Bailout and inflation
ta
point, doesn't the trillions of dollars being pumped into the economy
necessarily mean inflation of large proportions . . . eventually?
I'm no economist, to be sure, but the money supply has doubled in the
last few months. I don't understand how flooding the system with money
will not cause some nasty inflation.
*Anarcissie*
According to W. F. Hummel, most effective money is generated
by private credit. A loss of belief in the fortunes of one's
community
would presumably discourage people from issuing this credit, so
there would be considerable deflation regardless of the production
of currency or credit by governments. See
http://wfhummel.cnchost.com/
A related aspect of the situation is that credit was inflated over a
period of several years, which caused real estate, stock and
collectibles prices to inflate out of proportion with ordinary
goods and services, that is, labor and the things produced by
labor. Eventually that imbalance would have to be corrected;
either the price of labor, etc., would rise or the price of stock
and real estate would fall. That is what's going on now, but
the process has probably not been completed.
This doesn't mean the government won't be able to create
inflation by printing a lot of money. But both the credit
inflation and the imbalance probably reflect deeper and
greater economic problems which have not been addressed
yet. If indeed they can be addressed.
Sir Frederick
Deteriorating cultures take many forms and have many symptoms,
including dynamic(changing) symptoms.
If the human race does not get honest about itself, temporary is as
temporary does.
ta
> On Jan 28, 9:47 am, ta <padl...@nc.rr.com> wrote:
>
> > Obviously right now we are in a deflationary environment, but at some
> > point, doesn't the trillions of dollars being pumped into the economy
> > necessarily mean inflation of large proportions . . . eventually?
>
> > I'm no economist, to be sure, but the money supply has doubled in the
> > last few months. I don't understand how flooding the system with money
> > will not cause some nasty inflation.
>
> According to W. F. Hummel, most effective money is generated
> by private credit. A loss of belief in the fortunes of one's
> community
> would presumably discourage people from issuing this credit, so
> there would be considerable deflation regardless of the production
>
> A related aspect of the situation is that credit was inflated over a
> period of several years, which caused real estate, stock and
> collectibles prices to inflate out of proportion with ordinary
> goods and services, that is, labor and the things produced by
> labor. Eventually that imbalance would have to be corrected;
> either the price of labor, etc., would rise or the price of stock
> and real estate would fall. That is what's going on now, but
> the process has probably not been completed.
>
> This doesn't mean the government won't be able to create
> inflation by printing a lot of money. But both the credit
> inflation and the imbalance probably reflect deeper and
> greater economic problems which have not been addressed
> yet. If indeed they can be addressed.
Thanks for the link.
Re: common misconceptions about inflation and money:
"The government causes inflation when it prints too much money.
Money is literally printed by the government only to meet the demand
for portable currency, i.e. Federal Reserve notes. The notes are
issued to banks in exchange for deposits the banks hold at the Fed.
The public acquires the notes in exchange for their own deposits at
banks. The amount of currency issued is no more and no less than the
public desires to hold as wallet money or rainy day money. It has no
bearing on inflation."
I don't think that is currently true, is it? The money we're printing
is not because of some demand by the public, is it?
Don H
news:b1002bd1-fd82-4f76...@v39g2000pro.googlegroups.com...
# The Capitalist economy operates on use of money as a means of
exploitation, not merely as means of exchange, and inflation occurs when the
profiteers try to maintain comparative advantage, due to public demand for
commodities.
Where there is lack of demand, as at present, and money is pumped into the
economy to stimulate it, then inflation holds off until "normality" is
restored.
Capitalism leads to Plutocracy, and the Elite want to maximise Profit,
while minimising Wages. Unfortunately, this leads to the whole Economy
becoming top-heavy, and collapsing into Recession or Depression.
Thus it is necessary to put money into the pocket of the undeserving
Poor, the mug Workers, like it or not. You can do this via tax cuts, money
grants, or a New Deal of public infrastructure works.
Currently, there is a World Economic Forum being held in Davos (phew, I
thought they said Davros) in Switzerland, where the aim is to save
Capitalism from itself. Economic Rationalism is alright, but not a Rational
Economy.
