Re:The resource leak bug of our civilization
by EGreg on Monday December 01, 2014 @05:25PM
(#8684357)
But others don't have to buy the US treasuries. They can diversity - China's beegun more aggressively pushing theirs, France recently got pisset at the US and may diversify. Russia is cutting ties with US banks, etc. I am not sure why you think the worldwide market simply doesn't realize that the dollar is going to get devalued in the near future, and with it the coupon payments. Countries compete on many levels including their currenxy, and in the market, the Fed sells treasuries at a favorable interest rate.
In the United States since 1959, banks lent out close to the maximum allowed for the 49-year period from 1959 until August 2008, maintaining a low level of excess reserves, then accumulated significant excess reserves over the period September 2008 onwards. Corporations began sitting on their cash. So money is being allocated towards other things than jobs and investment in local wages, which have been stagnating for decades, and given a boost by the consumer credit explosion of the 80s and 90s. The money is being offshored, globalization and automation have caused the American worker to participate in a race to the bottom with the rest of the world - this mean reversion helps billions of people around the world but undoes the dominanxe the US has enjoyed thus far. Supply chains now stretch around the world. Apple offshored its money to avoid taxes for one thing. Amazon employs robots now, and its wage slaves are interchangeable etc. I see structural problems as being responsible for the slow recovery the US, not Fed policy.
Although I would probably agree with you in one thing - a direct unconditional basic income for US residents would do much more long term to revitalize the economy and lower misallocation of resources, than giving it to banks.
In the United States since 1959, banks lent out close to the maximum allowed for the 49-year period from 1959 until August 2008, maintaining a low level of excess reserves, then accumulated significant excess reserves over the period September 2008 onwards. Corporations began sitting on their cash. So money is being allocated towards other things than jobs and investment in local wages, which have been stagnating for decades, and given a boost by the consumer credit explosion of the 80s and 90s. The money is being offshored, globalization and automation have caused the American worker to participate in a race to the bottom with the rest of the world - this mean reversion helps billions of people around the world but undoes the dominanxe the US has enjoyed thus far. Supply chains now stretch around the world. Apple offshored its money to avoid taxes for one thing. Amazon employs robots now, and its wage slaves are interchangeable etc. I see structural problems as being responsible for the slow recovery the US, not Fed policy.
Although I would probably agree with you in one thing - a direct unconditional basic income for US residents would do much more long term to revitalize the economy and lower misallocation of resources, than giving it to banks.