(14-09-2012, 05:52 PM)KopiKat Wrote: Mostly agree with what you say except the above.
The stock market is also closely linked, so many of us here who invest in stocks would be an indirect beneficiary. With STI +16.02% so far this year, I have no complaints. Just have to make sure I run faster than Property Price increase and also be able to run fast enough if the dominoes start to fall....
Hi Kopikat
The issue right now isn't about just individual benefits one can take from the QEs from either stock or property mkt.
The issue is the aftermath after the black swan hits.
Everybody wants to think that he or she will be able to escape in the nick of time. Truth to be told, nobody is certain he or she escape in time until hindsight.
What I rather have is a world economy that allows a slow reversal back to the norm than a highly leveraged banking system that still refuse to be corrected and politicans that are only keen to hold on to power.
I believe the ending would be far worse than 2008 GFC. But only time shall prove whether I am right or wrong.
And in that sense, the common people, not the ones in the HNW bracket, that will suffer the most. They are the ones that will be highly subjected to retrenchment, pay cuts, mortgage loans.
A common person trying to eke out a living using salary to pay for housing installment and renting out, hoping for rental income and capital appreciation. He is in far greater danger than a rich person who paid out in cash due to the fact he can be retrenched. Thus the saying the Rich get richer.
I cannot recall throughout history of any country that can print unlimited amount of money without any side effects, only either collapse or hyperinflation.
What would happen when the market participants literally dries out no matter what QE the American propose to dish out.
In the last few QEs, at least there were a fixed amount. Now that they have thrown the ultimate challenge of having limitless amount, tied to unemployment rates, I believe we are threading on unknown territory.
The only saving grace as I previously suggested was the reserve currency status.
But it will not hold out this status indefinitely. We are seeing the dusk of the American empire as this crisis unfolds.
The sunset of the empire would not be a 5 or even 10 years thing. Even the British Empire took two World Wars to bring about its sunset.
(14-09-2012, 06:22 PM)Temperament Wrote: Yes agree. But does our current Capitalist System base on "Fiat Money System'' has an alternatives?
Anyway, when Britain & some Euro countries ruled the waves, what happened to East Asia (Especially China).
Now America is the Economic Power of the World and printing money is the way they try to "Rule the World".
And Euro is doing the same-Printing money.
It's like another form of colonization of weaker countries.
i think BRIC will protest very strongly in the future.
Or maybe they can play the game accordingly.
The question is will "Fiat Money System" collapse one day?
i think it will, if there is a major war between the Big Countries.
Hi Temperament
Honestly, I would rather a fiat monetary system than a system based on hard commodities such as a Gold std based.
The reasoning behind is I have read articles and research showing that a Gold standard based system actually cultivates Deflationary circumstances to occur during economic busts.
Deflation is definitely worse than inflation. (To all non-economic students, pls read up why). The only worse thing than this is hyperinflation, in my personal opinion.
A fiat monetary system, however allows central banks to print, therefore avoiding a deflationary scenario.
But the danger of hyperinflation is there, which is one of the thing I fear for unlimited QE.
Currently we are having a highly manipulative monetary system, a system that is geared only the bankers and the polticians. (Yeah, you might think I sound like one of those Occupy 99%..)
The fiat system inherently is ok or in fact, better than the Gold Std based system. But the world has abused and manipulated it to such an extent, its usefulness to me, is highly in doubt.