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Why quantitative easing and negative interest rates will fail (creditwritedowns.com)

geerussell が 投稿

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[–]jlew24asu -5ポイント-4ポイント  (19子コメント)

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QE was the only thing that saved our ass from a much deeper depression because our politicians got cold feet and haven't been able to pick up the slack.

QE was perfectly fine 7 years ago when we were in the depths of the financial crisis. but here we are in 2015 and QE shows no signs of stopping. yes, QE3 just ended in the US but rates are going no where (along with all their other "tools") and they've promised more QE if things turn south. not to mention the new QE bazookas in EU & Japan.

so when does it all end? CBs talk about of both sides of their mouth. "Economy is doing great now!" ok well lets normalize rates and unwind QE. "We can't, the economy still show signs of weakness." CBs have backed themselves into a corner and can now never get back to "normal" because risk asset prices will crash and no one wants to be the one responsible for that. so I ask, how does this all end?

[–]stolt 5ポイント6ポイント  (18子コメント)

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QE was perfectly fine 7 years ago when we were in the depths of the financial crisis.

Unless you live in the USA. If you do, then you live in a country where QE has already ended.

[–]jlew24asu -1ポイント0ポイント  (17子コメント)

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...for now. ZIRP and other "tools" still remain. not to mention QE is still on the table if things go south. the threat alone keep risk asset prices elevated

[–]stolt 3ポイント4ポイント  (6子コメント)

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I really do not see why you are bullshitting us about QE (and apparently you haven't read anything else about economics either).

If you live in the USA (or in Great Britain), then you live in a country where QE has already ended.

If you live in Europe (or canada), then you live in a country where QE hasn't started yet.

So, do you live in Japan or something?

[–]jlew24asu 1ポイント2ポイント  (5子コメント)

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I really do not see why you are bullshitting us about QE

what do you mean?

(and apparently you haven't read anything else about economics either).

such as?

If you live in the USA (or in Great Britain), then you live in a country where QE has already ended.

forever?

If you live in Europe (or canada), then you live in a country where QE hasn't started yet.

I know. it starts in 30 days to the tune of $60 Billion a month until Sept 2016 and is open ended if conditions arent met.

So, do you live in Japan or something?

no, I live in America which is very much part of a global economy. wouldnt you agree?

[–]stolt 1ポイント2ポイント  (2子コメント)

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If you live in the USA (or in Great Britain), then you live in a country where QE has already ended.

forever?

Given the context here, I cannot even tell if this is a serious question.

[–]jlew24asu -2ポイント-1ポイント  (1子コメント)

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yes it is a serious question. is QE over forever?

[–]stolt 1ポイント2ポイント  (0子コメント)

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why should we assume that it should be forever, and not something cyclical?

especially since most of the research about the non-neutrality of money outlines that it's definitely effective in the (cyclical) short-run, but not as much in the (structural) long run?

A part of the context here is that the relevant policy statements tend to use phrases like "numbers-driven", meaning that they are specifically looking out for signs indicating where we are in the business cycle, and that they are telegraphing that to the financial markets.

Another part of the context here, is that you claim to live in the USA, who is already in a different part of the business cycle, and whose central bank is not only acting accordingly, but has also been pretty upfront about that to the media and to the public.

A further part of this specific context, is it isn't exactly as if relevant research were published just last month either. If I'm not mistaken, academia has been arguing back and fort her about this since Freidman's 1968 research. Which is to say we as a humanity have had evidence about that for around 50 years at this point.

so that's why i'm asking if indeed this is actually a serious question, given the context.

[–]stolt 1ポイント2ポイント  (1子コメント)

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(and apparently you haven't read anything else about economics either).

such as?

any other topic in this field.

at all.

whatsoever.

[–]jlew24asu -1ポイント0ポイント  (0子コメント)

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such as?

[–]MrDannyOcean 1ポイント2ポイント  (9子コメント)

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I don't have any personal thing against you... but people aren't going to take you seriously if your counter to "QE has ended" is "BUT IT MIGHT COME BACK". And ZIRP is really not the same thing - adjusting interest rates should not be nearly as controversial as QE, which was never really tried before the great recession.

[–]jlew24asu 0ポイント1ポイント  (8子コメント)

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but people aren't going to take you seriously if your counter to "QE has ended" is "BUT IT MIGHT COME BACK".

am I wrong?

And ZIRP is really not the same thing

before QE existed this was as extreme as loose monetary policy could get. you make it sound like ZIRP is a normal thing. maybe to you it is.

[–]MrDannyOcean 1ポイント2ポイント  (7子コメント)

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am I wrong?

it's a nonsensical reply. QE is over. Saying 'BUT IT MIGHT COME BACK OMGGGG' makes it seem like you predicted it would be endless QE forever and are now bitterly refusing to admit that was wrong. I have no idea if that was what you thought, but that's what it looks like.

When there's a tax cut, do you protest the tax cut with 'But they could always raise it again! So watch out..."? Is your first comment on trade treaties "They could always bring back high tariffs!"? It's just a nonsensical way of looking at the world.

QE is over. It won't be coming back any time soon with like >99% certainty.

[–]jlew24asu 0ポイント1ポイント  (6子コメント)

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QE is over. It won't be coming back any time soon with like >99% certainty.

did you give it the same 99% when QE1, 2, and twist ended?

[–]MrDannyOcean 0ポイント1ポイント  (5子コメント)

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No, seeing as the macro conditions are vastly different now as opposed to then.

[–]jlew24asu 0ポイント1ポイント  (4子コメント)

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One of your heros Bullard disagreed as little as TWO weeks before QE3 ended.

so if macro conditions are so much better now vs all the other QEs, I guess the Fed can raise rates and unwind QE, right? when will that happen? next quarter for sure

[–]MrDannyOcean 1ポイント2ポイント  (3子コメント)

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One of your heros Bullard disagreed as little as TWO weeks before QE3 ended.

Who says Bullard is my hero? that's random. So a guy said a thing... cool?

so if macro conditions are so much better now vs all the other QEs, I guess the Fed can raise rates and unwind QE, right? when will that happen? next quarter for sure

Now you're just shifting goalposts. It's VERY clear that they won't be doing QE again any time soon, given the current macro conditions. (side note: I'd place a very large amount of money on that if there was some sort of secure way to do so. Know of one?) That's the conversation we're having.

"When do we raise/when do we unwind" is a different conversation. If you'd like to talk about that, cool, but it's a different topic. Right now you just seem to be changing the subject.