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/biz/ - Business & Finance

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17843737 No.17843737 [Reply] [Original]

Can someone explain to a retard like me why the fed pumping trillies into the market is a good thing?
I just wanna see the other side. Enlighten me. How does it benefit the average goy?
I think get the lower interest rate, makes financing easier and it makes people shuffle money around, but I just don't see how injecting money helps in the long therm.
The main issue is that people have no confidence in the market, no?
Enlighten me.

>> No.17843807

>>17843737
It's a short term loan to give banks liquidity. Look up what the repo market is

>> No.17843841
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17843841

>>17843737
Because the money printer makes a cool sound

>> No.17843855

>>17843737
It's not a good thing. Everyone can tell it's an absolutely retarded thing to do and they're just using imaginary money at this point. Yes, it's about confidence and getting the average goy to keep thinking everything is fine and their daily lives can go on, because if it isn't fine then the entire economy is immediately fucked and things are going to get really bad quickly for everyone.

>> No.17843857

>>17843807
>short term

>> No.17843882
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17843882

>>17843737
Because BOOMERS

That's why

>> No.17843934

>>17843737
It actually does work.

People think because hyperinflation marks the collapse of an economy that it is the cause. When in reality it slows it. Its like saying chemotherapy is the disease and not cancer.

>> No.17843949

>>17843857
Yes, it's usually a few days

>> No.17843958

>>17843737
They buy up lots of government bonds, this reduces the yields on bonds and make them not as much of a good investment. Then banks, pension funds etcs are required to look for other ways to generate revenue, so in theory should stimulate the equity and lending markets. Very similar to QE.

>> No.17843971
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17843971

>>17843807
So the point is to keep banks liquid? So when I go to the bank to take my money back they can actually hand it out, or loan to companies?

>> No.17843977

>>17843841
haha. Brrrrr

>> No.17844010

>>17843971
Banks need liquidity to move around their positions and such. They may face a sudden lack of liquidity during a sudden economic downturn, like right now

>> No.17844033

>>17844010
Just let them die. That's what a real free market would do

>> No.17844047
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17844047

>>17843737
to keep the ball rolling, no one every will pay back anything and at some day the clock will just be set to 0. Rinse repeat.

>> No.17844049

>>17843737
it's a pump n dump so the elites have a little more time to cash out, not even kidding. then they buy at the bottom.

>> No.17844057
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17844057

>>17844033
But then people would lose everything they hold in banks, no?

>> No.17844087

>>17843971
Yes. Banks don't actually hold your money for you. They just hold a balance for you. So if times get hard, banks might not have your money, because they already loaned it out to other people, etc. already. USA government thus prints more money for them, but in turn we are all doomed in the near future, so there isn't much point in having a job, trying to start a family, etc..

>> No.17844107
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17844107

>>17843971
Banks lend out money but need to actually keep some of it to remain solvent. The velocity of money in today's world allows banks to transact continually without too much fear of low liquidity. Except when people stop going to work using the currency. It's not money. You don't want to save fiat you just want people to spend it. That's why it's just important to keep the cogs turning. Stimulation is key soo brrrrr is good right?

>> No.17844110

>>17844057
the vast majority only hold debt, this would be a huge plus

>> No.17844124

>>17843737
>Can someone explain to a retard like me why the fed pumping trillies into the market is a good thing?

They are delaying the inevitable, if you print enough money soon it becomes worthless. It's just paper after all backed by deadly force or lifetime confinement. If the military goes away and law and order collapse, the USD does too.

>> No.17844164

Go and watch that gold&silver dude talk about money on YouTube. If you want a deeper understanding of money you can read Simmel's philosophy of money or for a more institutional understanding Wrays modern money theory

>> No.17844171

>>17843737
>I think get the lower interest rate, makes financing easier and it makes people shuffle money around

Yeah but it won't be people like you or me, the liquidity is for large banks and the 1% of the 1%. The large hedge funds and merchant banks are probably just gonna use the liquidity to cover losses and short the market even further.

>> No.17844196
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17844196

>>17844110
But that negative value just represents the loans the people took out to pay for their SUVs, houses and other shit, no? Are you thinking people will never pay their loans back to offset that negative balance?

