Replies to post #108245 on Biotech Values

[jbog]

Blade,

The fact of the matter is that over 12 trillion dollars has been lost in household assets, since the start of the Great Recession (really a Depression, IMO.)

I'll agree there was a tremendous asset loss from a given point. Everyone is forgetting that your basis was the from the top of a bubble. If you invested $1000 with Bernie Madoff and it grew to $1,000,000 after twenty years, did you lose a million or a thousand in the long run? Secondly, the recession in hindsight wasn't nearly as bad as thought.

The economists that I follow say that more household de-leveraging is necessary before (American) consumer demand can increase significantly.

I agree fully

Since the numerator of the income-to-asset ratio is not going to increase anytime soon, that means that all you can play with is the denominator. And that's exactly what Bernanke is hoping to accomplish. Since no one can increase home values, that means that equities must be Bernanke's target. An asset bubble in equities? Maybe. But please don't start lecturing us about the evils of asset bubbles. Bernanke has to help force money out of the bond markets and back into equities. The increase in equity assets will, hopefully, lead to the vaunted "wealth-effect." Well, at least that's the idea.

The Government is floating $86 mil in new bonds next week alone. They certainly aren't acting like they are trying to force people out of the bond market. When have I lectured?

Personally, I think both the Left-wing and Right-wing attacks on Bernake are totally misguided, but I'm sure you don't agree.

I miss what this has to do with someones political belief.

Whether Bernanke can save the economy (from further deterioration) and the Obama Presidency is an open question.

So now saving Obama is the Federal Reserves goal?

And yes, jbog, none of this deals with the structural problems in the U.S. economy. But try telling us something that we don't already know.

It isn't what we don't know, it what we won't accept. The Fed is going to create $600 Billion Dollars and buy back treasuries from the banks. When they create this $600 Bil, we'll see the dollar devalue again (already done) and now it's up to the banks to do something with the cash. They'll probably do nothing except buy more bonds.

Instead we could take that same destructive $600 Billion and give every worker in America $3900 or we could give each American Family $5100. How would that effect our #1 and #2 real problems, Debt and Demand. How about the Gov buying 3 million $200k homes and renting them back to the owners?