Auckland stays near top of unaffordable list - Check out Hong Kong
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The problem is the structure of the whole financial system. We all have to keep on borrowing in order to keep the whole ponzi scheme going. Not just the USA but everyone. The scheme will keep on going as long as we continue to run to the US dollar. The day we loose confidence in the US$ is the day we will have the biggest financial crisis to date... One day it will happen.
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The solution, stop spending money on offense sorry I mean defense, stop fighting illegal wars, stop bailing out banks, get corporations to pay tax, ban lobbyists from finding loopholes ensuring the likes of Starbucks get away scot-free. The solutions are simple, just not popular to the 1% elite. Will this ever happen, like f@ck it will, the point of this post is?
Last edited by Threethirty; 27th Jan 2013 at 13:52.
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Flyingkiwi,
George W. borrowed about $9000bn in his 8 years and Obama has put on just over $7000bn in his first 4 years. The point to note is the debt trajectory under Obama and the effect of compounded interest rates. There is plenty of blame to go around, so neither Democratic nor Republican are blameless here.
However, Obama is President and responsibility rests with him. I find it amazing that around every table in America, families discuss their finances and make a plan around some basic principles, like,
1. A scenario of spending more than you earn is not sustainable. It is not acceptable to say you need to save money and then move the conversation to what coloured car you are buying.
2. If you need to raise your overdraft limit to ensure you can pay your mortgage, you have a problem.
3. The only way to fix a financial problem is to write a budget and stick to it.
These principles are so obvious to individual citizens, yet on a national level, look at the performance of Congress (both Parties)
1. Both parties agree they have a problem, yet neither party has promoted a comprehensive plan to raise revenues and cut spending. In any conversation. both parties pay lip service to debt and quickly move to talking about raising spending.
2. Last week Obama stated he needed Congress to raise the debt ceiling to ensure America can pay its debts. Not one member of the Press picked up on the story. Would you be happy to borrow money to make your mortgage payments?
3. The Obama administration has not produced a Budget for nearly 4 years. America has no fiscal plan. America has spending policies, a fixed income and borrows to cover the shortfall.
Why should we care? Whether Frogman likes it or not, the US is the World's number 1 economy and if they catch a cold, we catch pneumonia. Also, the US is the "goto" country in time of crisis. If they go into full austerity, in time of crisis the America presence, whether Military, Diplomatic or Humantarian will be sorely missed.
I find it amazing that many people are concerned about Climate Change and the planet they leave their children, yet and completely blind to the debt mountain they will leave their children. Climate change may have a profound effect in 50 years or so, but this debt will have an effect in 10 years.
George W. borrowed about $9000bn in his 8 years and Obama has put on just over $7000bn in his first 4 years. The point to note is the debt trajectory under Obama and the effect of compounded interest rates. There is plenty of blame to go around, so neither Democratic nor Republican are blameless here.
However, Obama is President and responsibility rests with him. I find it amazing that around every table in America, families discuss their finances and make a plan around some basic principles, like,
1. A scenario of spending more than you earn is not sustainable. It is not acceptable to say you need to save money and then move the conversation to what coloured car you are buying.
2. If you need to raise your overdraft limit to ensure you can pay your mortgage, you have a problem.
3. The only way to fix a financial problem is to write a budget and stick to it.
These principles are so obvious to individual citizens, yet on a national level, look at the performance of Congress (both Parties)
1. Both parties agree they have a problem, yet neither party has promoted a comprehensive plan to raise revenues and cut spending. In any conversation. both parties pay lip service to debt and quickly move to talking about raising spending.
2. Last week Obama stated he needed Congress to raise the debt ceiling to ensure America can pay its debts. Not one member of the Press picked up on the story. Would you be happy to borrow money to make your mortgage payments?
3. The Obama administration has not produced a Budget for nearly 4 years. America has no fiscal plan. America has spending policies, a fixed income and borrows to cover the shortfall.
Why should we care? Whether Frogman likes it or not, the US is the World's number 1 economy and if they catch a cold, we catch pneumonia. Also, the US is the "goto" country in time of crisis. If they go into full austerity, in time of crisis the America presence, whether Military, Diplomatic or Humantarian will be sorely missed.
I find it amazing that many people are concerned about Climate Change and the planet they leave their children, yet and completely blind to the debt mountain they will leave their children. Climate change may have a profound effect in 50 years or so, but this debt will have an effect in 10 years.
