This QE really drove these oil prices

[piezoe]

All I have heard from these QE supporters was that this QE was such a great thing and we should be doing more of it. Over the last 5 years there have been plenty of people making that exact claim.

I want it pointed out that as soon as the QE ended, the price of oil tanked and now the price of gas is down over a dollar and will drop more. My vehicle takes about 20 gallons to fill up. That means every fill cost me more than $20 more because of QE. Why is this cost not being pointed out to the public?

Don't include me in the ones who think we should do more of QE. But you can include me in those very few who think we should have invested far more on infrastructure projects, education, research etc. as part of the stimulus package. QE, on a massive scale, is an emergency measure when you are going to go into a very deep recession if you don't do it. We have shown that it really works! QE is only a part of what was done, but an essential part..

 

[piezoe]

All I have heard from these QE supporters was that this QE was such a great thing and we should be doing more of it. Over the last 5 years there have been plenty of people making that exact claim.

I want it pointed out that as soon as the QE ended, the price of oil tanked and now the price of gas is down over a dollar and will drop more. My vehicle takes about 20 gallons to fill up. That means every fill cost me more than $20 more because of QE. Why is this cost not being pointed out to the public?

This is a public forum, so you are doing your part to point it out. Thank you.

It is well understood why the price of oil, in dollars, has gone down. It is due to a combination of a rising dollar in anticipation of the end of QE and the beginning of higher interest rates and supply growing faster than demand. You are also correct that QE was one of the factors that caused the cost of oil in dollars to rise, and therefore the cost of gasoline. This is a negative, undesirable effect of QE, but it is outweighed by the benefits to the economy in times of deep recession.

I was also wondering if you had an answer to my question regarding who it was that told you that QE would not affect prices.

 

[piezoe]

Exactly...Piezoe tries to be "slick" with his escape artist antics, but it's so transparent...(i.e. disregard all of the blunders PRIOR to 2007 that led to a negative savings rate) as if that somehow justifies more monetary hijinx.

you're one of the non-readers here, I see.

 

[der_kommissar]

I could not remember if it was you concerned about hyperinflation. That's why I asked. Sorry I am not inclined to look for those old posts. It really does not matter that much. I just recall many posts by various ET members who were expressing concern about hyper inflation when the Fed started QE. They were wrong of course.

Not hyper inflation, but persistent inflation in rents and food prices with stagnant wages...Not to mention an entire generation of underemployed recent college grads with staggering student debt that will drag down future demand for housing and all sorts of traditional consumer spending...

You call it a success, but I'd call it a respite from the realities of 2008.

 

[fhl]

The left's economic policy of increasing the federal debt by 7 trillion and the fed's balance sheet by 3 trillion is sheer lunacy. After they used neg real rates to pump up the housing market in the previous decade, they thought they were clever in blaming it on the borrowers and lenders for doing what negative real interest rates implore anyone to do.
But now the bubble is in bonds and currencies. Just how are they planning to blame the debacle to come in those markets on private interests? The fed can only control bonds or it's currency. Not both. It really should be hilarious observing the left attempting to point fingers away from themselves when gov't bonds or the dollar go six feet under.

 

[Tsing Tao]

All I have heard from these QE supporters was that this QE was such a great thing and we should be doing more of it. Over the last 5 years there have been plenty of people making that exact claim.

I want it pointed out that as soon as the QE ended, the price of oil tanked and now the price of gas is down over a dollar and will drop more. My vehicle takes about 20 gallons to fill up. That means every fill cost me more than $20 more because of QE. Why is this cost not being pointed out to the public?

That's because the philosophy of the Cult of Krugman is that, if something didn't work, it's because there wasn't enough money thrown at it and it should have been bigger.

 

[Tsing Tao]

I could not remember if it was you concerned about hyperinflation. That's why I asked. Sorry I am not inclined to look for those old posts. It really does not matter that much. I just recall many posts by various ET members who were expressing concern about hyper inflation when the Fed started QE. They were wrong of course.

Good for them, and good for you. If you're going to say it was me, point out the posts. As I said, I'd like to refresh my memory.

 

[Tsing Tao]

Hilarious and timely. From today's FOMC minutes:

"In their discussion of financial market developments, participants observed that movements in asset prices over the intermeeting period appeared to have been importantly influenced by concerns about prospects for foreign economic growth and by associated expectations of monetary policy actions in Europe and Japan."

Hmm..so QE affects asset prices. Gotcha. Thanks, Fed!

 

[Ricter]

I'm not a supporter of QE, I'm just tired of the overplayed Feddunit card.

 

[Ricter]

That's because the philosophy of the Cult of Krugman is that, if something didn't work, it's because there wasn't enough money thrown at it and it should have been bigger.

Lol, now that you bring it up... enjoy.

"Let me jump right in here. How many people, I wonder — even among economists who have eagerly taken sides in the austerity debate — have a sense of what the overall picture looks like since the great turn to austerity in 2010? I don’t mean what happened in country X in year Y, which you imagine supports your position; I mean the overall shape of events across many countries and multiple years.

"Well, here’s a quick and easy picture. I’ve taken annual data on the growth of real GDP and of government purchases from Eurostat, using every country for which data are available 2010-2013. I was tempted to edit out minor countries like Malta, but decided to do this as cleanly as possible. What we get are 33 countries for 4 years, 132 observations. And they look like this (bear in mind that these are percentage changes, so you can’t read the slope of a trend line as a multiplier):

Photo

Credit
"Does this picture make you think that Keynesian economics is nonsense? You can, if you like, argue that it’s a spurious correlation for some reason. But surely the raw observations are consistent with the view that in depressed economies, cutting government spending hurts growth.

"Of course, the fit isn’t perfect. In fact, the R-squared is only 0.31. That’s because in economics as in life, and as the bumper stickers don’t quite say, stuff happens. And that is why we have statistics. Government spending only explains part of the variation in growth, but the t-statistic is 7.7; for the uninitiated, anything over around 2 is statistically significant at the 95 percent level.

"As I said, you can, if you like, try to argue that this relationship is spurious, maybe not causal. But one form of argument that is really illegitimate is to comb through the data, pick out outliers, and claiming that the existence of these outliers — because stuff does, in fact, happen — disproves Keynesian logic. Unfortunately, you see a lot of that, including from economists who really should know better."

http://krugman.blogs.nytimes.com/20...Opinion&action=Click&pgtype=Blogs&region=Body