The European Central Bank is finally doing something--but it won't be enough

More Than Mortal · January 16, 2015, 06:14:59 PM

FT paywall.

Essentially, come next Thursday the ECB is going to reveal a mass bond-buying scheme known as quantitative easing. It's a form of monetary stimulus--used to increase the amount of money in the economy--which should put the Eurozone back on track. It'll be closer to the policies of Mark Carney and Ben Bernanke (who's a brilliant economist) at the BoE and Fed respectively.

However, the German Bundesbank exerts a lot of influence over Eurozone monetary policy, and they are exceptionally afraid of inflation to the point of ridiculousness. It's expected that the German governors on the ECB will reject or hamstring the QE efforts.

Hopefully, however, the ECB will be able to raise inflation and stabilise aggregate demand.

Lemy the Lizerd · January 16, 2015, 06:19:38 PM

Camnator · January 16, 2015, 08:10:07 PM

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More Than Mortal · January 17, 2015, 04:55:37 AM

Quote from: Camnator on January 16, 2015, 08:10:07 PM

The same thing that is causing the collapse of our economy?

Ha.

Gold-bugs and Paulites have been screaming hyperinflation ever since QE started, and they've been wrong every single time. The Recession was caused by tight monetary policy, expanding it is the most obvious and effective remedy.

Camnator · January 17, 2015, 04:59:55 AM

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More Than Mortal · January 17, 2015, 05:02:02 AM

Quote from: Camnator on January 17, 2015, 04:59:55 AM

There's a reason our debt has increased exponentially.

Yeah, because of government spending. You can blame the 107th Congress for that, as well as Obama's stimulus packages.

Monetary policy, however? Yeah, it needs to be more expansionary. It needs a bit extra in America too, probably, seeing as inflation has dropped to 0.8pc.

Camnator · January 17, 2015, 05:04:00 AM

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More Than Mortal · January 17, 2015, 05:08:37 AM

Quote from: Camnator on January 17, 2015, 05:04:00 AM

There are many factors, but creating money out of nothing isn't some magical fix to anything

It's quite obviously a fix to high demand for money and low nGDP growth.

Quote

Also, you clearly don't have a proper understanding of inflation, as it takes years for effects to happen.

The Fed has been doing QE for almost six years, now, do you want to present an assertion that's actually falsifiable? The idea of Milton Friedman's "long and variable lags" in monetary policy are dead, at least when you base policy on market expectations. I mean, you know, there's a reason the market wildly fluctuated when Ben Bernanke tried to be more open compared to Alan Greenspan.

Camnator · January 17, 2015, 05:11:06 AM

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More Than Mortal · January 17, 2015, 05:21:25 AM

Quote from: Camnator on January 17, 2015, 05:11:06 AM

What demand for money?

Yes, you could have a huge increase in the monetary base and have no effect on inflation or spending if demand is proportionally as large.

Quote

They've been printing money long before that which is all the same. It's caused us nothing but problems.

Despite the fact that it helped Britain's economy in 1933, America's in 1987 after the stock-market crash and both of those countries in 2009 and onwards. Not to mention, pretty much the whole of the Great Moderation under Alan Greenspan was due to good monetary policy.

What your saying is essentially "We had a serious Recession which was caused by a tight monetary policy, and in response to that we should keep money tight". I mean, come on, even Hayek wanted to stabilise what he called the "nominal income stream" (nGDP) with monetary policy if it were necessary.

I mean, this is what good monetary policy looks like:

That is monetary easing almost two orders of magnitude bigger than the Federal Reserve's, and Sweden has seen a decent recovery. Where does their inflation lie now? A measly 1pc.

Camnator · January 17, 2015, 05:24:54 AM

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More Than Mortal · January 17, 2015, 05:28:14 AM

Quote from: Camnator on January 17, 2015, 05:24:54 AM

and I intend to address the source of the problem.

I'll be waiting for you to actually do that, instead of spouting pseudo-economic bullshit like you are now.

Camnator · January 17, 2015, 05:30:26 AM

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More Than Mortal · January 17, 2015, 05:32:13 AM

Quote from: Camnator on January 17, 2015, 05:30:26 AM

I mean, you're literally saying we can solve problems by creating more money.

I'm saying we can solve the problems associated by tight money with more expansionary money.