The fact that we are virtually back to the Great Depression of the 1930s
shows nothing has been learnt in the meantime - except gloating at Fall of
the Berlin Wall.
A Command Economy may not be the full answer to Market Forces, but some
form of Socialism is. And Socialism is not synonymous with Communism.
The sub-prime mortgage collapse would not have occurred if American
workers had a decent wage to start with - and could thus afford to buy a
house, using a mortgage.
Capitalism is an obsolete relic from the 19th century, and until this is
admitted, then boom and slump will continue, and probably with greater
frequency.
Michael Coburn
Hummel has a way of being overly correct about minutia and not addressing
the bigger picture. I assure you that in a properly managed fractional
reserve system, the banks do not create inflation. The government is the
creator of inflation and it happens due to deficits and failure to
regulate.
--
"Those are my opinions and you can't have em" -- Bart Simpson
Michael Coburn
Why do you think that inflation is "nasty"?
*Anarcissie*
> On Wed, 28 Jan 2009 07:41:23 -0800, ta wrote:
>
> Hummel has a way of being overly correct about minutia and not addressing
> the bigger picture. I assure you that in a properly managed fractional
> reserve system, the banks do not create inflation. The government is the
> creator of inflation and it happens due to deficits and failure to
> regulate.
What I have liked about Hummel is that his theories help explain
how there could strong inflation in real estate and equities, and
yet very little inflation, or even deflation, in wages and consumer
goods and services. If the government were simply printing a
lot of money and handing it around, one would expect inflation,
but it would be general, not restricted to rich people's stuff.
*Anarcissie*
> On Wed, 28 Jan 2009 06:47:21 -0800, ta wrote:
> > Obviously right now we are in a deflationary environment, but at some
> > point, doesn't the trillions of dollars being pumped into the economy
> > necessarily mean inflation of large proportions . . . eventually?
>
> > I'm no economist, to be sure, but the money supply has doubled in the
> > last few months. I don't understand how flooding the system with money
> > will not cause some nasty inflation.
>
> Why do you think that inflation is "nasty"?
Perhaps he's taking the point of view of the less aggressive, less
well-off members of the community. Inflation is nasty for those on
fixed incomes and those with savings accounts -- old, disabled,
poor and the working-class people for the most part. And many
working-class people, especially those on the low end, find it a
hard struggle to raise their wages in proportion to strong
inflation.
ta
> > Obviously right now we are in a deflationary environment, but at some
> > point, doesn't the trillions of dollars being pumped into the economy
> > necessarily mean inflation of large proportions . . . eventually?
>
> > I'm no economist, to be sure, but the money supply has doubled in the
> > last few months. I don't understand how flooding the system with money
> > will not cause some nasty inflation.
>
> Why do you think that inflation is "nasty"?
I didn't say that it was. I said "nasty inflation".
ta
> On Jan 28, 11:53 am, Michael Coburn <mik...@verizon.net> wrote:
>
> > On Wed, 28 Jan 2009 07:41:23 -0800, ta wrote:
>
> > Hummel has a way of being overly correct about minutia and not addressing
> > the bigger picture. I assure you that in a properly managed fractional
> > reserve system, the banks do not create inflation. The government is the
> > creator of inflation and it happens due to deficits and failure to
> > regulate.
>
> What I have liked about Hummel is that his theories help explain
> how there could strong inflation in real estate and equities, and
> yet very little inflation, or even deflation, in wages and consumer
> goods and services. If the government were simply printing a
> lot of money and handing it around,
But isn't that exactly what the government is doing? They're not
handing it out randomly, of course, but when Citi and AIG and GM etc.
etc. get trillions of dollars, my "common sense" layman's mind
(rightly or wrongly) hears "inflation".
So to my original question, why won't that action have a massive
inflationary effect?
Michael Coburn
This is something on which Hummel does not spend a great deal of time.
The questions are really two: Where does the money enter the system and
where does it leave/settle. If money is created (appropriated) and
placed into the banks then the money is essentially sterile in that it
never made it into the real economy. This injection arrests the decline
in asset prices while not having any effect on wages. The money goes
into the banks and sits there. In effect the rich get richer and the
middle class gets poorer.
