The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

There is no growth anyway. Bit of inflation would generate pay rises for the 99% and generate economic growth. Losers would be the 1%. They do nothing with their money at the moment.

The winners would be the 1% if interest rates rise. They are the ones with the money to buy bonds.

Can you explain how raising interest rates would increase inflation?

inflation would be the way to raise ratesbut debt issuance would have to stop cos debt is driving rates down.

You are not making sense to me.

How can Trump raise interest rates without decreasing inflation and without further debt issuance, which as you say drives the rates he is trying to raise, down?

Trump can implement inflationary policies like loosening fiscal constraints and spending government money with abandon or giving all public employees a 10% pay rise.
If inflation rises rates go up.
The Fed is trying to raise rates without success cos there is no inflation....

Think about the debt in terms of heifers. Heifer prices are very high at the moment. FG farmers are making a lot of money at the mart.
Trump comes along and implements policies that favour sheep farmers. Heifer prices fall. FG farmers lose money.

If inflation turns up bond prices fall and that will hit the 1%
no financial asset  has an intrinsic price. Bond prices can fall back to 100. Nobody will die

If Trump starts by 'loosening fiscal restraints and spending government money with abandon or giving all public employees a 10% pay rise' he will have to borrow more trillions to do that. He will then have to pray that it works better at generating inflation than QE did or the US economy and the dollar will collapse. May money would be on the latter.

Marxism won't go down well with the GOP either.

Oh, and people would die. There are always unintended consequences.

[seafoid]

There is no growth anyway. Bit of inflation would generate pay rises for the 99% and generate economic growth. Losers would be the 1%. They do nothing with their money at the moment.

The winners would be the 1% if interest rates rise. They are the ones with the money to buy bonds.

Can you explain how raising interest rates would increase inflation?

inflation would be the way to raise ratesbut debt issuance would have to stop cos debt is driving rates down.

You are not making sense to me.

How can Trump raise interest rates without decreasing inflation and without further debt issuance, which as you say drives the rates he is trying to raise, down?

Trump can implement inflationary policies like loosening fiscal constraints and spending government money with abandon or giving all public employees a 10% pay rise.
If inflation rises rates go up.
The Fed is trying to raise rates without success cos there is no inflation....

Think about the debt in terms of heifers. Heifer prices are very high at the moment. FG farmers are making a lot of money at the mart.
Trump comes along and implements policies that favour sheep farmers. Heifer prices fall. FG farmers lose money.

If inflation turns up bond prices fall and that will hit the 1%
no financial asset  has an intrinsic price. Bond prices can fall back to 100. Nobody will die

If Trump starts by 'loosening fiscal restraints and spending government money with abandon or giving all public employees a 10% pay rise' he will have to borrow more trillions to do that. He will then have to pray that it works better at generating inflation than QE did or the US economy and the dollar will collapse. May money would be on the latter.

Marxism won't go down well with the GOP either.

Oh, and people would die. There are always unintended consequences.

7
Muppet the US can issue debt indefinitely. the market will buy it . they will buy any shite. Sure look at Irish bonds trading at 90bps ...
If money goes to the 99% inflation is guaranteed. Sending it to the 1% is deflationary

[muppet]

If money goes to the 99% inflation is guaranteed.

What money?

Again, what money?

QE is debt. That is the problem with QE and why it doesn't work.

If you give money to the 99% will it be debt or free money?

[seafoid]

If money goes to the 99% inflation is guaranteed.

What money?

Again, what money?

QE is debt. That is the problem with QE and why it doesn't work.

If you give money to the 99% will it be debt or free money?

The money that is on the asset side of the balance sheet that issues debt. Central Banks are printing money 24/7
QE is money and debt. The problem is who it goes to.

[seafoid]

Muppet re bonds price is present value of cash flows.

Say a bond issued at 5% 5 years ago with 10 years to go .
Cash flows are 5 5 5 5 5 5 5 5 5 100
If interest rates were 5% price would be 100
if interest rates were 2% the price would be higher than 100
If interest rates were 7% the price would be lower than 100.

When rates go up bond prices fall
When rates go down bond prices go up

Supply of bonds drives bond yields down as well.
This is the bond trap

[muppet]

If money goes to the 99% inflation is guaranteed.

What money?

Again, what money?

QE is debt. That is the problem with QE and why it doesn't work.

If you give money to the 99% will it be debt or free money?

The money that is on the asset side of the balance sheet that issues debt. Central Banks are printing money 24/7
QE is money and debt. The problem is who it goes to.

QE isn't really money.

http://www.cnbc.com/id/100760150

I think you are talking about printing and giving free money to 'the 99%'. If not, I apologise. But if you are, I'll leave it there.

[seafoid]

If money goes to the 99% inflation is guaranteed.

What money?

Again, what money?

QE is debt. That is the problem with QE and why it doesn't work.

If you give money to the 99% will it be debt or free money?

