Yeah, I don't know, because I'm certainly no expert either. Deflation is definitely bad, so I understand that they're trying to fix it. I also worry about hyperinflation though, which may be a result of the family lore from the German side of the family who came over to the States in between WWI and WW2 when Germany was going through hyperinflation.
The people I feel bad for are the savers, because with all of this cheap money from the fed floating around and interest rates so low, the people with bank bonds (like my grandmother) are getting completely hosed with these insanely low interest rates. And, of course, the money itself is worth less with more of it being printed. It seems like we're stealing money from those people with our monetary policy, so we can bail out people/companies/banks that made some really bad decisions.
I dunno. I'm really not smart enough to understand how all of this works. I guess I'm just worried that by trying to fix the problem, we're going to end up making things worse. That maybe if we let the credit market go through it's cycle and unwind all of this bad debt, that the market will recover on it's own. But maybe that's just wishful thinking on my part.
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Date: 2009-04-18 11:32 am (UTC)The people I feel bad for are the savers, because with all of this cheap money from the fed floating around and interest rates so low, the people with bank bonds (like my grandmother) are getting completely hosed with these insanely low interest rates. And, of course, the money itself is worth less with more of it being printed. It seems like we're stealing money from those people with our monetary policy, so we can bail out people/companies/banks that made some really bad decisions.
I dunno. I'm really not smart enough to understand how all of this works. I guess I'm just worried that by trying to fix the problem, we're going to end up making things worse. That maybe if we let the credit market go through it's cycle and unwind all of this bad debt, that the market will recover on it's own. But maybe that's just wishful thinking on my part.