Testing The Financial Apologists

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QE refers to Quantatative Easing, which is a euphimism for monetizing the debt. Barrons explains what the Fed does and why it is risky.

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More importantly Quantitative Easing is an alternative to reducing interest rates when there’s no room to cut them.In your last post you assert that the trouble is that there’s no room to increase interest rates.These are contradictory. The Fed can’t desperately need to reduce interest rates AND increase them.You wanted to know why Percy says that you are delusional! There’s a reason right there.It looks to me as if you have your doom scenario in mind and “see” it everywhere - even in sources that contradict it. That sounds pretty delusional to me.

Phat, I hope you realise that there is a distinction between your claims to have listened to qualified people and those people supporting your assertions.So far we’ve seen that they typically disagree.And that’s the problem.

In my case I see you claim that gold should be rapidly increasing in price, you say it isn’t because the banks are holding the prices down - but the respectable sources you cite suggest that the banks are keeping the price rising.So it looks to me very much as if the idea that the price of gold should be steeply rising is “snake oil” you’ve been sold, and that the bank’s involvement is just an excuse for why it hasn’t happened. You certainly did not get it from the sources you cited.

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The current rate of inflation is higher than the expected values of maturing bonds.
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There is no way to stop inflation in todays world. It will slowly chew all of our incomes up.

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Indeed, after a long period of low inflation the after-effects of COVID plus the effects of the Russian invasion of Ukraine have seen a rise.But obviously there are ways to keep inflation down. That’s why we’ve had low inflation for the last few decades. Remember the ‘70s? The current inflation rate in the US is not bad by that standard.

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The #2 person at the Federal Reserve is a Modern Monetary Theorist, which, as you all know, I disagree with (that philosophy)

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Really? Who do you think is #2 at the Federal Reserve and what evidence is there that they follow Modern Monetary Theory?

Perhaps you’d like to answer Message 200 to show that you’re not completely clueless?

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Krugman is a modern monetary theorist, which is not the final word.

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No, he isn’t. Really, why do you try to post this label on people when you have no idea of their views?

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Did you know that the next likely chairman of the Fed will be a Modern Monetary Theorist?

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Does this have any more basis than your previous claim that the second in charge at the Fed was a Modern Monetary Theorist? Or is it just more silly scaremongering.

And the person who registered the site apparently lives in Iceland. Not exactly local to Houston.

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If a gold coin trades for $2,300.00 today and $3000.00 a year from now, it means that the fiat money--be it paper or digital, is valued less than a year ago in ounces of the precious metal. One mistake that many make is that they claim that gold changes value when in reality the fiat money changes value. Otherwise, it would make little sense for Central Banks to even own gold. Gold is their insurance.

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You are making a bigger mistake. If the price of gold increases faster than inflation, then surely its value has increased. It may be wrong to compare dollar amounts but surely it is right to compare what those dollars could buy at the time.And the price of gold is a consequence of the banks holding large stockpiles as you ought to understand. If the banks weren’t keeping large amounts of gold out of circulation the price would be lower. There is no absolute value in the price of gold.

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His economic ideas were soaked with Libertarian ideology. No, I didn't respect him.

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Objectivist ideology which is similar but not quite the same.

Well the dollar’s position as a reserve currency IS threatened - by the Trump administration. The tariff policy Trump was trying to use and (garbling) was meant to end it. Trump’s own shilly-shallying over tariffs has stopped it working so far - but trying to use tariffs as a weapon against Brazil didn’t help. Nor does the erosion of the US economy.Phat is just trying to pretend that he’s right, even though Trump’s policies are by far the biggest factor.

Rubbish. The dollar wasn’t tanking under Biden. It’s Trumps mismanagement that’s the problem.

You’re making things up again.

The price of gold is not tied to its use - a good chunk of it is due to the huge reserves held by banks. It’s not a lot better than fiat currency. That’s why Warren Buffet wouldn’t invest in gold.Homes are also not exactly a safe investment - there are a lot of “soft” aspects to the valuation.And recognising that Trump’s policies are the main problem for the dollar at least points to a way it could be fixed. Which is more important than “pretending that Phat was right”.