Blog Posts

QE=$772 Tax per Month per Family

4/6/2014

When the Fed does QE of $85 billion a month, the value of that comes from the existing dollars that you own. The Fed Digitally shaves off value from each dollar. $85 Billion divided by 110 million households equals $772 per family.

Fed Chairmen, Janet Yellen

The worth of newly printed money has to come from somewhere. The only place it can come from is a little bit of value from all the other dollars.

QE is Not Printing Cash from Thin Air

4/6/2014

It is often said that the FED is printing money from thin air. While this is true to some degree and I clearly have stated this. I think it is more accurate to state that these new dollars are created by shaving off value from each dollar in existence.

Let us look at an imaginary amount of capital, let us call it's value $100x. Let us say that there are 100 Billion dollar bills out in circulation. If the FED prints up 1 billion new dollars, the imaginary amount of capital stays at $100x, however now spread over 101 billion bills. Every existing bill is taxed roughly 1% and the value going into the new dollars.

A gallon of orange juice has 1,792 calories in it, thus 128, one-ounce cups, of 14 calories per ounce. If you added one gallon of pure water to the one gallon of orange juice, you would now have 256 ounces of orange juice; however, each ounce of this diluted orange juice would now have only 7 calories per one ounce cup.

Water is a great way to hold and transfer calories. Similarly, the dollar bill holds and transfers value.

QE is like adding water to orange juice, the calorie count does not change, the number of calories per ounce changes. To consume 14 calories, one used to have to drink one ounce, after the QE on OJ, inflation occurs, and now we need to drink two ounces of OJ. Each existing cup, like the dollar, must give up calories or worth when extra water or dollars are added to the whole.

The solution is simple, add more orange juice if you need more juice and the calories per one ounce will stay the same. Likewise, when extra currency is needed, add dollars backed by things of worth. If we need $100 billion of new currency, we should add $100 billion of precious metals, stocks, commodities among other things of real value.
Monetary Policy Quantitative Easing (QE) = Devalued Money

A Plan to Pay off the Debt

11/3/2013

Using Past QEs to Pay off Our National Debt

The Plan

Tax the balance sheet of the Federal Reserve Bank so that when banks repay loans, the funds pay off the National Debt. Basically, we are converting all QE's to paying off the debt. I do not endorse starting new QE’s for this or any other purpose; however, the damage was already done.

Definition of 'Quantitative Easing'

Money that is not backed by things of real value is created thus devaluing all existing currency. This money buys bonds, which in turn frees other capital to buy more things.

Monetizing the Deficit

Taking the newly created money and just paying money to the government to cover the deficit.

How Are They the Same?

Creating unbacked-up money devalues all existing money whether buying mortgage-backed securities, bonds or just giving the money to the government. They will both leave the same amount of capital in the system, however monetizing the debt leaves The US with less overall debt.

Contracting the money supply also does great harm. QE has to be repaid where monetizing the debt does not. Like other forms of taxation, creating unbacked-up money creates the hidden tax of inflation.

Capitalism takes capital and inflation taxes capital thus resulting in less capital.

The Bad Effects

Retirement planning is essential and people's knowledge that the dollar they save today will be worth a small fraction when they spend it results in fewer retirement savings.

Long term projects, contracts, and employment agreements are very disrupted by the changing value of the currency in that contract.

Fed’s balance sheet

The Federal Reserve Bank balance sheet (unbacked-up money that was lent out) is uncertain. However, I believe it is around the 4 Trillion Mark.

Explaining How Contracting the Money Supply is Bad

When expansionary money policy (QE) creates inflation, the damage is done. It would be an interesting study (a very difficult study) to determine how long it takes.

I believe that the damage is started when the market thinks QE will happen a year from now and there is a steady progress of damage done all the way through. Once the damage of inflation is done, it is not repaired by doing more damage created by deflation.

Taxing All the Repayments Would Keep the Monetary Supply Neutral

Some could argue that taxing money would take it out of the system and I would counter that a tax does not take it out. Loans to the Fed must be repaid, that money would be taxed and applied to the debt, and thus less money will be needed to cover the debt, creating a neutral position.

Currently, $17.1 Trillion needs to be lent to the US government. Money taken out of the Fed’s bond-buying program will mean the same money not having to be loaned to the government to cover the debt.

Stopping the Madness
A new system
Please see Financial CRAs and

http://haley2024.org/monetary-policy.html

for a better system

Quantitative Easing (QE) = Devalued Money

9/29/2013

Quantitative Easing (QE) = Devalued Money

Government rulers used to try to gain money by taking small shavings off of gold coins and then create new gold coins with the shavings. The amount of gold stayed the same, however more coins were made. The rulers tried to do this without the people knowing. As this continued people started noticing and started requiring more (now smaller, thus devalued) gold coins for the purchase of an item. This is inflation. Blog: Is There really Inflation?

They also started to realize the rulers were stealing from them every time the coins went thought the hands of the rulers. If a certain quantity (100) of coins represents a certain amount of assets such as land (one acre) then each coin is worth 1% of that acre. If someone adds 10 coins to the 100 and keeps the assets the same, then each coin is now worth about 0.9% of that acre. The acre of land does not change value, the coins changes value. It now takes 110 coins to buy that acre when it use to take 100.

