Economy Quanatattive Easing is Steroid Withdrawl

[ElKarlo]

Years ago I got a weird rash on my arm and it wouldn't go away, it was an allergic reaction to something. I went to the derm and got some steroids for it. My wife saw the cream and only let me take it for like 3 days. I was like why, I have used Hydrocortisone before for maybe 5 days before when I would get dry skin in college. My wife, who is a scientist explained that you get addicted to topical steroids and it will eventually get really bad, to the point where you internal problems and can not make your own cortisone anymore.

Steroids reduce inflammation

Take them too long and you get crazy withdrawls because you become addicted.
https://mototsugufukaya.blogspot.com/
https://en.wikipedia.org/wiki/Topical_steroid_withdrawal

Anyhow, sorry about that. Goggle or Reddit it more if you want to see some crazy pics of TSW.

I listened to https://podcasts.apple.com/us/podca...roke-the-american/id928933489?i=1000547158224 today.
I am no anti Fed guy. But the money supply and constant QE that seemingly doesn't end has made me concerned. The massive amounts of money created has basically all gone to assets and that has benefited the rich, and t has created massive debt bubbles. All the while destroying regular people's ability to earn money from savings and from bonds. Binds used to be what regular people bought, and rich people bought stocks.
The Taper tantrum occurred in 2013 when the Fed was trying to normalize rates. Basically stop QE
https://www.investopedia.com/terms/t/taper-tantrum.asp

The Repo market froze up, and I wrote in my stock notebook about something not being right and that a recession was coming back in late 2019.
https://finance.yahoo.com/news/repo-market-broken-fed-wants-202356690.html The Fed had to inject 400 billion to bail out hedge funds and it showed how severely addicted we had become to QE and that any sign of trying to return to normal has resulted in freakouts and not just from Trump. The whole assets system according to Christopher Leonard reacted so badly that the Fed had to reverse course and cut rates while the economy was doing well.
Like topical steroids, the system can not quit QE. TS are for short duration, if you use them too long, you can't just quit and are addicted to them. So instead of having had some problems in the recovery, we covered over our eczema with QE and kept putting more and more QE on, to the point where markets can't handle normal conditions. Like with TSW reg ski can't handle normal conditions anymore.
The longer you use TS, the longer it takes to recover from the addiction. Leaonard said that it would take probably 10 years for the Fed to unwind it's 9Trillion dollar balance sheet. That is a long withdrawl period and I see problems coming when that happens.
Or we can continue to use and depend on QE which will further warp the system even more.:

Btw I am a deficit hawk type and have been calling for reducing debt spending by 50 billion a year for quite a while.

 

[Blayt7hh]

Oh wow. Your body doesn’t become addicted. You’re talking about rebound.

 

[Clifford_Harris]

Oh wow. Your body doesn’t become addicted. You’re talking about rebound.

You know he's talking about corticosteroids and not anabolic steroids?

 

[ElKarlo]

Oh wow. Your body doesn’t become addicted. You’re talking about rebound.

What’s @Clifford_Harris said

anyways our solution to economics is treating a chronic condition with an acute cure. I hope you understand that point and can add commentary

 

[86'd]

“I believe that banking institutions are more dangerous to our liberties than standing armies,” Jefferson wrote. ” If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” - Thomas Jefferson

 

[Crom Cruach]

Years ago I got a weird rash on my arm and it wouldn't go away, it was an allergic reaction to something. I went to the derm and got some steroids for it. My wife saw the cream and only let me take it for like 3 days. I was like why, I have used Hydrocortisone before for maybe 5 days before when I would get dry skin in college. My wife, who is a scientist explained that you get addicted to topical steroids and it will eventually get really bad, to the point where you internal problems and can not make your own cortisone anymore.

Steroids reduce inflammation

Take them too long and you get crazy withdrawls because you become addicted.
https://mototsugufukaya.blogspot.com/
https://en.wikipedia.org/wiki/Topical_steroid_withdrawal

Anyhow, sorry about that. Goggle or Reddit it more if you want to see some crazy pics of TSW.

