Fed pumps $1 Trillion Dollars into economy

Discussion in 'Politics & Law' started by MenInTights, Mar 20, 2009.

  1. MenInTights

    MenInTights not a plastic bag

  2. Mirage

    Mirage Administrator Staff Member V.I.P.

    I've been looking for ways to get out of the dollar. I didn't realize this was going to happen yesterday. I wish I would have bought some gold yesterday.

    Every American dollar just went down in value because of this atrocity.

    The sad part is people will take one look at the video and say "Oh that's Glenn Beck. I'm not watching that right wing psycho." I tip my hat to anybody who wouldn't generally watch him but actually watches that video. I think it's a very important thing to be in the loop on.

    The video is dead on and pretty scary if you are somebody who carries dollar bills in your wallet. We spend all this time trying to combat inflation and now we just create a trillion dollars to help the economy?

    The only difference between this trillion dollars and a mound of counterfeit trillion dollars is that this one was government authorized. How dare they make the value of our money worth even less. :mad:

    As far as I'm concerned we need to go back to the gold standard at of current value and never print another dollar or mint another penny unless we are taking another one out of circulation.
  3. MenInTights

    MenInTights not a plastic bag

    Few thoughts:

    1. Gold went from 920 to 970 in 2 days and won't slow down for awhile.

    2. Higher gas is the 1st place it will show. You will probably see the signs change today. Oil is traded in dollars, so oil just got a lot more expensive.

    3. You can sell products overseas to profit from this dollar collapse. I did ok in mid 2008 selling to Australians. The problem now is nobody is buying anywhere in the world so its probably a mute point.

    4. You could forex money. Warren Buffet and others have lots invested in Switzerland.

    5. I understand what you said about the "right wing. Fox News, partisan, blah-blah...." but trust me, this has nothing to do with Obama. (not you Hybrix, it was directed at others)

    6. Everyone at the house gasped when the graphic of a trillion dollars came on the tv. That's a haunting image if you know what it means.

    7. Russia has been pushing for a global currency during the G20. This gives their idea a lot more validity. If (big if) they could pull it off with China nd the middle east, we're done! seriously.
    Last edited: Mar 20, 2009
  4. Bananas

    Bananas Endangered Species

    Dont be so pessimistic guys, look at the positives!!! Listening to that guy he did not highlight why they are even doing it, he just used a load of scaremongering analogies and metaphores.

    One thing you have both overlooked; I assume you both get paid in dollars and you spend in dollars. Your dollar is still worth the same to you.

    It is in foreign investors and your import market that will get hurt, and I cant see that as being any bad thing of late. You want to buy American goods here is a good reason too. Lower that trade deficit at the end of the day $1tr is less than 10% of what you have racked up in the past.

    The real people who are going to be hurting from this are China and Japan, not Joe Public of the US. Unless that is you are addicted to Asian consumer goods or planning a long-haul vacation.

    How much did the DOW rise on this news? Does it not show that amid all the fears people are still not using money, the dollar has been too safer investment, even with a less than .25% interest the stability that it offers during this period has been evident, it has also been the US's ecomonies downfall. In the UK we took the hit earlier in the year, the pound was at an alltime low against the dollar and €uro but even though global consumerism is low by having such a weak currency that trickle of exports is still consistent. Sure the downside of this is inflation, but few people at home are spending money anyway. Our money is not good enough but other peoples is an attractive opportunity.(In our scenario that of the EU)

    The real loosers in this $1tr deal will be Mexico and Canada, they will get a nice little short term boost in affordability with their trade partner but that is money flowing from their pockets into your(US) borders. Any inflation that you experience should already be countered by the stimulus and tax rebates, that rather than spending like you should of been, people have been putting in savings, now that choice is gone, inflation and a weak dollar will to see to that. The gold rush has been and gradually those who put their money in it will want to get that money back before the price settles, they wont put it in dollars yet so will probably look towards other investment, the DOW will rise again!

    If I was in China sititng on a pile of yuan I'd consider the dollar as a good investment in the next 6 months or so.

    This is not going to happen, Russia is not a part of OPEC, between them and Venzuala they are not going to become the global financial hegemon. This is your classic right wing propoganda.:rolleyes: Just over ten years ago Russia defaulted, it is on the brink of going back down that route again, what it is asking for is more protection like the western countries get after all the IMF has been dominated by US/Euro influnce.

    Basically all that is going to happen is the IMF will expand its interests and give coutiries like Russia and China more stability and reassurance. The financial crisis has made the G8 less significant as the other 12 that make up the G20 not only play catch up but have almost caught up. Argentina and Russia are prime examples of developing countries where when times get hard get flung out on their own. It is time the big boys start playing with the youth team, they have some skills that would benefit us.
    Last edited: Mar 20, 2009
  5. MenInTights

    MenInTights not a plastic bag

    Well first, the segment was about 25 minutes long and it gave the positives and negatives of this decision. Nobody is saying the fed is evil or trying to control the money. Everybody understands that the fed is doing what they think is best for the economy.