Last edited by Liam Gallagher; 27th Jan 2013 at 14:52.
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Threethirty
The basic numbers are the US receives $2500bn in Revenues and spends $3800bn, so consequently borrows $1300bn to balance the budget.
Let's debunk a few myths,
1. Defence spending is $900bn. If the US spent no money on Defence, they would still need to borrow money.
2, Social Security costs are rising rapidly and sit at about $1500bn. An aging population and rising medical costs are prime causes in increased spending. Regarding medical costs, more money is spent in the final year of life, than the the other years of their life combined.
3. More than 50% of babies are born to unmarried mothers. Statistically, children from fatherless families fare badly economically in later life and are more likely to become a net-taker from the State.
4. The bailout cost about $1000bn. However, it preserved a lot of jobs and companies and the consequent tax revenues. Whether that was worth doing is debateable, however can you or any else say with certainty how the economy would have fared without the bailout?
5. The US GDP is $17,000bn. The 1%ers represent $170bn of the US economy, so even if you taxed them at 100%, you so do not even dent the national debt. The Starbuck's issue does remind us that if you raise taxes too much, taxpayers move to jurisdictions that have lower taxes. This is not a loophole, but the reality of a modern globalized economy. Don't believe me, just walk through Soho in Hong Kong on a Friday night.
In short, the popular media will focus on Defence spending, bad mouth Wall Street and promote the idea of taxing the 1%ers, but the US needs to come to terms with a rapidly aging population, expanding healthcare costs and an exploding subculture of people who will always be a drain on the Budget.
Boring, unpalatable, even unelectable, but true.....
Let's debunk a few myths,
1. Defence spending is $900bn. If the US spent no money on Defence, they would still need to borrow money.
2, Social Security costs are rising rapidly and sit at about $1500bn. An aging population and rising medical costs are prime causes in increased spending. Regarding medical costs, more money is spent in the final year of life, than the the other years of their life combined.
3. More than 50% of babies are born to unmarried mothers. Statistically, children from fatherless families fare badly economically in later life and are more likely to become a net-taker from the State.
4. The bailout cost about $1000bn. However, it preserved a lot of jobs and companies and the consequent tax revenues. Whether that was worth doing is debateable, however can you or any else say with certainty how the economy would have fared without the bailout?
5. The US GDP is $17,000bn. The 1%ers represent $170bn of the US economy, so even if you taxed them at 100%, you so do not even dent the national debt. The Starbuck's issue does remind us that if you raise taxes too much, taxpayers move to jurisdictions that have lower taxes. This is not a loophole, but the reality of a modern globalized economy. Don't believe me, just walk through Soho in Hong Kong on a Friday night.
In short, the popular media will focus on Defence spending, bad mouth Wall Street and promote the idea of taxing the 1%ers, but the US needs to come to terms with a rapidly aging population, expanding healthcare costs and an exploding subculture of people who will always be a drain on the Budget.
Boring, unpalatable, even unelectable, but true.....
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You're way off the mark on the bailout costs, the actual figures are in the region of 29 trillion dollars L. Randall Wray: Bernanke's Obfuscation Continues: The Fed's $29 Trillion Bail-Out Of Wall Street given to finance houses. Most of the debt incurred by Obama, all 6 trillion dollars of it, has gone to the banks. Bailing out banks has not saved jobs it has destroyed them. The post bailout world has given us sluggish to zero growth, excessive inflation and propping up off stale, zombie like, parasitical enterprises such as Bank of America and Citi bank. The current reality in the US as I have discussed is not conducive to a thriving economy, America is now a kleptocratic hell hole run by oligarchs. The constant bailouts/QE combine to suck the lifeblood out of the economy, Obamacare meanwhile has created a bureaucratic minefield for small companies making it increasingly difficult and expensive for them to employ anyone.
The only jobs saved have been for bank employees who created the mess we are in today. Moral hazard doesn't come close to describing the assault on our liberties incurred by this event. Using the US as an example, employment has nosedived, the 7.8 million unemployed is a figure which only a moron would believe. If not unemployed the populace can look forward to a part time job in Walmart, retiring in their 70's and picking up food stamps to supplement their meagre income.
You mentioned that if pushed to pay tax companies would move away from the US, then why not let them? What has the country got to lose, certainly not tax money! It is not acceptable for corporations to not pay their fair share of tax, Goldman Sachs pays less than 1% for f@ck sake. I find it incredible that anyone would condone this behaviour from fat-cats.
