Disliked{quote} Logic is useful here: print money=reduced currency exchange rates = reduce trust + incease in inflation = higher profit to business = more $tax = reduce deficit = increase interest rates = deficit payments increase = reduced government spending = reduced employment opportunities = print more money... Zimbabwe government did this cycle 4 times in 10 years until currency was worth less than a single sheet of toilet paper. $500 note blew about parking lots like leaves.....Ignored
I was in Zimbabwe at the height of that crisis, I remember it was costing them more for the paper to print the money on than it was worth,and then there was the so called agricultural checks, that Bob forced everyone to accept, which was really semi printed (I think $50 notes). I know the story of Zimbabwe only too well, for the fact that I was born there, and moved to UK well before the shit hit the fan.
I will ,however not dwell too much on Bobs policies being similar in anyway to what the developed world is doing, money is being created yes, but all the CBs are working in some form of syncronization, and thus we could all say that all fiat money is going to the shits, but I beg to differ on this though. The creation of fiat money such as the trillions that the fed has created, can only be considered part of the total money supply in circulation, once that money has achieved something to show for, i.e. when the banks have loaned it out and it gets repaid, that money has actually given rise to some form of productivity, and even though it may not be backed by a commodity of some sort, it has contributed to GDP in some way, if however , that money does not get repaid back then it is wiped off completely as a write off, it will vanish just as fast as it was created, but we dont hear about it until the ratio of defaults is at a critical level.
Zimbabwes money printing was not so much due to bad debt write offs, but due to stupid inflation brought about by scarcity of mainly food, which had to now be imported and sold at ridiculous prices, this in turn caused the money supply in circulation to either leave the country in greater volumes, and people were holding on to it rather than banking, as they were fully aware of the shortage of actual currency... to sum it up , its a completely different scenario brought about by one power hungry , incompetent moron.
So I dont see the money creation that we are witnessing as so much as inflation driving, but rather as a means to make up for the bad debts that ensued in 2008, and which are still taking place , due to banks lending even more recklessly now than before the crisis. Tapering will occur at the first sign that the ratio of loans being repaid are greater than loans that are defaulting. I cant tell when that will be because that is data that few of us mere mortals have access to.
But that's what money is and printing money is the inevitable outcome of previous money in the system having been wiped out of existence.
Anyway thank you for the lenghty reply, and keep up the good work its all Laka
Officer ... I swear to drunk I am not God