If QE is So Great…Why Stop Printing Now?

Janet Yellen - Caricature

 

Headline:
Why Stop Printing Money Now?

Chair Yellen frequently reminds us how effective and innovative
QE is as a monetary policy tool. She even referred to the monetary
actions, of her former boss, as heroic at a commencement speech
this past spring. Literally…QE has saved the financial world. We
must thank Mr. Bernanke and Ms. Yellen for being so Ivy League and
Beltway intelligent.

And, also, how generous of them to share this amazing gift of
theirs with our friends in the developed world [UK, Japan, and
the EU, from what I understand, is now beta testing the program].
This magical elixir is sure to cure any and all global economic
ills.

Come to think of it why don’t we erect two massive monuments
of the both of them? They can be built right in the middle of
America for everyone to see. And since Ms. Yellen seems to be so
diminutive we can build both of them really big…each one 500
stories tall to match their massive intellects. The project will
surely create hundreds of jobs and the payroll can be “covered”
by a “one time” ceremonious QE4.

But what I’m really curious and concerned about is the following:

Ms.Yellen…oh worshipful economic guru…
Why are you stopping QE right now?

There is so much more to be done. For example, why doesn’t
The Fed buy and retire ALL of the national debt? Then the
government would be in a really keen financial position.
The true envy of the world.

Why are we, the citizens of this great country, no longer worthy
of the almighty, far ranging and omnipotent QE?

We’ve done what you’ve asked of us.

We’ve bought stocks…like you desired.
We’ve bought bonds too…as suggested.
We’ve bought houses/condos…like you told us to.
We’ve bought new cars…like you said we should.

And we’ve borrowed a whole lot of money in order to
finance these transactions. Isn’t that what we are supposed
to do? You see, it seems, having debt does not really matter
anymore because you’ve been so kind to keep interest rates
artificially low. Of course you’ve maintained low rates, on
our behalf, because you are so wise and wonderful. And we know
that with this powerful machine you have…I believe it is called
a PRINTING PRESS…you can solve any economic problem. So, to
reiterate, why are you stopping QE? You must be kidding…Right?
I’ve become so accustomed to it. Sort of like my 2 glasses of wine
every night while watching my recorded versions of “The View”.

I’ve even noticed that you’ve been buying a lot of debt issued
by our awesome US Treasury…6 years running. How nice of you to
immediately return the coupon payments paid by the US Treasury
right back to the US Treasury. It makes me wonder why these bonds
were ever even issued but I guess it makes sense because you really
did not work for that money [in order to buy those bonds] in the first
place [unlike everyone else]….but I won’t tell anyone. Someone also
told me that when you return the money to the US Treasury it
actually lowers the “implied” interest rate ultimately paid by the US
Treasury. I really do not know what “implied interest” means but it
sounds really good. And it must be great if you’ve decided that it is
the right thing to do because you are so smart.

It has also been suggested to me that the Federal Reserve may also
own my mortgage. That is so cool. Could you use that amazing
machine of yours and send me some money to pay it off? Or maybe
there is just a giant shredding machine at the Federal Reserve
too? How about slipping my mortgage through the teeth of that
thing and I’ll be in a much better financial position?

While you are at it I also have a “boatload” of a balance on my VISA
bill. Could you please print some money for this bill too? And, sorry
to say, both of my kids owe 6 figures on their student loans. It would
sure be helpful if you could load some more paper into the tray
of that “printing press” for me. BTW…I have some extra green paint
from our home remodel that I could forward to you…for…you
know…to color the paper. I’ll accept your thanks, for my modest
gesture, in advance.

I know that you will take care of these tasks for me because you are
so nice and so smart and so sympathetic. I saw you on television this
past year trying to help a couple of ex-con felons get some work.
Hey…they really don’t get much better than you Ms.Yellen. And
“hob-nobbing” with the common folk? If I did not know better
I’d say you were a politician. A really good one.

Anyway, the other day my brother in-law suggested to me that all of
this money printing could lead to something called a MORAL
HAZARD. I don’t know what that means either but it didn’t sound
very good. He is usually so cynical anyway. I just ignored him.

So, Ms. Yellen, don’t you stop this money printing anytime soon.
Just erase that thought from your mind just like you can simply
erase away all my financial worries with that great machine of yours.
We, the ignorant public, are so relying on you.
As we see it there is just no downside to any of this money printing.