Monday, January 19, 2015

Princesse Mange-Marde Economy 101

I dont understand this.

I admit, like most people I haven't put in the sufficient effort and time to adequately study the matter but still, I just can't get my head around the most basic explanation of the general idea.

Since 2008, the FED's been shitting money at a rate faster than the growth of the shit morasses trailing all the herds of all the hippos struck with pachyderm diarrhea in the universe, including alien hippos whose turds are made up of dark matter and thus are orbiting their own little shit planetoid until the total accretion of dark matter alien hippo shit exceeds a certain threshold after which the hippo is sucked in his pile of dark matter.(thats ok though because: just like its ok that plants were meant to be transformed into animal shit, alien hippos are meant to disappear in their own shit).

Anyhow, we're talking rates shooting from 30 billion dollars to 85 billions per month, spread over the last 6 years.

85 billion dollars a month. Around 2.8 billions per day.

It all came to an end last october with a total of 4.5 trillions dollars worth of accumulated assets.

Thats 4500000000000.00$ in mortgage securities, government bonds and other insanely boring things on which the whole stability of our financial system rests.

(by the way if at this point you TL;DR, you're an hydrocephalic maggot, now go out there and post something on your facebooks)

From what I understand, the federal reserve, an organism created out of a psychotic event in the early 20th century and whose nature is as cryptic as a skizo's diary, is printing all this money and using it to buy government bonds which translates into government debt (soon to cause a float overflow on this site), and other financial stuff which translates into banksters profits.

Thats all good. What I dont understand is, with all those craaaaazy amounts of money thrown in the system, how come the dollar has not been dramatically devaluated. And also, all that money printed must use up insane amounts of trees (for the dollar paper) and insane amounts of octopus (dollar ink), so isn't there a risk that the primary resources for that quantitive easing become rarer and therefore finally give an intrinsic value to money?


Barbarosa said...

In my opinion, the reason why the dollar has not been overly devaluated is because it was and is still the world's reserve currency. China and friends still buy T-bills and other government debt, to keep their money safe. This has the effect of propping up the American dollar.

Furthermore, the American government has not been the only using quantitative easing, meaning there is no reason to devaluate the dollar relative to other currencies since they have done the same.

And finally, isn't all this money being printed merely electronic? It really doesn't need to be made into a physical bill for it to have value.

Dementor said...

Really? So they just switch some binary digits in some database and billions of dollars are created? I dont know.