At some point ethics has to take centre stage. Do we honestly condone what has happened in the world? Is it right to reward fraud and corruption? What example is this setting for future generations? I commonly find that when talking about these issues with people in Hong Kong; opinions often tend to side with the corporate angle rather than that of individual sovereignty, an unfortunate reminder of just how much moral slippage exists is this place.
Visualizing The True Cost Of The First Bank Bailout: $3.5 Trillion And Rising At Over $1 Trillion Every Year | Zero Hedge
The true cost of the bank bailout | Need to Know | PBS
Alternate Unemployment Charts
The only jobs saved have been for bank employees who created the mess we are in today. Moral hazard doesn't come close to describing the assault on our liberties incurred by this event. Using the US as an example, employment has nosedived, the 7.8 million unemployed is a figure which only a moron would believe. If not unemployed the populace can look forward to a part time job in Walmart, retiring in their 70's and picking up food stamps to supplement their meagre income.
You mentioned that if pushed to pay tax companies would move away from the US, then why not let them? What has the country got to lose, certainly not tax money! It is not acceptable for corporations to not pay their fair share of tax, Goldman Sachs pays less than 1% for f@ck sake. I find it incredible that anyone would condone this behaviour from fat-cats.
At some point ethics has to take centre stage. Do we honestly condone what has happened in the world? Is it right to reward fraud and corruption? What example is this setting for future generations? I commonly find that when talking about these issues with people in Hong Kong; opinions often tend to side with the corporate angle rather than that of individual sovereignty, an unfortunate reminder of just how much moral slippage exists is this place.
Visualizing The True Cost Of The First Bank Bailout: $3.5 Trillion And Rising At Over $1 Trillion Every Year | Zero Hedge
The true cost of the bank bailout | Need to Know | PBS
Alternate Unemployment Charts
Last edited by Threethirty; 27th Jan 2013 at 21:05.
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330,
US corporations pay the highest corporate tax rates in the world. That is NOT the problem! Why do you think so many of them move their holdings overseas? They are trying to avoid punishing taxes. I really think you have only to look at Hong Kong to find a simple and fair taxation scheme. Maybe in the US the rate would have to be more like 20-25% instead of 15%, but it could work.
US corporations pay the highest corporate tax rates in the world. That is NOT the problem! Why do you think so many of them move their holdings overseas? They are trying to avoid punishing taxes. I really think you have only to look at Hong Kong to find a simple and fair taxation scheme. Maybe in the US the rate would have to be more like 20-25% instead of 15%, but it could work.
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Threethirty
I could trawl the Internet and find links to support my argument, indeed I could trawl the web and find links to prove the moon is made of green cheese, however I am not going to.
If you choose to believe the US Government, who receives $2,500bn a year in revenue, found $29,000bn stuffed behind the sofa to bail out Wall Street (who has a market cap of only about $16,000bn) then you go right ahead and believe that. Surely, if the US could generate that amount of cash, then there is no fiscal problem in the US. The whole US debt must be a myth, because Wall Street no longer requires bailouts and the US could easily repay their national debt of $16,400bn.
Again, the argument regarding taxing so called US companys is well rehearsed, but utter nonsense. If it was easy to write legislation to compel companies, who are global entities, to pay US taxes, that legislation would have been written decades ago.
You are free to blame to the bailout, the War against Terror, big business not paying what you deem to be an appropriate amount of US Tax, however whilst you are seeking to apportion blame, the debt is mounting, the interest on that debt is mounting, to levels the US can no longer service.
Threethirty, if you are an American with kids, I am sure as your kids struggle with the debt your generation racked-up, they will be very forgiving when you emerge from under your Coffee Table, take off your tinfoil hat and blame the Bailout, American Corporate greed and anyone else you can think of. Much easier to do that than face the fact that the America cannot continue to borrow 40 cents for every dollar it spends.
The only solution is to raise taxes on the middle class and cut entitlement spending.
If you choose to believe the US Government, who receives $2,500bn a year in revenue, found $29,000bn stuffed behind the sofa to bail out Wall Street (who has a market cap of only about $16,000bn) then you go right ahead and believe that. Surely, if the US could generate that amount of cash, then there is no fiscal problem in the US. The whole US debt must be a myth, because Wall Street no longer requires bailouts and the US could easily repay their national debt of $16,400bn.
