Why people say that in times like this Fed printing money and government "bailouts" are bad?

Yes, but shareholder do not incentivise that. Shareholders wan companies that grow fast and number go up not build "cushions". So market itself is not incentivising these "safety pillows"

This is the most retarded argument I've ever seen.

I'm not even kidding. People like you should not even be allowed to vote.

Americans have become so retarded it's actually almost insane.

> But, do you agree that more money and slow velocity would create the ultimate stagflation overnight?

I don't know, I'm an economics noob. Can you explain what you mean by "slow velocity"? You mean stocks not being traded?

If Fed injects money into stocks, but people just continue selling their stocks then stock market value goes down and dollar value still goes up, so that doesn't cause stagflation.

Can you explain in detail?

Nice argument. Stay poor retard

Lol.

The systems a joke bro thats why we joke about it.

A bunch of narcissitic sociopath coke heads run everything and when their comeuppance finally arrives its fucking crocidile tears and pleas to keep their exteavigent luxurious lifestyles intact.

Like Disney google youtube and Facebook are some irreplaceable good instead of the fucking incarnations of evil.

When my life goes to shit they say, “well let them eat cake”.

When we have child care problems its “figure it out” and “you do what you have to do”

When we need to go to the doctor we just dont go and hope we dont die.

But a little pain comes their way and they need money for their yatchs and private jets. Heaven forbid they have to live like us. LMAO.

They have stolen entire generations retirments twice in a decade! Do have any comprehension of how fucking irredeamable these assholes are? How fucked the system they perpetuate is?

Stop being such a fucking boot licker!

If our masta dies how we feed and cloth weselves?!?!? Jesus Christ dude

Institute IQ test to vote.

The problem is not that they are stupid. Its that they are amoral psycopaths.

> Because it encourages terrible corporate behavior and causes even larger crashes like the one we are having now.

Yes, but isn't that better than those companies dying off completely, sending US spiralling into larger recession / depression and reducing US influence on global stage?

And those bailouts are more like a lottery anyway, you can't be sure your large corp will get bailed out. It might, it might not.

And even with those bailouts isn't aggressive economic growth preferable to more conservative growth? US is not alone and has to maintain power position, so China does not overtake. And they are close.

So it makes sense for Fed to do ANYTHING to keep the music playing, to prevent depression, to pump the economy, to create growth of economy and productivity, leading to further advancements in tech, improving productivity even further and so on.

People say "this cannot go on forever", but... why not? What magically prevents it from "going on forever"?

> CEO: Should we spend our money on actually valuable things that encourage long-term growth like investing in a good workforce, plants, factories, rainy day fund, etc...or...make greedy wall street parasite investors happy by being as lean as possible, using all of our money to make the stock price go up, and if it goes tits up, well, the government will save us and our workers will subsidize us (by having to pay higher taxes to cover our bailouts...even as we slash their wages. Mhmm, I'll choose the latter because my executive friends and I are going to get a golden parachute no matter what happens along with my best investor friends who I'll warn of a dump way ahead of time.

What if you don't look at it from your point of view but from governments point of view? Isn't an aggressively growing economy and stock market preferable thus pulling in more funds from all over the world into US stocks?

Yes, it will go tits up every 10-12 years, but with Fed pumping and bailouts the recession will be softer and there won't be a "hard restart" which could send US back on global stage.

If we look purely from neutral stand point - goal of US gov is to maintain US power position in the world economy. If sacrifices need to be made that is preferable to being more "conservative" .

> Bailouts keeping shitty companies and/or zombie companies afloat are not "dealing with the problem" - they're simply kicking the can down the road to create an even bigger collapse in the future.

This what I don't understand - what is actually preventing US gov to keep "kicking can down the road" literally forever?

They can keep printing money right?

So what is magic moment where can cannot be kicked down any longer?

I'm not American, can you explain why am I retarded? I'm just learning. Thanks.