So now let's talk about the bottom side stimulus of the current package
before the Congress: This money will be injected into the real economy
and will have an inflationary effect which is good. Wages will rise and
more job opportunities will be created than would have otherwise been the
case. But if the improved position of the middle class is to be
sustained then the money must be removed from the system from the top or
in ways that promote a better economy. The proper mechanism for doing
that is the tax system and it is very important as to how the tax system
is shaped.
RGrannus
But of course in reality money does not just go into banks and sit
there. The banks have to lend that money in order to make a profit
and stay in business. Indeed, since banks need only keep a fraction
of their assets liquid, they have the effect of multiplying any money
placed with them.
> So now let's talk about the bottom side stimulus of the current package
> before the Congress: This money will be injected into the real economy
> and will have an inflationary effect which is good. Wages will rise and
> more job opportunities will be created than would have otherwise been the
> case.
That's what been happening for the past 8 years, i.e., government
running huge deficits and thereby injecting money into the economy.
Why hasn't it led to increased prosperity? It seems to many of us
that the stimulus package is essentially just an expanded version of
what the government has been doing.
> But if the improved position of the middle class is to be
> sustained then the money must be removed from the system from the top or
> in ways that promote a better economy. The proper mechanism for doing
> that is the tax system and it is very important as to how the tax system
> is shaped.
That is entirely your own opinion. I think that most experts would
argue that it is primarily increased productivity that has led to an
improved position for the middle class--and all classes.
Michael Coburn
So if the inflation is induced by giving money to these people then they
will not be harmed by the inflation.
Michael Coburn
Wake up and smell the doo-doo. The banks in which this money is being
placed are actually insolvent and they are not making any loans. They
are using the money to "shore up" their very stinky assets and they are
not in any shape to make any loans.
>> So now let's talk about the bottom side stimulus of the current package
>> before the Congress: This money will be injected into the real economy
>> and will have an inflationary effect which is good. Wages will rise
>> and more job opportunities will be created than would have otherwise
>> been the case.
>
>
> That's what been happening for the past 8 years, i.e., government
> running huge deficits and thereby injecting money into the economy. Why
> hasn't it led to increased prosperity? It seems to many of us that the
> stimulus package is essentially just an expanded version of what the
> government has been doing.
To my knowledge the government has not been investing in the USA.
Government has been spending money on imperialism as opposed to
infrastructure. Productive infrastructure and factories are a far
superior use of money than is war or personal housing.
>> But if the improved position of the middle class is to be sustained
>> then the money must be removed from the system from the top or in ways
>> that promote a better economy. The proper mechanism for doing that is
>> the tax system and it is very important as to how the tax system is
>> shaped.
>
> That is entirely your own opinion. I think that most experts would
> argue that it is primarily increased productivity that has led to an
> improved position for the middle class--and all classes.
I think that you are absolutely correct when you say that the "experts"
that have been labeled as "experts" by the Republican regime will most
certainly agree that Republican economics has done wonders. However,
most of the Nobel recipients seem to be singing a different tune. They
seem to be recognizing that the American middle class has gotten the
shaft from the Republicans and that the "experts" that agree with the
Republicans are just part of the extended cronyism.
And YES! It most certainly my own opinion as well.
If you think you have a valid economic argument then make it. I am not
the least bit interested in what your bought and paid for right wing
"experts" have to say.
Rod Speed
> Michael Coburn <mik...@verizon.net> wrote
>> ta wrote
>>> Obviously right now we are in a deflationary environment, but at
>>> some point, doesn't the trillions of dollars being pumped into the
>>> economy necessarily mean inflation of large proportions . . . eventually?
>>> I'm no economist, to be sure, but the money supply has doubled in
>>> the last few months. I don't understand how flooding the system
>>> with money will not cause some nasty inflation.
>> Why do you think that inflation is "nasty"?
