will there be a QE 3 ?

I don't think it is some shallow philosophy to say that combining food and oil into our calculation of the effect of increasing the money supply on current prices will cause those calculations to change much more often.

It was made obvious by the most recent chart I posted that the price of food and oil are very volatile compared to the rest of the CPI.

I don't think you have refuted this point as well as you may want to. Do you want to put forward the idea that those prices are not so volatile as to warrant their exclusion? That graph shows some serious volatility, both up and down.

 

I am not saying they are not volatile - I believe they are.

But that does not matter to me in so far as inflation is concerned.

If it is a regular and substantial part of monthly household expenses (and food and transportation costs DEFINITELY are) - then it (imo) should be included in inflation tabulation...not matter how volatile it is.

 

But what if we are only trying to measure one thing: how much monetary policy like QE3 is affecting inflation?

What if we only want to know the effect on inflation of our monetary policy?

If we change monetary policy to cause more deflation, then we will Not see a significant drop in the price of food and oil, because the evidence seems to show that the effect of monetary policy on these items is low!

If you admit that these prices are volatile, then what you are saying is that the effect of monetary policy on these items is low!

So if 'core inflation' is low like my chart suggests, let's print that money it's party time let's make a swimming pool like scrooge mcduck filled with fiat dollar bills instead of gold coins!

The effect of monetary policy on the price of food and oil will be low, because, like you said, those prices are "volatile"

 

You are trying to measure that...not me.

And I said they were volatile...not THAT volatile.


There is NO CHANCE you are convincing me that flooding America with 'cheap' money is not going to raise inflation greatly.

No chance at all.

 

For you to convince me that QE3 WILL raise the price of food and oil on the same scale that we saw happening recently (while callously disregarding those prices at the whim of Alan Greenspan),

You simply need to show a line chart with the dates lined up with headline inflation and QE's lining up, or

Maybe show a chart of the money supply and where it is being spent,


OR MOST IMPORTANTLY!:

An example of a country from history printing a bunch of money, and then the effect on prices of that printed money.

Let's talk about Zimbabwe and post-ww1 Germany right?

How much money did they print and what was the immediate effect on prices? Were food and oil prices affected more because of the large portion of the common-consumer-basket that is taken up by those goods? (it would be only food at that time, not oil)

Come on give me some data man. I came here to figure out why people could possibly think that inflation is high.

All I have to do is say that Alan Greenspan, not generally considered a hyper-Keynesian, thinks that food and oil are affected by droughts and oil-supply-shocks and we can simply look at the blue line in my most recent chart.

That line goes down big time! Then after the chart it goes up to only 1.6% as of July2011.

Come on don't dismiss me! You are the representative of the right wing in the thread devoted to QE3!

 

I am not trying to convince you or anyone of anything.

I gave up trying to do that on chat forums long ago.

I suggest you do the same...they are just time wasters...imo.


Have a good night.

 

the only reason the dollar has not tanked yet is because as the dollar falls from all this QE, then central banks come to its rescue and buy up treasuries because they dont want their currency to rise. This is foolish of course and it will hurt all the central banks in the long run. Eventually they will cut the cord to the titanic.

If printing money was the road to prosperity then, Poland, Argentina, and the former soviet union would all be wealthy! Its amazing how people just cant grasp that basic concept. Look at Zimbabwe...this is the end result of too much money printing!

 

The reason why I have come to this forum

I google searched "political forum" and this one was the number one search result "www.politicalforum.com" makes sense. The number two search was "www.liberalforum.com" because liberals like to blab on the interwob because we don't work on farms or something.

I have not registered on or read the liberal forum because I want to know why people disagree with me.

How can your ideas compare to mine?

Are you saying that you don't want to participate in the strenuous exercise of completely comparing all of our very different sources of knowledge? I came here to do this, I don't know why else I would write here.

The definition of QE is "the central bank buying treasury bonds more quickly than they otherwise would have; a one-year-bond should give the bond-buyer their full amount plus interest one year after they gave the govt some cash, but the government gives them their payment after only six months"

So we take money out of the future and put it into the economy of today, causing some, controversially undetermined, amount of inflation

I don't think your first sentence was constructed properly... Also I don't understand the titanic reference.

Zimbabwe had 600% inflation in 2003. So gas would be $12 a gallon. I don't think bacardi is taking this forum seriously.

 

That's right.

I don't wish to have long debates with anyone...not just you.

I am quite sure if you look around you will find lots of people to debate things with..bacardi for one.

You might also try perspectives.com

I understand they can get into great debates on economics.

http://perspectives.com/forums/

 

grumble...

 

Lol.

You might also try threads where Reiver debates...he will go on and on if you wish...and in great detail.

