Thanks for the ground breaking revelation that stocks and unleveraged bond portfolios should have the same nominal rate of return without accounting for risk premiums.
Economics is a science, believe it or not and conflating those rates in this particular situation is about misleading as swapping Fahrenheit and Celsius values without conversion. And then just waving your hands about unspecified cash transfers is just more of the same on the top. But what are prices when you remove the prices from their evaluation. Quite the koan.
The point is that the Federal Reserve isn't making any real profit on those bonds since they're barely keeping up with inflation, and even a first year econ major would know that the Fed isn't buying bonds to make a profit regardless, so you're shifting the topic.
Anyhow, from what I can decipher from your argument (inasmuch as you're making one at all), you seem to think the Fed's bond purchases and current policies don't constitute giving money to the rich because all they do is buy assets at market value, so it isn't really giving them money, just making an honest purchase. Except this argument is circular, because the "market value" of bonds these days is primarily held up by Federal Reserve asset purchases, so the "market value" is realistically whatever the Fed sets it at. Similarly, a hypothetical Fed with no restrictions on purchases could buy donuts at $5 apiece in sufficient volume to drive the price of donuts to that level, and at that point it would be the "market value", but it would be "market value" in a weird, post-Keynesian sense.
I you dont want me "changing the subject" by correcting your factual inaccuracies, stop repeating them.
That's a fun argument that market prices are meaningless if affected by participants. I didn't know you dabbled in philosophy. I just wade in the shallow end of political philosophy myself.
I don't recall ever saying that I expected the Fed's bonds to increase at the same rate as comparatively high risk stocks. I said that the Fed's policies meant that a 2% rate of return is basically meaningless and not a profit, but also that the Fed's purpose isn't to make a profit regardless so why do you keep harping on it
Also, market prices are meaningless when the government, or a subsidiary of the government, is capable of using fiat to completely override every other participant.
In Weimar Germany, the government instituted price controls on goods to attempt to combat inflation. Were these arbitrarily low prices at all meaningful?
In the US after the 1930s, it was illegal for individuals to own gold, and the US government very tightly controlled the flow of gold. Were the prices of gold at the time even remotely meaningful?
In the Soviet Union, there were, in fact, prices of goods and services, albeit all provided by and set by the state. Were "prices" in the Soviet Union meaningful?
etc etc etc
Poll
7 (6.5%)
Author
Topic: Bay12 Election Night Watch Party (Read 837516 times)