Can you explain how I am wrong and address each of my points in logical manner without resorting to platitudes, exaggeration and personal attacks? Thx I really want to know WHY I am wrong. I might be wrong, I just want to know WHYYYY

Velocity in general is regarded to how people spend their money/assets. In time of war, uncertainty and time like today, people might spend initially some cash for provision, but after a while they will stop and start putting money "under the mattress". That thing with the fact that more money are injected into circulation by the feds by simply printing more, historically leads to hyper inflation, literally overnight, its 2% today, 4% tomorrow and 16% the next day... by the end of the week the $1 menu at McDonald's is of value of $100 bucks today. And all the savings people think they have made are useless, and when they try to go and buy some stuff its too late, economy is about to collapse, factories are closing, people are losing their jobs etc. So stagnation is happening in general. This is the stag-flation I am talking about.

It happened around WW1 in Germany, the Great Depression in US was just stagnation, there wasnt any inflation, the dollar remained the same. So in general, we haven't seen something like that in the west. And now due to the China Virus, stagnation is happening, due to feds around the world printing more cash without backup we see an incoming inflation. So the only logical outcome is mass stagflation.

This is my take on this, as far as my understanding of economy and history goes, we are on the wrong path today, sadly.

>Yes, but isn't that better than those companies dying off completely, sending US spiralling into larger recession / depression and reducing US influence on global stage?

No, because like I said, you are literally just causing the next depression to be even WORSE. Can you imagine something even worse than now? How about instead of a bottom at -60% we get a bottom five, ten years later at -80%? And if we kick that can down the road, what, a -99%? Hyperinflation? Civil war? The complete collapse of society? There is always a reckoning for bad behavior and even though there would be pain in the short-term, long-term we would be okay with real growth.

>And those bailouts are more like a lottery anyway, you can't be sure your large corp will get bailed out. It might, it might not.

Executives paint a rosy picture to people that they will and convince themselves mentally that they will. So that doesn't matter-in order for them to be even somewhat responsible, you need to make it 100% clear that no bailouts will happen, sans for REGULATED defense contractors, etc, who are actually essential and will be forced to save up money anyway due to the regulations.

>And even with those bailouts isn't aggressive economic growth preferable to more conservative growth?

No. It is better to have sustainable, conservative growth backing your global superpower than fake growth, because eventually that aggressive growth will crater, and you really can't control when it will, leaving your country more vulnerable than before.

>US is not alone and has to maintain power position, so China does not overtake. And they are close.

And if you kick this can down the road...they will absolutely rape us for the rest of the century, possibly into the 22nd. We need to start the foundation for real growth now...and if China decides to continue with its crackpot growth strategy (which they are doing now, printing out trillions upon trillions of local government debt...)

Its not. In fact, what you are suggesing makes crashes like this inevitable, just way bigger and way more painful.

And what do you mean you can't be sure? Look at the massive bailouts that went on, everyone had their hands out. The US is buying corporate bonds like crazy.

And aggressive economic growth is obviously preferable, but this isn't real growth. If it was, why not just have the Fed/US Gov just contantly buying bonds, and even stocks. It will make the market soar like crazy. But we don't do that when times are good, because of the extremely negative consequences.

There is no magic involved here. Eventually debt becomes so massive it is non-serviceable, the governments balance sheet is overloaded with toxic, money losing assets, and then money printing gets out of control to service the debt, At which point, inflation flies wildly out of control and the USA looks like zimbabwe.

Inflation. When you print money, inflation will devalue it. Each dollar has less purchasing power. If what you are suggesting is possible then every banana republic could just print billions and billions of their own dollars and end up as rich as switzerland.

Cont. and national government debt. That combined with the fact China is an authoritarian hellhole means that when the reckoning comes from them (and it will), you're going to see a hard repeat of the Warring States period eventually, unless they get their shit under control.

>What if you don't look at it from your point of view but from governments point of view? Isn't an aggressively growing economy and stock market preferable thus pulling in more funds from all over the world into US stocks?

>Yes, it will go tits up every 10-12 years, but with Fed pumping and bailouts the recession will be softer and there won't be a "hard restart" which could send US back on global stage.

Like I said...you can't do fake growth forever. Eventually, there will be a reckoning. You can either take a punch and go down for a few years...or delay it. Then get stabbed or shot. It's just how systems work. Without real, fundamental growth, nations collapse, and the US is no exception. If the government held a long-term view, it can cope far better with getting rekt for a year or few years than pushing this down the road and then suffering for decades or even centuries (as China, Rome, and every other Empire before has discovered).

