6 ms·

Gold would be extremely deflationary. It is what made the great depression worse. If the Fed didn't "print money" as QE1, QE2, QE3 then you would have 25% une

Gold would be extremely deflationary. It is what made the great depression worse. If the Fed didn't "print money" as QE1, QE2, QE3 then you would have 25% unemployment in the US alone. Having half of society unemployed just so that you can "hoard gold" would lead that half of society taking up guns to take it away from you. Be careful what you wish for.

dnprock 7y ago
The problem with QE is you will have QEn. Everyone will do QE on their economies. We don't have any accountability. During the 2008 crisis, we were told this is the right thing to do. And we keep doing it. We're not at the stage where half of the society is unemployed and hoarding gold. We're at the stage where everyone is doing QE on their economies. Having full employment for the sake of full employment is dumb. That's the same as communism.
- dageshi 7y ago
  The goldbugs all said the fed and its helicopter money would have lead to hyperinflation at this point. Well every major central bank in the world did QE and it didn't happen, inflation barely cracked 5% if I recall? And quickly retreated from there.
  - dnprock 7y ago
    The QE technique is interesting and new. They write up the money on Fed book as liability without pumping printed money into the economy. I think it's recently possible because our money is mostly digital now. You can look at US national debt clock. It's there. I think inflation is shifted into debt on Fed book. Between having some inflation and blowing up the debt, I think having some inflation is better now. You don't want to load up all your risks in a central book. But our political class doesn't want this. They want to keep loading up debt. We'll then have a QE race between nations. Maybe, at some point, we come to love each other and burn our debt on each other books. JK, that'll never happen :)
    - chantelles 7y ago
      Not all nations to QE - quantitative easing, some to QE- qualitative easing: https://blogs.wsj.com/chinarealtime/2014/08/11/how-chinas-trying-to-boost-its-economy-qualitative-easing/ https://blogs.wsj.com/chinarealtime/2014/08/11/how-chinas-tr...

dnprock 7y ago

The problem with QE is you will have QEn. Everyone will do QE on their economies. We don't have any accountability. During the 2008 crisis, we were told this is the right thing to do. And we keep doing it. We're not at the stage where half of the society is unemployed and hoarding gold. We're at the stage where everyone is doing QE on their economies. Having full employment for the sake of full employment is dumb. That's the same as communism.

dageshi 7y ago
The goldbugs all said the fed and its helicopter money would have lead to hyperinflation at this point. Well every major central bank in the world did QE and it didn't happen, inflation barely cracked 5% if I recall? And quickly retreated from there.
- dnprock 7y ago
  The QE technique is interesting and new. They write up the money on Fed book as liability without pumping printed money into the economy. I think it's recently possible because our money is mostly digital now. You can look at US national debt clock. It's there. I think inflation is shifted into debt on Fed book. Between having some inflation and blowing up the debt, I think having some inflation is better now. You don't want to load up all your risks in a central book. But our political class doesn't want this. They want to keep loading up debt. We'll then have a QE race between nations. Maybe, at some point, we come to love each other and burn our debt on each other books. JK, that'll never happen :)
  - chantelles 7y ago
    Not all nations to QE - quantitative easing, some to QE- qualitative easing: https://blogs.wsj.com/chinarealtime/2014/08/11/how-chinas-trying-to-boost-its-economy-qualitative-easing/ https://blogs.wsj.com/chinarealtime/2014/08/11/how-chinas-tr...