I listened to https://podcasts.apple.com/us/podca...roke-the-american/id928933489?i=1000547158224 today.
I am no anti Fed guy. But the money supply and constant QE that seemingly doesn't end has made me concerned. The massive amounts of money created has basically all gone to assets and that has benefited the rich, and t has created massive debt bubbles. All the while destroying regular people's ability to earn money from savings and from bonds. Binds used to be what regular people bought, and rich people bought stocks.
The Taper tantrum occurred in 2013 when the Fed was trying to normalize rates. Basically stop QE
https://www.investopedia.com/terms/t/taper-tantrum.asp

The Repo market froze up, and I wrote in my stock notebook about something not being right and that a recession was coming back in late 2019.
https://finance.yahoo.com/news/repo-market-broken-fed-wants-202356690.html The Fed had to inject 400 billion to bail out hedge funds and it showed how severely addicted we had become to QE and that any sign of trying to return to normal has resulted in freakouts and not just from Trump. The whole assets system according to Christopher Leonard reacted so badly that the Fed had to reverse course and cut rates while the economy was doing well.
Like topical steroids, the system can not quit QE. TS are for short duration, if you use them too long, you can't just quit and are addicted to them. So instead of having had some problems in the recovery, we covered over our eczema with QE and kept putting more and more QE on, to the point where markets can't handle normal conditions. Like with TSW reg ski can't handle normal conditions anymore.
The longer you use TS, the longer it takes to recover from the addiction. Leaonard said that it would take probably 10 years for the Fed to unwind it's 9Trillion dollar balance sheet. That is a long withdrawl period and I see problems coming when that happens.
Or we can continue to use and depend on QE which will further warp the system even more.:

Btw I am a deficit hawk type and have been calling for reducing debt spending by 50 billion a year for quite a while.

I do agree with you (a lot) but I think you are blaming the medicine (which has serious side effects) without addressing the illness, which was the deregulation that Reagan and Clinton introduced.

For example bringing back something like Glass-Steagall and giving the anti-trust authorities more power should be part of the solution.

It's not a case of just go cold turkey you need to change your lifestyle too.

 

[Boxingfan998]

Everything OP says is accurate.
Both on qe and dermatology.

I was just arguing with a geriatric woman hysterical about needing her steroid pills to treat inflammation in her body. PS the problem is not really addiction to steroids but decreasing effectiveness. I used to have a dermatological problem, dermatologist prescribed me a steroidal cream and it lost effectiveness very fast in addition to essentially being a nuclear option that doesn't solve the root cause of inflammation. But people like their easy pills that remove symptoms.

Economy and qe has been the Western modus operandi since ww2. It's how we keep the dying corpse that is the west going and pretend we are number 1. All backed by the mighty pétrodollars and euro.

Problem is this only works as long as the world allows it to go on. When Chinese and others have had enough and pull the plug on investments, we will simply see a financial crisis.

In Europe tons of countries including mine France survived only due to QE and massive debt. And according to eurozone rules we shouldn't even be allowed to increase the debt beyond that point.

It's over.

 

[ElKarlo]

“I believe that banking institutions are more dangerous to our liberties than standing armies,” Jefferson wrote. ” If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” - Thomas Jefferson

And as the podcast said the fed has been under pressure to keep rates lower than they should be since the 60s. That’s why the 70s had such awful inflation. It was a correction to 69s and too low for too long. That’s without QE, imagine what happens when this all pops?

 

[ElKarlo]

I do agree with you (a lot) but I think you are blaming the medicine (which has serious side effects) without addressing the illness, which was the deregulation that Reagan and Clinton introduced.

For example bringing back something like Glass-Steagall and giving the anti-trust authorities more power should be part of the solution.

It's not a case of just go cold turkey you need to change your lifestyle too.

I think some deregulation was needed. Definitely so but the way it was done wa haphazard and honestly short sighted. I think regulators as you said need to be able to come in and kick butt and take names. They should stay out of it for the most part, but when it’s needed take immediate and effective action. After Enron basically nothing has happened to bad actors at all

I think there are so many problems layered on top of each other that it’s almost impossible to tell what’s a root problem and what’s a symptom anymore

 

[ElKarlo]

Everything OP says is accurate.
Both on qe and dermatology.