Again, the argument regarding taxing so called US companys is well rehearsed, but utter nonsense. If it was easy to write legislation to compel companies, who are global entities, to pay US taxes, that legislation would have been written decades ago.
You are free to blame to the bailout, the War against Terror, big business not paying what you deem to be an appropriate amount of US Tax, however whilst you are seeking to apportion blame, the debt is mounting, the interest on that debt is mounting, to levels the US can no longer service.
Threethirty, if you are an American with kids, I am sure as your kids struggle with the debt your generation racked-up, they will be very forgiving when you emerge from under your Coffee Table, take off your tinfoil hat and blame the Bailout, American Corporate greed and anyone else you can think of. Much easier to do that than face the fact that the America cannot continue to borrow 40 cents for every dollar it spends.
The only solution is to raise taxes on the middle class and cut entitlement spending.
Last edited by Liam Gallagher; 28th Jan 2013 at 14:03.
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Taxes have been raised on the middle classes from Jan 1st, do the research, http://www.zerohedge.com/contributed...class-tax-scam meanwhile big companies have been given tax breaks.
The 29 trillion is very real, "only" about 3.5 trillion in bailout money came from the Treasury, the rest came from the Fed which printed money out of thin air to give to the banks. In this regard you make a very important point, if the Fed can give money away to banks from a limitless well of free money, why do we as tax-payees have to pay tax?!
This is the crux of this issue Liam, bankrupt the whole world through fraud and greed and get rewarded but act as a responsible middle class citizen and get pummelled into the ground by the government who expect you to pay for parasitical groups at both extremes of the political spectrum!
As for sources, I didn't need to look hard to find them; simply because there is a wealth of material to support the argument.
This is a must read below!
Guest Post: Apparitions In The Fog | Zero Hedge
The 29 trillion is very real, "only" about 3.5 trillion in bailout money came from the Treasury, the rest came from the Fed which printed money out of thin air to give to the banks. In this regard you make a very important point, if the Fed can give money away to banks from a limitless well of free money, why do we as tax-payees have to pay tax?!
This is the crux of this issue Liam, bankrupt the whole world through fraud and greed and get rewarded but act as a responsible middle class citizen and get pummelled into the ground by the government who expect you to pay for parasitical groups at both extremes of the political spectrum!
As for sources, I didn't need to look hard to find them; simply because there is a wealth of material to support the argument.
This is a must read below!
Guest Post: Apparitions In The Fog | Zero Hedge
Last edited by Threethirty; 28th Jan 2013 at 19:43.
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Threethirty
I think you need to broaden your reading beyond rants on the blogosphere. You also need to understand the difference between Quantitative Easing, the Government providing backing and guarantees and "Printing Money out of thin air".
You appear to float the idea the US can solve its problem by simply printing $16,400bn and pay off the debt and then print a further $1,300bn a year to Fund the Federal deficit. Whilst I not saying an element of printing, with the negative consequences, will be required to solve this, its usefulness is limited. In short, if any government over does the printing they become Zimbabwe!!
Should the US just print $16,400bn and then pay back its creditors, there would be a total loss of confidence in the US dollar and if anyone was to lend money to the US in the future they would insist the loan was in a currency other than $US and the interest rates would be punitive. Printing the equivalent of the annual US GDP would be hugely inflationary globally. If you think HK property is expensive now....
The blog you highlighted was highly emotive, but behind the emotion it is saying exactly what I am saying, US Debt is out of control and the negative effect of that will be felt markedly around the globe. Rather than propose a solution the blog chooses the lazy option of apportioning blame.
Printing is not the solution, Taxing Multinationals is not going to happen. Taxing the 1% must be done, but won't generate enough money. It's time for America to "Eat it's brocolli" and raise its tax revenue and cut its spending. It must accept this will be recessionary, there is no silver bullet.
Given the amount required, the bulk of the US populace, being the middle class, has to be targeted. On the other side of the ledger, spending cuts are required and again given the bulk required, Defence and Social Security Entitlements have to be targeted.
Maggie Thatcher said, "You cant buck the market". The Party needs to end before the International Money Market shuts it down. Put down the champagne and caviar and eat some brocolli.
You appear to float the idea the US can solve its problem by simply printing $16,400bn and pay off the debt and then print a further $1,300bn a year to Fund the Federal deficit. Whilst I not saying an element of printing, with the negative consequences, will be required to solve this, its usefulness is limited. In short, if any government over does the printing they become Zimbabwe!!
