Brian Kelly

Quantitative Easing: Money Supply Is Actually Decreasing

My optimism for sound growth assumes that the financial landscape will change - by that I mean the so called "zombie" banks will cease to exists.

I agree that keeping these institutions alive is simply repeating the mistakes of the past. Until the Govt and the banks admit they made bad loans then we will continue to wallow. Unfortunately, we got another program today (PPIP) that keeps the denial alive.


On Mar 23 01:10 PM axelrod608 wrote:

> >> "As I see it, the goal of these programs should be to rebuild
> the financial infrastructure which has been badly damaged. This will
> take a while and the financial landscape will look vastly different
> when we are through rebuilding, but if done properly it could provide
> a very solid foundation for growth." >>
>
> Adding non-money derivatives to money does not increase money. It
> merely points out the unsustainability of the financial system circa
> 2000 - 2006. Those amounts were the bubble, the highly leveraged
> unsustainable bubble.
>
> Helping the "too big to fail" companies will recreate what the Japanese
> did - keep zombie banks in operation that were not necessary for
> the new conditions. I call it government sponsored unsustainability.
>
>
> Your optimism regarding a solid foundation for future growth is unwarranted.
> The zombies we are now creating will continue to provide no growth
> and will continue to hemmorhage losses for another several years,
> adding to unemployment and the national debt.
>
> I'm not too worried about hyperinflation. I see the toxic assets
> as quicksand, swallowing the new money as fast as it's poured in.
>
>
> I hope I'm wrong. I would love to see this mess get fixed and the
> return of economic good times. Unfortunately, I see no economic
> data or trends to support that premise.