Matt Taibi – Magic Money Printing Machine at The Fed

Roach: QE Won’t Work

Airtime: Tues. Oct. 12 2010 | 12:40 AM ET

Quantitative easing is not going to work, warns Stephen Roach, non-executive chairman at Morgan Stanley Asia. In this First On CNBC interview, he tells CNBC’s Chloe Cho why, as well as if capital controls will

Category: Federal Reserve, Video

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7 Responses to “Taibbi, Roach: Magic Money Printing Machine at The Fed”

  1. Jack Damn says:

    Excellent videos. I learned from them. Couple of thoughts.

    1.) Matt needs a hairpiece.

    2.) Am I correct to assume that the Fed wants inflation this time around? I mean, they’re thinking of QE-2 in order to stoke inflation … am I correct or is that off? I thought the main point of QE-2 was less about mortgages and more about getting the populace spending again (via inflation).

    3.) Stephen Roach seems to be advocating “savings” and yet near zero percent interest rates and QE-2 seem like a massive transfer from the responsible “savers” to the banks. So, why save?

    4.) How do we stop the Banks?

  2. Easyenough says:

    1) Matt needs a hairpiece.
    2) the first stimulus was not 800 billion in roads and bridges – it was 40% tax breaks and then a hodge podge of other political crap. The official number is $271 billion in direct federal investment, which is obviously a trivial amount in the context of the recession. We have no idea if it works.
    3) Printing money is different than putting that money into circulation. No demand, no money supply expansion, no inflation. See Japan and it’s red hot printing press for the last 15 years. Or just look at the 30 treasury’s (3.85 yield today) implied expected inflation. Why do I even have to write this?
    4) What the banks are doing is disgusting, sure. But what does he want, more unemployment?

  3. ReadingFundamental says:

    Easyenough hit the nail on the head – inflation is not an issue when DEMAND is well below productive capacity. All these drama about the deficit and money printing is being promoted by people with agendas – either political ones like the republicans (“all this debt will destroy our country!”) and economic ones (“buy gold, it’s your only hope!”)

    At the time of the stimulus bill being passed the non-Chicago school economists tried to tell everyone that the stimulus was grossly insufficient but most people ignored them. They have been proven correct.

  4. boveri says:

    I wouldn’t call Roach a dummy but who can forget the many years he spent trying to convince us (or himself) that raging inflation was just around the corner. He was and still is flat wrong so why listen to his current nonsense.

  5. plop says:

    you can put all your keynesian and chicago crap up your cake holes. if you haven’t figures out that was really matters is real disposable income you haven’t got a clue. aggregate demand isn’t created by governments at all once you factor in the debt and to create income you need to create jobs, and btw, governments don’t create jobs, the private sector does based on capital derived from savings pools and innovation.

    government spending just like money printing is nothing more than another form of tax; one needs to be paid back with interest, the other through the debasement process that will drive the price of real goods up.

    the problem is not the banks; its a morally bankrupt fed that is pushing the WRONG kinds of policy that will benefit banks and hedge funds and the top 5% of society that owns all the wealth at everyone else’s cost.

    mr roach is right indeed … the USA needs more savings and china/germany need more consumption. what the US does not need is daft policy makers that think americans should be competing with low paying jobs in china/vietnam/india etc through low wages and a low currency.

  6. cgasho1 says:

    1. Any one want to comment on the potential role of the FED in legally bailing out the banks this time. To elaborate if BofA can sell all of the these mortgages to the FED especially the ones they cant find paper work for … wont it be difficult for the individuals to prosecute the FED for title of said mortgage? Could the state be considered a fair arbitrator in such a case??

  7. patient renter says:

    4) What the banks are doing is disgusting, sure. But what does he want, more unemployment?

    This statement seems to imply that the only target for printed money is banks. Why, exactly, should that be the case?

    If the goal of QE is truly to stimulate the economy, newly printed money could just as easily be helicopter dropped, and it would do a hell of a lot more to stimulate things than building reserves at banks.