>
> Perhaps he's taking the point of view of the less aggressive, less
> well-off members of the community. Inflation is nasty for those on
> fixed incomes and those with savings accounts -- old, disabled,
> poor and the working-class people for the most part.
There's plenty of the comfortably off that are on fixed incomes too.
And plenty more that used to be quite comfortably off no longer are just because
the interest paid on safe investments like CDs and bonds etc is no so derisory.
> And many working-class people, especially those on the low end, find
> it a hard struggle to raise their wages in proportion to strong inflation.
And hordes of those who have retired etc in spades.
Anarcissie
Michael Coburn <mik...@verizon.net> wrote:
> On Wed, 28 Jan 2009 09:42:55 -0800, *Anarcissie* wrote:
>
> > On Jan 28, 12:06 pm, Michael Coburn <mik...@verizon.net> wrote:
> >> On Wed, 28 Jan 2009 06:47:21 -0800, ta wrote:
> >> > Obviously right now we are in a deflationary environment, but at some
> >> > point, doesn't the trillions of dollars being pumped into the economy
> >> > necessarily mean inflation of large proportions . . . eventually?
> >>
> >> > I'm no economist, to be sure, but the money supply has doubled in the
> >> > last few months. I don't understand how flooding the system with
> >> > money will not cause some nasty inflation.
> >>
> >> Why do you think that inflation is "nasty"?
> >
> > Perhaps he's taking the point of view of the less aggressive, less
> > well-off members of the community. Inflation is nasty for those on
> > fixed incomes and those with savings accounts -- old, disabled, poor and
> > the working-class people for the most part. And many working-class
> > people, especially those on the low end, find it a hard struggle to
> > raise their wages in proportion to strong inflation.
>
> So if the inflation is induced by giving money to these people then they
> will not be harmed by the inflation.
My observation and personal experience of Welfare schemes is that the
money goes to (1) the aggressive, who know how to work the system, (2)
those who are the friends or relatives or ethnic brethren of those who
know how to work the system, or (3) is distributed rather unevenly, in
lumps, and in fits and starts.
In any case the funds are usually distributed rather parsimoniously;
the alms Caesar casts as his chariot trundles by are, after all, not
very great in value.
The last time there was strong inflation, in the late 1970s, I escaped
only by aggression: as soon as I saw it coming, I took all my savings
and bought overpriced, heavily mortgaged real estate. It would have
been a terrible deal any other time, but it saved my butt -- or at
least my pocketbook. And my family had a place to live. A year later
old ladies were crying in the supermarkets because they couldn't buy
even cat food. That was in the reign of the good king Jimmy Carter,
too. God knows what happened to those people.
I still haven't gotten my "stimulus" check, by the way. You will
have to pardon me if I don't think the largesse of the government
is going to compensate me for rapid inflation.
Michael Coburn
You seem unable to refute what I have said. That is because it is
actually irrefutable. If the dispensation is poorly handled then some
will fall through the cracks and be picked up by charity. Cherry picking
a few failures is rather silly.
Anarcissie
Michael Coburn <mik...@verizon.net> wrote:
It seems to me, since you made the positive assertion
that inflation would not harm the poor, it's up to you
to demonstrate that the money would actually be
distributed as evenly and as fairly as you say. It is
true my evidence is formally anecdotal (while yours is
nonexistent) but in fact everyone saw what I saw and
no one who was conscious during that period would
contradict me. The record of the United States
government in regard to bureaucratic performance is
not encouraging.
Of course, I don't think what we say here makes the
slightest difference. I assume currency will be thrown
around in massive bundles with great fanfare, inflation
will occur, and large sums will be pocketed by the
rich. I am already studying the real estate sections
of Craigslist with the closest attention. Or maybe I
should buy gold bricks and an AK-47. Hard to tell.
James A. Donald
> Obviously right now we are in a deflationary
> environment, but at some point, doesn't the trillions
> of dollars being pumped into the economy necessarily
> mean inflation of large proportions . . . eventually?
That which cannot continue, will end.
My current guess is that inflation should kick in around
2010 june-december, but should take some time to reach
really terrifyingly awesome levels.
