The Federal Reserve escalated its efforts to get the U.S. economic recovery back on track Wednesday, again entering the realm of risky and untested policy in response to the worst downturn in generations.
Basic market indicators are that this is a bad idea. The value of stocks didn't jump yesterday. The value of gold never jumps. What changed is the value of the dollar, which is down among bellwethers like gold. Here's something that most folks never grasp. The value of gold never changes. The price of gold changes based on market perceptions of the value of a dollar. If the market perceives that a dollar is worth less than it was yesterday, the price of gold rises in response.
So, on Tuesday, we gave Obama a shellacking, and on Thursday he devalues the dollar with money we don't have. I don't understand what the man is doing, but even the Washington Post says that this is risky and untested policy. I think he's playing payback.
5 comments:
I know what the hell he is doing....printing more money with nothing of vlue to back it up. What a damn mess we are in.
This appears to be just spite, and I hope that some future Administration puts him on trial for it, and sends him to prison.
The point is, it didn't work.
There won't be any more jobs with that $600BN debt increase than there would have been without them. Money is moving around in a circle on Wall Street, also. The Day Traders have refined what used to be a hobby, buying shares and holding them for a few hours only, into the major system of trading prevalent on the Street today.
PawPaw, you're correct in all your economic theory, but you're too nice as to what to do about it.
Get a rope.
Rivrdog said...
This appears to be just spite, and I hope that some future Administration puts him on trial for it, and sends him to prison.
Never happen.
The problem, Rivrdog, is that you'd probably use the rope on the fellows trying to fix the mess instead of the fellows who made it.
The value of gold never jumps. What changed is the value of the dollar . . . .
I recall reading that a hundred-and-some years ago, you could take a twenty-dollar gold piece and buy a good suit of clothes, a fine rifle or pistol, or throw a hulluva party for some friends. You know, that's still true today.
JPG
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