    This is a real world example of what is happening and what it means to me anyway. I went to the grocery store this week. Everything was cheaper than a year ago. They were having a hell of a sale, but still I haven't seen these prices in over a year (actually years):
    milk less than $3, pork $1.59, hamburger $1, canned beans $1.......
    Like I said it was a hell of a sale, but even so, the entire store was on sale. It was great!

    Now I know what that means. The grocery cannot sell pork for $1.59. Lower prices come with lower margins. If he does that, he lays off a cashier and the trucker works less and the pork farmer lays people off. And we are in a depression. So, the fed comes in to try to get pork back to $2.85 or whatever.

    This is the problem. I can't afford pork at $2.85. So, the cashier still gets laid off, the trucker still drives less and the farmer still lays off people. So, we end up in a depression and prices are out of control.

    Bernake comes in and says. "Don't worry. I can get pork back to $2.30." This sounds great. I can still afford it, everybody still works. But, all I'm saying is if Bernake overshoots this, we're screwed. I hope he can do it. I'll be the federal reserve cheerleader. But I tell ya, my gut says there's no way this is going to work.
    The image of a trillion dollars on the show shocked me. GWB's trillion dollar deficient, Obama's trillion dollar deficient(s), GWB's .7 trillion dollar TARP, Obama's trilloion dollar stimulus.

    This is the website that has the same graphic that was used on the show last night: What does one TRILLION dollars look like?

    Here is 100 million dollars on one standard pallet($100 bills):

    Here is a billion dollars stacked on pallets:

    Here is a trillion dollars(double stacked):
    Last edited: Mar 20, 2009
  6. Mirage

    Mirage Administrator Staff Member V.I.P.

    Not the dollars people already own. Those all just went down in value. By creating more money, the total amount of money in circulation just went up. That means the % of the total money that everybody has has just gone down slightly. Supply and demand. The more money that's in circulation, the more people will need to live on. Prices go up etc. This is classic inflation.

    Technically, everybody should go to their boss today and demand a fraction of a $ raise because technically everybody got a pay cut if they are paid in dollars.
  7. Bananas

    Bananas Endangered Species

    This is all part of the problem though, like you described, you need some inflation to get out of the slump the country is in. Cost of living will rise in the short term but its either that or face a long term depression where cost of living for many will be only what they can afford.

    Thats true but you are going to have to have faith in the system.

    Remeber that this is the US economy we are talking about and not some despotic country in southern Africa. You have one advantage over everybody else, you are the financial hegemon and the black stuff is bought in your currency.

    When the US turns on the printing press, everybody else has to keep within reach. Considering that in recent months the dollar has remained strong whilst other currencies take a hit, you have along way to go before any inflation would destabilise the dollar to any significant level.

    They did one on the BBC with the US stimulus pack, they stacked them up on top of each other.

    $1trillion in $1 bills would stack a quarter of the way to the moon.
  8. ExpectantlyIronic

    ExpectantlyIronic e̳̳̺͕ͬ̓̑̂ͮͦͣ͒͒h̙ͦ̔͂?̅̂ ̾͗̑

    If this results in inflation, then mission accomplished. That should be what the Fed is gunning for. Now hyperinflation would be a problem, but I have my fingers crossed.

    Edit: I'm just going to say that whenever there's deflation, it seems like a lot of bad things happen to people in the working class, whereas a bit of inflation seems to always accompany economic growth (albeit economic growth doesn't always accompany inflation). That's just what I've picked up from what I've been reading and hearing since this recession business started.
    Last edited: Mar 20, 2009
  9. MenInTights

    MenInTights not a plastic bag

    My gut says what everyone is missing is globalization. In 1985, this would have worked without a hitch. What happens if you pump all this money into the economy, you get inflation and people are still getting laid off because now its even cheaper to make stuff in Mexico or Africa. I'm not talking about the effects of a weak dollar. I'm talking about economic forces pushing down on wages in America past the point of the dollar collapse? What if pork chops now cost $5.00 and I don't get a raise because my job is global and India will do it cheaper? I hope Bernake can do it. But, this thing seems so complex I don't see how.
  10. ExpectantlyIronic

    ExpectantlyIronic e̳̳̺͕ͬ̓̑̂ͮͦͣ͒͒h̙ͦ̔͂?̅̂ ̾͗̑

    It's true that companies have been outsourcing to other countries less since this recession started, but we're still losing more jobs than we were before. I get the feeling that the harmful effects of some jobs jumping overseas are often wildly overstated, admittedly due in large part to the efforts of labor groups I'm normally sympathetic with, but meh.
    Last edited: Mar 20, 2009

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