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40654 No.40654[DELETED]  [Reply] [Original]

Hey guys, I know how the US can pay off its debt! Let's just print more money!

>> No.40669

>>40654
but it's ramping down

>> No.40717

>>40654
>still believing the US economy is in debt

>> No.40708

>>40654
>I have no idea how modern macro policy works

>> No.40720

>>40669
after inflating the base money supply like > 400%. And while it's ramping down it's only reducing by 10%. Their still printing $85 billion every month and the market is better yellen will pause the taper based on bad data. It's going to be a fucking disaster.

>> No.40751

>>40720
The quantity increase in the money supply means nothing if the velocity isn't there. Step it up son, economists worked this out half a century ago.

>> No.40753

>>40708

>taking the b8

>> No.40763

Start printing trillion dollar bills. Boom, richest nation in the world! B^)

>> No.40781

>>40751
>The quantity increase in the money supply means nothing if the velocity isn't there
with regards to inflation yes. For now. But inflation can kick up very suddenly too and the fed will be unable to control it much like during the 70's where the US has high inflation and low growth. Economist worked this out too.

>> No.40797

>>40751

>it doesn't mean anything

That's a fallacy. It means something to the value of everyone who holds cash.

>> No.40798

>the fed prints money
This is b8

>> No.40793

>>40781
Except if velocity speeds up and causes an increase in the price level, it's incredibly easy for the FED to simply contract the money supply and stem the inflation. It's the same logic.

>> No.40801

>>40654

>I'll have 100 slices of that pizza! I'm felling hungry.

>> No.40812

>>40807
you can get a zimbabwean one

>> No.40807

>>40763
tfw u will never have a trillion dollar bill

>> No.40817

>>40793
incredibly easy how exactly?
>>40798
>the fed prints money
That's the common term used yes.

>> No.40823

>>40797
No. You have no idea what you're talking about. This is what happens when the only education you've had about economics comes from infographics you found on 4chan.

MV=PY

>> No.40833

>>40817
Uhh...

http://en.wikipedia.org/wiki/Open_market_operations

>> No.40840

I kind of wish the would go ahead and get it done with. Let's hyperinflate out from this debt and go back to kicking ass.

>> No.40854

>>40833
Will they be able to sell the assets and bonds etc for the same price they bough them for or anything like that? Also, why was inflation so high in the 70s if the fed could have easy controlled it?

>> No.40900

>>40823

No, wrong. You have no idea. If it meant nothing they could do it without any limit. Nobody would listen to the Fed decision.

>> No.40906

>>40840
I think you'll be a little disappointed at how that would work out. First the US should get used to not relying on loads of borrowed money to simply run the country.

>> No.40940
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40940

>>40854
>Will they be able to sell the assets and bonds etc for the same price they bough them for or anything like that

It doesn't really matter tbh. The purchases aren't usually outright, but through repo agreements.

http://en.wikipedia.org/wiki/Repurchase_agreement

>>40900
>hurr
>durr
see pic related...

I wonder what that

>> No.40951

>>40900
I think his point is that they can print loads of money without causing inflation so long as money velocity is low. The problem is they can't control money velocity and it could spike up rapidly.

If inflation ever starts to rise people could start thinking "better stop keeping all my money n savings, prices are starting to rise quick and money money is devaluing! better spend it!" this causes inflation to rise faster which means more people want to spend their savings, or borrow money to buy shit. Now all this money the fed printed over the past 4 years starts flooding into the economy and you have runaway inflation. I gather the ref will find it a lot harder to slow the inflation then they found it hard preventing deflation by printing money.

>> No.40963

>>40654

>based United States of Zimbabwe.

>> No.40976

>>40940
so the Fed has been buying loads of bonds off of the treasury. If inflation hits hard the fed can simply make the treasury fulfil it's obligation in buying back trillions of dollars worth of bonds? Am I right here? Or am I mixing this up here.. would it be the banks who would be obliged to buy back these bonds? Would the banks be able to buy back trillions worth of bonds in a short time frame?

>> No.40982
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40982

>>40963

>> No.41001

>>40982
oh, hey! I have one of those!

>> No.41004

>>40976
afaik the FED has never actually bought treasury bonds directly from treasury auctions. My understanding was that it makes bid offers to the major financial institutions. I could be wrong though, I've studied central banking with a focus on the RBA (australian).

>> No.40997

>>40817
No that's the treasury.
The fed primarily buys and sells bonds in order to set rates of interest etc.
Or what did you think QE was literally just printing money and giving it to people?

>> No.40996

>>40951

I couldn't have said it any better myself. His argument is about the same as saying "let's deport 100 million people to England". It doesn't matter to Europe.

>> No.41012

>>40951
>fed
>printing money
Stop this.

>> No.41018

>>40997
>No that's the treasury.
What's the treasury?
>The fed primarily buys and sells bonds in order to set rates of interest etc.
yes and they buy it with currency they create out of thin air. This is the point at which the "money printing"/currency creation happens.
>Or what did you think QE was literally just printing money and giving it to people?
Did I say anything to even remotely suggest that?

