'Fear Factor' Is Running High as Currency Markets Resume Trading

Re:'Fear Factor' Is Running High as Currency Markets Resume ... by webninja on Sunday March 01, 2020 @04:15PM (#22459391)

In 2008+ when they “printed money” via “Quantitative Easing”, they would buy bonds off the market. This puts printed money in the hands of bond holders. Presumably bond holders are very rich. Presumably very rich people already have a good enough car and already frequent restaurants. Now if the Fed printed money and put it in the hands of the middle class, not just the hands of the upper class, I’d bet you new cars would be bought and restaurants would be dined.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by gentleman11 on Sunday March 01, 2020 @05:11PM (#22459726)

Years ago in Canada, one province decided to mail $500 cheques to every adult in the province as an economic stimulus after they had an oil and gas surplus. Apparently it helped a lot

And it wasn’t just middle class, but lower too...

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by flukus on Sunday March 01, 2020 @05:55PM (#22459981)

Australia did this in 2008, part of the reason we avoided a recession. Parts of China have started doing the same for coronavirus.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by ceejayoz on Sunday March 01, 2020 @08:03PM (#22460651)

Alaska's been doing this since the 1980s.

https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

I prefer Norway's approach of saving (to the tune of nearly $200k per citizen!) for a rainy day.

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by dageshi on Sunday March 01, 2020 @05:12PM (#22459730)

I think you're misrepresenting QE. The Bonds the fed bought eventually expire, the money they used to buy the bonds gets repaid to the fed. It's not like they gave the value of the bonds to "very rich people" and said "here buy another yacht on us".

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by Donald on Sunday March 01, 2020 @05:24PM (#22459801)

Yes, the original bonds expired, but the Fed has actually resumed buying short-term treasury bonds since Sept 2019. This has offset long-term maturities (e.g., 10Y) rolling off and actually has resulted a net expansion in their balance sheet: https://www.federalreserve.gov/monetarypolicy/bst_recenttren...

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by gdubs on Sunday March 01, 2020 @04:33PM (#22459521)

“[...] restaurants would be dined.”

Kind of ignoring the root cause of this market sell-off.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by wrkronmiller on Sunday March 01, 2020 @04:28PM (#22459492)

> Presumably bond holders are very rich.

I'm not sure that's a safe assumption. These bonds could be held by pension funds etc...

If I am a blue-collar worker nearing retirement, and I find out my pension plan just imploded, it's definitely going to impact my spending negatively.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by webninja on Sunday March 01, 2020 @05:45PM (#22459925)

87% of Americans do not have pensions. [1]

The median savings for American families whose wage earners are between 56 and 61, is $17,000. [1]

34% of American adults have zero savings (retirement + non-retirement). [1]

Anecdotally, I had a Grandpa with a $60k/yr pension and he was definitely upper class.

[1] https://www.cnbc.com/2017/06/13/heres-how-many-americans-hav...

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by Ambele on Sunday March 01, 2020 @05:51PM (#22459962)

Those statistics are crazy. I'm not sure how the world still functions.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by kgwgk on Sunday March 01, 2020 @06:34PM (#22460187)

> 87% of Americans do not have pensions.

By “pensions” do you mean defined benefit plans only?

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by webninja on Sunday March 01, 2020 @08:10PM (#22460696)

See above citation around where it says 13% of Americans have a pension. Feel free to counter with a separate citation.

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by kgwgk on Monday March 02, 2020 @01:05AM (#22462054)

If you follow the link in the (misleading, in my opinion) “Given that less than 13 percent of Americans have pensions” quote, it says that

“In 1980, more than 148,000 DB plans covered 30 million active workers (38% of the workforce), but by 2008 just over 48,000 DB plans covered 18.9 million American active workers (13% of the workforce). Over the same period, the number of DC plans increased from 340,850 to 669,156 with an increase in active workers covered from 14 million (14% of the workforce) in 1980 to more than 67 million (46% of the workforce) in 2008.”

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by heartbeats on Sunday March 01, 2020 @04:28PM (#22459489)

What you're describing is called "helicopter money". It was just tried in Hong Kong, with unimpressive results.

https://www.zerohedge.com/economics/hong-kong-embraces-helic...

https://ftalphaville.ft.com/2020/02/26/1582705518000/Helicop...

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by HappySweeney on Sunday March 01, 2020 @04:55PM (#22459660)

The article is dated Feb 25, and mentions that the disbursement has yet to occur, so we don't have any data on the success of the measure, or do I have this wrong?

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Re:'Fear Factor' Is Running High as Currency Markets Resume ... by salty_biscuits on Sunday March 01, 2020 @05:25PM (#22459802)

Australia had a similar thing during the gfc and they managed to dodge a recession.

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