 

I try to inform people as the amount of ignorance is amazing......printing money has never worked but some how because now its the US doing it they assume a diferent outcome. The only saving grace is the fact the US has the reserve currency which it has no business having...this is forcing other central banks to buy dollars in order to prevent their currency from rising.....what part of that dont you understand? No other country on earth would be able to get away screwing the globe like this.....and of course....you have no idea what I am talking about right?

 

"Printing money" has been working fairly well since around 1930, when the Great D made it clear that the only previous system, the gold standard, can not handle the newly very large turbulences/fluctuations/uncertainties of the post ww1 market.

We have not seen a giant crisis caused only by "Keynesian counter-cyclical fiscal policy"

Please understand that quoted term, which I learned about when going to university for economics, is an action that is to be taken when aggregate demand is low, and only then.

Post ww1 germany printed money because of lots of debt and currency valuation problems that were ironically caused by a reliance on a commodity called gold.

Zimbabwe printed money such that prices in 2003 were SIX TIMES HIGHER in their CPI from the PREVIOUS year. So when gas in your car costs around $12 per gallon (it is now around 4), you will want to think about Zimbabwe, but even then, we would be experiencing less inflation than Zimbabwe. Also, Zimbabwe is a reference commonly used as a supporting fact by people who disagree with me. I think this reference is very thoroughly discredited.

Are you aware of historical examples where a country printed money like the United States and then something happened?

Is it fair to compare the United States of today with.... the United States of 1930 or around FDR election? Did we do ok at that time, in regards to debt and inflation?

 

I really dont know where to begin.

For one thing germany got into trouble not so much because of the debts to france and england but more because they went into the market and started buying bonds to keep interest rates low.

Zimbabwe started paying the military more than what it can afford....government workers too!

As for historical examples of what the US is doing? Why not read up on the US in the late 60's when they started to monetize the vietman war!

 

I don't think you read a Pulitzer Prize winning book called "Lords of Finance" which I did, and which I found to be extremely excellent.

Where do you get your knowledge of Germany's behavior at this time? Please link to website or book that I can buy or something that I can research, because I don't even know what argument you are even trying to put forward. "All bonds are always only bad" seems to be the only scrap I can get from your shallow analysis.

So you are saying that Germany only got into trouble ONLY BECAUSE they bought domestic bonds, in order to stimulate domestic demand. They DID NOT get into inflation trouble during post-ww1 because of huge capital outflows imposed by debt and a-historical reparation payments? (i say a-historical because countries don't f-ing pay reparations after losing a war, it is bad economics)

You are saying that IF GERMANY DID NOT PURCHASE BONDS IN ORDER TO STABILIZE ITS CURRENCY VALUE, in the face of giant external debt (the likes of which are not comparable to the modern world, let alone america), THEY WOULD BE BETTER OFF?!?!? THEY WOULD BE BETTER IF THEY DID NOT TAKE OUT SHORT TERM DEBT?

Is that what you are saying? That is a very complicated thing to say. It is a thing which I believe is outside of the mainstream of people who read textbooks and write big, long papers. Please cite your source.

I want to know your source that say the monetization of Vietnam was a big deal.

I am extremely personally interested in this "monetization of the Vietnam war" because I base a lot of my personal opinions on the terrifying effect of:

Supply Decreases from OPEC embargoing us! This is the worst economic thing of all things! It is the greatest monster!

BUT WHAT YOU ARE SAYING IS:

The big economic problem that we faced around 1979, when the Iranian revolution took place, what you are saying the PROBLEM WAS AT THAT TIME IS THIS:

America Printed money for the Vietnam war. So therefore there was inflation.

What every single economist who went to college for economics would say is that in the year 1979:

"Oil prices went super high because of the Iranian Revolution of 1979. OPEC Began An Embargo On Oil Exports To The United States"

Therefore, oil prices went up. Therefore, the cost of every single things went up. It was AN EMBARGO! AN EMBARGO! WAR!

This was a terrifying catastrophe that is WAY WORSE THAN THE GREAT D. We have no way to fight this OPEC embargo. It is, by far, the very most frightening possibility.

Nothing is worse than an OPEC embargo.

Do you think the problems of the late 1970s were caused by Vietnam War money-printing, and not the OPEC embargo?!?!

When did the OPEC embargo begin? When did the Vietnam MONETIZATION BEGIN?

LET US LINE GRAPH THIS!

 

any book that deals with the mainstream keynessian crap is worthless....as was proven in the crisis of 2008.....notice how very few of the keynessian fanatics got it right? If you really want to learn then read books from Jim Rogers or Marc Faber.

Another informative book was written by Peter schiff back in 2006 and explained to the letter exactly where we are now....that book is still available now so you should pick up a copy.

