will there be a QE 3 ?

I have news for you...its already near 9% now and climbing!

 

I doubt the euro will be around in 10 years time!

 

To original post, yes there will be, and it will work just as well as the last one. And interest rates will remain 0% because we "all" benefit from that. (*)(*)(*)(*)ing joke is the American economy.

 

You need to stop listening to wackos like Peter schiff and Ron Paul.

http://www.tradingeconomics.com/united-states/inflation-cpi

 

That may be true, because Europe isn't an optimal currency area. Greece, Ireland, spain, etc. are hampered in breaking loose from their budget and economic problems being a part of it.

 

there will be a global currency in less than ten years

 

Highly unlikely.

 

Roubini : Good Chance of QE3 by year-end

The probability of QE3 will become "significantly higher" if US economic weakness persists and the stock markets correct 10 percent or more.
"Especially because we cannot do another round of fiscal stimulus, the pressure is going to be on the only policy that is available, which is another round of quantitative easing," Nouriel Roubini told CNBC recently

http://nourielroubini.blogspot.com/...ed:+NourielRoubiniBlog+(Nouriel+Roubini+Blog)

 

Good. Miltie Friedman would approve, as he said about Japan a decade ago.

 

actually, Peter Schiff is a funny guy

 

Cool! You have a sense of humor.

 

as QE 2 ends soon, the economy will slow down more and more....the markets are already anticipating this.....notice the DOW is very stagnant now? Without QE 3 interest rates will start rising as there is no demand for treasuries. This will start a chain reaction similar to 2008. I doubt Bernacke will allow another spectacular collapse worse than in 2008. However, he may be foolish enough to not realize that the economy will collapse without QE 3....in that case he will wait until the collapse happens and then come along with QE 3.....this would be foolish as it will mean even more debt purchases!

 

The smart thing to do (which the GOP will oppose with every fiber of their being) is to do the fiscal spending in a large enough amounts to get the economy back up to growth of the Clinton years, at least. and do it without a GOP-style housing bubble.

 

to suggest the USA will balance the budget anytime soon is to believe in fairy tales. And as for the Clinton years? The only reason there was a surplus was because of all the phoney profits generated by the dot.com bubble.....everything from profits made by underwriters of those dot.com stocks, to profits from speculators, to high salaries generated by the ones fortunate enough to work for those companies.

It all came crashing down of course in 1999!

 

It was an interesting study in unintended consequences that the benefits of a common currency in the EU wasn't weighed against the disadvantage faced by these small economies of not being able to devalue their currency to get them out of debt crisis.

I suspect everybody assumed the benefits exceeded the risk of turndown of this magnitude. Or maybe they didn't even contemplate how the euro would bar devaluation as a strategy to deal with it for the smaller economies.

What is shameless is how conservatives are using the Greece crisis to promote their budget hawkery. It's comparing apples to drachmas.

 

Well, we've heard this before. With so few dollars in the hands of consumers, deflation remains the real risk, not inflation. Getting cash into the hands of the lower brackets should be the number one priority, starting with a nice big tax hike on billionaires.

 

I've seen some arguments that being a part of the EU can be a way for governments to show that they are worthy of foreign investment because the EU membership means stability. I'm sure you've read about how assymetric shocks have thrown all of that to the wind.

 

bank on it.

 

Like the people who believed in this?

No thanks.

 

No Keynesian Economist in Government (be it the Fed, WH Economic Council, or even 1 congressional critter on the liberal side has actually came out and said we need to save in the good times. They talk about increasing spending in good times or bad. It's why our Federal budget has increased by 2 fold over 15 years (good and bad years) as federal wages increase by the rate of inflation. But here is an example..

Bush's last budget (2009) was $3.1 trillion, Obama's budget for 2012 will be $3.7 trillion. That's before any future stimulus or extras that come down the pipeline.

But hey.. that's increased spending right? What more do you want? Another trillion tossed down the drain and the Fed to pump another couple trillion into the markets? Failed the first, think it's gonna work a 2nd time?

Really? I am pretty sure, I told you QE2 will fail. In fact.. I can go back to 2007/8 on another form ran by Viv and I laid point by point what would happen to the economy both in the US and Europe, minus Ireland as Ireland got bullied into accepting a bailout due to Portugal and Spain.

Since your Keynesian brethren were doing real work and studying outcomes how did the Fed (and no Alan Greenspan is not a Free Market guy), and every Economist from Paul Krugman to Joesph Stiglitz calling for Greenspan and Bush to pump the housing market in the early 2000's or some kind of increased spending miss the outcome in their models?

Oops

When that (*)(*)(*)(*)(*)(*)bag owns up to his studying failing and he never using models just his mouth.. then we'll talk about who's correct cause I and other Austrians aren't looking like jackasses who called for what is a 2nd depression.

You mean the tax increases, which raised the vat to 23% and going after people who have swimming pools?

Or not replacing Government workers when they choose to leave work?

State enterprises cutting overhead costs (imagine that, making something profitable for the state?)

Reforms in hospitals, co-payments, and applying the extended negative list of non-reimbursable pharmaceutical products? Pay attention Americans (Obamacare will turn out this way)

Privatization? Really hasn't started, reforms to their banking sectors haven't started either as the world is waiting to see what the US does.

Labor market reforms? Hmm, arbitration and collective bargaining laws were passed in December way to early to know.

The only harmful thing asked of them was opening their "closed" professions. But they had to at some point as it's kinda a big issue in the EU since other countries have opened them.

A big deal that still hasn't taken place and the cause of the current scramble to bailout Greece again is that..Greece has yet to give accurate information in statistical reporting. So nobody really knows how much debt Greece actually had at the start.. it could easily be at 150% of GDP before austerity.

