase perpetually?
So let's see the possible natural progression here:
-QEs makes the rich, immediately, richer (not in the long run if inflation is rampant),
-banks with more free money for even more speculation on asset classes creating even bigger bubbles
-System finally overload with funny money and inflation creeping up parabolic
-Joe public get the shaft with higher prices, taking on more debt, become even more insolvent
-Price increases (as companies must raise prices to keep profit margin intact) outpaces salary increases
-Standard of living nose dived
-Fed must keep printing 4 ever to keep the ponzi scheme alive
-Dollars get even more worthless
-The world starting to refuse the dollar
-Dollar finally loose it "reserve" status to a basket of currencies (or even the EURO)
-US will be in a bigger hole due to the lost privileges follow with more credit down grades
-US will be in the mother of all depressions due to the world "dumping" the dollar event
-Ben will be retired and like his predecessor said "My bad"
One day a boy will ask his dad why are we poor when our closet is stacked with Federal reserve notes. Dad will tell him a lengthy lecture about the first German Republic, Zimbabwe, and finally the USA and the nature of fiats and their abusive nature and the technique of zeroes entry dubbed QE and eventually explain the route of how the family ended up in the getto. The kid become disinterested and said "Dad I'm hungry". Dad said "Lets go to Mac Donald and I'll get us some big Mac" But first let me get filled the car trunk with a few stacks of Federal notes first"
The kid said " Really?" and "I remembered last month you only put a couple stacks in your man purse?" Dad smiled and said "Son, you still have a lot to learn"
Than how can it help with US GDP if 2/3 is based on consumer spending?
Ok...actually banks are getting free money from the FED and lend to Joe public at those bottom rates for some profit I guess...Does that imply that the FED's balance sheet must be increase perpetually?
So let's see the possible natural progression here:
-QEs makes the rich, immediately, richer (not in the long run if inflation is rampant),
-banks with more free money for even more speculation on asset classes creating even bigger bubbles
-System finally overload with funny money and inflation creeping up parabolic
-Joe public get the shaft with higher prices, taking on more debt, become even more insolvent
-Price increases (as companies must raise prices to keep profit margin intact) outpaces salary increases
-Standard of living nose dived
-Fed must keep printing 4 ever to keep the ponzi scheme alive
-Dollars get even more worthless
-The world starting to refuse the dollar
-Dollar finally loose it "reserve" status to a basket of currencies (or even the EURO)
-US will be in a bigger hole due to the lost privileges follow with more credit down grades
-US will be in the mother of all depressions due to the world "dumping" the dollar event
-Ben will be retired and like his predecessor said "My bad"
One day a boy will ask his dad why are we poor when our closet is stacked with Federal reserve notes. Dad will tell him a lengthy lecture about the first German Republic, Zimbabwe, and finally the USA and the nature of fiats and their abusive nature and the technique of zeroes entry dubbed QE and eventually explain the route of how the family ended up in the getto. The kid become disinterested and said "Dad I'm hungry". Dad said "Lets go to Mac Donald and I'll get us some big Mac" But first let me get filled the car trunk with a few stacks of Federal notes first"
The kid said " Really?" and "I remembered last month you only put a couple stacks in your man purse?" Dad smiled and said "Son, you still have a lot to learn"
If I own a home on a cheap 30 yr mortgage and have a federal job that gives me raises with inflation, I win at the expense of savers, non property owners, and tax payers, right?