Should the US just print $16,400bn and then pay back its creditors, there would be a total loss of confidence in the US dollar and if anyone was to lend money to the US in the future they would insist the loan was in a currency other than $US and the interest rates would be punitive. Printing the equivalent of the annual US GDP would be hugely inflationary globally. If you think HK property is expensive now....
The blog you highlighted was highly emotive, but behind the emotion it is saying exactly what I am saying, US Debt is out of control and the negative effect of that will be felt markedly around the globe. Rather than propose a solution the blog chooses the lazy option of apportioning blame.
Printing is not the solution, Taxing Multinationals is not going to happen. Taxing the 1% must be done, but won't generate enough money. It's time for America to "Eat it's brocolli" and raise its tax revenue and cut its spending. It must accept this will be recessionary, there is no silver bullet.
Given the amount required, the bulk of the US populace, being the middle class, has to be targeted. On the other side of the ledger, spending cuts are required and again given the bulk required, Defence and Social Security Entitlements have to be targeted.
Maggie Thatcher said, "You cant buck the market". The Party needs to end before the International Money Market shuts it down. Put down the champagne and caviar and eat some brocolli.
Last edited by Liam Gallagher; 29th Jan 2013 at 00:55.
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The USA can print until people or govenrments loose confidence in the USD. When they stop buying treasury bonds, the game will be over. The unwind will be very quick and sudden, as they all run for the same exit at the same time.
The Fiat currency system is going to fail again just read you history books to find out why.
Are Fiat Currencies Headed for a Collapse?
The Fiat currency system is going to fail again just read you history books to find out why.
Are Fiat Currencies Headed for a Collapse?
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Threethirty
I think you need to read the link about Midde Class Tax rises more carefully. It was written pre-election and reinforces what I am saying. The removal of the Bush Tax Cuts for those earning $250k (your article), $400k in reality, is largely window dressing. Obama likes to talk up the revenue generated by quoting 10 year figures, but the reality is only $60bn p.a. will be is generated versus a yearly spending deficit of $1300bn.
The 2% increase in FICA came as a surprise to many. Equally, Obamacare starts to kick in. I understand the Obamacare Act was over 1,000 pages long and I am yet to meet anyone who really understands the effect of Obamacare. However, a European style Healthcare system it is not!!
Bottom line, if you think the middle-classes are getting hit post 1 January 2013, do the math. The expired Bush Tax cuts generate $60bn, coupled with 2% FICA rise gives $180bn increased revenues. That increase in revenue does not even pay the interest bill on the current debt.
Such is the scale of the problem.
The 2% increase in FICA came as a surprise to many. Equally, Obamacare starts to kick in. I understand the Obamacare Act was over 1,000 pages long and I am yet to meet anyone who really understands the effect of Obamacare. However, a European style Healthcare system it is not!!
Bottom line, if you think the middle-classes are getting hit post 1 January 2013, do the math. The expired Bush Tax cuts generate $60bn, coupled with 2% FICA rise gives $180bn increased revenues. That increase in revenue does not even pay the interest bill on the current debt.
Such is the scale of the problem.
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Liam,
You are very knowledgeable, and I tip my hat to you. I can't find a single chink in your armor. I hope you are American. We need more like you in our country.
330,
You have allowed anti-business, super-conspiracy blogs to become your information source. I think that is very unwise. Your numbers are wild, and the assignment of blame accomplishes little.
You are very knowledgeable, and I tip my hat to you. I can't find a single chink in your armor. I hope you are American. We need more like you in our country.
330,
You have allowed anti-business, super-conspiracy blogs to become your information source. I think that is very unwise. Your numbers are wild, and the assignment of blame accomplishes little.
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Liam, you've totally misunderstood me, I don't advocate printing money at all, quite the opposite! I was simply highlighting the fact that we live in a world where banks, who caused the crisis, are given free money on a plate whilst the current middle class and future generations have to take it up the rear. Austerity only applies to every person and industry other than finance, that was my point. I abhore money printing and you have made my point for me, by continually bailing out the banks by printing money, the US dollar will eventually collapse.
In addition you mentioned that I was confused about the various forms of supplying money, there is no difference between QE and the Fed giving banks secret bailouts, it's all money printing.