The price of gold reflects speculator's estimates of
likely future inflation. They estimate very severe
inflation.
I think we will probably see very distubing levels of
inflation around 2012 or so.
If the US continues as the global currency, US will gain
substantial seignorage by inflating, causing everyone
else to subsidize the US. This will eventually provoke
a switch to other means of exchange - most likely gold
or euros. I would recommend widely diversified baskets
of exchangeables.
--
----------------------
We have the right to defend ourselves and our property, because
of the kind of animals that we are. True law derives from this
right, not from the arbitrary power of the omnipotent state.
Bret Cahill
> > > point, doesn't the trillions of dollars being pumped into the economy
> > > necessarily mean inflation of large proportions . . . eventually?
>
> > > I'm no economist, to be sure, but the money supply has doubled in the
> > > last few months. I don't understand how flooding the system with money
> > > will not cause some nasty inflation.
>
> > Why do you think that inflation is "nasty"?
>
> I didn't say that it was. I said "nasty inflation".
Inflation _is_ nasty for those living on a fixed income. The proper
way to choke off inflation, however, isn't to let the Fed jack up
interest rates which will turn Obama into a one termer but to pre empt
inflation with tax hikes on those making more than average mean income
~ $150K/yr.
Pelosi needs to let the Fed know that its very existence rests on a
mere banking act that can be overturned any time. Congress was
originally intended to control monetary policy. Art I, Sec. 8, U. S.
Const.
It's not like the corp. whore media still have the same influence they
had back in 1913.
Bret Cahill
Michael Coburn
> In article <glr4q...@news4.newsguy.com>,
> Michael Coburn <mik...@verizon.net> wrote:
>
>
>> > My observation and personal experience of Welfare schemes is that the
>> > money goes to (1) the aggressive, who know how to work the system,
>> > (2) those who are the friends or relatives or ethnic brethren of
>> > those who know how to work the system, or (3) is distributed rather
>> > unevenly, in lumps, and in fits and starts.
>>
>> You seem unable to refute what I have said. That is because it is
>> actually irrefutable. If the dispensation is poorly handled then some
>> will fall through the cracks and be picked up by charity. Cherry
>> picking a few failures is rather silly.
>
> It seems to me, since you made the positive assertion that inflation
> would not harm the poor, it's up to you to demonstrate that the money
> would actually be distributed as evenly and as fairly as you say.
NO. It is not. I said that if the inflation was caused by distributing
money to the people that _YOU_ said would be harmed by inflation then the
people that _YOU_ said would not be adversely affected by the inflation.
It is not on me to "prove" whether or not the distribution can be done.
I see no reason why it can't, but that is beside the point.
> It is
> true my evidence is formally anecdotal (while yours is nonexistent) but
> in fact everyone saw what I saw and no one who was conscious during that
> period would contradict me.
I am 63 years old and I assure you that I was alive and participating in
the economy in the 70's and 80's. Your problem is that the inflation of
that period was not caused by distributing money top the poor. It was
caused by tax cutting that traces all the way back to Kennedy and by the
dual "war on poverty" and "war on Vietnam" with no tax increase to cover
either one. It was exacerbated by abandoning the gold standard and by
the reaction of the oil suppliers. That is NOT inflation induced by
distributing money to the elderly and the others that you say are harmed
by inflation.
> The record of the United States government
> in regard to bureaucratic performance is not encouraging.
>
> Of course, I don't think what we say here makes the slightest
> difference. I assume currency will be thrown around in massive bundles
> with great fanfare, inflation will occur, and large sums will be
> pocketed by the rich. I am already studying the real estate sections of
> Craigslist with the closest attention. Or maybe I should buy gold
> bricks and an AK-47. Hard to tell.
Either one might be a good investment. But if the Republicans have their
way it will be a much deeper recession. You are now moving away from the
actual point. That point was that bottom side stimulus will not harm the
people on the bottom. Bailing out banks does harm people on the bottom.
Rod Speed
> Michael Coburn <mik...@verizon.net> wrote
>> Anarcissie wrote
>>> Michael Coburn <mik...@verizon.net> wrote
>>>>> Obviously right now we are in a deflationary environment, but at
>>>>> some point, doesn't the trillions of dollars being pumped into the
>>>>> economy necessarily mean inflation of large proportions . . . eventually?
