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This fairy story about all the money coming from the Fed's printing press is basically a misunderstanding. The money was all created by the banking system via l

This fairy story about all the money coming from the Fed's printing press is basically a misunderstanding. The money was all created by the banking system via leverage before the bubble, and the Fed basically stopped all that money being destroyed at once via defaults. letting the people who got the money created (printed if you like) by the private sector keep it.

oleganza 13y ago
As far as I know, Fed prints around $80 billion since 2012 and does it today. All this money does not just sit somewhere, but is being "invested" to "stimulate the economy". Sources are listed here: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing Then, you ignored the fact that existing Fed policy made possible murder of 1 million people over several years at a cost of $6 million per person. There were no taxpayers or private investors who'd save that much money to invest in a large scale murder operation. It was all possible because of Fed, legal tender laws and tons of regulations that make sure people have to accept USD as money. I think it is important to understand that to see the power that the Fed has and how much lives are affected by that power. It just gives the proper context.
001sky 13y ago
This fairy story about all the money coming from the Fed's printing press is basically a misunderstanding Excess liquidity reduces the scarcity value of money, and results in lower quality thresholds for investment decisions. Thats pretty simple. If you want to debate about liquidity, you need to look at who invests in the investors. That is the place to measure liquidity that is relevant to distorting investment decisions. In the case of non-public equity...its pretty clear VC lps have too much cash. The Kaufman fund does research in this area and blames poor LP performance for the below-RAROC returns on VC portfolios when considered as an asset class. That should tell you something right there.

oleganza 13y ago

As far as I know, Fed prints around $80 billion since 2012 and does it today. All this money does not just sit somewhere, but is being "invested" to "stimulate the economy". Sources are listed here: http://en.wikipedia.org/wiki/Quantitative_easing http://en.wikipedia.org/wiki/Quantitative_easing Then, you ignored the fact that existing Fed policy made possible murder of 1 million people over several years at a cost of $6 million per person. There were no taxpayers or private investors who'd save that much money to invest in a large scale murder operation. It was all possible because of Fed, legal tender laws and tons of regulations that make sure people have to accept USD as money. I think it is important to understand that to see the power that the Fed has and how much lives are affected by that power. It just gives the proper context.

001sky 13y ago

This fairy story about all the money coming from the Fed's printing press is basically a misunderstanding Excess liquidity reduces the scarcity value of money, and results in lower quality thresholds for investment decisions. Thats pretty simple. If you want to debate about liquidity, you need to look at who invests in the investors. That is the place to measure liquidity that is relevant to distorting investment decisions. In the case of non-public equity...its pretty clear VC lps have too much cash. The Kaufman fund does research in this area and blames poor LP performance for the below-RAROC returns on VC portfolios when considered as an asset class. That should tell you something right there.