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uomo_senza_nome
2013 Jan 2, 9:35am
I know past performance is not an indicator for future, however history does sometimes rhyme.
Here's what happened to consumer confidence and SP500 during Aug 2011 debt ceiling fiasco.
uomo_senza_nome
2013 Jan 8, 7:03am
once we see it as a debt crisis, Steve Keen's solution becomes more clear.
Here's Keen himself:
A Modern Jubilee would create fiat money in the same way as with Quantitative Easing, but would direct that money to the bank accounts of the public with the requirement that the first use of this money would be to reduce debt. Debtors whose debt exceeded their injection would have their debt reduced but not eliminated, while at the other extreme, recipients with no debt would receive a cash injection into their deposit accounts.
The broad effects of a Modern Jubilee would be:
1.Debtors would have their debt level reduced;
2.Non-debtors would receive a cash injection;
3.The value of bank assets would remain constant, but the distribution would alter with debt-instruments declining in value and cash assets rising;
4.Bank income would fall, since debt is an income-earning asset for a bank while cash reserves are not;
5.The income flows to asset-backed securities would fall, since a substantial proportion of the debt backing such securities would be paid off; and
6.Members of the public (both individuals and corporations) who owned asset-backed-securities would have increased cash holdings out of which they could spend in lieu of the income stream from ABS’s on which they were previously dependent.
Clearly there are numerous complex issues to be considered in such a policy: the scale of money creation needed to have a significant positive impact (without excessive negative effects—there will obviously be such effects, but their importance should be judged against the alternative of continued deleveraging); the mechanics of the money creation process itself (which could replicate those of Quantitative Easing, but may also require changes to the legal prohibition of Reserve Banks from buying government bonds directly from the Treasury); the basis on which the funds would be distributed to the public; managing bank liquidity problems (since though banks would not be made insolvent by such a policy, they would suffer significant drops in their income streams); and ensuring that the program did not simply start another asset bubble.
American in Japan
2013 Mar 26, 4:18pm
This Steve Keen's solution is interesting. We could do worse and are.
Anyway with the Dow Jones...
Up up up it goes. It seems like a "low brainer" now.
The S&P 500 is getting close to a high.
So far it seems so. What do you all think?
Good earnings come in...market up... everyone cheers on Wall Street.
Bad earning / other bad news..Fed prints money that indirectly goes into the stock market via the banks...market up... everyone cheers on Wall Street.
#politics