Printing our way out of 2008-2010 is exactly what we did that worked, and it's what Europe mostly didn't do and their results were terrible by comparison (leading to another bad recession a few years later, after which the ECB finally learned a lesson; and finally after that, Europe began to properly recover, including countries hardest hit like Spain and Portugal).
The Fed's balance sheet makes this exceptionally clear:
https://i.imgur.com/QbF5jzJ.png
It took the Fed a short amount of time to ramp up the programs, including eventually moving on to QE. And it worked just fine.
See that epic balance sheet expansion in 2013 and 2014? That's the Fed avoiding what hit Europe. That's the Fed further printing our way out of the mess. It's how the US economy kept expanding for ten years.
You can in fact use the Fed to debase USD-based productivity + assets and then redirect those resources in a concentrated manner at a problem, such as the housing market. The Fed can take a trillion dollars from every holder of dollars and dollar assets, and put that trillion dollars toward a problem. This only stops working if the USD has no value (or in more realistic terms, if the USD loses very immense amounts of value, becoming mostly worthless, which makes the dollar debasement & redistribution efforts lose their punch).
The Fed bought all the toxic mortgages. They recapitalized the banks, keeping the majors and the real-estate market from collapsing under the weight of trillions in junk mortgages. They largely removed those mortgages from the market, which very rapidly helped the housing market begin to stabilize and turn around.
They successfully directly bailed out homeowners to the tune of trillions of dollars and reinflated the housing market and the stock market via low interest rates.
It was always just a band-aid. The reason the Fed has had to take interest rates so low now is that they were unable to raise them during the lastest 'boom'.
It's the Japanification of the US economy, including a similar Federal debt problem (which is the single biggest reason the Fed can never raise rates back to a normal level again).
Japan still has a highly functioning country and functioning economy (one of the wealthiest and most productive on earth), even though their central bank policies and debt situation are an enormous mess.
The US has a lot of household wealth (~$100-$110 trillion) that the Fed can debase on a perpetual basis, as a never-ending band-aid. Then there is all the other dollar based wealth around the world. They can run a never-ending $80 billion per month QE program and it'll barely scratch the massive US asset base (which over time, averaged, may well outgrow a trillion dollar per year debasement). Ideally you want to see the US Government bring its irresponsible fiscal situation under control, sooner than later, so that approach doesn't have to go on for 30 or 50 years (but nobody is going to hold their breath for that). The counter is to point out that foreign actors will pull their confidence in the USD during this process (increasing the real cost for the Fed to keep doing it), whether after 10, 20, 50 years - and that may well happen, but it's impossible to forecast when. This is especially true given the currency competitors are all a mess as well, with China overloaded with debt, Japan in far worse shape than the US, and the Eurozone with no growth and their own miscellaneous debt & economic problems.
If you've downvoted me then you probably need to watch this: https://www.youtube.com/watch?v=PHe0bXAIuk0.
This is a wet band-aid.
Also who the hell is downvoting me? LOL. If you downvote, please comment here so we can debate. I'm dying to see you defend the bull market case (even sideways to slightly up which would be best case scenario).
We don't need to merge two different ways for the financial system to collapse.
To bad for them, there's collateral damage sometimes… only the strong will survive.
I think more people would probably hope that central banks don't make bad bets anyway.
You know when you hear about Japan being this futuristic society? You go and visit and you feel like they are "ahead" and have things figured out?
Their economy is what our economy is going to look like. A short-medium term down and then long drawn out sideways market. Who knows when a recovery will be.
Good time to refinance.
Was there for a couple weeks in dec '18… kyoto, fujisan, hiroshima, tokyo… I didn't think this at all unless the "ahead" was meant in jest
> Their economy is what our economy is going to look like. A short-medium term down and then long drawn out sideways market. Who knows when a recovery will be.
So people can look forward to a 30 year bear flag? lol
> Good time to refinance.
Yeah, if you aren't already underwater facing no bids when trying to get liquid.
Tokyo is a hell of a lot more advanced than the bay area (where I grew up).
> So people can look forward to a 30 year bear flag? lol Facetiously, I don't know what you're talking about because you look like someone from /r/wsb, but I'll entertain your comment: the markets are highly manipulated and the fed is going to turn on the money machine to pump them up again.
It's all a bubble. Until you run out things to turn into bubbles.
Have a look at any country in history that printed it's way out of trouble, and see how that worked out for them in the longer term.
Zimbabwe is a good recent one to look at.
Yes, as the poster to whom you responded to said. The United States, for some definitions of printing.
It's the kind of thing that you can do, when you control the world's reserve currency.
They've already lost it. It's clear they're scrambling. You can't print your way out of this is the lesson we KNEW from '08.