>>>>> I'm no economist, to be sure, but the money supply has doubled
>>>>> in the last few months. I don't understand how flooding the
>>>>> system with money will not cause some nasty inflation.
>>>> Why do you think that inflation is "nasty"?
>>> Perhaps he's taking the point of view of the less aggressive, less
>>> well-off members of the community. Inflation is nasty for those on
>>> fixed incomes and those with savings accounts -- old, disabled,
>>> poor and the working-class people for the most part. And many
>>> working-class people, especially those on the low end, find it a
>>> hard struggle to raise their wages in proportion to strong inflation.
>> So if the inflation is induced by giving money to these
>> people then they will not be harmed by the inflation.
> My observation and personal experience of Welfare schemes is that the
> money goes to (1) the aggressive, who know how to work the system,
In any properly organised welfare system, it also goes to those the
system was designed to assist, who choose to apply for the welfare too.
And those grossly outnumber those you listed.
> (2) those who are the friends or relatives or ethnic
> brethren of those who know how to work the system,
That happens much more to those the system was designed to assist too.
> or (3) is distributed rather unevenly, in lumps, and in fits and starts.
That only happens with the welfare that is based on difficult criteria to measure.
> In any case the funds are usually distributed rather parsimoniously;
Thats just plain wrong with the absolute vast bulk of modern first world welfare.
> the alms Caesar casts as his chariot trundles by are, after all, not very great in value.
The real world has moved on just a tad since those days. And thats not welfare, thats charity anyway.
> The last time there was strong inflation, in the late 1970s, I escaped
> only by aggression: as soon as I saw it coming, I took all my savings
> and bought overpriced, heavily mortgaged real estate. It would have
> been a terrible deal any other time, but it saved my butt -- or at least my
> pocketbook. And my family had a place to live. A year later old ladies
> were crying in the supermarkets because they couldn't buy even cat food.
Oh bullshit, that never happened then.
> That was in the reign of the good king Jimmy Carter,
> too. God knows what happened to those people.
Hardly any of them even needed to eat pet food.
> I still haven't gotten my "stimulus" check, by the way.
> You will have to pardon me if I don't think the largesse of
> the government is going to compensate me for rapid inflation.
We aint see any rapid inflation currently. We have in fact seen massive deflation in the price of gasoline.
James A. Donald
*Anarcissie* wrote:
> > Perhaps he's taking the point of view of the less aggressive, less
> > well-off members of the community. Inflation is nasty for those on
> > fixed incomes and those with savings accounts -- old, disabled, poor and
> > the working-class people for the most part. And many working-class
> > people, especially those on the low end, find it a hard struggle to
> > raise their wages in proportion to strong inflation.
Michael Coburn
> So if the inflation is induced by giving money to these people then they
> will not be harmed by the inflation.
But inflation will not be induced by giving money to these people. It
will be induced by giving money to people considerably less deserving
- at the high end, the government just recently gave billions of
dollars in bonuses to financial wizards to reward them for their great
success in financial wizardry. At the other end, expect hundreds of
millions for various violently obnoxious, but highly organized
political factions of poor people.
Sushi Fish
Inflation is the cause of excess money _circulates_ in the market,
ready to be spent while the goods availability are at constant level
For example: if Obama ordered 30 trillions USD be printed and gives it
to Americans, if they don't spend and keep the money locked,
inflation will not happen
ta
But that's not what would happen, right? Presumably those trillions of
dollars are going to circulate through the economy (which is the point
of the stimulus). My question is, isn't that going to eventually
create massive inflation? If not, how is that prevented?
ta
> ta <padl...@nc.rr.com> wrote:
> > Obviously right now we are in a deflationary
> > environment, but at some point, doesn't the trillions
> > of dollars being pumped into the economy necessarily
> > mean inflation of large proportions . . . eventually?
>
> That which cannot continue, will end.
