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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (757211)	12/12/2013 10:55:40 AM
From: RetiredNow	Read Replies (1) \| Respond to of 1574577

BTW, I didn't confuse high price of bonds as the same thing as the high price of money. Quite the opposite. The price of money in a debt based, fiat currency, is the interest rate. The interest rates are at rock bottom, which means the price of money is LOW. So you are correct in saying QE destroys the value of money. Of course it does. That's the very definition of an easy monetary policy. As to you other points, here's my rebuttal. Most of what you say is predicated on one major assumption: that a few smart men in Washington can more effectively manage our economy than millions of free market actors acting in their own best interests through the evaluation of risk and reward, supply and demand, and a host of other factors. I reject all your arguments, because I fundamentally reject the assumption they are based on. As I say all the time, free markets work far better than a centrally planned economy. In all of economic history, free markets have always created far more wealth and jobs over the long run than any centrally planned economy. So the Fed is trying to sell us all on the idea that they can manipulate the price of money and bonds in order to create more growth and jobs. Well, maybe in the short run that might work, but it will always create excesses and bubbles in other areas that will deflate horribly. The net net of central planning is always worse than the net net of free markets. That's what history tells us. Find me one instance in history where, over the long run, a country that debased its currency met with good outcomes. Hell, even Rome found out that monetary dilution leads to tears. What makes the US so different? Are we smarter than all monetary masters in all countries in history? I seriously doubt it. The only thing I'll give Bernanke and the Dems credit for is that they are good at selling snake oil to the American people. People so much want to believe that there is a free lunch. So when Nobel Prize winners like Krugman tell them that in fact there is a free lunch with QE, they embrace it readily. It's a fantasy, a mass delusion. The only thing that creates wealth and prosperity for the masses over the long run is a free market economy and a government with strong regulatory and legal enforcement to create a level playing field and strong property rights, while keeping their fiscal house in order and the medium of exchange (currency) stable, so as to protect the people's store of value and to lessen friction in trade. Every other system creates instability, higher variability, and sudden massive wealth losses for the people.