I was just arguing with a geriatric woman hysterical about needing her steroid pills to treat inflammation in her body. PS the problem is not really addiction to steroids but decreasing effectiveness. I used to have a dermatological problem, dermatologist prescribed me a steroidal cream and it lost effectiveness very fast in addition to essentially being a nuclear option that doesn't solve the root cause of inflammation. But people like their easy pills that remove symptoms.

Economy and qe has been the Western modus operandi since ww2. It's how we keep the dying corpse that is the west going and pretend we are number 1. All backed by the mighty pétrodollars and euro.

Problem is this only works as long as the world allows it to go on. When Chinese and others have had enough and pull the plug on investments, we will simply see a financial crisis.

In Europe tons of countries including mine France survived only due to QE and massive debt. And according to eurozone rules we shouldn't even be allowed to increase the debt beyond that point.

It's over.

It’s an easy pill to take and it works. Unfortunately it loses effectiveness and then causes addiction. Same with QE

I think the model is flawed and QE encourages debt to a dangerous degree. Look at all the companies that raided up serious debt ratios to buyback stock because dividend payments were higher than interest payments, so it made sense for the ROA to leverage up and buyback shares. Of which does nothing for the economy. They weren’t making new products or new facilities.
The west also needed China to make cheap stuff which helped giant companies. Which cost the lower and middle classes many jobs. This has made the west even more dependent upon QE. Heck wells internet rates are why the banks and mortgage companies went nuts in the 00s. The low rates made bonds not worth chasing and stocks were still declaring after the tech boom

 

[86'd]

And as the podcast said the fed has been under pressure to keep rates lower than they should be since the 60s. That’s why the 70s had such awful inflation. It was a correction to 69s and too low for too long. That’s without QE, imagine what happens when this all pops?

It’s not going to pop. They’ll just keep artificially inflating and deflating markets to minimize and do damage control.

Most don’t have a clue or understand this stuff and are more focused on surviving and having families. So long as the artificial markets can keep them fed and housed no one will do shit or figure it out too late once they’ve gotten old and weak.

It’s also advantageous for the wealthy to give back and find an appropriate amount of liquid to give the middle class. The USA is a consumer economy. They need people to have disposable income to continue to purchase their goods.

However they will look at metrics and data and decide which employment sectors to inflate and deflate based upon the times and markets. They have total control and the ability to do this and have done it

 

[ElKarlo]

It’s not going to pop. They’ll just keep artificially inflating and deflating markets to minimize and do damage control.

Most don’t have a clue or understand this stuff and are more focused on surviving and having families. So long as the artificial markets can keep them fed and housed no one will do shit or figure it out too late once they’ve gotten old and weak.

It’s also advantageous for the wealthy to give back and find an appropriate amount of liquid to give the middle class. The USA is a consumer economy. They need people to have disposable income to continue to purchase their goods.

However they will look at metrics and data and decide which employment sectors to inflate and deflate based upon the times and markets. They have total control and the ability to do this and have done it

I know they’ll keep this bubble going as long as possible. The fed is still buying what, 150 billion of asserts a month? No wonder the market keeps going up no matter what
Regular people don’t understand this and honestly I’m wonky and I still don’t fully understand how QE impacts jurist wall street not to mention the world.
You’d think the Elite would give money to the poor in some meaningful way. They they don’t they give to charities which are just placed to park their wealth and they gives cushy jobs to the elite’s children and friends.
I see the middle class dwindling more and more. As none of the money sloshes down to then meanwhile assets like housing continue to rise in price faster than wage inflation

 

[Boxingfan998]

Problem is that they can't go on with QE forever lmao. This is the big fallacy, that it somehow keeps working forever. Nothing in the economy is for free, including diluting the money supply with more bills.

Let's be realistic though, USA still has a massive economy, they have shale gas, they can still find real output somewhere.
So you Americans can chill, although reducing QE by increasing rates should be done. Why aren't they doing it? Because coca Cola guzzling idiots will complain with the inevitable (but necessary) slowdown. It's why trump got mad when the fed raised rates.

In Europe we have major league problems though. We will have Greek style financial crisis in places like France which will even damage countries like Germany, Netherlands, Sweden, etc.

Europe is done as a continent, we're sliding into poverty right now.

