tag:blogger.com,1999:blog-4290163255778893789.post8031520538787535772..comments2024-03-16T05:19:07.061-04:00Comments on Retirement Blues: Thoughts on QE IIJazzbumpahttp://www.blogger.com/profile/07337490817307473659noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4290163255778893789.post-73734232233394519942010-12-08T16:52:18.167-05:002010-12-08T16:52:18.167-05:00We are in complete agreement on the need for fisca...We are in complete agreement on the need for fiscal stimulus. And with the tax cuts are the solution for all that ails the economy crowd getting ready to take over, federal stimulus/job creation is a non-starter. The solution to be sure, but not gonna happen. <br /><br />On QEII: If inflation is the intent, then by default the lowering of real long term rates would follow. No? Otherwise, deflation would make real long term rates higher. Or, am I totally confused? I'm gonna have a drink now.nanutenoreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-31132525411725667082010-12-08T16:25:05.599-05:002010-12-08T16:25:05.599-05:00I don't recall haring anything about reducing ...I don't recall haring anything about reducing long rates, so I can't help with that specific question - but I do not see all nor know all.<br /><br />It's a failure of aggregate demand. People without jobs can't spend. This is the fallacy of off-shoring jobs. No demand - no hiring - no jobs - no demand; wash, rinse, repeat. Meanwhile, the personal part of the private sector is - perforce - deleveraging, which means even less demand.<br /><br />This is the recipe for a deflationary spiral.<br /><br />The answer is fiscal stimulus, and that is not going to happen.<br /><br />QE II increased long rates all the way back up to where they were 6 months ago.<br /><br />http://krugman.blogs.nytimes.com/2010/12/08/bond-vigilantes-still-invisible/<br /><br />The Rethugs don't give a rat's ass<br />about the deficit, jobs, the people nor any aspect of the economy. In fact, they have no principles of any kind. Other than the last few years, I don't know if that has ever been true before.<br /><br />And the Dems are feckless.<br /><br />God, what I wouldn't give for some feck!<br /><br />Hence, my despair<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.comtag:blogger.com,1999:blog-4290163255778893789.post-58582455787116822682010-12-08T15:58:34.393-05:002010-12-08T15:58:34.393-05:00Thanks for the explanation. So, what you are in ef...Thanks for the explanation. So, what you are in effect telling me is that when the Fed says they are trying to lower long term rates, they are alluding to the real rate? (more inflation = lower real rates.) Under current conditions, this is indeed wishful thinking. No demand for goods and services = no inflationary pressure on real rates. Correct? Pushing on a string? To quote an old football coach: "it looks like a frog pissing up a rope." <br /><br />Your outlook on the future, is I fear, spot on. The Republicans are hell bent on reducing the deficit, except when it comes to tax cuts for millionaires, which means they'll be looking to drastically reduce spending in the upcoming budget.nanutenoreply@blogger.com