>> No.41026

>>41012
please enlighten me what actually happens then. I'm aware it's not "printing money" in the literal sense, but it is currency creation and money printing is a common term used.

>> No.41037

>>41018
>What's the treasury?
When I say that I mean "what is it that happens at the treasury that you're referring to?".

>> No.41061

>>41018
>currency created out of thin air
It's called credit.

>> No.41086
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41086

>>41061

So you are claiming that the Fed could go bankrupt if they don't pay back the "credit".

>> No.41093

>>40654
He was trying to close the GDP gap we had. He did what he was supposed to do, while Obama fucked up the fiscal side of it all.

>> No.41099

>>41061
credit is generally loaning someone something you own. When the fed loans money the loan money that never existed before the loan. hence the "printing money" term.

>> No.41118

>>40654
Lol the only reason people are mad about fiat currency, is cuz they bought into the gold racket, and will only get richer if the price of gold goes up even more. But hey if yall wanna bilk people out of their shitty 14 k gold blowjob token that's fine by me.

>> No.41121

>>40781
dumbass havent you ever studied the liquidity trap?

>> No.41155

!ZkdamFhldE could you recomment me books on this subject?

>> No.41198

>>41099
>never existed
Except the Fed is able to build a fairly substantial amount of liquidity in order to back it's loans through its bonds buying and selling to the point where they turn enough profit they annually deposit around 70 million into the us treasury.

>> No.41583

>>40720
But she isn't going to stop tapering at all.

>> No.41615

What does money velocity mean, exactly?

>> No.41699

>>41615
the rate at which money is used to buy goods and services

essentially, all these billions and billions that the Fed is printing aren't going anywhere because nobody wants to spend money on anything except wall street casino games

>> No.44885

>>41198
my understanding is that even today the fed is technically insolvent.
>>41583
where did you gain you ability to tell the future? Can I attain the same ability somehow and if so where?

>> No.47040

>>40854
>Also, why was inflation so high in the 70s if the fed could have easy controlled it?

There are two types of inflation: demand-pull and cost-push inflation. "Demand-pull" inflation is what happens when consumers are swimming in so much cash that they go out and spend it and drive up prices. "Cost-push" inflation is when things actually become more expensive to produce from the supply side.

The inflation of the 1970s was "cost-push inflation" and was the result of growing union power (higher wages) and oil shocks from tumult in the Middle East. The gov't/Fed have no control over supply-side, cost-push inflation, only the demand-pull variety, which can be controlled easily via monetary and fiscal policy.

>> No.47388

>>40982
Only government can take valuable commodities like ink and paper and make them worthless.

>> No.47432
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47432

>>40654

Do you even know what it means for a country to be in debt you illiterate spastic?

That simply refers to the amount of various debt securities that the US Treasury issues to buyers all around the world.

People and nations buy US debt because they have confidence in the US economy. Sit down and read a fucking book about bonds before you start shit posting catch phrases from Ron Paul.

>> No.47495

>>47432
What happens when the interest rates rise?

>> No.47529

>>47495

Bond yields go down..?

>> No.47591

>>47529
The interest on the national debt going up, even slightly, can strain an already tight budget and even precipitate a recession.

>> No.47679
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47679

>>47432
>confidence in the US economy

the party will come to an end eventually.

>> No.47760

>>47679

You better hope not.

>> No.47790

>>47760
most of my investments were done with the mindset that it will.

>> No.47802

>>41583
>But she isn't going to stop tapering at all.
I know, it's going to continue.

>> No.47823
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47823

We have the petrodollar system so we get to export our inflation all around the world and not have to deal with it.

>> No.47846

>>47790

There are no investments that would benefit from the decline of the US economy.

>> No.47833
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47833

awww yeah

>> No.47852

>>47846
>There are no investments that would benefit from the decline of the US economy.
Asian stocks
Gold
Bitcoins

>> No.47865
File: 108 KB, 625x625, 1389416090056.jpg [View same] [iqdb] [saucenao] [google]
47865

PRINT MORE MONEY

FUCKING LIBERTARIANS YOU DON'T UNDERSTAND ECONOMICS

>> No.47874

>>47852

>Asian stocks

>Not inter-dependent on the US economy

>Gold

>Any use at all

>BTC

Lel.

>> No.47910

>>47874
>>Not inter-dependent on the US economy
When they stop propping up fat americans like yourself they would consume the goods they actually produce.

>Gold
>Any use at all
Have you ever studied history?

>> No.47929

>>47846
i own lots of oil and some amerifat shit like walmart and mcd. also some really boring companies that did fine in 08. i do agree with you though.

>>47852
>bitcoins
nigger please

>> No.47967

>>47929

If the US economy does collapse, the only valuable commodities are going to be portable food that doesn't perish like rice and ammunition.

>> No.47969

>>47910
>When they stop propping up fat americans like yourself they would consume the goods they actually produce.
>implying middle class in China
>implying Japan and South Korea don't already do this
>implying the US isn't one of the main trading partners in the region

lrn2economics

>> No.47994

>>47967
i dont foresee any situation like that. i do foresee daily purchases costing lots more though... maybe double. people will then try to get the cheapest stuff, eat the cheapest, and while they maybe will be more conservative with gas, they must buy it and will buy it. remember gas went from 1 dollar forever up to 2 then 3 then 4? people still bought the shit out of it.