>
> My current guess is that inflation should kick in around
> 2010 june-december, but should take some time to reach
> really terrifyingly awesome levels.
>
> The price of gold reflects speculator's estimates of
> likely future inflation. They estimate very severe
> inflation.
>
> I think we will probably see very distubing levels of
> inflation around 2012 or so.
>
> If the US continues as the global currency, US will gain
> substantial seignorage by inflating, causing everyone
> else to subsidize the US. This will eventually provoke
> a switch to other means of exchange - most likely gold
> or euros. I would recommend widely diversified baskets
> of exchangeables.
So you're saying there is no way to stimulate the economy to
sufficiently prevent Great Depression II without causing hyper-
inflation? There's no way to mitigate the inflationary effects?
ta
Which is basically what is happening now -- banks aren't actually
lending out the money.
> So now let's talk about the bottom side stimulus of the current package
> before the Congress: This money will be injected into the real economy
> and will have an inflationary effect which is good. Wages will rise and
> more job opportunities will be created than would have otherwise been the
> case. But if the improved position of the middle class is to be
> sustained then the money must be removed from the system from the top or
> in ways that promote a better economy. The proper mechanism for doing
> that is the tax system and it is very important as to how the tax system
> is shaped.
Gotcha. So this is basically an exercise in wealth redistribution to
prevent the middle/lower classes from dispensing with this system
altogether.
James A. Donald
> You seem unable to refute what I have said. That is
> because it is actually irrefutable. If the
> dispensation is poorly handled then some will fall
> through the cracks and be picked up by charity. Cherry
> picking a few failures is rather silly.
Failure is the norm, not the exception - the squeaky
wheel gets the grease, and the squeaky wheel is the
least deserving. The recipients of government welfare
are generally political activists and criminals - for a
recent example:
<http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html>
The same is true on the lower end - drug addicts, ward
heelers, and petty criminals, though at least those
criminals come cheaper and do less damage. I am more at
risk from the government subsidized criminals at Goldman
and Sachs, than the government subsidized
criminals in East Palo Alto.
James A. Donald
<pad...@nc.rr.com> wrote:
> So you're saying there is no way to stimulate the
> economy to sufficiently prevent Great Depression II
> without causing hyper- inflation? There's no way to
> mitigate the inflationary effects?
This is not a Keynesian deflationary crisis to any very
substantial extent. What is causing economic crisis is
that people don't trust financial intermediaries.
Printing large amounts of money will not ameliorate this
problem. To remedy the problem, we need more financial
intermediaries to jump through windows instead of
getting billion dollar bonuses as rewards for their
immense success in managing other people's money.
The bailout rewards bad behavior, is intended to reward
bad behavior - is intended to prevent the market from
punishing bad conduct and rewarding good conduct, thereby
ensuring the continuation of the bad conduct.
Anarcissie
<1d7c6171-15a6-40de...@k9g2000vbl.google
groups.com>,
ta <pad...@nc.rr.com> wrote:
Above, I was reflecting on the goodness of Hummel, not
predicting the effects of the latest government
schemes. Hummel explains to me why there was radical
inflation in some areas like real estate and equities
and not in others, like wages.
What I think is going on now is an attempt to replace
the now absent private credit with public credit.
Since massive deflation is occurring as correction to
the the previous bubbles, it's hard to say which will
"win". As another poster notes, if the recipients of
the credit simply use it to shore up their own
positions, instead of lending, spending or investing
it, then it won't have much effect. The next step
might be to start printing a lot of currency for
general distribution, a la Weimar.
Michael Coburn
Inject the money in the bottom instead of injecting it at the top. There
is no reason to fear hyperinflation. Most certainly there is no reason
for fear at this point. And if we simply have to use the banking system
and loans then I offer the following:
Bailout 15: More on the solution
http://www.youtube.com/watch?v=-KrSxA9NCf0
Michael Coburn
> On 29 Jan 2009 02:38:00 GMT, Michael Coburn <mik...@verizon.net> wrote:
>> You seem unable to refute what I have said. That is because it is
>> actually irrefutable. If the dispensation is poorly handled then some
>> will fall through the cracks and be picked up by charity. Cherry
>> picking a few failures is rather silly.