 

I am too lazy to break down your post again but you mentioned where I learned about the monetization of the vietnam war? Its actually common knowledge that it was and this is what caused central banks to get nervous especially france and so nixon had to close the gold window. The inflation that followed was a direct result of the monetization that occured in the late 60's and early 70's. If you dont want to believe then what can I say!

 

I just wanted a link to some wobsite that said the inflation during the OPEC crisis was largely a result of monetizing the vietnam war. Anything that is in your mainstream that describes this time period I guess. I might criticize your author by judging the cover of his book, but really I think my mainstream would say that OPEC was the cause of "stagflation"

If inflation was caused by "monetization" of the vietnam war, then we would not see high unemployment.

When Inflation happens because of an increase in money supply:

1. People are able to pay more for things, so prices rise
2. Wages might not increase quickly enough to allow people to buy expensive food

That is the problem with inflation that we need to worry about. I don't think we are seeing a problem with prices too high outside of food and oil in August 2011.

If unemployment is HIGH, then inflation can not ALSO be high. During the strangely named "Stagflation" of the OPEC embargo (or maybe vietnam-war money printing scheme), we had high, stagnant unemployment and also high inflation.

I always thought that we had high inflation and high unemployment at the same time because of only one thing: supply side restriction of oil (and of course oil is a part of the entire economy). Restricting the supply of oil will raise prices of everything in the economy and WILL NOT BE a result of an increase in the money supply. People will not have more money, but everything costs more anyway.

The inflation we are apparently worried about today is caused like my numerical outline above. People HAVE lots of money, therefore prices increase. The Stagflation of the 70s was different because people did NOT HAVE more money; prices only went up because of an Embargo. Not Just Money Printing in the 70s.

If people don't have a job, this causes deflation. We are currently seeing 1.6% core inflation; I call this deflation. Inflation was higher during the 70s because the cost of oil increased very much. People DO HAVE money for the prices of today because prices ARE NOT HIGH. We are not dealing with an embargo today.

So what website describes the effect of the vietnam war monetization on inflation, compared to the effect of the embargo? I will have to google it myself eventually.

 

Ok let me explain something to you.....when there is a period of high monetization the first thing to always rise are commodities....especially food and energy....now as those two rise ( and your pay dont) then you must alocate more to food and energy ( especially large families) and so there is less disposable income....this is why its called stagflation.....prices for necessities rise while at the same time the economy gets more and more stagnant especially for non-essentials like cinema or electronics!

 

OK try this link.....it doesn't explain fully that the vietnam war caused the 70's inflation but its the best I can do on such short notice!

http://www.investopedia.com/articles/economics/09/1970s-great-inflation.asp#axzz1X8fxpzsB

 

still no QE announced I take it?

 

not yet.......but I am sure its already in the making

 

(edit: I forgot to mention that QE3 was almost certainly not announced as a direct result of a 'conspiracy' between the entirely independent Fed and Obama. Obama said he will cause inflation with a real deal jobs bill, and Bernanke said 'ok we need to print money one way or the other, if you want to, its your funeral. thank you mr president for being a superhero')

$400 billion down the drain on a jobs bill which ONLY HELPS NON-BILLIONAIRES, SPECIFICALLY

oh god how horrible for your incredibly misguided war to protect "job creators"

Man that speech was AWESOME. OBAMA YELLED AT YOU

And Boehner said something like 'it is worth considering' or some lame response.

This is in contrast to the expected response of "obama just loves poor people and poor people are the cause of everything and we are supposed to never give them money"

Yeah boehner didnt say that. He said it may be possible that some parts of obamas speech just might maybe offchance perchance perhaps will NOT BE IMMEDIATELY REJECTED by congress.

OH HAPPY DAY. WAY TO GO REPUBLICANS, IT IS POSSIBLE THAT YOU ARE NOT TOTAL FAILURES OF DEMOCRACY.

Jobs bill wins or repugnicants lose. Ball is in your court. Feel free to screw it up.

 

How about plain old common sense? If there are so many dollars in existence and you print more of them without creating any wealth in doing so, how does it not dilute the value of the existing dollars? Wealth comes from trade, investment, work, natural recources....things like that. You can't create wealth simply by operating a printing press. It can only result in diluting the value of the existing dollars. Common sense. Think it through.

 

Wasn't it released earlier in the week that Bernanke and his Fed goons had discussed this as a very real possibility back in August, I think it was Aug. 9th? Or am I confused and thinking of something else.

IMO quantitative easing is very dangerous, posing grave risks to the health of our savings and the overall value of our dollar....ESPECIALLY if it's done in such a very short period of time. I really hope QE 3 isn't coming any time soon, but it definitely appears as though the Fed have their hands on the button, what with the 2012 election rolling around and Obama looking very bad in the polls. He'll want them to roll this out if only to look as though he's taking action to solve the epic (by this point unsolvable) problem we face.