How far does the stock market fall...

Discussion in 'Too Hot for Swamp Gas' started by gregthegator, Sep 30, 2013.

  1. tegator80
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    tegator80 Well-Known Member

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    I have one question for all of you expert economists, you know the ones who like to get their hands dirty in the technical details. If the Fed is printing money at 85B per month, isn't that a functional part of our national sovereign debt? In other words, isn't it a plausible notion to say if the debt ceiling isn't raised then the Fed can't take on any more debt? I realize that the Fed is an independent entity from the Treasury but the bonds are being sold with the faith and credit of the Treasury.

    Thoughts?
  2. gulfgator
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    gulfgator Well-Known Member

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    IMO, anyone with a vote in congress from any party. now or in the future, that supports defaulting on our debt for political means, should be charged with treason.
  3. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    Because one cost can be recovered but not the other?

    The tapering fears are about prime rate.
  4. tegator80
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    tegator80 Well-Known Member

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    http://abfm.org/?p=28870

    LACKER EXPRESSES CONCERN ABOUT FED, QE

    SEPTEMBER 27, 2013 BY KWHUNTER

    Since the introduction of the latest round of Quantitative Easing by The Federal Reserve, reflected in the monthly purchase of $85 billion by the central bank of Federal Treasuries and Mortgage Backed Securities, Richmond Fed District President Jeffrey Lacker has been a consistent critic of the strategy. More specific, Lacker has expressed concern about the ability for the Fed to reverse course on the strategy, first by reducing and eliminating its asset purchases, then with the exiting its holdings. At the present time, the Fed is reinvesting in Treasuries as current ones they hold reach maturity...

    Perhaps one of their own is a better person to convince you.
  5. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    Convince me of what, exactly?
  6. tegator80
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    tegator80 Well-Known Member

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    You didn't like my original post and I am saying that a Fed President feels the same way as I do.
  7. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    I didn't like your analogy, I largely agree with the opinion about Fed injections but people seem to have a very tenuous grasp on how this all operates.
  8. tegator80
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    tegator80 Well-Known Member

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    Alright, trying to parse disagreeing about my analogy but agreeing with the Fed and its attempt to keep the ship righted. My point is that the Fed is going on a "keep going forward" approach even though it is going into uncharted territory. That is my point of the analogy: you can artificially move forward but for how long? When do you decide that land isn't just beyond our view and begin to assess a different approach?

    And this is investment money that needs to pay dividends. If we spend it all now, then how can we spend it later on a new strategy?
  9. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    To be fair, I did specify that I was talking about the analogy.

    Assuming there is no real risk, it can go on for some time. We've done this before, quite a few times.
  10. gregthegator
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    gregthegator Well-Known Member

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    time for our master's the Chinese to say something...
  11. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    Are they really our master's [sic] if they are at the mercy of our internal politics?
  12. Swamper
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    Swamper New Member

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    if the market falls big, keep buying stocks at low prices---they will go back up in value in a month or two
  13. dadx4
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    dadx4 Well-Known Member

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    It's my understanding we have never defaulted on our debt before so this is unprecedented. I have seen estimates of a 45% haircut on the S+P.
  14. orangeblueorangeblue
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    orangeblueorangeblue Well-Known Member

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    Check when the thread was made, dad.
  15. OklahomaGator
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    OklahomaGator VIP Member

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    It seems like it is up today.

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