Ok this explains everything

>B-B-But Orange Man is the best at economics. K-K-Keep on winning, right guys?

They will print more money and repeat the cycle. Litterly the ride will never end. Uncle sam is going to make us all rich af.

They are not "burning" USD, just not buying treasuries.
Currency in circulation is still increasing.

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>fed
>orange man
Are you retarded?

lel he doesnt know how the federal reserve works. pro-tip. central banks like the US federal reserve, the bank of england etc. are privately owned by mega-banks and not by the countries who's currencies they run. its sad and fucked up but true.

>orange man can't cope with responsible central bank policies

yeah, it's his fault, you dolt.

Really what does this mean???

You idiots don't even know how QE works, apparently. Money wasn't "printed" and it didn't even increase money supply beyond the Monetary Base. Fed bought a bunch of securities from banks and created reserves for them, which are not even physically present in banks, it's just virtual accounts withing Fed. And daily reminder YOU CAN'T LEND OUT RESERVES.
Now they stopped buying securities, let the old ones roll over, and the reserves are decreasing. But actual money is not being destroyed.

fred.stlouisfed.org/series/WCURCIR
fred.stlouisfed.org/series/M1
fred.stlouisfed.org/series/M2

>It collected $30 billion from the Treasury Department for part of the securities that matured. The Fed creates money, and it destroys money; but it doesn’t sit on trillions of dollars in cash. So when it received the $30 billion from the Treasury Department, it then destroyed this money just as it had created this money to purchase these securities. That was the QE unwind part.

It means normalization of monetary policy, that's it. You can't have low rates and hold hand of the banking system forever.
But it doesn't mean the end of the world. People think for some reason that Fed printed enormous amount of cash and now it's literally burning it and going to destroy the economy.

So selling basically. As you can see on the chart the total assets are going down. They aren’t disappearing in to thin air. They’re being sold

There is something severely wrong with people like you.

That's not how it happens, go to Fed website and read in detail how it actually happens. Instead of reading some morons.

OMG... Do you know what maturity is?

>actual money is not being destroyed
Sure, asset values are getting destroyed. Assets that were artificiality inflated by the fed buying them without spending real money.

Here, if you're a brainlet and can't find it yourself.
federalreserve.gov/monetarypolicy/policy-normalization-qa.htm

It will only affect bank reserves, which is not the same as destroying money. If you don't know what monetary aggregates are - reserves are not currency in circulation and it's not part of M1 or M2.

They won't be destroyed, just normalized - that's a good thing.

Why pump them up just to normalize them though? Could have left them normal. Why should the fed get to pump and dump the stock market, creating massive gains for insiders?

They try to counterbalance the markets.
When there is a bear market they print more money and lower interest rates so that Companies and people are encouraged to pump the market (b/c banks and treasuries offer low yield) and get more credit. That keeps the economy stimulated and the panic dissapears.
When there is a bull market they lower the money supply and increase interest rates so that the economy doesn't overheat and collapse 1929 style.

No its not

Because the system crashed leaving working businesses without capital to expand. They pumped to counter the dump, if they had not the real economy would have suffered and real "wealth" would have been "burned".

yeah the banks are allowed to buy unlimited bonds and mark them at 100% no matter what the price does. the fed is just selling to the banks (who can also create infinite currency)

Working businesses could expand by reinvesting profits or becoming more efficient. They could raise capital from people that actually have money instead of getting it from banks that lend it into existence.

The people that had money were all invested in real estate and bank accounts etc. When an economy is asset backed it locks up completely in a collapse. The current made up token fiat system allows you to maintain liquidity.

Of course you need to be fully invested when the fed is inflating assests.

t. Retarded Keynesian

It would also apply if the currency was gold backed with zero inflation and no inflated markets like real estate. The people who have gold would lend to productive businesses looking to expand, like to farmers who can multiply their output by buying one machine that would take 10 years to save up for without it but 1 year to pay back if he already had it. Eventually the gold just runs out and businesses can't grow as fast as in the neighbor countries that use fiat money so they achieve economic dominance and soon after military dominance.

>if they had not the real economy would have suffered and real "wealth" would have been "burned".

Like Iceland? Everyone knows you're pushing your agenda here. The agenda where profits are kept by private entities and losses are socialized to the masses. You're going to hang with the rest of the hook noses.

I sold EURUSD at a low 1.122 around there and now nearly 7k deep underwater. Do you think the EURUSD will revisit the 1.122 mark again?

At least I get some good amount of swaps from it each day.

Because that’s how the Jews control this world, the central bank is their seat of power

Or maybe a limit on lending forces people to invest intelligently, leading to more real growth and less crashes due to idiocy enabled by free money. That nation would have the military edge in my mind.

There are only so many real resources including human resources. Money is a tool that allows people to allocate the resources in a decentralised way. Perverting money by inflating it willy nilly only ruins the effectiveness of the tool.

