The same thing happened after QE1.
I don't recall anyone on TV predicting this would happen (either after QE1 or after QE2).
QE2 Ends - Treasury Rates Fall
Moderator: Global Moderator
QE2 Ends - Treasury Rates Fall
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: QE2 Ends - Treasury Rates Fall
I thought all of a sudden China was going to "decide" to stop funding our confetti operation.
The foreign-held debt crisis is one I still have yet to hear a decent argument for... as long as we spend $$'s in other countries (ie, China), they'll have to put it somewhere. They'll either buy our bonds or our stuff (or invest here). If the former, we won't have a debt crisis, if the latter, our balance of trade turns around and our factories start producing for Chinese consumers.
Somehow, pundits seem to miss the part where US goods are actually demandend beyond our productive capacity and our unemployment rates drop to 4% before we get to hyperinflation.
The foreign-held debt crisis is one I still have yet to hear a decent argument for... as long as we spend $$'s in other countries (ie, China), they'll have to put it somewhere. They'll either buy our bonds or our stuff (or invest here). If the former, we won't have a debt crisis, if the latter, our balance of trade turns around and our factories start producing for Chinese consumers.
Somehow, pundits seem to miss the part where US goods are actually demandend beyond our productive capacity and our unemployment rates drop to 4% before we get to hyperinflation.
"Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds."
- Thomas Paine
- Thomas Paine
Re: QE2 Ends - Treasury Rates Fall
[quote author=moda0306 link=topic=1183.msg13005#msg13005 date=1310415880
Somehow, pundits seem to miss the part where US goods are actually demandend beyond our productive capacity and our unemployment rates drop to 4% before we get to hyperinflation.
[/quote]
I thought that the unemployment rate was 80% for the Zimbabwe hyperinflation, the Weimer hyperinflation was triggered by a general strike (what unemployment rate does that equate to?). Such classic hyperinflation scenarios come about when supply plummets due to no productive work getting done. If political factors or war damage prevents production then there are fewer goods for the existing $ to chase. The knee jerk reaction of the government is to make sure that the police and tax collectors can get enough food so money gets printed to pay them. In the UK after WWII we had extensive rationing of most goods. My guess is that if we had not done that, we could have had hyperinflation here.
I totally agree that currently there is spare productive capacity standing by that would be brought into use if customers could afford to buy what is being offered. I also think that even if unemployment was to fall below 4%, then even more productive capacity would be created.
Somehow, pundits seem to miss the part where US goods are actually demandend beyond our productive capacity and our unemployment rates drop to 4% before we get to hyperinflation.
[/quote]
I thought that the unemployment rate was 80% for the Zimbabwe hyperinflation, the Weimer hyperinflation was triggered by a general strike (what unemployment rate does that equate to?). Such classic hyperinflation scenarios come about when supply plummets due to no productive work getting done. If political factors or war damage prevents production then there are fewer goods for the existing $ to chase. The knee jerk reaction of the government is to make sure that the police and tax collectors can get enough food so money gets printed to pay them. In the UK after WWII we had extensive rationing of most goods. My guess is that if we had not done that, we could have had hyperinflation here.
I totally agree that currently there is spare productive capacity standing by that would be brought into use if customers could afford to buy what is being offered. I also think that even if unemployment was to fall below 4%, then even more productive capacity would be created.
"Good judgment comes from experience. Experience comes from bad judgment." - Mulla Nasrudin
Re: QE2 Ends - Treasury Rates Fall
I just wanted to draw everyone's attention to the title of this post once again since no one on TV seems to be talking about it.
It's exactly the opposite of what eveyone was certain would happen.
It's exactly the opposite of what eveyone was certain would happen.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: QE2 Ends - Treasury Rates Fall
I've made much more money ignoring market gurus than I ever have listening to them.
Re: QE2 Ends - Treasury Rates Fall
Sometimes I'm very tempted to take small amounts of money and trade exactly opposite the latest bit of punditry...ie, Jim Rogers shorting LTT.LGrand85 wrote:Something I have just really started learning since jumping in the PPcraigr wrote: I've made much more money ignoring market gurus than I ever have listening to them.
"All men's miseries derive from not being able to sit in a quiet room alone."
Pascal
Pascal