Cxorcist, zerohedge is a well respected blog not some nutter fringe element. You call it anti-business, the only anti-business faction is your current brought and paid for Government and a Federal Reserve that props up "too big to fail" parasitical banks at the expense of every man woman and child in what was once a great Republic. I would speculate that it's not good business sense to hand over upwards of 29 trillion dollars to a corrupt, greedy and brazen element of your economy and if that's not enough; let them dictate to you through threats and bribery what future policy will be! I would say that adequately describes the insestous relationship you know have in the US between those that make the decisions and those that are too well connected to fail, China anyone?
Worth watching below,
Olafur Ragnar Grimsson Iceland president 'Let banks go bankrupt' - YouTube
Daniel Hannan | Occupy Wall Street Debate | Oxford Union - YouTube
In addition you mentioned that I was confused about the various forms of supplying money, there is no difference between QE and the Fed giving banks secret bailouts, it's all money printing.
Cxorcist, zerohedge is a well respected blog not some nutter fringe element. You call it anti-business, the only anti-business faction is your current brought and paid for Government and a Federal Reserve that props up "too big to fail" parasitical banks at the expense of every man woman and child in what was once a great Republic. I would speculate that it's not good business sense to hand over upwards of 29 trillion dollars to a corrupt, greedy and brazen element of your economy and if that's not enough; let them dictate to you through threats and bribery what future policy will be! I would say that adequately describes the insestous relationship you know have in the US between those that make the decisions and those that are too well connected to fail, China anyone?
Worth watching below,
Olafur Ragnar Grimsson Iceland president 'Let banks go bankrupt' - YouTube
Daniel Hannan | Occupy Wall Street Debate | Oxford Union - YouTube
Last edited by Threethirty; 29th Jan 2013 at 09:05.
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Threethirty
The problem i am referring to is the uncontrolled US Debt and the very detrimental effect a failure to bring it under control will have on the World Economy. I don't agree with your views that the cause of this problem was "the banks". It was caused by two successive Presidents spending more than they received and funding the shortfall by borrowing money. Currently the annual revenue received is $2,500bn and the spending is $3,800bn, of which interest on debt is about $300bn (about 12% of revenue). Obama expects to borrow $1300bn this year and is on a trajectory to leave Office with the US owing $22,000bn, which equates to about 150% of GDP which is approaching Greek levels!!
You have told me you don't support "printing money", so what is your solution to the US debt problem?
By the way, QE is very different to "secretly bailing out banks", which you characterized as "printing money". The current round of QE differs from the first 2 rounds of QE on a number of counts, however the current QE involves the Fed "printing" $40bn a month, then using that money to purchase $40bn a month of debt (mortgages/loans) from the banks. As these loans/mortgages are repaid by the banks' customers, their repayments go to Fed who then "unprints" this money. The purpose of this round of QE is not to bail out the banks, but to provide the banks with temporary liquidity (Money) in the believe (hope) they will lend to businesses, thereby creating jobs. The Fed is trying to stimulate the US economy to get people off Social Security and get paying taxes. The current round of QE is actually fixed to the unemployment rate.
I am not saying QE is effective, all I am saying is QE is not printing money "Zimbabwe Style", nor is it a form of bank bailout, nor is secret.
You have told me you don't support "printing money", so what is your solution to the US debt problem?
By the way, QE is very different to "secretly bailing out banks", which you characterized as "printing money". The current round of QE differs from the first 2 rounds of QE on a number of counts, however the current QE involves the Fed "printing" $40bn a month, then using that money to purchase $40bn a month of debt (mortgages/loans) from the banks. As these loans/mortgages are repaid by the banks' customers, their repayments go to Fed who then "unprints" this money. The purpose of this round of QE is not to bail out the banks, but to provide the banks with temporary liquidity (Money) in the believe (hope) they will lend to businesses, thereby creating jobs. The Fed is trying to stimulate the US economy to get people off Social Security and get paying taxes. The current round of QE is actually fixed to the unemployment rate.
I am not saying QE is effective, all I am saying is QE is not printing money "Zimbabwe Style", nor is it a form of bank bailout, nor is secret.
Last edited by Liam Gallagher; 29th Jan 2013 at 14:57.
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The Fed is taking worthless Mortgage Backed Securities (MBS) off the banks, the majority of MBS are linked to foreclosed properties, they are dead in the water. It's not called "cash for trash" for nothing. Why do you think the Fed has to buy them off the banks? It's because they aren't selling them to each other, knowing full well that what lies beneath the veneer is worthless garbage! This is what QE is, a fire-sale of all the sh#t the banksters can't get off their balance sheets.