I'm from Iceland and the foreign perception of what happened here is basically all nonsense like everything else portrayed in anglo media.

Our currency halved in value, real estate loans were discounted by a corrupt government fighting specifically to not have to pay their own personal million dollar loans. The most overextended greedy people were rewarded the most with money from the pockets of the poorest people who can only afford to rent. Less than 10% inflation is considered decent, everyone has real estate loans even if they don't have to because the government rewards anything that pumps the real estate market.

>only so many real resources
Like in the farmer example if you rigidly only allow real resources to be spent you can't invest in things that allow you to produce more until the required resources are really available. In that time you and your nation are losing economic output, the machinery is sitting unused and the machine producers are underestimating demand or even going out of business even though all the farmers need their machines.

keynesian satanic tamperings

The machine producers could sell to farmers on credit if they deemed the opportunity to be real and lucrative, especially if they've already built the equipment and it's just sitting there. This would be better than detached bankers managing all credit.

They don't have the expertise required to efficiently manage risk without going out of business, if they were they would soon become the defacto bank. They're experienced in building machines not in finance. To meet demand they also need loans to expand their production themselves requiring a banking department in every business in the chain.

Banks don't seem to be able to manage risk either. It's just when they go out of business they fuck up the whole country because the system of credit is so centralized. Then you get the "too big to fail" arguments and then they get bailed out and everyone pays for the incompetence.

But the farmers have their machines and the nation can produce more real food. The tokens are just a tool to maximize output and a crash is just a systemic lockup like in computer systems. You can restart it by pumping in tokens.

So it essentially boils down to tokens are constantly being pumped into the system and Jews decide how many and where the tokens go. Tokens can also be strategically withheld to show the goyim just how bad it gets when the tokens aren't being issued, justifying the issuance of more tokens while allowing the people who knew when the token supply was being switched off to legally take possession of properties held by people caught out as the token supply dries up.

They are taking money out of circulation, which is has the same effect as destroying money.

Yes. The solution for Iceland is simple, just don't allow jews to control our central bank but the US economy is different, it relies on globalism and jewing everyone.

The Pension Bubble will pop the fiat Bubble. Boomers are going to suffer the most.

I think central banks will always be Jew magnets. Better would be to have free market banking that is decentralized.

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It only works if everything is backed by assets and then the system can lock up with no way out except violence. Even if everything is on a decentralized blockchain there needs to be a buffer for lock ups like fiat central banking provides.

i remember this :)

>The Pension Bubble
I keep hearing this for over few months now.
Is is that bad?

>responsible
kek

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NO, THEY ARE NOT, YOU GODDAMN MORON. They are taking out reserves, which are not in circulation!!!

The Fed is his enemy, they answer to no one. His only power over them is choosing their Chairman...from their list of candidates.

>he thinks the Fed slowly selling off some MBS and bond = stock market crash

No, the stock market is having a natural correction from the Financials/Banks cycle

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they answer to (((someones))) though

From WIkipedia:
>A central bank implements quantitative easing by buying specified amounts of financial assets from commercial banks and other financial institutions, thus raising the prices of those financial assets and lowering their yield, while simultaneously increasing the money supply.
>increasing the money supply
>increasing the money supply
>increasing the money supply

en.wikipedia.org/wiki/Quantitative_easing

I mean, are you mentally deficient or what? I even linked cash in circulation, m1 and m2 It's not falling!
Reserves are falling, but it's not money in circulation!!! It's just an account within Fed. It was created with QE, to make a buffer for the banking system and only indirectly help with lending. And now when the economy stabilized and getting back to normal, it is getting destroyed.
fred.stlouisfed.org/series/WRESBAL

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>Fed bought a bunch of securities from banks and created reserves for them, which are not even physically present in banks, it's just virtual accounts withing Fed.

How did the Fed buy securities? Buy printing money out of thin air. That's the point of QE: you increase the supply of money by exchanging securities for money, injecting a lot of cash into the economy. Now they're reversing the process, letting securities mature and thus DECREASING the rate of issuance of new money. Raising interest rates will have the same effect. The market is selling stocks in anticipation to what is to come.

>I even linked cash in circulation, m1 and m2 It's not falling!
It's not falling yet, but it will.

As I said ():
>The market is selling stocks in anticipation of what is to come.

>Government sells bonds to Feds to get money
>Fed buys them with money they make up out of thin air. In the digital age this is the same as a centralized digital coin with infinite supply.
>Fed earns money back on interest.
>Fed generates more aritifical money and lends it to commercial banks with interest
>Commercial bank now has 100$
>Loans out the 100$ it has but to ten different people, more money out of nowhere
>These people have to pay interest on this make belief money to the commercial bank
>These people also have to pay taxes of their hard earned salary, products they buy and air they breath to the government, who then gives the money as interest to the federal reserve (private entity) and the cycle repeats

Is this not Literally the definition of a pyramid scheme?

