Started By
Message
0
Posted on 11/12/14 at 5:23 pm to Duke
quote:
First of all, I find it interesting that USD Index you posted didn't go back any farther than 2010.
Actually if you actually looked at the chart it starts in 12/08 which is when QE1 started
The first two peaks and valleys are when QE1 and QE2 started and finished.
The last is when QE3 started and the last run up is caused by QE3 winding down.
quote:
Why if QE is driving up inflation would inflation start to spike as the program is winding down?
When is the last time you looked at the price of commodities? If you aren't aware crude has fallen from around $115 to $77 today. Look at the value of any other commodities.
I've been in the finance industry for 18yrs
Posted on 11/12/14 at 5:25 pm to No Colors
quote:
The year I had it was worthless because no doctors in my area would take it. So what was the point? I am just going back to private pay.
It's so hilariously flawed.
Posted on 11/12/14 at 6:00 pm to bbvdd
quote:
Actually if you actually looked at the chart it starts in 12/08 which is when QE1 started
The first two peaks and valleys are when QE1 and QE2 started and finished.
The last is when QE3 started and the last run up is caused by QE3 winding down.
I did and misremembered the start date. My bad. I'll pose my question on the matter again, why does the run down on QE lead to spikes if QE is the cause of inflation? Also why are the current highs still below the USD index for most of the 1990s and early 2000s?
quote:
If you aren't aware crude has fallen from around $115 to $77 today. Look at the value of any other commodities.
I'm aware the price of crude has recently dropped. I do drive a car and noticed the low prices at the pump which suggest crude has been dropping.
quote:
I've been in the finance industry for 18yrs
Which is why I posted much of my response in question form as it appeared you had experience in the field of finance based on tone and your fancy graph. You know, for you to explain my mistakes since Im in engineering and not finance.
I appreciate you not answering any questions posed and instead making a point to smugly respond to misstating of a date and assuming I had no idea of current affairs after I responded earnestly and asking you for the flaws in my understanding.
I find this to be the style of most financial folks if a lay person has a misunderstanding. It's no wonder the stereotype of the a-hole banker.
This isn't my area of expertise and I appriciate someone showing me where Im wrong about something. It would be nice to not face hostility in this process.
Posted on 11/12/14 at 6:30 pm to Duke
quote:
why does the run down on QE lead to spikes if QE is the cause of inflation?
When you stop QE you stop the excess supply of cash entering the system. The less dollars cause the value of the dollar to rise (there's less of it)
The chart is the actual value of the dollar vs other currencies. The value of the dollar started falling in '02 or something like that. Tomorrow I will try to remember to post a chart of the money supply. It's had a dramatic upward trajectory size Obama took office.
I will go back to your other msg and try to be a little more thorough.
Posted on 11/12/14 at 6:38 pm to bbvdd
Thanks. 
ETA: I know you finance guys get into arguments with people who know little and are convinced theyre correct no matter the evidence. So you have some reason to assume everyone is such. I'm not one of those people.
ETA: I know you finance guys get into arguments with people who know little and are convinced theyre correct no matter the evidence. So you have some reason to assume everyone is such. I'm not one of those people.
This post was edited on 11/12/14 at 6:42 pm
Posted on 11/12/14 at 6:43 pm to Duke
quote:
So why am I to take a recent spike as showing any significant erosion in the value of the USD?
The spike is actually a strengthening of the dollar.
quote:
Why if QE is driving up inflation would inflation start to spike as the program is winding down?
Again, the chart is the value of the dollar not inflation. As the dollar strengthens, inflation starts to ebb. Something else to look at to get an idea of inflation is the steepness of the US Treasury curve. Over the past 5yrs it has been extremely steep with short rates near zero and the 30yr 300+bps higher. If you look at the 2s/10s curve (the difference between the 2yr and 10yr UST) it has narrowed tremendously over the past 6 months.
quote:
Also correct me if I'm misunderstanding the function of QE, but doesn't act more as an asset swap? Trading assets like bonds and mortgage backed securities with dollars. Yes means more dollars in the financial system but to get those dollars in the market the banks would actually need to increase lending
Yes, but it didn't increase lending, it basically took those securities out of the system which increased their value (which in turned decreased the value of the dollar) of mtgs and the UST. Since the end of QE treasuries have increased in yield (lower in value) some but the FOMC is still holding those securities.
Posted on 11/12/14 at 6:57 pm to bbvdd
Read through quick, but I was absolutely reasing your chart upside down. Im on the same page now.
ETA: will respond with any questions following up later/likely tomorrow
ETA: will respond with any questions following up later/likely tomorrow
This post was edited on 11/12/14 at 6:58 pm
Posted on 11/12/14 at 7:17 pm to kage
quote:
Forbes article on Obamacare,
You mean Ungar-Obamacare-water-carrier article. Does no one know Ungar is an Obamacare shill?
~20 states didn't have any significant data in this study. That's really all you need to know for this piece.
Posted on 11/12/14 at 10:40 pm to Duke
quote:
Read through quick, but I was absolutely reasing your chart upside down. Im on the same page now.
ETA: will respond with any questions following up later/likely tomorrow
Yeah once I think I understand it, I really don't. My current understanding is that they can't raise interest rates like they used to because there are too many excess reserves. So they are kind of sitting on their thumbs.
Either way, interest rates being low means inflation is high. Interest rates have been low for a long time.
Posted on 11/13/14 at 1:06 pm to TeLeFaWx
Here is one of the charts I told you I would post. This is M1 (money supply)
This is the value of the dollar going back to 2001:
This is the value of the dollar going back to 2001:
Posted on 11/13/14 at 2:59 pm to bbvdd
So we need to restrict the money supply, let interest rates rise, and put some equity back in to our economy is what you're saying? I remember seeing some documentary on the financial crisis and they claimed that the systematic stripping of equity out of our economy was something that would take a decade to recover from.
Posted on 11/13/14 at 3:22 pm to TeLeFaWx
quote:
So we need to restrict the money supply, let interest rates rise, and put some equity back in to our economy is what you're saying? I remember seeing some documentary on the financial crisis and they claimed that the systematic stripping of equity out of our economy was something that would take a decade to recover from.
Stopping QE3 will help to restrict the money supply as the assets that are held at the fed begin to roll off. Flooding the mkt with dollars absolutely strips equity/capital so anything that reverses that will definitely help.
Posted on 11/13/14 at 3:55 pm to bbvdd
quote:
Stopping QE3 will help to restrict the money supply as the assets that are held at the fed begin to roll off. Flooding the mkt with dollars absolutely strips equity/capital so anything that reverses that will definitely help.
I hope we do. I want stronger fundamentals in the economy. I'm young I want to get the difficult shite over with ASAP.
Posted on 11/13/14 at 4:13 pm to boxerbulldawg
Page 4 of 4
Popular
Back to top
Follow SECRant for SEC Football News