When you say that QE3/4 is not a bailout because the Fed will eventually get their money back, you're referring to Sterilized versus Unsterilized asset purchases. Sterilized is when an agency buys an asset but does not print outright to obtain the "asset", this would be the case in a swap, one asset for another, as in "Operation Twist". Unsterilized is obviously the opposite of sterilized, in this case the Fed would be buying assets outright from the balance sheets of the so called Too Big to Fail banks. So in your mind QE3/4 is Sterilized. Sadly you're very much mistaken, you've been suckered into believing what the Fed and the Financial Times wants you to believe. The theory you espouse assumes that one day in the distant future, Ben Bernanke and his Federal Reserve will find buyers for these dodgy "assets"; purchased from the insolvent Too Big to Fail banks. To be frank, I seriously doubt that the Fed will ever find anyone in this lifetime or the next to buy this crap, why do you think they had to buy them in the first place? The only solution would be if we could find another planet full of suckers to invest in this garbage but even then you'd probably struggle. In summary then, these purchases are cast iron 100% Unsterilized asset purchases, make no bones about it.
If by some chance you meant that the MBS are still being payed for by homeowners and are somehow worth something, that is unfortunately not true either. Like I said the securities are tied up mostly with sub-prime foreclosed properties which are currently mostly vacant. Like I said, MBS are worthless. Playing devils advocate, if by some slim chance fore-closed upon, sub-prime properties are still occupied and paid for by mortgage payers, then there would still be a market for these toxic derivatives. The fact that these corrupt institutions have to sell them off to the Fed as a last resort, is proof positive that there is absolutely no market for these crappy financial products, other than that provided by the Fed to prop up the very same institutions. That is not capitalism.
As we've seen from the previous three rounds of QE, the banks are not lending money, nor will they in the future. No amount of QE will get them lending, what is the motivation to do this when they can borrow infinite free credit from the Fed at no interest then speculate on the stock Market? QE unlimited has been proven time and time again to do diddly squat for jobs or for the middle class, it's a bank bailout dressed up as an economic fix so the average sheeple while buy it. QE4 is yet another bailout, banks borrow off the Fed for next to nothing; use this money to front run the Fed by buying Treasury bonds, then get rewarded by receiving a fat profit in the ensuing transactions.
I tell you what, let's have this conversation this time next year when the slimy bastards are rolling out QE5/6, will people still believe this is about jobs then? At what point does it become obvious that the Fed is not interested in you and I but their bankster masters instead? They've pulled the biggest stunt on man kind in recent history, they've lied cheated and stolen but then they've twisted and manipulated the facts so that we think the blame lies with us, then they've lied and cheated again by saying that the only solution is to give them even more of the spoils, unbelievable!
Lastly, reference the initial article, the vast majority of the bailout was conducted in secret by the Fed, printing money behind closed doors, it took an audit by the GAO to uncover this, here look: The Fed Audit - Newsroom: Bernie Sanders - U.S. Senator for Vermont, and again: http://www.sanders.senate.gov/imo/me...estigation.pdf. If that's not enough proof I don't know what is!
Yes you're right the entitlement culture has got to stop but unfortunately that's all that's left for a nation that shipped most of it's industry to third world hell holes such as China.
When you say that QE3/4 is not a bailout because the Fed will eventually get their money back, you're referring to Sterilized versus Unsterilized asset purchases. Sterilized is when an agency buys an asset but does not print outright to obtain the "asset", this would be the case in a swap, one asset for another, as in "Operation Twist". Unsterilized is obviously the opposite of sterilized, in this case the Fed would be buying assets outright from the balance sheets of the so called Too Big to Fail banks. So in your mind QE3/4 is Sterilized. Sadly you're very much mistaken, you've been suckered into believing what the Fed and the Financial Times wants you to believe. The theory you espouse assumes that one day in the distant future, Ben Bernanke and his Federal Reserve will find buyers for these dodgy "assets"; purchased from the insolvent Too Big to Fail banks. To be frank, I seriously doubt that the Fed will ever find anyone in this lifetime or the next to buy this crap, why do you think they had to buy them in the first place? The only solution would be if we could find another planet full of suckers to invest in this garbage but even then you'd probably struggle. In summary then, these purchases are cast iron 100% Unsterilized asset purchases, make no bones about it.