Economics is a pseudoscience

Well, right now USD is very powerful, so by printing money now you aren't reducing USD value that much.

Besides, we always had inflation, everyone knows that. Inflation encourages spending. What's so bad with inflation? Economy keeps growing. Hyperinflation? Well, Fed would obviously not print so much USD to cause that.

>Velocity in general is regarded to how people spend their money/assets. In time of war, uncertainty and time like today, people might spend initially some cash for provision, but after a while they will stop and start putting money "under the mattress". That thing with the fact that more money are injected into circulation by the feds by simply printing more, historically leads to hyper inflation

Right now USD is very strong even with money printing, so why do you think Fed would be so retarded to initialise printers and never stop them? Obviously when they see USD fall in value too much they would stop the printing process.

>Well, right now USD is very powerful, so by printing money now you aren't reducing USD value that much.

For now. That isn't sustainable forever. Germany probably thought the same thing...until it suddenly stopped working.

>Besides, we always had inflation, everyone knows that. Inflation encourages spending. What's so bad with inflation?

Moderate inflation is good, hyperinflation is bad.

>Well, Fed would obviously not print so much USD to cause that.

That's what Germany and every other country with hyperinflation thought...except the problem is, they, and we, are funding this printing through debt, and eventually debt has to be repaid...

>and eventually debt has to be repaid.

And how are they going to repay this debt? By going into more debt to print more money, causing more debt and more inflation, until everything is fucked.

> Eventually debt becomes so massive it is non-serviceable, the governments balance sheet is overloaded with toxic, money losing assets, and then money printing gets out of control to service the debt, At which point, inflation flies wildly out of control and the USA looks like zimbabwe.

Sorry, but why is it "not serviceable"? What exactly makes this debt "not serviceable"?

> the governments balance sheet is overloaded with toxic, money losing assets

So government ends up holding shitty bonds?
What happens next?

> money printing gets out of control to service the debt, At which point, inflation flies wildly out of control and the USA looks like zimbabwe.

But if money gets printed only to cover the debt, why hyperinflation?

I just don't get it.

If all of this is so bad, what is a better alternative and why isn't it being implemented?

Yes, but eventually it will. How do you believe inflation encourages spending exactly? Other than people have no choice but to pay double or triple for groceries?

And where is this obvious stopping point? Where exactly does hyper inflation take over?

If you are trolling, you got me 100%. I am totally convinced you are slow.

>Executives paint a rosy picture to people that they will and convince themselves mentally that they will. So that doesn't matter-in order for them to be even somewhat responsible, you need to make it 100% clear that no bailouts will happen, sans for REGULATED defense contractors, etc, who are actually essential and will be forced to save up money anyway due to the regulations.

But if a cataclysm like Corona or Yellowstone occurs, it is not execs or company fault, right? So isn't bailout helpful here?

> No. It is better to have sustainable, conservative growth backing your global superpower than fake growth, because eventually that aggressive growth will crater, and you really can't control when it will, leaving your country more vulnerable than before.

I don't understand why this "fake growth" can't go on forever? Aren't all countries doing it? Isn't it done to ensure US is #1 economy even if fake? It's not like China numbers are real, so is US left with any choice if it wants to maintain power position?

Japanification.

Because the only ones who profit from this are the fucking CEOS or people at the top, literallt making millions while letting OTHER people pay for their mistakes. There’s NO reason they should be judged differently. Why no bailout for small businesses then?

> And if you kick this can down the road...they will absolutely rape us for the rest of the century, possibly into the 22nd. We need to start the foundation for real growth now...and if China decides to continue with its crackpot growth strategy (which they are doing now, printing out trillions upon trillions of local government debt...)

Again ,if China also has crackpot strategy then aren't US and China pretty much on even ground?

Maybe it's a game between superpowers to see who can last longer in this musical game of chairs?

And if all of what you are saying is true - why is US still choosing this harmful strategy?

>Sorry, but why is it "not serviceable"? What exactly makes this debt "not serviceable"?

