Jun

24

Isn't one of the main reasons that the economy has not been as vibrant as hoped because of the QE? The Fed has an opportunity cost for the assets it has bought. That opportunity cost around the world must be 400 billion. It was taken from the common man, either through direct payments not given or futures increases in service rates and interest costs, and given to the banks. The Fed itself must have a loss of 200 billion on those assets purchased. How has this provided an artificial and frictional stimulus which in the reasonable future will leave us worse off? Regardless, they can't let stocks go down too much, or else everyone will complain and it will be bad for the flexion in November, 2014.

Gary Rogan writes: 

QE is mostly an response. The cause is the federal spending that would be unsustainable were it not for QE. You can't stop QE while the government is running enormous deficits and while everybody and their brother is actively encouraged to go on food stamps and disability. Until the federal government totally changes its tone and approach, QE is inevitable and in fact the only thing that prevents quick collapse. It's not stimulus, as you can't push a rope but a destruction of new government debt via wealth transfer. Inflation plus the interest not paid to those who have cash is what's subsidizing the government largesse.


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