>> No.48024

>>47529
>Bond yields go down..?
Up, actually.

>> No.48036

>>47969
>>implying middle class in China
Yes faggot, if they let their currency rise they would be able to consume the products they actually make, they would be the richest country in the world and america would be a shithole

deal with it

>>implying Japan and South Korea don't already do this
I know, that's why their people are not as poor as china.

>>implying the US isn't one of the main trading partners in the region
>IF WE STOP WORKING SLAVE WAGES FOR FAT AMERICANS WE WILL HAVE NO ECONOMY

Top lel

>> No.48043

>>47967
>portable food that doesn't perish like rice and ammunition.

Ammunition does make a nice stew.

>> No.48050

>>40654
You can soft default on anything through inflation while you're the world reserve currency.

>> No.48064

>>48036
>china delusion
angry chink or self-loathing middle class white american detected

>japan and korea in good shape
wow

troll or retard, don't care which

>> No.48078

>>48064
>angry chink or self-loathing middle class white american detected

So what you're saying is, you have no argument and I am correct?

Thanks.

>wow
Far better than the average chink you idiot.
and japan is getting worse because they're increasing inflation.

>> No.48135

>>48078
Inflation in Japan is actually a great thing. It's signalling the start of a recovery after more than a decade of stagnation. You're an idiot.

>> No.48131

I thought they weren't paying off their debt and were literally just giving it away for free to corporations in the hopes they will hire people, which they don't.

Am I wrong?

>> No.48157

>>48135
>It's signalling the start of a recovery
Right just like in america. Where we've printed trillions of dollars and ended up with nothing.

>after more than a decade of stagnation.
and inflation which was the problem

mises.org/daily/1099
http://mises.org/daily/6452/Is-Japan-Heading-for-Another-Lost-Decade

>> No.48182

>>48157
>and ended up with nothing.
we ended up with lots of shit that we dont deserve. someday the chinese will sell that tv to themselves instead of us

>> No.48183

>>48157
>ended up with nothing.

all that police state shit aint free

>> No.48249

>>48135

Just is failing demographically.

It has no grounds for an economic rebound.

Japan is about to shrink 1/3 in the next several decades.

>> No.48263

>>48036
You know you're stupid when you are taking the shit the CCP shits out at face value. I bet you think the world global fish catch is going up still too right?

>> No.48261
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48261

>>48249

>> No.48286

http://www.youtube.com/watch?v=-DdfLtOrBPU

>> No.48298

>>48249
>muh brics

>> No.48423
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48423

>>48157
>Where we've printed trillions of dollars and ended up with nothing.

You should read about something called "opportunity cost".

Also,
>mises.org
pic related. Don't bring that psuedo-economics here.

>> No.48446
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48446

>>48423
>psuedo-economics here.
LOL Do you even know what fucking board you're on?

If you can't refute what was written in these articles then you're wrong.

>> No.48456
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48456

>>48446

>mises
You mean the guy who doesn't want math in economics

Don't expect me to play with your a priori religious magic

>> No.48475
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48475

>>48456
>You mean the guy who doesn't want math in economics
>using math in economics
That's like using psychology in particle physics.

>Don't expect me to play with your a priori religious magic
Awww, someone destroyed your mystical religious theories.
Yeah, we can spend out way out of recessions, that makes perfect sense.

>> No.48481
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48481

>>48456
>math and logic are bullshit because they're a priori
Lel

>> No.48496

>>48475
hahahahaha. Nice picture, but it's a pity you don't realise that there is empirical evidence for a fiscal multiplier, especially when AD is falling.

You have no idea what the paradox of thrift is. You've never had any kind of education in economics. Other than Hayek, no austrian economist has ever been taken seriously and it's time for you to get back to /pol/, because this place is for adults.

>> No.48529

>>48496
>but it's a pity you don't realise that there is empirical evidence for a fiscal multiplier,
No there's not.
Keynes math was wrong, the facts are RIGHT THERE
If the math is wrong, the entire thing is wrong.
Lol I haven't seen this much cognitive dissonance in a while.

>You've never had any kind of education in economics.
Lol so desperate
>if you didn't learn keynesian economics in university you're not an economist
my sides

>and it's time for you to get back to /pol/
You go back to /pol/ this is the economics board, we have several threads mocking the stupidity that is "keynesian economics" here.

>> No.48539

>>48496
>paradox of thrift
Oh wait you're serious.
http://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1996/5/cj16n1-7.pdf

>> No.48742

>>48263
>You know you're stupid when you are taking the shit the CCP shits out at face value
Except they don't say these things.

>> No.51202

>>40951

lol please use common sense dude. people will dump US currency if there are any fears of hyperinflation, not rush to spend things before they become more expensive (what the hell would they even buy? good luck purchasing a year's worth of groceries).

>> No.51239

As a layman: any time I see a gross simplification of something extremely complex I think less of the side that's using it.

>> No.52364

>>51239
Any fool can make something complex; it takes a genius to make something simple.