The Fed followed my advice! "Prints" $1.2 trillion of new money .

[denem]

From Monday "Question: How to fund a $1 trillion buyout of toxic "assets"
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5264152&mesg_id=5264152.

To be fair, they are only buying $300m of Treasuries.

[denem]

1. Kick

...

[dkf]

2. Its doing wonders for Oil and commodities.

[denem]

3. Oil and commodities are lead indicators for the depression.

... it's a deflationary wave.

[MadHound]

4. And what happens when hyper-inflation sets in?

Since inflationary numbers went up last month, I think that this new money could be a mistake. We'll see, I certainly hope not.

[denem]

5. You've drunk the Friedman kool aid.

If you read Galbraith on 'The Crash', you might note that in 1930, the fed was petrified of Weimar inflation and tightened credit to insure the 'integrity of the dollar'. By your argument, it's pefectly fine if the Banks and other private Financial Institutions create credit (ie. money), but its the one thing the Federal Government must stay out of? Hogwash.

[MadHound]

8. Umm, I've read Galbraith, along with several other economic experts

I know several economists personally. I haven't drunk the Friedman Kool-aid(but hey, thanks for the gratuitous insults). I'm simply expressing a worry that this whole mess could suddenly switch from a deflationary cycle to an inflationary one. We're really walking a fine line between the two, and many economists are cautioning that we shouldn't be overbalancing too much one way or the other, and to be ready to make a correction quickly. Even Krugman and Reich are saying this.

So please, take your uninformed (really now, how do you know what I'm thinking from a two sentence post) insulting bullshit and shove it.

Really, how much do you know about economics? How many economists do you know personally and talk to on a regular basis? Hell, I talk to at least one every single day, she's my wife.

Blithering uninformed idiot is what you are, jumping in for a Pavolovian over the top response when somebody mentions a buzz word that you happen to have picked up in your meanderings.

[denem]

10. I have first class honors in economics.

and yes I have been expressing myself in simple language. Talk of "hyperinflation" in the midst of a commodities and asset price crash is way over the top, and was exactly the language going around in the wake of the 1929.

Nobody talks "hyperinflation" in the midst of explosions of private credit. It is used as an ideological construct to keep governments at bay in all circumstances, by pointing to the exceptions - Wiemar, Zimbabwe.

[MadHound]

12. Hmm, let's see, 0.7% jump in CPI over the past couple of months

The government is essentially printing more money, and has been for awhile, even before Obama took office, yeah, I think that hyperinflation is a problem that we should be aware of.

"Kiss the idea of deflation goodbye. The brief foray into declining consumer prices over the winter seems to be over and done with," said Howard Simons, strategist at Bianco Research in Chicago."

<http://news.yahoo.com/s/nm/20090318/us_nm/us_usa_economy_21>

You're again making the assumption, from a two sentence post, that I'm against government involvement, I'm not. I am however concerned about an over-reaction with our money policy in response to this problem. That doesn't make me a follower of Friedman or whatever other slur you want to use, that simply means that I believe in keeping an eye on future potential problems which can and do arise out of short term solutions, like printing more money.

Don't like that, oh well, I'm not here to please your happy ass.

[GoesTo11]

6. There's always more where that came from.

You should fix OP to say 300 Billion not 300 Million.

[denem]

7. Thanks, 300 billion treasuries. Too late to edit.

[soothsayer]

9. The UK is doing it bigtime. not sure why you are happy about it, but there you go.

[denem]

11. Iam happy because it is a precedent to break the nexus between spending and deficit financing.

Deficit spending and printing money are both inflationary, not only the latter as The Chicago school would suggest. Monetarist ideology dictates that investment in the present must mortgage the future.