I'm not going to argue for more money creation when we're sitting at 4.5-5pc nominal income growth--that would cause serious inflation. And everybody know serious inflation is a bitch.

Camnator · January 17, 2015, 05:34:21 AM

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More Than Mortal · January 17, 2015, 05:36:14 AM

Quote from: Camnator on January 17, 2015, 05:34:21 AM

There are plenty of other problems with money that this would only make worse.

Again, when you want to stop espousing bullshit and present something solid, I'll be here.

Camnator · January 17, 2015, 05:38:22 AM

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More Than Mortal · January 17, 2015, 05:39:59 AM

Quote from: Camnator on January 17, 2015, 05:38:22 AM

. . .

I've already told you the money isn't necessarily going to be worth less because of the interaction between supply and velocity. I've already told you that the high levels of debt are caused by government spending from around 2000 onward.

The only person who needs to read the conversation is you.

Camnator · January 17, 2015, 05:42:10 AM

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More Than Mortal · January 17, 2015, 05:54:06 AM

Quote from: Camnator on January 17, 2015, 05:42:10 AM

I don't see how you are confused.

I'm not, you are.

The value of money doesn't change when demand increases proportionally with supply. It's the same for anything else in the economy. If you increase the demand for tomatoes 100pc and then increase supply 100pc, it'll remain the same price.

Camnator · January 17, 2015, 06:02:21 AM

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More Than Mortal · January 17, 2015, 06:43:17 AM

Quote from: Camnator on January 17, 2015, 06:02:21 AM

such as why demand is changing and whether or not the changes are either productive or handled correctly

I don't think you understand money demand. . .

Camnator · January 17, 2015, 07:25:05 AM

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More Than Mortal · January 17, 2015, 07:35:00 AM

Quote from: Camnator on January 17, 2015, 07:25:05 AM

I do when it works and is regulated by free people, not tyrannical entities that constantly abuse us.

Okay you really don't understand money demand. Money demand is regulated by the people.

Camnator · January 17, 2015, 07:36:22 AM

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More Than Mortal · January 17, 2015, 07:37:24 AM

Quote from: Camnator on January 17, 2015, 07:36:22 AM

And the government controls quantitative easing, I've already told you there are many problems, and they are all connected. The people DON'T control money at all, that has been my entire point.

Except we're talking about money demand at the moment. . . Which quantitative easing responds to.

It's like you haven't been reading the thread, or you don't understand economics.

Probably both.

Camnator · January 17, 2015, 07:40:13 AM

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More Than Mortal · January 17, 2015, 07:46:00 AM

Quote from: Camnator on January 17, 2015, 07:40:13 AM

I don't care about money demand

Well that just tells me all I need to know, to be honest.

Rejecting an entire part of the M x V = P x Y equation isn't going to lead you to a good understanding of monetary economics. But everybody here already knows you have no idea what you're talking about, and base all of you political views on Stefan Molyneux's videos.

Nick McIntyre · January 17, 2015, 07:55:30 AM

Quote from: Camnator on January 17, 2015, 07:54:32 AM

Quote from: Meta Cognition on January 17, 2015, 07:46:00 AM
Quote from: Camnator on January 17, 2015, 07:40:13 AM
I don't care about money demand
Well that just tells me all I need to know, to be honest.

Rejecting an entire part of the M x V = P x Y equation isn't going to lead you to a good understanding of monetary economics. But everybody here already knows you have no idea what you're talking about, and base all of you political views on Stefan Molyneux's videos.

Except I know exactly what I'm talking about which is why you can't even make an argument and have no idea what you're talking about. You fantasize and imagine yourself being intelligent over most of the other losers here, some major accomplishment that is, when in reality you're just another pathetic squirt that wants to be special and whore attention on internet forums because your life is that miserable. Your entire argument is invalid because the very fabric of it does not work. The economy of the world has already failed, and it will never be corrected without completely starting anew. You're so far behind in understanding you don't even realize it. I genuinely feel sorry for your simple mind. Enjoy your delusions, though. At least all of the other obsessed fools on here will give you support. I know you will never accept the truth and will continue remaining in your cognitive dissonance as always. Of course you would make things up about me because I prove you wrong and embarrass you.

>Trolling this hard in Serious.

Camnator · January 17, 2015, 07:56:13 AM

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