Quote from Tsing Tao:
This article is infested with errors and half-truths. The author is obviously of your economic religious cult and a follower of your High Priest, the Reverend Krugman.
Where to begin...
In the second paragraph, the author implies that "unconventional" policy is not really unconventional at all when the Fed buys Treasuries, since they are low risk. He recalls a better Keynesian day when the Fed bought up toxic MBS crap and anything that wasn't nailed down from the banks willing to toss it their way. Perhaps the author would like the Federal Reserve to go out an buy up more motel properties?
The Fed knows that toxic junk is worthless. In giving the banks cash for that shit, it was an overt bailout and got a lot of flak for it. it also knows that it takes a loss every time it does that - and it's balance sheet can't take much more of that.
Oh really? Whose assessments were those again? The banks? OPEC? What did QE succeed at again? It did absolutely nothing for the real economy. Show me one piece of evidence, anywhere, that it did anything but distort markets, give money to banks, and create inflation. If you're going to call on the fact that interest rates hit all time lows and that this was good for people stuck in high mortgage rates, you could possibly be right - but only if those people were able to refinance. Most people who could did so in the first few months. The rest of QE was a worthless, erosion of the US dollar, and an overt bailout to the banks. QE Twist was a covert one, but accomplished essentially the same exact nothing. Mortgage rates have been at historic lows for two years now. Where's the housing recovery? Where the employment burst? Horseshit.
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What? The majority of the public has no vested interest in the market. They just get hit by the rising commodities. Go down to the local grocery store and ask people what the S+P closed at. Riiight. There is something to the 401k effect that the upper middle class reacts to, but the malaise in the economy at the present time is just to severe to overcome that. People aren't fooled anymore and are getting wise to the aspect that the market is manipulated and inflated, and it won't last. This is why you're seeing record insider liquidation of vested stock, and outflows in equity markets. They don't see the value.
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Whose inflation rate? The joke Core CPI? What a laugh.
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Can't argue with any of this. The ECB did precisely that, and it resulted in the death toll to their money markets. If the Fed did the same...well, I shudder to consider it. This is probably precisely why the Fed hasn't done this. Not to mention if trillions of dollars flew into the system, who knows what real inflation would behave like?
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What planet has the author been on in the last few years? Financiers can't handle taking on more risk! That's why they've shunned it. Their balance sheets are crap. As for the markets, they've taken on all the risk they can handle - look at junk bonds! And consumers seeing the real value of their debts eroding? You must be joking. The fool is advocating inflating our way out of debt by devaluing the currency outright, and announcing our intent to do so. Does anyone else but me see the catastrophic consequences of such an action on the world's reserve currency?
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These two sentences sum up the Keynesian view of the last few decades. A miserable failure. [/B]