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AT LEAST read what you fucking linked!!!
>A central bank enacts quantitative easing by purchasing—regardless of interest rates—a predetermined quantity of bonds or other financial assets on financial markets from private financial institutions.[3][4] This action increases the excess RESERVES that banks hold. The goal of this policy is to ease financial conditions and facilitate an expansion of private bank lending.
QE directly created RESERVES, that is it. It's supposed to help with lending, but not even necessarily will. Now it decreases those reserves, because banks don't need them anymore in such quantity. But it doesn't affect money in circulation. Despite the reserves falling - cash, m1 and m2 are still rising. NO MONEY BEING DESTROYED like you brainlets claim.

>QE directly created RESERVES, that is it. It's supposed to help with lending, but not even necessarily will.
It will. Everyone knows that when you increase reserves (with low-interest rates) lending increases, and therefore the supply of money increases. Back in 2012 everyone was saying that QE was needed to prevent a repetition of the 1929 recession (when the supply of money decreased). The Fed printed money, bought securities, increased bank reserves, and the money was loaned out, resulting in an increase in the supply of money.

Now they aren't destroying money, but simply REDUCING THE RATE OF GROWTH IN THE MONETARY SUPPLY.

This is common knowledge, QE increases the money supply, period.

>Buy printing money out of thin air.
Well, as I already said - at least read the wiki article completely. Or better read/listen/watch the Fed, they explain everything perfectly well and in detail.
Fed didn't "print money", and certainly didn't "inject a lot of cash into the economy" with QE. In exchange for securities Fed created reserves for the banks. It's not cash, it's not injected into the economy. It just eases financial conditions for banks and helps them with lending. It certainly helped somewhat, but funny thing is there was no lending boom as the result.
And now Fed doesn't take out money out of circulation, it only takes out reserves. But banks don't need so much reserves now anyway.

>Government sells bonds to Feds to get money
Yes
>Fed buys them with money they make up out of thin air. In the digital age this is the same as a centralized digital coin with infinite supply.
Yes
>Fed earns money back on interest.
Yes, but the excess profits earned are rebated to the Treasury Department.
>Fed generates more aritifical money and lends it to commercial banks with interest
In order to meet overnight holding limits, yes.

Everything after that stems from a gross misunderstanding of what the Federal Reserve does.

Doesn't a larger reserve allow the bank to lend out more money than it actually has (fractional reserved banking), which injects money into the economy?

Reducing the reserves of the banks will effectively mean less loans, and thus money injected into the economy, no`?

Maybe life is a pyramid scheme?

>In exchange for securities Fed created reserves for the banks. It's not cash, it's not injected into the economy. It just eases financial conditions for banks and helps them with lending. It certainly helped somewhat

Which resulted in an increase in the monetary supply. Just look at the chart YOU PROVIDED. Currency in circulation begins to increase at a faster rate after 2012, thanks to QE.

Attached: 2018-12-08 14_29_27-Currency in Circulation _ FRED _ St. Louis Fed.png (1173x445, 47K)

>And now Fed doesn't take out money out of circulation, it only takes out reserves.
The Fed is taking some money out of circulation, yes, and also reducing incentives for banks to issue new money. See chart Once they're done unwinding QE, we're going back to 2002-2008 steepness levels.

>Doesn't a larger reserve allow the bank to lend out more money than it actually has (fractional reserved banking), which injects money into the economy?
Yes, ALLOWS. Doesn't mean that it will happen. And it didn't happen in a way people think. All those reserves didn't just pour directly into the economy. In fact, banks were quite reluctant to lend out. Because Fed actually pays interest on those reserves. Why even bother lending out and risk it not getting paid back, especially with such low interest rates. But now they are rising.
>Reducing the reserves of the banks will effectively mean less loans, and thus money injected into the economy, no`?
Required reserves are much lower than the current level of overall reserves. Banks don't really need so much reserves for lending. And Fed doesn't plan to outright take it all anyway.
Not at much faster rate though, and it's not even close to the amount of assets Fed has bought. And it's not the result of QE. QE was for commercial banks and lending. But commercial banks can't create cash, they can only increase M1 and M2. This is the result of increased borrowing by the government (Treasury). And I don't see Fed stopping lending to the government.

It's not a pyramid scheme, more like a mosquito draining 3% of your blood every year then selling you the blood against your labor.

It's not a pyramid scheme it's slavery, but desu centuries ago you would just be a farmer and the king's men would come by every so often and take a cut of your carrots amd taters, maybe take your daughter if she was hot.
By all accounts you have it better now than centuries ago as even poorfags have the luxuries kings had back then.
Quit the resentment and improve your lot in life, as well as that of your future progeny.

nice explanation, jew