Thursday, September 13, 2012

Tripling Down on Folly: QE3 and "Easing"

"Easing"
(sung to the tune of the Commodores' "Easy")

Know it sounds funny,
But I just can't stand the wane.
Stocks, I'm boosting you tomorrow.
Seems to me polls
You know I've done all I can.
You see, I begged, stole,
And I borrowed.

Ooh, that's why I'm easing,
I'm easing 'spite expert warnings.
That's why I'm easing.
I'm easing 'spite expert warnings.

Why in the world
Would anybody put chains on me?
I've paid my dues to make it.
Everybody wants me to be
What they want me to be.
I'm so happy when I try to fake it.
Yo!

Ooh, that's why I'm easing,
I'm easing 'spite expert warnings.
That's why I'm easing.
I'm easing 'spite expert warnings.

I wanna be high, so high.
I wanna be free of knowing
The things I do bring blight.
I wanna be free,
Just me, babe!

That's why I'm easing,
I'm easing 'spite expert warnings.
That's why I'm easing.
I'm easing 'spite expert warnings.

Because I'm easing,
Easing 'spite expert warnings.
Because I'm easing,
Easing 'spite expert warnings.

16 comments:

Hugh Akston said...

This is great news. I was thinking about putting up new wallpaper in my place. Now the only question is whether I should use 50s or 100s.

Anonymous said...

thanks for sharing.

Daniel I said...

How can you identify an internet "austrian" ?

Easy - he correctly foresaw 10 of the last 0 bouts of hyper-inflation.

Pro Libertate said...

I don't think we're going to have hyperinflation now. Maybe later, but not now. Still, how much can the economy support government intervention, insane spending, and mounting debt? It's not like we can't see the path ahead of us, thanks to our friends in Europe. And Japan, for that matter.

Daniel I said...

Economics is not a morality play.

SOMETIMES printing money IS the way out of the mess. This happens to be one of those times.

And on a related topic, let's conduct a little thought experiment.

If the teabaggers are right, we will end up with runaway inflation - and that will be clearly visibile - and Bernanke and those who supported his QE policy (such as myself) will have been proven wrong.

But let's flip the coin - what exactly would it take to prove the likes of you wrong ?
What proof would you require to admit that your criticism of Bernanke is ignorant and misguided (though well-intentioned, no doubt) ?

Pro Libertate said...

Right. It's worked so well in recent years. Worked so well for Japan. Working so well in Europe.

Maybe government intervention isn't the answer?

Daniel I said...

So I asked a simple question - namely, is it possible to measure Bernanke's performance as head of a central bank - and your answer is "yeah, right".

You speak with the certainty of ignorance.

Pro Libertate said...

What's happening here? Is GDP surging? There is inflation, there is high unemployment, and there is a credit crunch. What metric do you want to use that shows his performance is good?

And, again, we have examples around the world that out-of-control spending is not sustainable in the long term.

Warty said...

What I want to know is why our dipshit troll friend thinks Bernanke is well-intentioned.

Daniel I said...

I probably shouldn't be wasting my time with people who yell about non-existent inflation ... but my trollish instinct are getting the better of me.

So

1) What inflation ?

http://krugman.blogs.nytimes.com/2012/08/25/another-alternative-inflation-measure/

(yeah, yeah - that great lefty boogeyman)

Furthermore, are you even able to tell the difference between supply-side inflation (for example, when oil prices go up due to decreased supply) and demand-side inflation (when prices go up due to excessive money printing) ?

2) So "excessive spending" is Bernanke's fault because ... ?

3) Funny you should bring up GDP, because that is the one metric we should use to judge a central bank's performance (nominal GDP, to be more precise)

And whaddaya know

http://oregoneconomicanalysis.files.wordpress.com/2011/10/ngdp_trend1.jpg

It would seem that NGDP is some 10% below trend. I dunno, maybe that's why unemployment is high and credit is crunching ...

So, to sum it up - Bernanke has in fact done a bad job - but not by being too loose (like some ignorants claim), but by being TOO TIGHT.

And the purpose of QE is to get nominal spending back on trend, since that is the only way to make unemployment go down.

Of course, the reason I'm wasting my breath here is the hope that I'm dealing with people who actually care about the truth - but why do I have the feeling that's not the case, that you care more about signalling your loyalty to the rest your "libertarian" tribe ?

Daniel I said...

Also - in the 1930's people were pretty sure money was extremely easy. After all, interest rates were at zero.

Turns out, money was insanely tight back then.

So you might want to think twice before spouting that "low rates = easy money" crap on me.

BakedPenguin said...

The monetary base has tripled in the past three years. How can you believe there will not be inflation?

Warty said...

It's all very complicated, you stupid penguin. You're much too stupid to understand.

Daniel I said...

You people might wanna learn about stuff like this

http://en.wikipedia.org/wiki/Velocity_of_money

Daniel I said...

But you know what ?

Don't take my word for it, listen to what the market says.

The markets know best, right ?

http://www.clevelandfed.org/research/data/inflation_expectations/index.cfm

So ... hmmmm ... it would seem the markets don't expect much inflation in the future either.

So what exactly are you people fretting over ?

Or is it (like I previously said) that you care more about being seen as a reliable member of the libertarian tribe than about the actual facts ?

Mark Etprophet said...

You're a funny guy, Erko.