Ben Bernanke's Potemkin economics is too expensive.......
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The real cost of Ben Bernanke's Potemkin economics in the long run.
Hi SixNein, would appreciate if U quoted the context with bold font to highlight (as I have done for your case)' anyhow, regarding Quantitative Easing ('QE'):Quote:Originally Posted by SixNeinThread source (PF): Moral Decay and the downfall of the Great American economy
I often see a great deal of confusion when it comes to the federal reserve. And programs like quantitative easing are no exception.
So first let me explain the problem:
One person's spending becomes another persons income. So one of the key things to watch for in an economy is total spending.
Total Spending = Money + Credit
A lot of people incorrectly believe that spending is only decided by money when in fact money only makes up a small portion of total spending.
So what is the deal with quantitative easing?
In the financial crash, credit began contracting as the economy underwent a deleveraging process. The news referred to this as a credit crunch. And it's a big deal because of the above equation. When credit is rapidly contracting, total spending in the economy is rapidly falling.
And this finally brings us to quantitative easing. By printing more dollars, one can offset the contraction in credit to stabilize total spending. And since total spending isn't increasing, one doesn't see runaway inflation as a result of the extra money.
Finally, American manufacturing is doing well. In fact, it's the largest it has ever been. But this doesn't translate into jobs because of automation.
[bold font added]
We all know that this is planet Earth where resources are finite. There might be no need to quote religion as U are "aethist to world religions", however I still explain somewhat here that God inGenesis ch3(garden of Eden/ the fall) sentenced Adam to toil the soil (work hard and probably not depend on borrowed credit) and the rest is history.
My point is that your economic explanation is superficially correct only (and might be missing the point), just like the family of a bank robber 'earns' sufficient to afford much/ live well: only until the breadwinner (robber) gets caught and convicted, and then everything for his family collapses/ falls apart.
U know credit can only be obtained based on trust: as such, it can also be considered a limited commodity. All your economic high theory only works when people actually trust and work for $$$- evidently, that works now, still, the trust in the $USD is fast eroding, at least where the rise in gold prices reveals the fast erosion of $USD value in the international market. China might be a key consumer of the $USD bonds, providing QE to the US economy in some form, but even China's economy is somewhat unstable: as all dictatorial/ communist economies are.
What I fear happening due to all these Potemkin economic boosting schemes (i.e. QE) is that there forms a permanently enlarging population of poor and disenchanted people in BOTH Chinese and USA economies which will be permanently dependent on government handouts and support pork barrel politicians, the greater their sweet talk/ lies. A high degree of discord and corruption and crime will occur in many areas of society and when that happens, there will be MANY structural problems ranging from unemployment to marital discord to homelessness, disease and life endangering air/ water pollution, robberies/ rapes and an array of crimes against persons. That I feel, is might become a greater problem than any particular $ credit crunch, and the credit crunch situation itself might just be a minor symptom of a very large problem (people returning to a state shunning credit with simple lives/ barter).
Yes, total spending on a select basket of goods might not increase (headline inflation rt= zero),but if U add in the inflating costs of healthcare in middle and old age (due to the ravages of pollution and a very stressful work/ family life) as well as a possibly shortened lifespan, reduced retirement or the suffering inflicted by crime: then only would U get a better picture of the real effect of the additional costs incurred and the consequent quality of life deflation suffered by the average consumer due to a "consumption rate" or "spending" that might have been excessive (stimulated by QE) in the first place.
Credit is never really cheap. Any good parent/ teacher will tell you that. Short term gain, long term pain (& vice versa): that is a good rule to live by.
Life cannot be only about growing a number called a GDP, cos to live like that would be like having the life of a machine- one purpose, one KPI. And we all know how machines are always treated as stupid/ used like puppets: hardly the ideal life; we all know that don't we? -
wot.
Can summarize in 10 words or less?
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Originally posted by charlize:
wot.
Can summarize in 10 words or less?
Criticize Ben Bernanke's in 10 words or less? U suggesting I use vulgarities???...
any how, here goes:
Printing $$$ breeds distrust in government, with widespread long term consequences.
(11 words).
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