 

I don't know who "talks about this", but classic Keynesianism involves running deficits if necessary in economic turndowns, and not doing so when the economy is expanding.

 

Democratic Presidencies have generally had more balanced budgets than Republican Presidents, particularly when the GOP controlled one or both houses of the legislature.

Proving the lost revenues and added necessity of spending for people needing help in a GOP inspoired housing bubble are extremely expensive. I know... you Austrians can't accept that Laissez Faire failures cost a ton of money. BTW, you included the whole Federal budget and not just the discretionary budget.

Bush: $1.21 trillion (2009)
Obama: $1.378 trillion (2010)

Remember, this was in the face of a near free fall in the economy left over from the GOP housing bubble bursting. Conservatives can't manage money. Just on population gains alone, the spending isn't a huge increase on Obama's part. And Census costs were added in to it.

Many on the President's Council of Economic Advisors, and most economists outside of it said the stimulus spending had to be $1.2 trillion, not the $787 bnillion it was. And 1937 and WWII still prove that spending works. 75 years of proof isn't enough for you, but you're going to cherry pick the one time spending was too small to overcome the second largest financial/stock market crash in our history.

QE2 needed higher inflation targets to be more effective. But economists aren't calling it a failure. In fact, Milton Friedman would be beating the drum for QE3 right now.

So Paul Krugman wonders who is actually going to call for more fiscal spending at the end of the article... after excoriating Bush for running up deficits and pointing out the fact that Greenspan's only means in that environment is to start a housing bubble to inflate the e conomy for a while. Aren't you just the brilliant one missing the point of the article? Cripes...

Your failure is that Krugman wrote some things that showed your reading comprehension is putting more into it that what the man actually said. And on top of that, you believe in a complete failure of an economic theory.

Pretty dumb, but what do you want from supply-siders and austrians?

How many months and years would it take to train them? and who would train them? and would Greeks in enough numbers even be the kind of traitors to their people to even want to take those jobs under those circumstances?

Can't say I agree with for-profit governing.

Because americans, the private health care sector already did all of that, and for 1/3 -1/2 more of the costs!

Privatization hasn't worked in very many places at all it's been done. Unless higher costs to customers, (*)(*)(*)(*)ty service and high profits for the newly private companies, along with the subsidies to keep them afloat, are what you want.

If they disengaged from the euro, they'd have the monetary policy to offset higher labor costs. No need for union busting and other means to steal the rights of working people and make them less free, like the Austrians would like to see happen to people around the world.

I'm not defending the practice or condemning it, but its another problem with the EU membership that can cause problems within a nation's own sovereign state.

And after austerity it will rise more. Bad policy. Bad Austrian and supply-side economics.

 

First, most politicians are Keynesian's or semi-Keynesian's. They LOVE to spend. So obviously they are going to be more likely to support any program that spends more.
And most economists COMPLETELY missed the housing crash and stock market collapse. So what they think means little if not nothing at all.
The only one's whose word should mean anything should be those who accurately foresaw the mess that was coming.

And two) from mid-1933 until mid-1942, the DOW went from over 108 to under 93. That is a loss of 13% in ten years. http://stockcharts.com/freecharts/historical/djia1900.html
Also, during that time, the unemployment rate averaged roughly 18%.
I hardly call that proof that spending works - quite the opposite.

Compare that to the 1920/21 recession/depression. Governments balanced the budget and left the economy to fix itself basically. The result? Within 18 months it was over and within 3 years the economy was stronger then when the recession had begun - all with a budget surplus.

http://en.wikipedia.org/wiki/Depression_of_1920–21


Now I agree with some of the measures FDR took - you cannot just allow your people to starve. But America has averaged a recession every 4 to 6 years for it's entire history and every single one of them she got out of. The vast majority of them without any government help.

 

But not for the sake of spending. The advise spending on things that help to bring "full employment", relatively low inflation, economic growth and taking care of deficits and debt. Supply-siders and Austrians, not so much.

If this is going to turn into a circle jerk for Peter Schiff and other crackpots, i'm not playing along.

again, like taking a little penicillin, a little money doesn't cure the illness. But when the largest spending program ever enacted in ther history of the world went and broke the back of the Great depression, and 40 years or relative growth ensues from Keynesian policies, I'd say that spending works.

The austrians love this recession, but they never seem to know what caused it...

There's a huge difference between pre-WWII recession/depression cycles, and the cycles up to the time of financial deregulation of the 1980s-90s. And the recessions after WWII to the Reaganista Era have been relatively shorter and less deep. so its important to identify what the causes are for different recessions, and the different measures to end them. It's not always fiscsal policy (except to keep people from starving, as you said), because sometimes monetary policy works it out. The current situation of a liquidity trap and lowered demand means that fiscal policy is the best means to fix the situation, along with good regulation and funded regulators.

 

The facts are the facts.

Between mid-1933 and mid-1942 the DOW LOST 13%. And unemployment averaged roughly 18%. And that is despite the New Deal.
If you want to call that a success - that is your prerogative.
I call that a failure.

The 1920/21 recession ended in 18 months with ZERO spending.

This mess has gone on from 2007 until today and despite the government/Fed spending FAR more on a per capita basis then FDR did during the New Deal, the unemployment rate is stalled at roughly 9% (and going up), the housing market is still going down (and some say has gone into a second recession), the trade deficit is at a record, inflation is going up and the deficit is skyrocketing.

These are facts.

Now if you wish to call these facts a sign of success? Go ahead.

I will not.

I realize people on chat forums like to debate theories. I generally do not. I am usually only interested in verifiable facts/proof. Now, if you have links to unbiased proof that proves these facts wrong - I would honestly like to see them.

Short of that, and with respect, I have stated what I wish to state on this.