The Phaserl


No Jobs: The Result of Wizard of Oz Economics

from Econophile via, Zero Hedge:

If there is one thing we should have learned from recent data is that you can “juice” the economy by inserting more money into it because when the money works its way through the economy, certain economic data will become more positive.

This is not a difficult concept to grasp. For example, if in a hypothetical economy there is a $1 trillion money supply and then it is increased by, say, 10%, assuming that new money is spent in economic activities, GDP will ultimately rise more or less by 10% because GDP measures spending. More money equals more spending, thus higher GDP.

During this phase one might see manufacturing and consumption increase and even employment grow. This happened with QE1 and 2. However, one might ask, if money stimulus actually revives real economic growth, why did we need QE2? Of course this is the flaw in the above argument. It doesn’t work.

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1 comment to No Jobs: The Result of Wizard of Oz Economics

  • dishesdealer417

    Banks have hidden massive losses on their hidden shadow banking unregulated and unreported derivatives and credit default swaps, which is resulting in massive hidden deflation on the overall economy.

    The Private Foreign banking Cartel known as the “federal reserve” makes up a bunch of money out of thin air which they hand the other banks for free and they use it to fill the hole of these massive losses so their bank looks profitable even though it is bankrupt actually.

    Then they still get their massive unearned bonuses on the taxpayers back, thus the money printing of QE has no positive effect on the real economy. It was never meant to stimulate the real economy of main street even though that is the fake reason given to the taxpayers. It was always meant to bail out the banks so they still get their unearned bonuses on the taxpayers back. That is what aristocrats do, they get rich on the labour of the actual wealth producers for being incompetent idiot welfare queens.

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