Skip to main content

View Diary: Fed's rumored "QE4" could circumvent the GOP (18 comments)

Comment Preferences

  •  WRONG (2+ / 0-)
    Recommended by:
    FG, bondibox

    The housing market deflation has caused great harm to a generation of homeowners.

    Fed and/or Congressional action is/was required to counteract these extremely harmful market forces.

    The Fed actions are precisely an attempt to create inflation for an economy that lost 10% of GDP.

    The Fed actions are an attempt to provide something to our ailing economy beyond the austerity measures espoused by the GOP.

    Lastly, your notion that, "You can't keep inflating the money supply without it eventually causing serious inflation," is based on what fact?

    The Fed may have increased the money supply, but they also exchanged this newly minted cash for other assets.  The Fed has purchased mortgage-backed securities that are paying them interest.  The Fed is making money from the money they've printed.  All the Fed has done is put cash in place of what the market believes is worthless paper.  Banks can loan against cash, but have a difficult time loaning against questionable commercial paper.

    The issues surrounding fixed-income and savings are unintended consequences.  If our economy fails again: no pension fund will be able to keep pace with obligations, social security will take in far less than necessary for future generations, and we will be providing current beneficiaries with far more than the market should provide them.  In other words, you're missing the forest through the trees.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site