Money by itself has little value : it is a government permit allowing you to make transaction. It's like a building permit. And, even a thousand building permits do not make a single building if nobody wants them. In the desert a hundred dollar bill is useless if there is no water and nobody around to sell it to you.
The rich put their money in banks, buy assets, invest in companies, and get money income from it. But their (eternal) problem with that is that they are rich already. Lucky for them ,these assets and companies give them "control" and now the game has no end. And of course becomes more and more unreal all the time (not even Napoleon Bonaparte, with all his brothers and his marshals managed to control Europe} In the end the rich do no longer control those assets, but only the (tax free) foundation that does it. Such control usually ends up (in the long run) in watered down control and spin off in monetary assets i.e. money again and little control. Only the poor guy, who picks up a dollar bill in the street ,gets full value ,as well as control at full value, until he finishes his beer.
The rich put their money in banks, buy assets, invest in companies, and get money income from it. But their (eternal) problem with that is that they are rich already. Lucky for them ,these assets and companies give them "control" and now the game has no end. And of course becomes more and more unreal all the time (not even Napoleon Bonaparte, with all his brothers and his marshals managed to control Europe} In the end the rich do no longer control those assets, but only the (tax free) foundation that does it. Such control usually ends up (in the long run) in watered down control and spin off in monetary assets i.e. money again and little control. Only the poor guy, who picks up a dollar bill in the street ,gets full value ,as well as control at full value, until he finishes his beer.
5 comments:
Am I the only one who thinks that QE is a pile of baloney? The money made available by QE should have been put in the hands of the poor and middle income folks, instead of given as a giant freebie to the banks.
Poor and middle income people spend any additional money that they get and create demand; our banks have hoarded the extra money or 'invested' it in the carry trade putting it into bonds in high interest rate markets in the Far East which is bad for everyone.
It's long been known that neo-classical economics, particularly with regard to the notion of infinite growth within a finite system, contradicts the most fundamental laws of natural science.
They can't both be right, so which set of theories do we favour for making predictions about the future; that which sees the realm of economics and human ingenuity as beyond the laws of nature, essentially a perpetual motion machine; or that which has underpinned all developments in technology since the industrial revolution and has been proven by experiment and observation and time and time and time again.
Hmm...
“The Norwegian economy is strong, unemployment is low. Norwegians therefore see no economic argument in favour of EU membership.”
Perhaps Latvia and Turkey should listen to the Euronews channel more often before they take the "suicide plunge" into the Eurozone!!!
Roubini cites three factors.
First, tail risks — or low-probability, high-impact events, such as a eurozone breakup — are lower now than a year ago.
Second, financial markets remain hopeful of recovery later this year and next year.
"Optimists repeat the refrain that 'this year is different': after a prolonged period of painful deleveraging, the global economy supposedly is on the cusp of stronger growth."
And third, central banks around the world have pursued more unconventional monetary easing, fueling temporary asset-price reflation. But there are risks to that strategy, Roubini writes. If growth does not rebound, slow growth will eventually push asset prices lower. In addition, "some central banks — namely the [Federal Reserve] — could pull the plug (or hose) by exiting from QE [quantitative easing] and zero policy rates."
A combination slow global growth and the Fed's early QE have hit emerging markets with a correction in commodity prices and equities and a repricing of currencies and both local- and foreign-currency fixed-income assets, Roubini explains.
"The consequences — sharp capital-flow reversals that are now hitting all risky emerging-market assets — have not been pretty."
Richmond Fed President Jeffrey Lacker says financial markets should get ready for more volatility as the Fed announces its plans to wind down QE, Reuters reports.
"This type of volatility is a normal part of the process of incorporating new information into financial asset prices and should not interfere with the moderate-growth scenario that I have presented," Lacker notes, according to Reuters.
Read Latest Breaking News from Newsmax.com http://www.moneynews.com/InvestingAnalysis/Roubini-markets-Fed-QE/2013/06/28/id/512486#ixzz2XgWBewsQ
Urgent: Should Obamacare Be Repealed? Vote Here Now!
Roubini cites three factors.
First, tail risks — or low-probability, high-impact events, such as a eurozone breakup — are lower now than a year ago.
Second, financial markets remain hopeful of recovery later this year and next year.
"Optimists repeat the refrain that 'this year is different': after a prolonged period of painful deleveraging, the global economy supposedly is on the cusp of stronger growth."
And third, central banks around the world have pursued more unconventional monetary easing, fueling temporary asset-price reflation. But there are risks to that strategy, Roubini writes. If growth does not rebound, slow growth will eventually push asset prices lower. In addition, "some central banks — namely the [Federal Reserve] — could pull the plug (or hose) by exiting from QE [quantitative easing] and zero policy rates."
A combination slow global growth and the Fed's early QE have hit emerging markets with a correction in commodity prices and equities and a repricing of currencies and both local- and foreign-currency fixed-income assets, Roubini explains.
"The consequences — sharp capital-flow reversals that are now hitting all risky emerging-market assets — have not been pretty."
Richmond Fed President Jeffrey Lacker says financial markets should get ready for more volatility as the Fed announces its plans to wind down QE, Reuters reports.
"This type of volatility is a normal part of the process of incorporating new information into financial asset prices and should not interfere with the moderate-growth scenario that I have presented," Lacker notes, according to Reuters.
Read Latest Breaking News from Newsmax.com http://www.moneynews.com/InvestingAnalysis/Roubini-markets-Fed-QE/2013/06/28/id/512486#ixzz2XgWBewsQ
Urgent: Should Obamacare Be Repealed? Vote Here Now!
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