Market crash: are we there yet ?

[sailhog]

Windy,
That's a fine primer on how the markets work, my man.

It seems that it would have been nearly impossible to have done well for the balance of 2008. The first have was inflationary, the second half deflationary. Oil went way up, then it crashed. Gold went way up, then way down and stayed there. Commodities crashed. Who would have thought that the USD would be doing this well six months ago?

[PBzeer]

Interesting that faced with a crisis of banks not lending, home sales shot up in December. One has to wonder how this is possible, even with the decline in home prices, since we are told there is no credit available.

[wind_magic]

Originally Posted by wind_magic

Here is an interesting chart showing in broad terms what the FED's current balance sheet looks like, thought someone besides me might be interested. They're still pushing on the string, trying to reinflate, but so far they haven't spoken "the incantation of unmaking" yet.

Geithner is the Secretary of Treasury for one day and he is already speaking the evil words .... QUANTITATIVE EASING. You knew they wouldn't be able to resist for long.

[sailhog]

Windy,
Just for grins, why don't you go ahead and tell me what quantitative easing is. Of course I already know, but what the heck. Again, I'm sure you realize that I already know what quantitative easing is. I mean, who doesn't?

[jrd22]

I agree Hog, it wouldn't hurt for Wind to give a brief explanation of Quantitative Easing for the benefit of the less informed on this forum. I, of course, know enough about it that I could probably teach a college level class on it, but I'm sure there are some here that are completely in the dark about it. So, what do you say Wind, help them out, OK?

[camaraderie]

Uh oh....

http://blogs.reuters.com/great-debat...ing-has-begun/

[wind_magic]

Quantitative easing is when they drop the whole charade and simply print money and spend it into the economy. Instead of borrowing it by selling Treasuries, or TARP'ing it into the economy, or tax cuts, or what have you, the federal government simply says - hey, I wish we had half a trillion $us to spend, and the Treasury says, oh, well, we've got these fancy printing presses, we'll print you some right up. They simply create money out of thin air and use it to buy their own Treasury bonds so that they can spend as much money as they want. No promise to repay it in the future, no nothing, just print as much as you want when you want it.

[camaraderie]

Sounds like good news for gold bugs.

[sailhog]

Yeah, that's about how I would describe quantitative easing.

I've been engaging in my own personal "quantitative easing" with my inkjet printer. I think I've got the right shade of green. Think I'll quantitatively ease out a few dozen $20s here in the next few minutes, if you know what I mean...

[craigtoo]

Originally Posted by wind_magic

Quantitative easing is when they drop the whole charade and simply print money and spend it into the economy. Instead of borrowing it by selling Treasuries, or TARP'ing it into the economy, or tax cuts, or what have you, the federal government simply says - hey, I wish we had half a trillion $us to spend, and the Treasury says, oh, well, we've got these fancy printing presses, we'll print you some right up. They simply create money out of thin air and use it to buy their own Treasury bonds so that they can spend as much money as they want. No promise to repay it in the future, no nothing, just print as much as you want when you want it.

Often Referred to as:

"Jimmy Cartering"