 

[Bry]

@ElKarlo
I agree with you. I have been interested in this topic for a while, but struggle at understanding it fully. My circle of friends have been talking about kicking the can down the street since the late 90s, which is when I took more of interested in what was going on around me.
One problem I see is that those who we depend on to look at and make decisions for our future are more worried about increasing their own wealth and getting re-elected. We do not look to the impact of our decisions today and see how they will affect future generations. It is a really sad thing and it crosses all sides of politics, not just in the US.
I think subconsciously, the millennial generation is seeing their future being destroyed and it is why they are approaching the "know" in the way that they are. It will only get worse and we as in the "first" world countries do not have the stomach to get off of the steroids.

In my mind, I believe that there will be a world economic collapse to the degree of the Great Depression or higher. My selfish side hopes it is after I am long gone of this world.

Bry

 

[jamel]

Tell that to my wheeping eczema..

 

[SSgt Dickweed]

Quanatattive

 

[86'd]

Problem is that they can't go on with QE forever lmao. This is the big fallacy, that it somehow keeps working forever. Nothing in the economy is for free, including diluting the money supply with more bills.

Let's be realistic though, USA still has a massive economy, they have shale gas, they can still find real output somewhere.
So you Americans can chill, although reducing QE by increasing rates should be done. Why aren't they doing it? Because coca Cola guzzling idiots will complain with the inevitable (but necessary) slowdown. It's why trump got mad when the fed raised rates.

In Europe we have major league problems though. We will have Greek style financial crisis in places like France which will even damage countries like Germany, Netherlands, Sweden, etc.

Europe is done as a continent, we're sliding into poverty right now.

Our economy isn’t solely dependent on our GDP or output. We’re consumers of the rest of the worlds goods and everyone is dependent on our dollar. They (the Fed) can print as much money as they like and go “into debt” as much as they please because they own the money printers and are backed by the largest and most technologically advanced military in the world.


Now will they bankrupt and collapse bubbles of their own country based on necessity and times? Of course. But it’s controlled in a strategic manner to avoid any real uprising


And they already have artificial intelligence computers with their algorithms that can predict and calculate the response to each move they make

 

[CaptHANDSUP]

“I believe that banking institutions are more dangerous to our liberties than standing armies,” Jefferson wrote. ” If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” - Thomas Jefferson

Jesus Christ modern banking was barely a thing when he wrote this. Dude was a fucking sage.

 

[Boxingfan998]

@ElKarlo
I agree with you. I have been interested in this topic for a while, but struggle at understanding it fully. My circle of friends have been talking about kicking the can down the street since the late 90s, which is when I took more of interested in what was going on around me.
One problem I see is that those who we depend on to look at and make decisions for our future are more worried about increasing their own wealth and getting re-elected. We do not look to the impact of our decisions today and see how they will affect future generations. It is a really sad thing and it crosses all sides of politics, not just in the US.
I think subconsciously, the millennial generation is seeing their future being destroyed and it is why they are approaching the "know" in the way that they are. It will only get worse and we as in the "first" world countries do not have the stomach to get off of the steroids.

In my mind, I believe that there will be a world economic collapse to the degree of the Great Depression or higher. My selfish side hopes it is after I am long gone of this world.

Bry

Unless you plan to die in next 20 years, you will live it.
Millenials and Zoomers basically won't retire until 70+ or never.

 

[Boxingfan998]

Our economy isn’t solely dependent on our GDP or output. We’re consumers of the rest of the worlds goods and everyone is dependent on our dollar. They (the Fed) can print as much money as they like and go “into debt” as much as they please because they own the money printers and are backed by the largest and most technologically advanced military in the world

What you're saying applies to 1950-2008.
The USA is no longer the sole superpower and people are relying on the dollar less and less.
It will only take a single event for part of the world, let's call it the "axis" (Russia, China, Iran, etc) and possibly the rest of the Arab world, to pull out of the US investments & petrodollars.

Basically it's USA and Europe at this point. But Europe will collapse financially in next 10 years unless something drastic is done. And when the US petrodollar collapses, the US won't be able to print ad nauseam. There will be a massive economic slowdown in the US which no President will fix.