Qualitative Easing (Froz and Chuck Bao nip)

[Oldnslo]

Here's what I understand: our government is creating money out of thin air in order to buy its own debt back from the banks currently holding it. $600B or so in play.

I understand that Japan has done this in the past, but not to the tune of $600B.

What I don't know and need help with: what happened with Japan's QE experiment? How does all this play out, and how do I protect my family from economic harm?

I'd assume that QE has a great chance of setting off inflation and that commodities, especially gold, silver and oil, would be places to seek safe harbor.

what the craphell is going on?

[pphilfran]

By most accounts it did little...interest rates might have declined somewhat...

It don't think it will do chit for the US for a year or so....the consumer is paying off debt....lowering the interest rate will not change that fact...

[85Sooner]

Japans economy was in the tank for a decade.

[XingTheRubicon]

I almost feel sorry for US leaders/politicians about 10 to 20 years from now.

[Okla-homey]

I'm no economist, but I understand that money can't stay "free" forever (e.g. the current T-bill rate < 1%). Sooner or later, there will be a reckoning. And it ain't gonne be pretty.

Japan lost a generation's worth of growth because of this kind of stuff.

[Okla-homey]

How does all this play out, and how do I protect my family from economic harm?



You can't. It's too late.

[StoopTroup]

Buy gold, gems, silver, Plutonium ;), Platinum, copper....etc....

Things that might be used to back the money down the road.

Hopefully the two gold teeph I have will go up in value. :D

[soonerscuba]

Just a friendly reminder to everyone, Japan's lost decade (90s) was caused by asset speculation during the 80s, and they tried QE from 2001-06. Saying that QE caused a recession is false, it simply failed to pull it out of one. Domo.

Also, commodities are good right now (I don't think XOM is losing money any time soon). But you don't make money buying at high, and there is an emerging global consumer market that the U.S. is attempting to sell to, so if you aren't risk adverse, I think there are some deals out there.

[StoopTroup]

texas longwhorn memorabilia will still be worthless in the future.

[Oldnslo]

okay. my current plan is to buy bullets and wait for the locusts and frogs.

[XingTheRubicon]

texas longwhorn memorabilia will still be worthless in the future.

<T-SHIRT FAN>WHAT ABOUT UPSIDE DOWN ONES!!!!<T-SHIRT FAN>

[dwarthog]

Isn't this QE2? As in the second time the feds have conjured up a bunch of cash and dumped it into the economy?

[Frozen Sooner]

Here's what I understand: our government is creating money out of thin air in order to buy its own debt back from the banks currently holding it. $600B or so in play.

I understand that Japan has done this in the past, but not to the tune of $600B.

What I don't know and need help with: what happened with Japan's QE experiment? How does all this play out, and how do I protect my family from economic harm?

I'd assume that QE has a great chance of setting off inflation and that commodities, especially gold, silver and oil, would be places to seek safe harbor.

what the craphell is going on?
Minor point:

Quantitative Easing, not Qualitative.

It's an inflationary measure, fo sho. The idea is to create greater liquidity so we don't have a lending lock-up. I've been somewhat dreading the point when all the business loans aren't going to be able to meet their balloon payments and banks won't have the liquidity to refinance. Looks like they're trying to avoid that.

However, I confess that I'm much more wrapped up with Federal Jurisdiction than I am finance right now. Ask me a question about habeas corpus and you're likely to get a much more detailed answer right now.

As I recall, Japan had fairly steady growth through much of the 2000s. As pointed out above, their financial problems were in the 1990s. However, I don't know that you can attribute their 2000s growth to QE. I do know that many of their problems in the 1990s could be traced to lack of liquidity in banks and massive loan defaults.

[NormanPride]

If you want to read a great fictitious but informational story about Japan's economy, read Akumetsu (http://www.mangareader.net/331/akumetsu.html).

Some shocking parallels to our own economy.

[C&CDean]

We just need to go over there and buy up all the prime real estate and golf courses like the japanese did here. Problem solved.

[royalfan5]

Plus today the commodity markets are getting absolutely smoked because of the strengthing dollar and rising Chinese interest rates.

[Bourbon St Sooner]

I imagine a lot of this liquidity is going to end up in the stock market, because frankly there aren't people out looking for loans right now. The thought is you prop up the market, people see their portfolios grow more valuable and they start to buy.

I'm not buying any more gold at this point. Eventually this bubble is going to burst.

[Blue]

It didn't work out well for Zimbabwe. Of course, we're not Zimbabwe.

[Oldnslo]

http://www.wallstreetwindow.com/content/node/18288

Here's a quick explanation that kind of sums everything up. Maybe a great time to buy into GoldmanSachs.

[BillyBall]

PTUY16CkS-k

[pphilfran]

PTUY16CkS-k

Nice...

[Jerk]

It didn't work out well for Zimbabwe. Of course, we're not Zimbabwe.

If the U.S. Dollar wasn't the reserve currency of the world right now, we would have already imploded.

[Jerk]

I keep on reading this stuff about how the economy is bad because the consumer isn't spending money, banks aren't loaning out, and people aren't borrowing money. As if that is the problem.

I never read what I think the true problem is: massive debt at all levels.

When I say 'all levels' I mean federal, state, municipal, corporate, family, individual.

[Jerk]

http://seekingalpha.com/article/97564-us-corporate-debt-default-rate-could-top-23-by-2010

http://nccp.org/publications/pub_534.html

http://www.businessweek.com/news/2010-06-02/buffett-expects-terrible-problem-for-municipal-debt-update1-.html

http://money.cnn.com/2010/07/30/news/economy/state_debt_levels/index.htm

http://www.usatoday.com/news/health/2010-05-30-stress-debt-poll_N.htm

[jkjsooner]

Just a friendly reminder to everyone, Japan's lost decade (90s) was caused by asset speculation during the 80s, and they tried QE from 2001-06. Saying that QE caused a recession is false, it simply failed to pull it out of one. Domo.

Exactly! And our recession was caused by asset speculation in the 2000's.

Facts aside, this is the liberals fault. Greenspan started the easy money policy in the early 2000's and Bernanke is doing it now. Don't pay attention to who originally appointed these two guys...

[Blue]

Exactly! And our recession was caused by asset speculation in the 2000's.

Facts aside, this is the liberals fault. Greenspan started the easy money policy in the early 2000's and Bernanke is doing it now. Don't pay attention to who originally appointed these two guys...

I can't wait for the day that people stop the partisan bull**** and realize both parties have been screwing us for a long long time.

[Blue]

You don't say?!

http://www.bloomberg.com/news/2010-11-18/dollar-to-become-world-s-weakest-currency-drop-to-75-yen-jpmorgan-says.html

[Jerk]

I read that link Bham and I noticed the Fed says QE is needed to "cap borrowing prices."

Yeah, that's what people need. More debt. Really, that's the only thing holding this economy back.

[Blue]

It's just a matter of time. The dollar will be devalued and lifes gonna get a little tougher.