Are we actually slipping into a depression?

If you hadn't lived under a rock for the last 4 years you'd know that we're actually slipping out of a depression. But keep making asses of yourselves. We want to enjoy Obama's victory in November and it's so much easier to do with all you wing trolls making your trademark stupid noise.

TCB wrote:

A final point: the Fed can't create inflation if banks don't lend out the money that it is giving them. If the Fed and Mint printed $100 trillion and then dropped it into the Marianas trench, would there be any inflation in the dollar? No, of course not, because it is not "in" the economy. Banks haven't been lending money out because the future has looked so uncertain and bleak for so long that they would have to be stupid to do so.

Money printed for the purpose of capitalizing banks enters the economy as soon as the banks receive it. The bank's vaults (figuratively speaking) are part of the circulation of money.

I generally agree with you. Although I think you are reading too much into global events. Environmental disasters are always happening in one way or another. The middle east has been in disarray for decades. Its actually just par for the course right now. But I do agree with you on Europe and China.

But above all there is a fundamental lack of trust that is supposed to be the foundation of any economy. That is the big elephant in the room. As you say, the Fed can create $100 trillion. But if it just sits on the books of banks because they don't trust anyone will pay them back, then the economy is dead in the water. And we are still heading in that direction even though Fed policies still work somewhat.

ryan foreman wrote:

But above all there is a fundamental lack of trust that is supposed to be the foundation of any economy. That is the big elephant in the room. As you say, the Fed can create $100 trillion. But if it just sits on the books of banks because they don't trust anyone will pay them back, then the economy is dead in the water. And we are still heading in that direction even though Fed policies still work somewhat.

"Trust" isn't the foundation of anything; RIGHTS are. The economy is going to hell because everything that the government is doing to "fix" it constitutes a massive encroachment on property rights. When the Fed prints trillions out of thin air and gives it to its friends in the banking industry, it does so at the expense of confiscating the wealth of everyone who owns dollars, which is a violation of their property rights.

i <3 boobs and donuts wrote:

Money printed for the purpose of capitalizing banks enters the economy as soon as the banks receive it. The bank's vaults (figuratively speaking) are part of the circulation of money.

NO. That makes absolutely no sense. That money has to be used to bid up prices in order to create inflation. If it is just sitting there doing nothing, it is not impacting prices at all.

TCB wrote:

NO. That makes absolutely no sense. That money has to be used to bid up prices in order to create inflation. If it is just sitting there doing nothing, it is not impacting prices at all.

Your mind is a mess. The concept of inflation doesn't just apply to consumer goods indexed in the CPI; it applies to ANYTHING that costs money. When the government prints money to capitalize banks, it fills a void that would have been filled by money already in circulation if the government hadn't intervened. The newly printed money props up a bank's stock price and the value of its debt, robs its competitors of the opportunity to buy its assets on the cheap and gain its business of its customers, prevents the bank's customer's from losing their deposits and enables the failed bank to continue lending. Over time, the consequences work their way down a chain that eventually ends with people buying consumer goods with cash from their inflated stock or bond values or with a a loan they got from a bank that would have failed, or deposits they would not have been able to withdraw had the government not intervened at the expense of bidding up prices for those who did not enjoy the advantage of being connected to the bank that got bailed out. This process takes time, but it WILL happen. We cannot just print trillions of dollars to capitalize banks without experiencing adverse (inflationary) consequences down the road, and to believe otherwise is to delude yourself into believing in the proverbial free lunch.

TCB wrote:

You people really frustrate me because you consistently refuse to look at the bigger (global) picture. If anything, it is a miracle that the economy has grew at all last year. Just look at what happened in 2011:...

Would the bigger picture have anything to do with the fact that the economy has grew last year? I want to be sure that I has understood this stuff because I definitely want my money to has grew in the years to come.

The economy is getting stronger. Obama has created over 3 million jobs since taking office. The dollar is getting stronger. The Stock market has risen. Gas prices are higher but this is a sign of a strengthening economy.

We still have a ways to go before things are better. We are coming out of a near depression, no thanks to Bush or his failed policies. If we can keep the healthcare bill in the law, and allow the President a free hand to be able to fix the economy, we can have prosperity again in America.

Who is this imposter taking peeps name?

No imposter. I'm not racist anymore can't you tell?

Once you stop being racist you will appreciate Obama's achievements and recognize what he's done for the economy, like I have.

Bump.

Flipping homes is a major reason housing cost are inflated. It should be outlawed.

great question

What was so great that he did?

Economic times are bad if you're middle class - have seen the cost of food & services lately? 😲

Don't blame Bernanke. B.H.O. Administration chose to play a game. B.H.O. Admin. intentionally allowed home owners to lose their homes. B.H.O. Admin. simply allowed home owners to lose their homes slowly, some not as slowly as others in order not to cause a severe depression.