Can one of you financial lender geniuses explain this to me?

Jim, remember, we were taken off of the Gold Standard. Therefore all money is nothing more than the strength of the issuing government.

The Fed is trying to de-value the $. By doing so, it makes the $ worth less so other countries will buy US goods. Foreign money buys a larger basket of goods.

It also helps sustain prices of items such as Real Estate and Stocks without changing value. For example: if $1 could buy you an item a year ago, but now that same item sells for $2, by making that $2 the equivalent of $1 of last years dollars it keeps the price high at $2 (to eliminate deflation of price) while retaining value.

Increasing the supply of $ allows interest rates to stay lower since there's more $ to lend.

They're playing a scary game in my opinion.

 

"scary" is one word. "stupid" might be another". at best, perhaps, "a game whose time has passed".

it'd be one thing if it was one or a few short-term bursts, but, correct me if i'm wrong, it's been a continual long exercise. at some point it's likely to backfire. and the longer they keep it up, the worse the backfire is likely to get.

doody.

 

I am ignorant on this, so what might the "backfire" be? Another great depression or something of that magnitude???

 

i wouldn't suggest anything of that magnitude, though i assume some outlier economists would suggest just about anything .

the risks are that they cause inflation to happen by printing too much money and they cause foreign exchange to go flaky if/when the other world governments think we've printed too much.

my two pennies. i'm not an economist - i just play one on the net.

doody.

 

Cool---Understand a little better now.

thanks Doody!

Red

 

I'm half expectnig a balance of payments crisis...

--Dan

 

Jim, I wouldn't waste any time trying to figure out the Fed. There's a small army of folks who daily study pig entrials and chicken guts trying to figure out the Fed, when the truth is that we are all caught in a riptide that is carrying us to who knows where. Put another way, even the Fed doesn't have a clue as to what's gonna happen next. Scary, but true.

IMHO, all you can do at the individual level is to "take a look around you and see which way the wind blows." There are always opportunties to make money, no matter how bad things might seem. According to legend, Lord Kynes made a killing buying real estate in Paris during WWI even as the Huns were approaching.

In other words, trust your own gut. Nobody bats a 1,000. But if you have good instincts, you can make it to the World Series.

Good luck, Dale

 

What a racket......run up a US defecit then print money to pay for it......I wish I could print money so I could pay back my loans.......