I had a few ideas about today’s Thursday Tirade,but I couldn’t settle on one.
I started out thinking about the crippling, ever-increasing US debt. But everyone’s heard about that already. And frankly, I get the impression the man on the street cares about this as much as the politician in Washington. “Yeah, it sucks, but what are we gonna do? We’ll fix it some day, but for now let’s argue about stupid polarized politics.”
Still, here’s a quick reminder:
16 trillion is a big number.
I walk pretty fast on average. Vigorous powerwalking is about 5 miles per hour. My comfortable pace if I have a destination in mind is about 4 miles per hour. That’s roughly 21,000 feet an hour. Supposing I can keep that pace indefinitely, 24 hours a day, 7 days a week, it will take me 86,400 years to walk 16 trillion feet.
Let’s go Star Trek and say I can suddenly walk at the speed of light in a vacuum. It is still going to take me four and a half hours to walk 16 trillion feet. At the speed of light. 186 thousand miles per second.
Of course, we’re talking about 16 trillion dollars.
Cue “Quantitative Easing 3,” or as my brother calls it, “Ctrl-P”
I guess someone in government figured, “Hey, what we need is more of those dollar things.”
I didn’t hear much about this. I guess some people did, since the stock market jumped a bit at the news. But I’ll assume you might have heard as little as I have.
Here’s the gist:
The government has decided to buy $40 Billion dollars worth of mortgage-backed securities a month. With what money, I’m not sure. But it’s the government, so they can Control-Print or Control-Poof money into existence if they feel like it.
I mean, there are potential consequences.
My dad is a coin collector, or numismatist, which sounds much more serious. I remember many trips to the local coin stores, and discussions about the value of gold and silver, the various coins he found, and some of the more bizarre items in his collection.I’m pretty sure he had an Argentinian paper bill that my brother and I laughed at. It was for one million pesos. One million! For kids who thought a five or ten dollar bill was a huge amount, a million was just plain ridiculous. “What kind of messed up country was that?”
We laughed, because we could not understand what living during hyperinflation must be like.
I’m not laughing now.
Imagine if I told you all that I came up with a great employment opportunity. I am going to get paid $100 for every blog post I publish.
Well, you’ve seen what I write, and you shake your head. “Seriously? Wow. Who’s your employer?” (As in, what idiot is giving you money for this?)
Then I respond, “Oh, I’m self-employed. Isn’t it great?”
We can pretty up QE3 however we like, and talk about the possible benefits if everything goes according to plan. But the fact is, we’re playing make believe with the rest of the world. We’re saying, “Hey guys, pretend that the US has more money than we both know is the case. Keep treating the dollar the way you have been. Don’t pay any attention to what’s in the print queue over there. It looks like sheets of money, but it’s actually perfectly safe and secure. Trust us.”
We’re rolling dice at the big boys’ table, hoping for the best while figuring nothing can possi-probably go wrong.
And maybe nothing will.
But still I fear that some day I’ll be reading a Chinese blog. It’ll be about how as a kid in the Two-Thousand-Teens, the writer laughed at the worthless 1 Million US Dollar bill her dad picked up at the local coin store.