Topic: The FED buys securities because, you know, the weather was too bad (Read 1488 times)

That's pretty much the point I was trying to make with this thread.  Instead of invoking the weather, they'd rather not try to justify themselves at all.

"We print money because the weather was too bad"  Come on.

I agree, but does the Fed even need to justify it with a proper reason? Nobody can really stop them from printing USD, like all other central banks that are independent from the government.

It is a factor in the economy, but it's ridiculous to deal with it by printing money.

Weather and climate certainly is a factor in the economy. It might sound ridiculous at first, but think about it.

All economies become partially planned if big enough.
A country cannot survive if there is no multi-year planning for lots of things, for instance food crops or energy consumption.
If you can't feed your people they will revolt and your country breaks down. It is that simple.
In reality there is a wide field of stability between completely planned and not planned at all.

The only reasonable choice in our universe is to have stability (planning/structure) on one side and chaos (unplanned/free) on the other.
That is the only way to gain flexibility while protecting the process as a whole.
And in fact all (successfull) systems in the universe follow this principle.
If a structure/system is too rigid it cannot interact with its environment (too much planning).
If a structure/system is too chaotic it cannot maintain its form and will disintegrate (no planning/complete freedom).

This is just the nature of our universe and we need to find a balance between these factors.

The process you described has a name - central planning.

It's the same economic theory that is unequivocally debunked, first by Mises, and then by the utter failure of every centrally-planned economy.

The only reason Western governments haven't gone the route of the USSR yet is because they've been sipping the poison instead of chugging it.

To be fair, there is a logic behind this.  I guess, in some perverted way, you can indeed solve any problem by printing money.

Let's say you want to find the Higgs Boson  (random example).  How could it be possible that you can do such an extraordinary accomplishment by just printing money?

Well, it's easy.  First, you need brain power.  And this, you have.  Thousands of people all around the word are smart enough to imagine a way to detect a Higgs Boson.  The problem is that it's difficult for them to convince other people (workers, engineers,...) to build a machine capable of doing that.

The solution:  just print the money and give it to the smart people.  They will give it to workers in order to convince them to build the machine.  The workers don't know that this money has been freshly printed.  Or they don't care, as long as they can give it to someone who will not care either.   At the end, people accept to work for a money that has been devaluated, and I'm not sure they always realize that.  Basically, the whole thing is either a fraud if you disagree with it, or an illusion if you think it's just the magic of monetary policies.

To me, it's a fraud, nothing else than money counterfeiting.   It should be a crime, even when the FED does it, and even if it's smart, good intended people who benefit from it.

Kind of you to say, Snapsunny.

I'm going to randomly answer "Better print some money!" tomorrow to anyone that brings me a problem to solve.

No wonder you have such a way with words, then

You're right. Oddly, I'm a songwriter. Thanks for making me take a second look at my own stuff.

That would make a catchy song.

Bernanke has gas. Better print some money.

Sunrise at 06:35. Better print some money.

Look at the time! Better print some money.

Wife yelled at me this morning. Better print some money.

Entrail reading was positive. Better print some money.

Of course.  And obviously the solution to solve this is to print money.       Paper is magic.

Right, because the economy is only affected by non-existent catastrophies.
Enjoy your cluelesness while you can!  

Unless you have:

. A giant wall of water hurtling towards you and crushing everything in it's path

. A risk of a nuclear meltdown engulfing a sizeable portion of a country in green light because of said weather

. The earth ripping itself apart underneath your feet

. A swirling mass of cylindrical pressurised death coming towards you

. A giant ball of ash floating in the direction of your airport


Then the weather is no excuse.

Have you ever considered what effects the weather has on the transport sector?
Or the tourism sector?
Or what compro01 mentions?

Yes, the 'fucking' weather has a huge impact on local and global economies.

Bad weather wrecks crops, houses, infrastructure, etc.  This can have non-trivial short term effects.

1 storm in a century and they panic.

The fucking weather? Tell me this isn't real!

http://www.bloomberg.com/news/2013-01-30/fed-maintains-85-billion-pace-of-purchases-as-growth-pauses.html


Whenever you want to print money, any excuse will do.