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> It's stunning that anyone who has witnessed per asset class appreciation (consider wages an asset class as well) since the GFC could believe what you said.

> It's stunning that anyone who has witnessed per asset class appreciation (consider wages an asset class as well) since the GFC could believe what you said. Between the two of us, one has a degree in economics from one of the top universities in the US and is posting under an established, identifiable handle. The other is posting from a brand-new throwaway account. I'm willing to accept that I might be wrong about things sometimes, but when a random, anonymous person on the Internet says they're "stunned" by me paraphrasing an established economic principle, I'm going to be pretty unconvinced unless they present some compelling evidence and solid analysis. As for the rest of your comment, even if one takes your statements about the current state of the world at face value, it doesn't leave you anywhere. You can't generalize entire economy of the last ten years and assume that it reflects the effects of quantitative easing (and no other confounding factors). I don't really want to litigate the post-2008 economy here, because that's pretty off-topic. In the context of the orginal statement - the claim that "basic income would be better than EQ because QE primarily benefits the rich" - yes, it's pretty clear that that goes against a rather straightforward and established body of both economic theory and empirical research.

sdljfslkjfdsj 9y ago
More than $4.5T in bonds bought in multiple policy regimes over years and have been halted for sometime but we can't use that as a benchmark? I suspect it has something to do with not aligning with your narrative. How about Japan pre GFC since they started QE in March 2001[1] meanwhile CPI in japan since 2001 has remained near 0[2]. Is 17 years enough data points? Which QE regime that resulted in any meaningful inflation or wage growth would you like to discuss? I'm afraid any I'd bring up from G7 sovereigns would be marginalized due to your credentials. Buying bonds does not help out anyone other than the rich. Artificially reducing interest rates makes borrowing easier which companies take advantage of[3] to buy back stock[4] which adds buying pressure to risk assets. Fewer shares to buy[5] helps the "E" in the P/E through financial engineering. Who buys those corporate bonds for the juicy yield (besides the ECB & BOE)? Hedge funds & those who have disposable income that can be allocated to risky assets via pensions & mutual funds. Not part-time workers or FTE's that live pay check to paycheck which most do[6]. QE doesn't primarily benefit the rich, it ONLY benefits the rich. [1] https://en.wikipedia.org/wiki/Quantitative_easing#Japan_before_2007 https://en.wikipedia.org/wiki/Quantitative_easing#Japan_befo... (see its citations) [2] http://www.inflation.eu/inflation-rates/japan/historic-inflation/cpi-inflation-japan.aspx http://www.inflation.eu/inflation-rates/japan/historic-infla... [3] https://fred.stlouisfed.org/series/TDSAMRIAONCUS https://fred.stlouisfed.org/series/TDSAMRIAONCUS [4] https://www.yardeni.com/pub/buybackdiv.pdf https://www.yardeni.com/pub/buybackdiv.pdf [5] https://www.yardeni.com/pub/sharesos.pdf https://www.yardeni.com/pub/sharesos.pdf [6] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...
sdljfslkjfdsj 9y ago
Forgot to cite my earlier comments. > Wages have stagnated & only recently picked up[1] > GDP has been the lowest post-recovery ever[2][6] > Net household debt is again at new highs[3] > Interest rates at forever in the history of human civilization lows.[4] > Meanwhile every single risk seeking asset class primarily owned by the wealthy has appreciated to levels last seen at prior bubble peaks.[5] [1] https://tradingeconomics.com/united-states/wage-growth https://tradingeconomics.com/united-states/wage-growth (can you even spot QE?) [2] http://fortune.com/2015/07/30/us-gdp-economy/ http://fortune.com/2015/07/30/us-gdp-economy/ [3] https://www.reuters.com/article/us-usa-fed-debt/americans-debt-level-notches-a-new-record-high-idUSKCN1AV1PY https://www.reuters.com/article/us-usa-fed-debt/americans-de... [4] https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rates-on-one-chart.html https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rat... [5] https://stansberrystreaming.com/presentations/grant-williams.html https://stansberrystreaming.com/presentations/grant-williams... (this years stansberry vegas conference) [6] https://www.economist.com/blogs/dailychart/2011/07/american-recessions-and-recoveries https://www.economist.com/blogs/dailychart/2011/07/american-...

sdljfslkjfdsj 9y ago

More than $4.5T in bonds bought in multiple policy regimes over years and have been halted for sometime but we can't use that as a benchmark? I suspect it has something to do with not aligning with your narrative. How about Japan pre GFC since they started QE in March 2001[1] meanwhile CPI in japan since 2001 has remained near 0[2]. Is 17 years enough data points? Which QE regime that resulted in any meaningful inflation or wage growth would you like to discuss? I'm afraid any I'd bring up from G7 sovereigns would be marginalized due to your credentials. Buying bonds does not help out anyone other than the rich. Artificially reducing interest rates makes borrowing easier which companies take advantage of[3] to buy back stock[4] which adds buying pressure to risk assets. Fewer shares to buy[5] helps the "E" in the P/E through financial engineering. Who buys those corporate bonds for the juicy yield (besides the ECB & BOE)? Hedge funds & those who have disposable income that can be allocated to risky assets via pensions & mutual funds. Not part-time workers or FTE's that live pay check to paycheck which most do[6]. QE doesn't primarily benefit the rich, it ONLY benefits the rich. [1] https://en.wikipedia.org/wiki/Quantitative_easing#Japan_before_2007 https://en.wikipedia.org/wiki/Quantitative_easing#Japan_befo... (see its citations) [2] http://www.inflation.eu/inflation-rates/japan/historic-inflation/cpi-inflation-japan.aspx http://www.inflation.eu/inflation-rates/japan/historic-infla... [3] https://fred.stlouisfed.org/series/TDSAMRIAONCUS https://fred.stlouisfed.org/series/TDSAMRIAONCUS [4] https://www.yardeni.com/pub/buybackdiv.pdf https://www.yardeni.com/pub/buybackdiv.pdf [5] https://www.yardeni.com/pub/sharesos.pdf https://www.yardeni.com/pub/sharesos.pdf [6] https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2017/08/24/most-americans-live-paycheck...

sdljfslkjfdsj 9y ago

Forgot to cite my earlier comments. > Wages have stagnated & only recently picked up[1] > GDP has been the lowest post-recovery ever[2][6] > Net household debt is again at new highs[3] > Interest rates at forever in the history of human civilization lows.[4] > Meanwhile every single risk seeking asset class primarily owned by the wealthy has appreciated to levels last seen at prior bubble peaks.[5] [1] https://tradingeconomics.com/united-states/wage-growth https://tradingeconomics.com/united-states/wage-growth (can you even spot QE?) [2] http://fortune.com/2015/07/30/us-gdp-economy/ http://fortune.com/2015/07/30/us-gdp-economy/ [3] https://www.reuters.com/article/us-usa-fed-debt/americans-debt-level-notches-a-new-record-high-idUSKCN1AV1PY https://www.reuters.com/article/us-usa-fed-debt/americans-de... [4] https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rates-on-one-chart.html https://www.cnbc.com/2016/11/17/200-years-of-us-interest-rat... [5] https://stansberrystreaming.com/presentations/grant-williams.html https://stansberrystreaming.com/presentations/grant-williams... (this years stansberry vegas conference) [6] https://www.economist.com/blogs/dailychart/2011/07/american-recessions-and-recoveries https://www.economist.com/blogs/dailychart/2011/07/american-...