>> No.17844226

>>17844107
brrrrrr

>> No.17844414
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17844414

>>17844107
brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr

>> No.17844446
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17844446

>>17843807
>>17843934
>>17843958
Anyway, thanks guys, I think I get it

>> No.17844510

>>17844446
>>17844196
>>17844057
Patrician taste

>> No.17844590

>>17843737
It inflates currency, so your money is made worth less to benefit corporate goons.
It's welfare for the "elite", deranged socialist scum who caused the crash knowing they would be bailed out. The average goy pays the price.

>109 counties.

>> No.17844658
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17844658

>>17844510

>> No.17844717

>>17843958
This is correct. However, investors are still dumping stocks and bonds.

>> No.17844743

>>17843737
because the entire system depends on making the cattle think that everything is fine. the economic and financial markets have been fucked for many years, but if everyone believes that things are fine, it can keep going on for a while longer. money printer does that

>> No.17844761
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17844761

>>17844414
The recession was coming anyway, a lot of indicators that economists believe in were signaling a recession. Corona chan was just the last push.

>> No.17844806

>>17844590
Most people are in debt. Peoples real debt becomes smaller.

>> No.17845039
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17845039

>>17843737
banks buy bonds from the government, and resell those bonds at higher interest to make money
when the economy goes bad, people tend to borrow less, this is bad because it shrinks the money supply, which causes deflation
so the FED lowers interest rates and BRRRRs 1.5trillion into existence, to buy back their own bonds from the bank.
the banks now have money to borrow out a lot, and the lower interest encourages more people to borrow money, avoiding deflation
the reason why /biz/ goes REEE at the thought of this is because they suspect that too low interest rates and too much BRRRing will cause a lot of inflation, which eats away at their investments.

>> No.17845157

>>17845039
So they're basically giving money to the banks?

>> No.17845258

>>17845157
not really
the banks paid money to obtain that bond in the first place, they're just getting THAT the money back early

>> No.17845263

>>17845039
But the problem is, this pandemic has caused a lot of uncertainty among literally everyone. It doesn't take an economist to know that we are currently in a global recession, which is directly caused by the pandemic. Once this pandemic gets under control, then the financial markets and economy will stabilize again. The Fed can only do so much to induce confidence. But until this pandemic blows over, there is not much else we can do.

>> No.17845343

The idea is to print and buy until we run out of sellers then we can resume bullrun

>> No.17845861

>>17845263
it would be beyond disastrous if businesses decided to shut down to whether this pandemic.
current monetary measures are needed to ensure that continuing operating is too good to pass up so people don't get fired and demand doesnt plummet
but i completely agree that the administration is doing the absolute worst it could possibly do

>> No.17846002

Printing money worked for the housing crash, but they were smart enough to do it at the Bottom of the crash. The crash is just fucking started, did they really think printing money can stock a waterfall crash? You pump at the BOTTOM of the waterfall. Jesus Christ, even George Bush is looking smarter than Trump now.

>> No.17846104

>>17844590
brainlet

>> No.17846339

>>17846002
Trump is a convenient fall guy. This shit would be just as bad with anyone else. It's biochemical warfare and China is winning.

>> No.17846387

>>17844164
link?

>> No.17846460

>>17846339
Unironically this. This a Pearl Habor type attack on our population, healthcare system, financial markets, and economy. Once we overcome this, we are going to war with China. That being said, Trump can't mention the fact that this is a biological weapon--imagine the shock across markets and the panic it would cause.

>> No.17846608

>>17844761
Corona Chan is a massive fucking push. Even a strong economy would go into recession with this. But it's the incredibly shitty handling that is making things worse.

>> No.17846654

>>17844107
>It's
BRRRRRRRRR

>> No.17846927

>>17845861
Well what would be without printing? Let banks collapse and everyone become homeless?

>> No.17847246

>>17845039
The market was priced for perfection, last week the P/E was still at levels where most stocks were blatantly overvalued, now we are approaching value in valuations.

A big enough bubble will find its pin eventually kek.

>> No.17847467

>>17846339
I'm not a commie but let's be real, that speech was fuckin disaster. It did not inspire confidence. He also seemed to sweep this shit under the carpet in the beginning on Twitter, basically almost calling it a hoax.
But yea, I agree that a fuckin Hillary wouldn't be better at this.

>> No.17847750

>>17847467
Hilary knows the establishment, and they know her.
The problem with Trump is that he's like that one retarded kid in your 10th grade. He can read word for word the presentation that the smart kid wrote, but as long as it comes out of his mouth it sounds like the stupidest idea