US Credit Downgraded. . .Again.

[Gaspar]

http://www.cnbc.com/id/49037337

Bernanke's mad printing to blame.

[erfalf]

I know this is not exclusively the administrations fault, but you know it has the distinct honer of being in power during the countries only downgrades.

I only say this because it seems like every time we criticize Obama, it is followed up with a "well Bush did this" or "Reagan did that". This one Obama holds the title all by his lonesome.

[Conan71]

"It doesn't mean what you think it means."

Curious what's being written in the spin rooms right now.

[Teatownclown]

Sure glad you three aren't calling the shots.

I have said, and continue to say, print more money. Restore confidence.

Seems to me between the Fed and our treasury the economy is improving despite the Teapublican obstructionists.

[erfalf]

Sure glad you three aren't calling the shots.

I have said, and continue to say, print more money. Restore confidence.

Seems to me between the Fed and our treasury the economy is improving despite the Teapublican obstructionists.

Fair enough that you think printing more money will help the economy. But I would dare to say if that maintaining the creditworthiness were the goal, I would recommend doing the exact opposite of what the ratings agency just said caused the downgrade.

[Teatownclown]

Baloney. Our credit remains the world standard even if the Chinese are paying for oil with yuan. 

Even this schmo Ricky Cantor, the worst member of congress next to Bohner, has some ideas about creating jobs. Looks like he's starting to figure it out.

Republican Leader Finally Admits That Federal Spending Cuts Kill Jobs

http://thinkprogress.org/economy/2012/09/13/847221/cantor-admits-spending-cuts-kill-jobs/


I'm not going to explain to you again about the velocity of money, money circulation, and confidence. If you haven't figured out the basic premise that re-inflating the economy makes sense then I will let you believe in the drown in a thimble theory of Rove and Nerdquist.

[nathanm]

Fair enough that you think printing more money will help the economy. But I would dare to say if that maintaining the creditworthiness were the goal, I would recommend doing the exact opposite of what the ratings agency just said caused the downgrade.

I would recommend ignoring the ratings agencies entirely. Do you not remember their epic love up from just a few years ago?

I would especially recommend ignoring the ratings agencies that don't understand the concept of borrowing in your own currency. Further, I would even more strongly recommend ignoring ratings agencies that don't understand that the Fed can't create inflation in this economic environment. People are not spending money, so it doesn't matter how much of it sits idly on balance sheets somewhere.

[erfalf]

I would recommend ignoring the ratings agencies entirely. Do you not remember their epic love up from just a few years ago?

I would especially recommend ignoring the ratings agencies that don't understand the concept of borrowing in your own currency. Further, I would even more strongly recommend ignoring ratings agencies that don't understand that the Fed can't create inflation in this economic environment. People are not spending money, so it doesn't matter how much of it sits idly on balance sheets somewhere.

Do you think all the extra cash is just going to disappear when the economy does turn around?

[nathanm]

Do you think all the extra cash is just going to disappear when the economy does turn around?

The Fed is just as capable of making it disappear as it is of making it appear.

[erfalf]

I would recommend ignoring the ratings agencies entirely. Do you not remember their epic love up from just a few years ago?

I would especially recommend ignoring the ratings agencies that don't understand the concept of borrowing in your own currency. Further, I would even more strongly recommend ignoring ratings agencies that don't understand that the Fed can't create inflation in this economic environment. People are not spending money, so it doesn't matter how much of it sits idly on balance sheets somewhere.

Maybe everyone has the impression that the Fed can create inflation because the fed is generally understood to have the task of controlling inflation. One would have to assume that the fed had tools at its disposal that could increase or decrease the likelihood of inflation occurring. Some more of that common sensyness I guess.

It is basically a forgone conclusion that QE3 will lead to higher commodity prices. Is that not inflation? (Oh wait, the fed doesn't measure fuel and food prices in inflation, so I guess it we won't have inflation in that regard) And considering the average income has been pretty much stagnant for quit some time, this seems like a fairly big problem. The problem isn't that there isn't enough money or it isn't easy to get. It's that nobody seems to need it or want to spend it. Unfortunately, just about the time the economy needs people to spend, people are doing what they should have been doing for year by saving. There is really nothing more the fed could possible do. It has limited tools at it's disposal. If people won't borrow at these rates, they're not going to borrow period.

Obviously it is impossible to say exactly what will happen in the future, but I believe that there are plenty of people that think QE3 is not a good thing. Not only may it not be a good thing, but it may be detrimental to job growth, possibly costing jobs, according to this:

http://www.forexlive.com/blog/2012/09/13/egan-jones-analyst-hints-at-us-rating-downgrade-post-qe3/

[nathanm]

Maybe everyone has the impression that the Fed can create inflation because the fed is generally understood to have the task of controlling inflation. One would have to assume that the fed had tools at its disposal that could increase or decrease the likelihood of inflation occurring. Some more of that common sensyness I guess.

Everyone has that impression because it's true...when we're not in a liquidity trap. In this situation, Fed policy short of truly radical action is mostly ineffective. It's slightly better than nothing, but it's all we've got since Congress won't step up. I was going to say "step up and make a politically unpopular decision," but I was looking at some polling earlier that indicates quite clearly that people in general are in favor of more stimulus, so it's not even politically unpopular except among the Tea Partyists.

[Conan71]

Interesting article on the winners & losers in QE3

http://seekingalpha.com/article/870621-qe-3-winners-and-losers

[Gaspar]

Rare video of Ben Bernanke's childhood.

[Teatownclown]

Good one Gassie. But that rascal resembles a bankster feeding the mortgage-backed security brokers from the Bush decade.

[Red Arrow]

Good one Gassie. But that rascal resembles a bankster feeding the mortgage-backed security brokers from the Bush decade.

More like the kid on the TV ad that doesn't want 5% more cash back.