You clearly seemed to think that an asset purchase program that actually contributed to the treasury was a stimulus program that contributed to the deficit. If that's the depth of your understanding of the topic, it's pretty much going to be wasted breath to go into macro topics with you. But, if you've taken a macro class or two and just misspoke, then happy to engage in a higher level conversation on the subject with you.
What will happen in the economy if 10 year treasury yields hit 5.3% like in 2003?
- Thread starter KINGOFSHORTS
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And you clearly seem more interested in proving some type of an intellectual edge than actually contributing to the topic. Now that would be wasted breath should i continue to engage.
But, if you've just woken up on the wrong side and hadn't had your coffee yet then maybe you can give an opinion on the subject of the Fed's balance sheet expansion and the addiction to it.
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If you are right, you should be able to project how long it will be before the U.S. qualifies for Chapter 11. I'd be very interested in what you come up with. Just use the same reasoning you would as if looking at personal finances. That will be good enough.
I think you would benefit from reading Soros. His lectures at the Central European University available on Amazon go into asset bubbles in considerable depth, in particular their causes. We will continue to have them, and they have nothing to do with Tarp. It is the other way around. Tarp was a necessary consequence of fallout due to a bubble collapse.
I don't know if Sig wants to engage you on this "box" topic, but I would. Let's begin with your stating clearly exactly what you mean by "box". In other words, in what specific way do you believe the Fed is boxed in?
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Sure. Just as @piezoe described, the Fed's balance sheet expansion isn't a problem in and of itself. There isn't a bright line you cross and all after is doom and gloom, and even if there was a line, it is constantly in motion as the economy grows. Additionally, as one of the world's main reserve currencies, the Fed has significant additional flexibility to increase the money supply without necessarily causing damaging inflation. The mistake that the doom and gloom team here is making is a belief that always debt=bad and we shouldn't have any, or perhaps the more subtle members would say we shouldn't have as much as we have now because in general it's a bad thing. It would take a macro class to begin to understand why that is not the case, I'm not going to be able to dispel that in a post.
Is the current level unsustainable? It could be. If you think so, you'd need to explain exactly why this level is unsustainable while previous levels clearly were. So far I haven't seen any explanation of that here, instead it's been a bunch of vague "ever since the TARP stimulus" type statements. As I previously explained, I once thought I had this concept wired and understood what the sustainable level was. It turned out I was wrong. Which has led me to the belief that those who claim to know what the sustainable level is and who are certain we are beyond that are generally unaware of their own limitations in forecasting and suffering from some hubris (that was me in 2009). But as a start, perhaps you can iterate exactly what you think a sustainable level is and specifically why?
i have no issue with TARP. It’s the never ending QE programs that I think are ruining the system. Perhaps I should’ve been more clear instead of alluding to it unsuccessfully it seems.
I can almost, literally, see low planes having to fly around Mar-A-Lago from where I sit.
How many of them have banners behind them saying "Impeach Trump"
By why, specifically, is QE a problem? Is any and all expansion of money supply bad? If not, what level is bad and why, exactly? "Because QE" isn't a reason.