If by some chance you meant that the MBS are still being payed for by homeowners and are somehow worth something, that is unfortunately not true either. Like I said the securities are tied up mostly with sub-prime foreclosed properties which are currently mostly vacant. Like I said, MBS are worthless. Playing devils advocate, if by some slim chance fore-closed upon, sub-prime properties are still occupied and paid for by mortgage payers, then there would still be a market for these toxic derivatives. The fact that these corrupt institutions have to sell them off to the Fed as a last resort, is proof positive that there is absolutely no market for these crappy financial products, other than that provided by the Fed to prop up the very same institutions. That is not capitalism.
As we've seen from the previous three rounds of QE, the banks are not lending money, nor will they in the future. No amount of QE will get them lending, what is the motivation to do this when they can borrow infinite free credit from the Fed at no interest then speculate on the stock Market? QE unlimited has been proven time and time again to do diddly squat for jobs or for the middle class, it's a bank bailout dressed up as an economic fix so the average sheeple while buy it. QE4 is yet another bailout, banks borrow off the Fed for next to nothing; use this money to front run the Fed by buying Treasury bonds, then get rewarded by receiving a fat profit in the ensuing transactions.
I tell you what, let's have this conversation this time next year when the slimy bastards are rolling out QE5/6, will people still believe this is about jobs then? At what point does it become obvious that the Fed is not interested in you and I but their bankster masters instead? They've pulled the biggest stunt on man kind in recent history, they've lied cheated and stolen but then they've twisted and manipulated the facts so that we think the blame lies with us, then they've lied and cheated again by saying that the only solution is to give them even more of the spoils, unbelievable!
Lastly, reference the initial article, the vast majority of the bailout was conducted in secret by the Fed, printing money behind closed doors, it took an audit by the GAO to uncover this, here look: The Fed Audit - Newsroom: Bernie Sanders - U.S. Senator for Vermont, and again: http://www.sanders.senate.gov/imo/me...estigation.pdf. If that's not enough proof I don't know what is!
Yes you're right the entitlement culture has got to stop but unfortunately that's all that's left for a nation that shipped most of it's industry to third world hell holes such as China.
Last edited by Threethirty; 29th Jan 2013 at 20:49.
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Threethirty
I think the difference between you and I is, where I see "c0ck-up", you see conspiracy. However, where we do agree is the acknowledgment of the urgent need for Entitlement Reform. Obama is never going to agree to that and therein lies the problem.
To the relief of Captain Dart I will attempt to bring this thread back to base. It is argued the Hong Kong Property Market is fuelled by the supply of plentiful cheap money. This cheap money comes in no small part from the issues we have been discussing. Whilst everyone has tuned out of our discussion, I predict that very soon people will adopt in their lexicon two phrases, "sequestration" and "Debt ceiling". Whilst "Fiscal Cliff" became popular in late December these two issues have the potential to drop some pebbles in the water, the ripples of which will be felt in Hong Kong later in the year.
I note in the news today Fitch Credit Ratings agency is already positioning for a downgrade of US Debt. Those HIBOR mortgages may start to get slightly more expensive soon and the HSI may have a few wobbles coming its way.
To the relief of Captain Dart I will attempt to bring this thread back to base. It is argued the Hong Kong Property Market is fuelled by the supply of plentiful cheap money. This cheap money comes in no small part from the issues we have been discussing. Whilst everyone has tuned out of our discussion, I predict that very soon people will adopt in their lexicon two phrases, "sequestration" and "Debt ceiling". Whilst "Fiscal Cliff" became popular in late December these two issues have the potential to drop some pebbles in the water, the ripples of which will be felt in Hong Kong later in the year.
I note in the news today Fitch Credit Ratings agency is already positioning for a downgrade of US Debt. Those HIBOR mortgages may start to get slightly more expensive soon and the HSI may have a few wobbles coming its way.
Last edited by Liam Gallagher; 30th Jan 2013 at 09:50.
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Threethirty,
While I definitely agree with your sentiment re: financial apocalypse, I don't agree with your ideas that everyone believes the HK property market can only go up. Nearly everyone I work with seems to believe that it is set up for a large correction. I think this is part of the reason for such low transaction volume. Perhaps it is just speak from those "not in the game", but I think many believe the same as you and I.
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While I definitely agree with your sentiment re: financial apocalypse, I don't agree with your ideas that everyone believes the HK property market can only go up. Nearly everyone I work with seems to believe that it is set up for a large correction. I think this is part of the reason for such low transaction volume. Perhaps it is just speak from those "not in the game", but I think many believe the same as you and I.
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