FED should buy stocks instead of government bonds - page 2.

hugolp

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Quote from: johnyj on August 20, 2011, 05:14:28 PM

companies' sells going down -> cut staffs -> more people becomes jobless or threatened by jobless possibility and spend less -> total demand going down -> companies' sells going down -> cut staffs -> ......

This is an economic fallacy. This "model" supposes that there is only one type of good being produced.

This does not happen in the real economy. Its only inflationist propaganda.

johnyj

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Quote from: The Script on August 20, 2011, 01:38:08 AM

How about the FED stops trying to "fix" things? Then we might actually recover.

That is also a good suggestion, but I'm afraid without we seeing a much deeper recession and everyone has been pushed to edge of poorverty, we are not going to see it happen

companies' sells going down -> cut staffs -> more people becomes jobless or threatened by jobless possibility and spend less -> total demand going down -> companies' sells going down -> cut staffs -> ......

This downward spiral can continue forever until either companies stop cutting staffs or the total demand can not going down further. With today's high speed development in software and automation, the process to cut staffs and replace them with software can go on for a long time before any major resistance showing up. And the total demand can also going down for decades since people can find cheaper and cheaper products and cut spending, sell assets etc...

jtimon

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The fed should stop buying things if he doesn't want the dollar to hyperinflate.

johnyj

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Quote from: CurbsideProphet on August 19, 2011, 08:36:28 PM

And which stocks get this lucky prop-up for nothing? Let me guess, Goldman?

S&P 500 index

hugolp

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Thats silly. The Fed should buy my house and my products. That way the (my) economy would recover very quickly.

And the price of food is very cheap, poor people have it too easy, so more money printing and higher food prices is not going to matter.

The Script

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How about the FED stops trying to "fix" things? Then we might actually recover.

CurbsideProphet

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And which stocks get this lucky prop-up for nothing? Let me guess, Goldman?

johnyj

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In this way, the stimulus money will have much better effect

I hope they even buy my used car for 1 billion$, because I can guarantee I will spend all those income, not like those big corporations sitting on tons of cash and doing cost cutting which bring down the total demand of the whole society Angry

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