“The government does not do enough to promote disease.” A great article pointing out the difference between cost and value (via Naked Capitalism). Of course, this is just a modern take on the Broken Window Fallacy, but it is still worth keeping in mind. Always.
Huxley vs. Orwell (via John Cook). Do not miss. Related: Too Much Information.
This week’s Keiser Report was pretty good; his interviewee is a Real Person.
What motivates humans? (via Chris Masse). Another one of those Marxist time-lapse animation videos.
Hi, I wondering if anybody can tell me why some people are adamant that Fed QE is not money printing, even though people like James Bollard says it is ‘money printing – if you like’
For example this from pragmatic capitalist:
http://pragcap.com/quantitative-easing-the-greatest-monetary-non-event
cite=”JJ Lando a bond trader at Goldman Sachs has eloquently described QE:
“In QE, aside from its usual record keeping activities, the Fed converts overnight reserves into treasuries, forcing the private sector out of its savings and into cash. This is just a large-scale version of the coupon-passes it needed to do all along. Again, they force people out of treasuries and into cash and reserves.â€
Some investors prefer to call it “money printing†or “stimulative monetary policyâ€. Both are misleading and the latter is particularly misleading in the current market environment. First of all, the Fed doesn’t actually “print†anything when it initiates its QE policy. The Fed simply electronically swaps an asset with the private sector. In most cases it swaps deposits with an interest bearing asset. They’re not “printing money†or dropping money from helicopters as many economists and pundits would have you believe. It is merely an asset swap.
How can it be an asset swap if you create the asset out of nothing??? It is only an asset swap from the point of view of the non-fed economy. “>
And i can see from Calculated risk blogg that many people are deeply upset about the fed actions. But is it completely justified? (sure i can see reasons to be annoyed)
1. Savings come from the debt of others. If debt is destroyed then so must savings be destroyed.
2. QE so far at a time of massive deflationary pressures has enabled people who want credit to be able to get it at historically low interest rates and to a degree it has supported the people who bought with all that debt…..which supports all of those savings created from this debt.
It seems to me there is a sort of holier than thou attitude out there amongst the savers who are creditors of banks, that somehow they are entitled to not have these savings devalued and they are directing their anger at the fed, because the fed has the power (or could have the power) to prevent a buying bonanza at rock bottom prices, because it is active in supporting the credit markets and so forth.
Anyway……..i am assuming that pragmatic capitalist is confused.
Can anybody help clarify please?