I don't know that there won't be. I was just sure that there would be in 2008 and was completely wrong. That led me to be much more aware of the limits on my/our ability to predict inflation. So now I'm of the mind that it's very difficult to predict in current circumstances in the U.S. (much easier to predict in a Zimbabwe/Venezuela/Argentina situation). Basically too many confounding factors. While there are certainly many differences between 2008 and today, I don't see any massive differences that point to a different inflation situation today versus 2008. Remember back then it was textbook going to happen.....then it didn't. All we can say today is that it's what, more textbook? I'm beginning to doubt the textbook.
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Is shorting the box legit?
- Thread starter kmiklas
- Start date
I don't know that there won't be. I was just sure that there would be in 2008 and was completely wrong. That led me to be much more aware of the limits on my/our ability to predict inflation. So now I'm of the mind that it's very difficult to predict in current circumstances in the U.S. (much easier to predict in a Zimbabwe/Venezuela/Argentina situation). Basically too many confounding factors. While there are certainly many differences between 2008 and today, I don't see any massive differences that point to a different inflation situation today versus 2008. Remember back then it was textbook going to happen.....then it didn't. All we can say today is that it's what, more textbook? I'm beginning to doubt the textbook.
I think the difference is that in 2008 while people claim the fed ran the printing presses they really acted as a bank. They issued loans and those loans were repaid. And in the time period the money was issued banks were hampered in their lending.
This time they actually ran printing presses with Donald trumps signature on the checks.
QE2 was nearly identical to what I guess we're now calling QE4, in size and the fact that they were treasury purchases vice mortgage backed securities. And the biggest wailing and gnashing of teeth regarding inflation I remember happened with QE2.I think the difference is that in 2008 while people claim the fed ran the printing presses they really acted as a bank. They issued loans and those loans were repaid. And in the time period the money was issued banks were hampered in their lending.
This time they actually ran printing presses with Donald trumps signature on the checks.
for the same reason we did not see measurable increases in inflation long after 2008. People can't pay for inflation.
why do you think there won’t be significant inflation?
QE2 was nearly identical to what I guess we're now calling QE4, in size and the fact that they were treasury purchases vice mortgage backed securities. And the biggest wailing and gnashing of teeth regarding inflation I remember happened with QE2.
yeah. I thought qe2 was really an “investment” made by the fed in a depressed value asset that was America. If I recall, the fed actually made money on those programs.
As opposed to just handing out money which is what happened today in what was really a full employment economy with a 1 year holiday.
Ah, how so? I have never seen a note with Trump's face or signature on it. Seriously asking, how were Trump's handouts to the rich and corporates any different from handouts under Biden, I mean specifically focusing on the origin of the money and repayment modalities.
Let's set aside politics, the only difference between now and 2008 is that in 2008 the money was lent to corporates, now its lent to the government. The Fed expanded its balance sheet and it shrunk it also between 2015 and 2019. The loan agreements in 2008 were much shorter-term while now they are much longer-term. The Fed does not print differently than in 2008, just more.
Let's set aside politics, the only difference between now and 2008 is that in 2008 the money was lent to corporates, now its lent to the government. The Fed expanded its balance sheet and it shrunk it also between 2015 and 2019. The loan agreements in 2008 were much shorter-term while now they are much longer-term. The Fed does not print differently than in 2008, just more.
I think the difference is that in 2008 while people claim the fed ran the printing presses they really acted as a bank. They issued loans and those loans were repaid. And in the time period the money was issued banks were hampered in their lending.
This time they actually ran printing presses with Donald trumps signature on the checks.
Well, clearly they did not make money, look at the Fed balance sheet. It tells a very different story. The only period in which the Fed balance shrunk was in 2018/2019. Before that, despite all the corporate loan repayments and returns on capital the balance sheet kept on expanding. Of course the media (remember, whom they are biased towards) highlighted a few cases of success to tell Mr Dummy NY Post reader that his tax dollars were invested with positive return. LOL. Not the case overall. Otherwise, where is all the notional repayment plus miraculous positive returns to be found on the balance sheet?
yeah. I thought qe2 was really an “investment” made by the fed in a depressed value asset that was America. If I recall, the fed actually made money on those programs.
As opposed to just handing out money which is what happened today in what was really a full employment economy with a 1 year holiday.
The mortgage based security purchases of QE1 and QE3 have been money makers for the Fed overall, although there are still loans outstanding under them. TARP was also a money maker although it was Treasury and not the Fed that made those investments. The balance sheet size in isolation does not indicate the profitability of specific Fed asset purchases, there were a lot of other actions, QE2 and QE4 for example, which increased and continue to increase it.Well, clearly they did not make money, look at the Fed balance sheet. It tells a very different story. The only period in which the Fed balance shrunk was in 2018/2019. Before that, despite all the corporate loan repayments and returns on capital the balance sheet kept on expanding. Of course the media (remember, whom they are biased towards) highlighted a few cases of success to tell Mr Dummy NY Post reader that his tax dollars were invested with positive return. LOL. Not the case overall. Otherwise, where is all the notional repayment plus miraculous positive returns to be found on the balance sheet?
Those are only parts of the funds the fed lent out. Where are all the notional repayments? I agree profitability does not show up in their balance sheets but repayments should show. When you subtract all the treasury purchases from the fed balance sheet there is a huge amount leftover that has not been repaid. Would need to dig into the details but I reckon a huge amount of QE1 has not yet been repaid.
The mortgage based security purchases of QE1 and QE3 have been money makers for the Fed overall, although there are still loans outstanding under them. TARP was also a money maker although it was Treasury and not the Fed that made those investments. The balance sheet size in isolation does not indicate the profitability of specific Fed asset purchases, there were a lot of other actions, QE2 and QE4 for example, which increased and continue to increase it.
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The mortgage based security purchases of QE1 and QE3 have been money makers for the Fed overall, although there are still loans outstanding under them. TARP was also a money maker although it was Treasury and not the Fed that made those investments. The balance sheet size in isolation does not indicate the profitability of specific Fed asset purchases, there were a lot of other actions, QE2 and QE4 for example, which increased and continue to increase it.
what did they do in QE2 that was different?
I don’t understand the graph at the bottom of this page but it looks like qe2 was really like qe1 but bigger.
still very different from qe4 as the debt securities mature and the equivalent money goes out of circulation at that time vs qe4 where Americans were just handed a check.