<\/a><\/p>\nWhat exactly does this new cycle mean to the Global Economy? To understand this, we must start by looking into the effects of QE. One hypothesis is that QE can bring down long term interest rates, and thus increasing investment. But skeptics argue that it\u2019s a game of managing trader\u2019s expectations for short-term rates and the extension of which produces money, i.e, money producing money. If this scenario is true, then there will be no guarantee of a bright economical future due to the fact that what moves money around is not products but blind optimism. Claudio Borio, an economist in Bank of International Settlements, said on Financial Times <\/em>that bonds and equity prices are beyond their fundamental values, and thus they could struggle to repay when rates rise. Moreover, amid this huge bubble of pure guesswork and hyperbole of values, companies are less likely to increase investment because of a small margin of error. Thus, Central Banks will have to decide to get rid of QEs, and the time for the Fed is now.<\/p>\nExactly what is \u201cfaith in the economy\u201d triggers my curiosity. It seems that the economy right now is \u201cthe blind led by the blind\u201d\u2014no one knows what\u2019s going on so why not just follow the trend. The cause is that all previous economic models have failed to articulate an efficient model for a global economy, perhaps it\u2019s because no central banks want their respective countries to give way to other country. We don\u2019t even know what does a global economy mean, because there are too many secret deals between different forces and there seem to be no higher authority to regulate people\u2019s greed when one can simply refuse to acknowledge one\u2019s greed and irrationality. The mentality is that in the modern Capitalist society, for one to be successful, one must possess a certain kind of \u201canimal spirit\u201d that can transcend our mortality and justify our dimmed past. This explains why sales of Ayn Rand\u2019s Atlas Shrugged<\/em> increased dramatically during 2009, once climbing to the top of Amazon\u2019s fiction bestsellers in April, 2009. Alan Greenspan admired the book and even defended the book as \u201ccelebration of life and happiness\u201d; popular TV shows such as Mad Men<\/em> also has significant resemblances to Randian ideals. However, despite its seemingly irresistible attractiveness among all social classes, Randian ideals is never successful when applied to monetary policies. Maybe it\u2019s useful in a modern individualist society for one to build an indifferent and strong attitude to \u201ccreate\u201d, but I would argue against it. If one recalls the classical Greek way of thinking, it would be easy to dissolve the doubt. Aristotle put it nicely in Politics, <\/em>\u201cas man is the best animals when perfected, so he is the worst when separated from law and justice. For injustice is most dangerous when it is armed; and man, armed by nature with good sense and virtue, may use them for entirely opposite ends. Therefore, when he is without virtue, man is the most unscrupulous and savage of the animals.\u201d<\/p>\n <\/p>\n
More on the issue:\u00a0http:\/\/fingfx.thomsonreuters.com\/gfx\/rngs\/USA-FED\/010050VD1YM\/index.html,\u00a0www.theguardian.com\/commentisfree\/2013\/oct\/11\/who-responsible-us-shutdown-2008-meltdown-slavoj-zizek,\u00a0https:\/\/www.youtube.com\/playlist?list=PL08C0992430469B34,\u00a0https:\/\/youtu.be\/9FrHGAd_yto?list=PL023BCE5134243987&t=759<\/p>\n
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The Case of the Fed The U.S. Federal Reserve is set to announce a multi-year plan tomorrow to shrink its balance sheet of $4.5-trillion of assets, which are amassed from series of Quantitative Easing following the 2008 financial crisis. The process will start gradually, depending on housing arrangement and refinance, according to The Economist. In […]<\/p>\n","protected":false},"author":1133,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/posts\/3158"}],"collection":[{"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/users\/1133"}],"replies":[{"embeddable":true,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/comments?post=3158"}],"version-history":[{"count":3,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/posts\/3158\/revisions"}],"predecessor-version":[{"id":3256,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/posts\/3158\/revisions\/3256"}],"wp:attachment":[{"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/media?parent=3158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/categories?post=3158"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/j469.ascjclass.org\/wp-json\/wp\/v2\/tags?post=3158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}