The money that is on the asset side of the balance sheet that issues debt. Central Banks are printing money 24/7
QE is money and debt. The problem is who it goes to.

QE isn't really money.

http://www.cnbc.com/id/100760150

I think you are talking about printing and giving free money to 'the 99%'. If not, I apologise. But if you are, I'll leave it there.

QE is money. Most money these days is electronic.

Central Banking today is about increasing the monetary base because Friedman said it was the dog's bollocks. But the Central Bankers do not understand how the economy works.   
There is the real economy of cash and the imaginary financial economy of asset prices.
Financial money has drowned the real economy.

[muppet]

QE is money in return for a bond, which has to be repaid. It is a very cheap loan. The only people benefitting from QE are the advisors, brokers and agents etc who all get fees. The economy isn't borrowing any more so it doesn't work. I am not disputing that.

But what Trump is proposing is completely different. You seem to be arguing for Trumps plan to raise interest rates, but can't explain how he will do this without adverse affects.

If anyone prints money, we are likely to get inflation, hyper-inflation. Ask Mugabe. And the Germans.

[seafoid]

QE is money in return for a bond, which has to be repaid. It is a very cheap loan. The only people benefitting from QE are the advisors, brokers and agents etc who all get fees. The economy isn't borrowing any more so it doesn't work. I am not disputing that.

But what Trump is proposing is completely different. You seem to be arguing for Trumps plan to raise interest rates, but can't explain how he will do this without adverse affects.

If anyone prints money, we are likely to get inflation, hyper-inflation. Ask Mugabe. And the Germans.

Muppet we have already had massive expansion of the monetary base and no inflation.
http://www.tradingeconomics.com/euro-area/money-supply-m1

Why? Cos the money goes straight to the rich. It blows up the value of their assets.
and does nothing for anyone else

We need inflation. Otherwise the whole thing will blow up.

[muppet]

QE is money in return for a bond, which has to be repaid. It is a very cheap loan. The only people benefitting from QE are the advisors, brokers and agents etc who all get fees. The economy isn't borrowing any more so it doesn't work. I am not disputing that.

But what Trump is proposing is completely different. You seem to be arguing for Trumps plan to raise interest rates, but can't explain how he will do this without adverse affects.

If anyone prints money, we are likely to get inflation, hyper-inflation. Ask Mugabe. And the Germans.

Muppet we have already had massive expansion of the monetary base and no inflation.
http://www.tradingeconomics.com/euro-area/money-supply-m1

Why? Cos the money goes straight to the rich. It blows up the value of their assets.
and does nothing for anyone else

We need inflation. Otherwise the whole thing will blow up.

Can you show us how 'the money goes straight to the rich' please?

As far as I can see, QE is simply cheap loans (bond buying) to banks created out of thin air. But the money and interest has to be repaid (although apparently none of it has been and there are those that argue it never will).

The problem is that the high street banks don't want to lend, due to over-concern about risk, after the crash (just as they had too little regard for risk before the crash) and also because most people are unwilling to borrow unless absolutely necessary.

The only solution is to force banks to lower their lending standards, which caused the last bubble, or something different like debt write-offs, which has opponents everywhere and on all sides of the political spectrum.

[seafoid]

Muppet something like 60% of bonds in the US are owned by the richest 1%. They own at least 50% of shares.
QE goes straight through for bonds
For shares it goes via buybacks. There was usd 1 trillion in buybacks last year.
And Hillary Clinton is funded by these people. 

[muppet]

Muppet something like 60% of bonds in the US are owned by the richest 1%. They own at least 50% of shares.
QE goes straight through for bonds
For shares it goes via buybacks. There was usd 1 trillion in buybacks last year.
And Hillary Clinton is funded by these people. 

What the 1% does amongst themselves is of no interest to me. I see it as a waste of time being angry at royalty being all regal.

Beyond wagging the finger at these people, what should we do?

[armaghniac]

Muppet something like 60% of bonds in the US are owned by the richest 1%. They own at least 50% of shares.
QE goes straight through for bonds
For shares it goes via buybacks. There was usd 1 trillion in buybacks last year.
And Hillary Clinton is funded by these people. 

What the 1% does amongst themselves is of no interest to me. I see it as a waste of time being angry at royalty being all regal.

Beyond wagging the finger at these people, what should we do?

Retailers "announcing jobs" or going bust rarely affects total retail employment much. These stores are OK, once the rent has been renegotiated.

[seafoid]

Muppet something like 60% of bonds in the US are owned by the richest 1%. They own at least 50% of shares.
QE goes straight through for bonds
For shares it goes via buybacks. There was usd 1 trillion in buybacks last year.
And Hillary Clinton is funded by these people. 

What the 1% does amongst themselves is of no interest to me. I see it as a waste of time being angry at royalty being all regal.

Beyond wagging the finger at these people, what should we do?

Get ready for when it all goes tits up

[muppet]