The same thing is happening in today’s economy! Today they call this quantitative easing and is done digitally. The Fed states that it is stimulating the economy, when in reality they are shaving off 1% of the worth of our dollars every month and digitally lending this money to the banks so that the banks

can lend us the money that they just stole by digitally shaving off the worth of currency and just adding new coins for the same value of assets. When people who trade on the stock market hear that there is more QE, they bid up the value of stocks of companies, not because the value of the company is greater, but because the value of the dollar is now devalued.
For a solution please check out Haley2024 monetary policy.

Hollowing out our economy

9/29/2013

Debt, deficit and Quantitative Easing are all hollowing out our economy. Our economy is built on a strong base of things of real value. These things are houses, businesses, vehicles, land, human capital, natural resources, among much else. While everything is consumable, many things hold their value for many years or even decades. At any given time you can put a worth on everything and come up with a value.

The deficit and debt, trades that worth to promises to pay in the future (IOUs). Quantitative easing takes a given amount of capital represented by currency and adds currency without adding capital, thus making the capital have to stretch over more dollars. These things hollow out our economy, creating an economic void that is under the surface and hard to see, creating a potential for an economic crash.

The 2008 Financial Crisis

9/15/2013

Much has been said about who is to blame on the adverse effects resulting from the 2008 financial crisis. Liberals blame the free market and the lack of regulations, conservatives blame liberal regulations, and libertarians think that 2006 -2008 was the harmful part and 2008 the healing.

Here is my, Bill Haley’s, take on the issue. There are banking regulations dealing with capital such as deposits (people’s savings accounts) and liabilities (money banks loaned out for house loans). Banks were playing too close to the line(percentage of capital to liabilities) in that if the value of a house (collateral: part of the capital side) were to fall, that the bank would be out of line and would no longer have money to lend and even have to call some loans.

in that if the value of a house (collateral: part of the capital side) were to fall, that the bank would be out of line or out of regulations, and would no longer have money to lend and might even have to call some loans.

While these are the results, the big question is why banks were playing so close to the regulatory line and here is the real cause of the crisis. Many factors contributed, however, I will only address a few key points.

Well, the home values did drop some and the dominoes started to fall in a catch-52, in that banks could not make needed business loans and then people started to get laid off, forcing foreclosures to increase, thus lowering the value of houses more, thus repeating and cascading.

1. Tax policies heavily favored banks playing it close. 2. The FED controlling the interest rates, which is the price of the use of someone else’s money, caused mal-investment. 3. Non-free market-low rates on mortgages caused people to be able to afford greater debt for their home, thus driving up housing prices.

4. Liberal policies about minority lending strongly pushed banks to predatory lending, which drives up housing prices and hurting minorities’ credit reports.

4. Liberal policies regarding minority lending strongly pushed banks to predatory lending, which drives up housing prices and hurt minorities’ credit reports. 5. Government is buying up mortgages through Fanny and Freddie and the FED, caused lower underwriting standards, thus resulting in borrowers qualifying for higher loan amounts and in turn driving up housing prices.

6. The preceding list all had the housing market being driven up by Government policies; this caused an inflated (bubble) market that when rapidly deflated caused a financial crisis.

Forward>>

QE=$772 Tax per Month per Family

QE is Not Printing Cash from Thin Air

It is often said that the FED is printing money from thin air. While this is true to some degree and I clearly have stated this. I think it is more accurate to state that these new dollars are created by shaving off value from each dollar in existence. ​

A Plan to Pay off the Debt

Using Past QEs to Pay off Our National Debt

The Plan

Definition of 'Quantitative Easing'

Money that is not backed by things of real value is created thus devaluing all existing currency. This money buys bonds, which in turn frees other capital to buy more things. ​

Monetizing the Deficit

Taking the newly created money and just paying money to the government to cover the deficit. ​

How Are They the Same?

The Bad Effects

Fed’s balance sheet

Explaining How Contracting the Money Supply is Bad ​

Taxing All the Repayments Would Keep the Monetary Supply Neutral ​

Stopping the MadnessA new system​Please see Financial CRAs andhttp://haley2024.org/monetary-policy.htmlfor a better system

Quantitative Easing (QE) = Devalued Money

Quantitative Easing (QE) = Devalued Money

Hollowing out our economy

The 2008 Financial Crisis

Contact

It is often said that the FED is printing money from thin air. While this is true to some degree and I clearly have stated this. I think it is more accurate to state that these new dollars are created by shaving off value from each dollar in existence.

Money that is not backed by things of real value is created thus devaluing all existing currency. This money buys bonds, which in turn frees other capital to buy more things.

Taking the newly created money and just paying money to the government to cover the deficit.

Explaining How Contracting the Money Supply is Bad

Taxing All the Repayments Would Keep the Monetary Supply Neutral

Stopping the Madness
A new system
Please see Financial CRAs and

http://haley2024.org/monetary-policy.html

for a better system