Not having enough money to pay the interest payments on the debt...meaning you default on the debt.

>So government ends up holding shitty bonds? What happens next?

It loses lots of money on its investments, making the problem above much, much worse.

>But if money gets printed only to cover the debt, why hyperinflation?

See my answer in the posts above.

>If all of this is so bad, what is a better alternative and why isn't it being implemented?

Let it crash and try to feed real people as best we can, than build up sustainable infrastructure and real growth. Bail out the people, not the corporations, and try and ride it out for a few years.

>Why isn't it being implemented?

Rich people would get absolutely shitwrecked and lose their positions of power before they can flee the country with non-monetary assets, and rich people currently control the economy.

>What about a non-apocalyptic alternative?

FTL drive is invented along with fusion reactors and we have infinite resources, space, and energy.

Go back to r/investing
reddit.com/r/investing/comments/fnlchp/why_people_say_that_in_times_like_this_fed/

Attached: YnfP4JqbEHB6ZhELvW09gYqKZ_AN7q4_DkX74Hs2b-U.jpg (717x880, 130.72K)

> For now. That isn't sustainable forever. Germany probably thought the same thing...until it suddenly stopped working.

What reasons are there for it to stop working? If USD is "bad" and it is this strong, isn't EUR and other currencies in even deeper shit?

And if everyone is in this shit together then will US no win by manipulating and pumping this smarter than others?

US repaying debt to whom? Other countries? It's not like anyone will "collect" it from US. And yes, let's say they print more money, let's say it causes inflation (it has been going on forever anyway)...how does this crash everything? You just have weaker dollar and more expensive stocks...show goes on. Why not?

> How do you believe inflation encourages spending exactly?

If my money will be worth less tomorrow I need to spend it fast!

> And where is this obvious stopping point? Where exactly does hyper inflation take over?

I understand that 2% annual inflation is the norm, no?

> If you are trolling, you got me 100%. I am totally convinced you are slow.

Tell me how my arguments are wrong

It is too big. The government cannot raise enough money in taxes to pay its current expenses and also pay off its debt. Its the same as you owing more than you make on credit cards and car loans.

If the government holds shitty bonds, then it never makes money off those bonds. So they buy assets that end up losing them money instead of providing a return.

Hyper inflation happens because the debt is so large. Even if they only print enough to cover the debt, the purchasing power of the money already in circulation goes down, due to the increase in money supply.

More dollars = each dollar less valuable.

>I'd like a logical explanation devoid of dogma and ideology
>"If no bailout then only potato :DDD"
Things are not only black and white and also you're a faggot

But is that really true or emotional speak?

So you have company with 10k employees. Obviously letting it go bankrupt will impact economy negatively with all those employees being out of work.

> Why no bailout for small businesses then?

Because it is not realistic to calculate bailouts for ton of small businesses doing audit on each. Lack of manpower, no efficient. It is way more logical and efficient from gov standpoint to bail out one large company than 10000 small ones.

>Again ,if China also has crackpot strategy then aren't US and China pretty much on even ground? Maybe it's a game between superpowers to see who can last longer in this musical game of chairs?

At last, now you see.

>And if all of what you are saying is true - why is US still choosing this harmful strategy?

See , except one political party wants to save their rich friends in the short term (Republicans) while one wants to save their rich friends in the long term by giving enough handouts to not cause the collapse of global capitalism (Democrats). Either way they will choose this bad policy so long as they continue giving a shit about their rich friends. We need to realize, as FDR put it, that some rich people need to be thrown to the wolves if the current system is to survive...or to let the system burn.

Attached: atlastnowyousee.jpg (655x960, 41.98K)

> Not having enough money to pay the interest payments on the debt...meaning you default on the debt.

Two things:
1) Can't US just print even more money then?
2) Can't US just default on debts then?

let me ask question here as well

Lmao gottteeeeemm

Attached: 1578907352449.png (214x300, 31.29K)

based kreia user

Attached: 2961D40C-D0C8-442C-8B88-A91BA69DA4D5.jpg (1183x1920, 175.3K)

>What reasons are there for it to stop working? If USD is "bad" and it is this strong, isn't EUR and other currencies in even deeper shit?

