Re: Recession
[Re: rex123]
#6947569
07/30/20 10:09 AM
07/30/20 10:09 AM
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Joined: Mar 2007
Posts: 35,176 McGrath, AK
white17
"General (Mr.Sunshine) Washington"
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"General (Mr.Sunshine) Washington"
Joined: Mar 2007
Posts: 35,176
McGrath, AK
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Well it sure hasn't helped anyone in Japan or Australia. In fact, since the BOJ started buying stocks, the overall price level has declined. I suspect that MAY be due in part to people being afraid the BOJ will dump shares back on the market ...further depressing prices.
Individuals COULD benefit psychologically because they may feel more wealthy, IF their portfolio value increases. The Fed would like that because people may be more inclined to spend. I think that people may be more inclined to sell.
I think the greater fool theory may emphasize itself. If the Fed tries to drive up asset prices when the economy is collapsing, I think more people would take advantage of having a willing buyer.
Mutual funds and holders of mutual funds may benefit initially, on paper because many of them must continuously buy or sell shares in order to stay within proscribed limits of the fund. Some companies share prices will rise while others fall. The funds will need to maintain the correct allocations.
The only true beneficiary that I can see might be some public companies who wish to engage in equity financing for some individual reason. IF their share price increases, they can borrow more cheaply than if it falls.
I think long before we see the Fed buying stocks, we will see the Fed using yield curve manipulation in order to control credit and liquidity without further expanding its own balance sheet. I wouldn't be surprised to see that within the next twelve months.
I also think it would be a terrible thing not just for the US but for the world.
Mean As Nails
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Re: Recession
[Re: rex123]
#6948515
07/30/20 10:56 PM
07/30/20 10:56 PM
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Joined: May 2010
Posts: 10,485 MN
Steven 49er
trapper
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trapper
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MN
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I agree that buying equities would be terrible, I also think buying MBS's, buying corporate junk bonds, QE, artificially low interest rates and anything else that manipulates the free market is terrible.
It's gonna be a heck of a ride.
"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
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Re: Recession
[Re: rex123]
#6948523
07/30/20 11:05 PM
07/30/20 11:05 PM
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Joined: May 2010
Posts: 10,485 MN
Steven 49er
trapper
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trapper
Joined: May 2010
Posts: 10,485
MN
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They can't unwind it. The world is addicted to cheap capital.
"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
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Re: Recession
[Re: rex123]
#6948531
07/30/20 11:16 PM
07/30/20 11:16 PM
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Joined: May 2010
Posts: 10,485 MN
Steven 49er
trapper
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trapper
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Posts: 10,485
MN
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That correlation has already gone away, the world hasn't realized it yet.
"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
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Re: Recession
[Re: rex123]
#6948594
07/31/20 12:27 AM
07/31/20 12:27 AM
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Joined: Jan 2014
Posts: 297 Oregon
Catpincher
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Posts: 297
Oregon
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Faith in the dollar is keeping this chucker afloat. I am probably wrong as I keep moving my currency into more tangible assets i.e. Cattle, land ,food metals and what I consider a fun life. P.S. May not be suitable for others and minor aged folks!
Last edited by Catpincher; 07/31/20 12:31 AM. Reason: Add on
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Re: Recession
[Re: white17]
#6949400
07/31/20 06:33 PM
07/31/20 06:33 PM
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Joined: May 2010
Posts: 10,485 MN
Steven 49er
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trapper
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MN
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Well at this point the market is still setting rates. Not the Fed. Let's hope it stays that way Sub 3 percent 30 year fixed mortgage rates is set by the market?That's lower than inflation and taxes. 10 year tbonds are below the rate of inflation. No wonder pensions and Social Security are going broke.
"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
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Re: Recession
[Re: Steven 49er]
#6950458
08/01/20 11:56 AM
08/01/20 11:56 AM
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Joined: Dec 2010
Posts: 11,205 Armpit, ak
Dirt
trapper
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trapper
Joined: Dec 2010
Posts: 11,205
Armpit, ak
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I agree that buying equities would be terrible, I also think buying MBS's, buying corporate junk bonds, QE, artificially low interest rates and anything else that manipulates the free market is terrible.
It's gonna be a heck of a ride.
Don't forget the worse government free market manipulating programs( Federal and State) that manipulate the housing market. Those seem to always end poorly. Repeat.
Who is John Galt?
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Re: Recession
[Re: rex123]
#6950483
08/01/20 12:24 PM
08/01/20 12:24 PM
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Joined: Dec 2010
Posts: 11,205 Armpit, ak
Dirt
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trapper
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Posts: 11,205
Armpit, ak
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It would not surprise me if the unemployed numbers are low. How many people are being payed (officially employed) by their employers from the government program to pay your employees that don't work because your business has been partly closed to closed?
This corona shut down is a disaster here.
Who is John Galt?
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Re: Recession
[Re: rex123]
#6950820
08/01/20 07:03 PM
08/01/20 07:03 PM
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Joined: May 2010
Posts: 10,485 MN
Steven 49er
trapper
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The debt can't be paid off. That will have a deflationary effect on the money supply.
Bryce you don't suppose that what we have been talking about the last 30 pages causes what you speak of. The system is rigged and it won't change until we go away from a debt backed currency. In fact it will get worse. Those capitalistic businesses you speak of stopped being true capitalists a long time ago. Government needs to get the heck out of markets.
"Inflation is always and everywhere a monetary phenomenon". Milton Friedman.
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Re: Recession
[Re: white17]
#6950877
08/01/20 08:02 PM
08/01/20 08:02 PM
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Joined: Mar 2013
Posts: 2,172 chelsea,wi
keets
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trapper
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Posts: 2,172
chelsea,wi
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Rising unemployment was mentioned on page one.
I think we have a situation where people don't want to work rather than businesses that don't want to hire. Many businesses can't get their prior employees to return because of the $600 giveaway from government.
I don't believe anyone honestly thinks the national debt can or will ever be paid off THIS IS IT
2021 goals....make time to trap PROUD MEMBER WTA NTA FTA GOA SPORTSMANS ALLIANCE
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Re: Recession
[Re: Steven 49er]
#6950896
08/01/20 08:15 PM
08/01/20 08:15 PM
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Joined: Dec 2018
Posts: 5,214 Crivitz WI
Sprung & Rusty
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trapper
Joined: Dec 2018
Posts: 5,214
Crivitz WI
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The debt can't be paid off. That will have a deflationary effect on the money supply.
Bryce you don't suppose that what we have been talking about the last 30 pages causes what you speak of. The system is rigged and it won't change until we go away from a debt backed currency. In fact it will get worse. Those capitalistic businesses you speak of stopped being true capitalists a long time ago. Government needs to get the heck out of markets. It is rigged. I will change when we have a global reset and global currency. unless something really changes, we're headed that way.
Last edited by Sprung & Rusty; 08/01/20 08:16 PM.
No Jab.
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