Systemic QE and PM prices.. good thing?

Good luck with your fantasy. The cure is to study countries with high inflation rates.

 

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In February 2009 Zimbabwe was the only country in the world without debt. Nobody owed anyone anything. Following the abandonment of the Zimbabwe Dollar as the local currency all local debt was wiped out and the country started with a clean slate.


I'm not saying we need to go so far as to abandon the dollar,,, but we could sure push the needle abit to eliminate a good % of the current unsustainable debt out there.​

 

Clean slate = no debt, no money, no savings, no investments, no commerce, no middle class. Only one of the worst levels of poverty on the planet. This is your aspiration?

 

Your trying to scare folks again.

The classes were not destroyed, if you owned an 8,000 sq ft mansion and 5 sports cars and two companies you did NOT lose that. You kept it !
If you owned a shack and scruffy old dog, you kept those too.

No one was going around collecting 1st born babies, everyone kept what was thiers at the point the government told the banks to take a flying leap because they had caused this issue in the first place... it was simply a matter of calling all dept paid, and then starting over. Something the US should consider seriously, and I'm sure they are.. just not to the same extent. QE will get us there Cloud... be patient.

Consider this:
Assume I have 1 million in debt and have roughly 3 million left in my working capital (all money I can expect to collect for the rest of my working life). 33% of my money will have to go towards paying this debt.
Now assume I inflate the economy to a point at which my salary "must" be adjusted by the company I work for or they risk losing me to McDonalds fry station #2.. Now my working capital has risen to roughly 30 million. So only 3% of my money will now have to go towards paying off my debt.
* so more money (as a percentage of my income) to spend on other stuff now,,, economy gets going again !!

Trick will be to level out this step wise inflationary evolution, or slow cook in over a 'short' and managable period of time. QE is a neat tool to do that.... we need more QE.
Just need to rename it so no one catches on to what we are doing ; )

 

I hope you and the rest of the cult will be very happy in your make-believe world.

 

I thought you were pro-bank bailouts... pro-QE1 and QE2 and QE3... where did we part ways ?

 

This is precisely the philosophy of our govt. Inflate our way out of our spendthrift ways. Baha's tongue in cheek scenario is really a pretty brilliant way to illustrate the problem.

In Weimar Germany the city dwellers were in deep doo doo. It was the farmers who paid off their farms with a months wages and had the ultimate trading stock (their crops) to conduct trade and "prosper". By all accounts it was no picnic for the German people and the experience gave rise to a guy named Hitler.

Bluesboy65

 

In the end, this royal family was doomed for their excess while people were starving in the street and this lady's head was chopped off. (so the popular story goes). Ironically France was bankrupted funding the American revolution against Great Britain. Maybe they should have just kept the cash.


http://www.youtube.com/watch?v=lRRSkaXnp1w

you're

 

Pretty sure we have those in the US also,, they're called bailed out bankers wives ; ) .. and there's a bunch of them.

The problem with stoppinig the QE now is that you essentially lock in your losses, like selling stock while it's down.

Now lets see, who currently had locked in debt.
1 - Wealthy Bankers. no, bailed out.
2 - Wealthy auto executives. no, bailed out.
3 - Bankers wives or auto executives wives. no, too busy to think about it, must eat cake and choose shoes for tonights party.
4 - Common joe with car loan and mort loan owed to wealthy bankers and auto executives - YES.

Stopping QE locks the mortgage holder and car loan holder John Doe like us into a static debt. It's only fair that our government continue to flood the market with cash via QE so that we also benefit from the inflationary effect and can pay our depts more readily.

Good heavens, there could be a total collapse of short term credit flow if we don't have more QE, and Vampires and Gobblins will come out at night to eat us,,,,,
Tell 'em Cloud... right ?

 

I've never been as bothered by QE as some folks here. I'm just not as paranoid as some of you.

 

Come on Cloud, don't you want one of these?....just use aluminum foil

http://www.wikihow.com/Make-an-Origami-Samurai-Helmet

 

The strange thing I've noticed about political and economic consipiracy theories over the years is that eventually, many of them seem to turn out to be true. I recall the days when even believing in an organization such as the CFR got you branded as a conspiracy theorist, but now they are on CSPAN every week. And gold manipulation used to be considered a conspiracy theory until Greenspan admitted it was true and Harvard Professor Larry Sommers wrote an academic paper on the gold supression mechanism.

So go figure....

 

IMO what would happen is that prices would become so volatile that nobody would be willing to sell anything. Money would become useless.