If other countries collapse less than we do because they aren't putting this shit off like we are and then rebuild with real growth, their currencies will naturally replace the USD over time as they are based on actual fundamentals instead of fake

LOL, yes, just spend all my money during a depression, sure, I won't be able to afford food in a week. LOL. Think about what you are saying?

GG, tho, you got me. I am convinced you are retarded. LOL.

Yes its really true.

>follow next 30 years with Great Depression 2.0 for what? Principles?
The problem with your reasoning is you think the fed can prevent a Great Depression 2.0 by printing money. It can't, the only thing it can do is save big businesses that took bad decissions while punishing the average joe that did nothing wrong (other than trust the US government).

Whoops, entered this before I intended to, to continue, instead of bullshit fake economics.

>And if everyone is in this shit together then will US no win by manipulating and pumping this smarter than others?

Not really because see the post I linked to, that only works unless literally every government on the planet agrees to do some kind of eventual debt reset or never ever tries to collect...which is not going to happen.

>
(You)
US repaying debt to whom? Other countries? It's not like anyone will "collect" it from US. And yes, let's say they print more money, let's say it causes inflation (it has been going on forever anyway)...how does this crash everything? You just have weaker dollar and more expensive stocks...show goes on. Why not?

Most US debt is held by US citizens such as rich people, banks, and retirement funds...if you don't repay the debt, say bye bye to our banks, rich people, and retirement funds, and likely an actual civil war. That and foreign countries will stop lending us money...and the only way to get them to land money is to invade them...and we can't invade the entire planet.

>So market itself is not incentivising these "safety pillows"

Yes, because the government bails out companies. The market would incentivize safety pillows if it was truly a free market.

>Am I not understanding something here, but if Apple decided to become "antifragile" and start building "virus ready" isolation offices, "Yellowstone eruption" ready bunkers and "Asteroid ready" space stations to ensure the company can survive in "bad times" instead of focusing on R&D and making new ipads...their stock would drop like a rock.
The people talk about not going into massive debth and having enough liquid assets to survive a bad jear with this
Not the bullshit you strawmanned

>If during 2008 no banks would have been bailed out and a worse recession and unemployment would have followed would people be happy
After fire you get new life

Attached: figure-new-life.jpg (1200x600, 112.48K)

now this is reddit spacing

Also save the companies, save the workplaces
LYNCH the CEO and the supervisory board
These are the cunts that profit the most and these are the ones at vault
Not the whole company

You think we have “capitalism”.
We dont.

We have state sponsored corporations. Just like communism. And just like communsim they are becoming over bearing and will bankrupt the state.

You see business are too large and complex to be privatly funded, Too subject to external shocks leading to bankruptcy and insolvancy, too unwilling to fund coslty but promissing R and D. The private market does not incentivise many worthwile risks and endevours. While many things like water and sewer, medical, education, healthcare, and retirement funds should never be left to the free market as its impulse would be extraction.

Point is We have 2 variations on facism.

1. The corporations try to extract wealth from the consumer rather than the state. When this fails they have the state steal the consumers wealth and give it to the corporations. (Bailouts).

2. The “market” which necessitates and amplifies quarterly growth. While this induces “innovation” it also creates radical incetivisation for non competative practices. (Like 10 year auto loans on 120,000 trucks for people earning 15k a year, or psuedo monopolization)

This means as the state sponored monoplies become entrenched and more subjected to state whim they become less able to meet their fiscal requirments and will eventually bankrupt everyone. At least we have awesome comcast cable internet for 150 dollars a month!!! And shitty overpriced cars designed to break and be serviced exclusivly by the dealers for even more money!!!!!!! LMAO

Moral hazard is a real thing. But how are companies supposed to prepare for a biological attack on the US from China? It violates all international treaties, was completely unprovoked, and had no warning or indication that the attack was in planning.
Idiots who are complaining about the Fed don't understand that this is economic warfare not business as usual. China is providing a huge amount of support to their companies. If the US doesn't, China will send in the PLA after the US military industrial complex is wiped out.

You're seeing things clearly. Good for you.