The Moral and Economic Imperative to Raise the Minimum Wage

[DEAD7]

Dude what're you talking about? We haven't even hit 4 under his administration.
http://www.usinflationcalculator.com/inflation/historical-inflation-rates/

Deflation isn't good. And any economist worth their salt is going to aim for 2-3%.

Most mainstream economists don't view increasing the min. wage as a bad thing. It's no secret that the income gains over the past 30 years have almost all gone towards the top. Keeping with productivity it'd be much higher than $10. Keeping with the rate at which the top earners have increased income it would approach $25.

Most min wage earners are in the service industry. These are jobs that can't readily be eliminated. The dollar menus will still be there, but the people making them will be making them a lot more. Will prices rise? Possibly A LITTLE. In the larger picture it'll be negligible.

You're right that was Bush in 08. My mistake.





Inflation disproportionately hurts the poor, and increases the wealth disparity. The lower the better IMO. But I'll look into this 2% consensus you mention.







And increasing the wage isn't bad per-say , it just doesn't do anything. Unless you count those that will gain around 10k a year but lose 15k in benefits that they no longer qualify for

The value of a dollar is something we need to seriously look at, as well as what it's backed by... If anything

 

[DEAD7]

I also believe we will see much higher inflation rates as a result of this quantitative easing approach

 

[Dafunkdoc_Unlimited]

There is no 'moral' imperative to raise the minimum wage. That's a fantasy.

People want to see others doing bad so they can look down on them to feel better about themselves.​

 

[Futuristic Eskimo]

I also believe we will see much higher inflation rates as a result of this quantitative easing approach

Explain exactly why you believe this and why long-term bond yields do not reflect this belief.

 

[DEAD7]

Explain exactly why you believe this and why long-term bond yields do not reflect this belief.

The biggest factor is that it doesn't address the underlying issues and should QE achieve to (temporarily) lift economic growth through higher credit extension, inflation (expectations) will rise immediately as the enormous amount of money created flows into the real economy. Investors in bonds will anticipate this, and will begin selling bonds they lose more value the higher inflation expectations – so there is a high risks that interest rates rise even more than inflation. The result is that it becomes increasingly expensive for the both the government and the private sector to (re)finance debts, and risks of bankruptcy loom.
If the central bank does try to avert higher inflation and interest rates when the economy starts growing again, it has to drain the money it has pumped into the banks before. The more money was printed, the more money has to be withdrawn. To the extent that high money creation has boosted asset prices, the opposite occurs if liquidity is withdrawn from the system. The more money has been printed, the more downward pressure there will be on asset prices if the central bank reverses this process...
and given the track record of those in control now, I expect all this to go poorly.


Just for clarity sake, QE is just a fancy way of saying they are printing more money

 

[DEAD7]

and all of this completely f*cks the poor

 

[Futuristic Eskimo]

The biggest factor is that it doesn't address the underlying issues and should QE achieve to (temporarily) lift economic growth through higher credit extension, inflation (expectations) will rise immediately as the enormous amount of money created flows into the real economy. Investors in bonds will anticipate this, and will begin selling bonds they lose more value the higher inflation expectations – so there is a high risks that interest rates rise even more than inflation. The result is that it becomes increasingly expensive for the both the government and the private sector to (re)finance debts, and risks of bankruptcy loom.
If the central bank does try to avert higher inflation and interest rates when the economy starts growing again, it has to drain the money it has pumped into the banks before. The more money was printed, the more money has to be withdrawn. To the extent that high money creation has boosted asset prices, the opposite occurs if liquidity is withdrawn from the system. The more money has been printed, the more downward pressure there will be on asset prices if the central bank reverses this process...
and given the track record of those in control now, I expect all this to go poorly.

Just for clarity sake, QE is just a fancy way of saying they are printing more money

Yes but why do you think that bond traders have not already begun to anticipate this? Everyone knows the mechanisms by which QE functions, yet long-term inflationary fears are not present at all. Dont you think its quite possible that your analysis might be missing a few crucial points that would completely change your conclusion? If not, I would hope you are shorting bonds because you clearly have an edge over the market with your fascinating insight

 

[DEAD7]

Yes but why do you think that bond traders have not already begun to anticipate this? Everyone knows the mechanisms by which QE functions, yet long-term inflationary fears are not present at all. Dont you think its quite possible that your analysis might be missing a few crucial points that would completely change your conclusion? If not, I would hope you are shorting bonds because you clearly have an edge over the market with your fascinating insight

Absolutely, and the introduction of new information can change my position completely(on any issue).

From wiki:

Risks[edit]
Economists such as John Taylor[72] believe that quantitative easing creates unpredictability. Since the increase in bank reserves may not immediately increase the money supply if kept as excess reserves, the increased reserves create the danger that inflation may eventually result when the reserves are loaned out.[73]

Savings and pensions[edit]
In the European Union, World Pensions Council (WPC) financial economists have also argued that artificially low government bond yield rates induced by QE will have an adverse impact on the underfunding condition of pension funds, since "without returns that outstrip inflation, pension investors face the real value of their savings declining rather than ratcheting up over the next few years".[74][75]

Increase income and wealth inequality[edit]
Main article: Economic inequality
In August 2012, the Bank of England issued a report stating that its quantitative easing policies had benefited mainly the wealthy. For example, the report said that the QE program had boosted the value of stocks and bonds by 26%, or about $970 billion. About 40% of those gains went to the richest 5% of British households.[78][79]

Dhaval Joshi of BCA Research wrote that "QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it".[79]

Economist Anthony Randazzo of the Reason Foundation wrote that QE "is fundamentally a regressive redistribution program that has been boosting wealth for those already engaged in the financial sector or those who already own homes, but passing little along to the rest of the economy. It is a primary driver of income inequality".[79]

In May 2013, Federal Reserve Bank of Dallas President Richard Fisher said that cheap money has made rich people richer, but has not done quite as much for working Americans.[80] Most of the financial assets in America are owned by the wealthiest 5% of Americans. According to Fed data, the top 5% own 60% of the nation's individually held financial assets. They own 82% of individually held stocks and over 90% of individually held bonds.[79]

Criticism by BRIC countries[edit]
BRIC countries have criticized the QE carried out by the central banks of developed nations. They share the argument that such actions amount to protectionism and competitive devaluation. As net exporters whose currencies are partially pegged to the dollar, they protest that QE causes inflation to rise in their countries and penalizes their industries.[81][82][83][84]

 

[Domingo Halliburton]

@DEAD7 its a race to the bottom with these currencies breh. The fed thinks there is too little inflation.

 

[88m3]

@DEAD7 its a race to the bottom with these currencies breh. The fed thinks there is too little inflation.

That's why we need to buy bitcoins to offset our loses!