Monetary policy

Gamesmith94134: Has there been a "Great Stagnation"?
Yes, the great stagnation is on due to the imbalance and inequality in adjusting the changes of the emerging markets and the monetarily sovereignties failed to cope with the debts and deficits that they created. At the same time, each must deal with its debts and deficits. The question on the imbalance and inequality in trading with each other, the stagnation would continue till the issues on the currencies and value is resolved. Considerably over-priced dollar or euro and unappreciated Renminbi are the cause of the debts and deficits and they became the hurdles and pitfalls made the global economy stand still.
There must be zones and boundaries to be established to alleviate further on the throw-weights on some dominant currencies and those excessive building from the debts and deficits; it is hard to tackle on the issue individually since the system at present does not satisfy the growing on the emerging market nations or the dominant ones.
In order to shift the throw weight to spread over to the emerging markets national. They must reclaim their funds to return to their zones and boundaries by developing the better transitional market including the bonds and open markets; so, infusion of their own currencies can ease the imbalance and inequality domestically. Eventually, the profits undercut the cost of labor will be dispensed to the poorer labors and domestic demand will build up and in flow of the imports can be trade off with the deficits and the debts will be consumed by the supply of better benefit and infrastructures domestically.
If currencies are merely the measurement on the values each consumes. Then, if we guarantee the freer cash flow on all sovereignties, the problem is not hard to be resolved. If there is less dependence on the dollar or euro; they can be less expensive since there are more choices of desired currencies from the emerging market nations. Consequently, the building on the inflow and trading on its own bonds can build a better domestic demand on the imports and it also cut export since laborer can benefit on the fluidity and transient trading conditions with the better mechanism from the transactions on bonds and stocks providing each zone can choose the currencies of its choices.
It is time for the world organizations to adapt the currencies policies and monitor each zone by its trading partners. So, each zone must be regulated through a system that must be guaranteed through the each sovereignties and not banks or exchanges. So, each can trade freely with more transparency and equality in the open market to the world instead of searching on the consumers from the wealthier nations, and they are not wealthy as expected. Now, we must look on to all consumers and not to target some with their currencies that are favorable by some; then debts and deficits can also be shared among all communities from the zones with less waiting on the lawyers and bankers. And, it is all fair and each must deal with it.
May the Buddha bless you?

Gamesmith94134: Could Japan earthquake-cause-a-debt-crisis?
Mr. Mitchell,
"print their way out of debt." For Monetarily Sovereign nations, debt is not the total of deficits. Such nations can have deficits without debt, and debt without deficits. The two are separate.

It is different. In order to get rid of the deficit, the monetarily sovereignty nations can prints their currency to erase their debts and infuse the economy with the cash from debts but it is still your currencies. The matter of such cash can only in use of purchase of the durable goods or real estate; it sound good for the commerce and we have our good time in the past twenty years. If the growth of the cash flow extended the productivity, then, the pricing would be inflated like the housing and commodities with 9-15% growth yearly. However, it is the citizens of US to sustain the values; we became richer by the infusion of cash but our wages did not proportionally advanced forward.
By then, the prices collapsed like the real estate and banking. It is fancy financing about the Monetarily Sovereignty to allow the liquidity and frequency to banking and business; but we must face the other side of the coin. I am not tell you of the half full and half empty of my glass again; however, I would consider such concept is a Faustian bargain that such idea is putting US citizens at risk in the home they cannot afford, bank hold credits with less cash(foreclosures).
Perhaps, it gives a trend on looking on the luxury of the more profitable deal and an attitude in irrational exuberance to yield production and our productions are too expensive to sell oversea. Those poor non-monetarily sovereignty nation citizens do not benefit from the dollar since they did not get their raise and we the American have to consume it all. Now, some complain of inflation is not real. We get sugar in three pounds instead of five—same price, 12 oz instead of 16oz. It is only the gas irritates Americans because there will be less cash to their pockets—it is hell out there.
Perhaps, if you are serious about cut the deficit, you do not infuse the economy with currencies or eliminate interest rates. You are only cut the value of the dollar and expand the volume of it that we the American must consume and sustain by the virtue of the integrity of our financial system and not monetarily sovereignty. I am warming those monetarily sovereignty nations that they will pay with their money or consumable goods. Debts, deficits or currencies are just other metamorphisms of the valuable that we trade.
This is a hell of Faustian Bargain that blindfold your eyes to own peoples who make values to their lives; and you trade in your integrity of the system on commerce forsake of the debts and deficits. It is your claim that your money works. Subsequently, I hope you see the six cylinders engine car going uphill is not sufficient to the present economy, that the emerging markets nations have exceeded their limitation to growth. If you can feel the exhaustion of the monetarily sovereignty nations, they are stalling to solve their debts or deficits problems. It is because the excessive cash of the non-sovereignty nations are still in their regime and they are profitable than returning to their workers for labor cost increase if necessary. It is time to change another twelve cylinders engine to run a global economy that can ease the imbalance of trade and growth.
A click away to get rid of the debts or deficits is plausible; but it is till all your money your citizen must consume and its government must sustain within the integrity of your financial system. This is a Faustian Bargain for who clicks and hell for those holds the bags.
Inflation, deflation, bloom, depression are just the metamorphosis of values—the mirror image of price.
May the Buddha bless you?

Some thoughts on US quantitative easing:
1. How can you solve a debt crisis by creating more debt?
2. Ok, so now they’ve got the extra cash. It seems like it’s not getting to the right places?
3. Bernanke’s media performances seem to be undermining consumer confidence.

And overall, nobody seems to think this QE is a good idea, more reasons why here:
http://www.mindfulmoney.co.uk/2648/economic-impact/bernanke-bottles-it-a...

I see Bernanke finally read R&R's This Time is Different .

"In an interview with CBS' "60 Minutes" that aired Sunday, Bernanke argued that Congress shouldn't cut spending or boost taxes given how fragile the economy remains. He also said it could take four or five more years for unemployment, now at 9.8 percent, to fall to a historically normal 5 percent or 6 percent. "

Regards

@The Probefessional

Hasn't this always been the way monetary policy is conducted? If the Fed raises the interest rate from 2%-2.5% and inflation continues to rise, it doesn't drop rates back down and try something different.

Indeed, rather than being an aberration, it seems like this is the standard approach for many instances where the necessary input is uncertain: you start off small and gradually increase until you get the desired result.

It's only when it becomes clear that your current course of action is no longer effective that you change tactics; arguably the reason for QE2 in the first place.

Bernanke has covered his butt by stating publicly that QE can't do it alone.

No wonder he "feels secure in his decision".

and it's been interesting to me to see how criticism of QE2 has quieted in recent weeks.

The Tea Party and the Republicans have put that on the back burner.

We all know why.

TP leader: "What do we want?!?!

TP crowd: "AUSTERITY!!!

TP leader: "When do we want it?!?!

TP crowd: "RIGHT AFTER OUR TAX CUTS ARE EXTENDED!!"

Regards

We have all the right problems for monetary easing to solve, but it still isn't clear we have the right solution.

The quiet is due to burn-out rather than increasing support.

You are ingoring the obvious possibility, that QE is contributing to the low inflation and high unemployment.

"It depends on the efficacy of the program."

If the program is effective, it raises the inflation rate from 1.6% to 2%. Target reached, goal achieved.

If it's ineffective, and the inflation rate doesn't budge, they just push on that string harder? To be expected of the dismal science?

I'm not saying it's totally unreasonable, it just is the sort of reasoning that doesn't work in most other fields. "It didn't work, let's do it again!"