>
> Failure is the norm, not the exception - the squeaky wheel gets the
> grease, and the squeaky wheel is the least deserving. The recipients of
> government welfare are generally political activists and criminals - for
> a recent example:
<<<<<<<<<Anecdotal cherry picked crap deleted>>>>>>>>>>>>>>>>
It is to me quite amazing the lengths to which you will go to embrace
your religious predispositions.
> The same is true on the lower end - drug addicts, ward heelers, and
> petty criminals, though at least those criminals come cheaper and do
> less damage. I am more at risk from the government subsidized criminals
> at Goldman and Sachs, than the government subsidized criminals in East
> Palo Alto.
If the people who the Republican apologists claim will be harmed by
inflation are the vehicle through which the increased money (the cause of
inflation) is administered then _THEY_ are not harmed by the inflation.
That is a fundamental reality and is not actually debatable. That is why
the religious nut cases must "invent" exceptions and magnify them.
Michael Coburn
I suppose you might be able to read that into it. I just see it as the
reality of a workable monetary system. My own perspective is that we
have dramatically increased productivity over the last 50 years yet we
are still trying to keep everyone employed for 40 hours a week and more.
We actually need to cut the work week without cutting wages. A national
health insurance system is probably key to doing that. We do not need to
"create jobs". We really just need to figure out how to redistribute the
work that needs doing among the people that want the work without being
communistic about it. I know that I would have partially retired in 2000
if not for the health insurance problem. People should not be forced
into full time jobs kissing big company butts in order to get health
insurance.
Michael Coburn
It SHOULD create inflation. That does not mean "massive" inflation and
inflation is the least of our worries at this time.
But let us look at "inflation" as it is or will be as opposed to just
accepting the conservative money holder proclamation that inflation is a
monster that will eat the children. Consider that the middle class is
now much more deeply in debt to the rich than ever before. Consider that
inflation is a boon to the debtor and a bane to the creditor. Consider
that inflation really does threaten the current stashes of money and that
unless the money holders actually INVEST their money then they will soon
be not so rich.
How you like it now?
Michael Coburn
> On 28 Jan 2009 19:31:31 GMT, <mik...@verizon.net> wrote:
>
> *Anarcissie* wrote:
>> > Perhaps he's taking the point of view of the less aggressive, less
>> > well-off members of the community. Inflation is nasty for those on
>> > fixed incomes and those with savings accounts -- old, disabled, poor
>> > and the working-class people for the most part. And many
>> > working-class people, especially those on the low end, find it a hard
>> > struggle to raise their wages in proportion to strong inflation.
>
> Michael Coburn
>> So if the inflation is induced by giving money to these people then
>> they will not be harmed by the inflation.
>
> But inflation will not be induced by giving money to these people.
If you want to address the point I have made then please do so. If you
question the actual thesis then lets see the questions. More
specifically, if infrastructure is funded with borrowed money then the
bulk of the money should pass through the proper hands. But even if it
doesn't the inflation will still happen. And inflation is the only valid
redress against the crooks that currently have all the money.
ta
In my original post I said *eventually*.
As to the massive part, the monetary based has *doubled* in a few
weeks. Given that *trillions* of dollars are being pumped into the
system, do you really think "massive" is such an inappropriate term?
If so, at what point do you think we would have too much inflation?
<straw man snipped>
Les Cargill
Gad, we're a culture of financial anorexics. The Pavlovian repeat
of "inflation is bad" will hurt us *badly* before we are done.
Inflation is no fun, but deflation is a lot less fun...
--
Les Cargill
Les Cargill
Once the velocity of money starts to pick up past a certain
threshold. We're, uh, not there yet...
> <straw man snipped>
>
>> --
>> "Those are my opinions and you can't have em" -- Bart Simpson
>
--
Les Cargill
ta
You're either not reading very carefully or you are a propagandist. I
never said "inflation was bad". I'm simply inquiring about the
potential for *significant* inflation with trillions of dollars being
pumped into the system.
At least take the time to read the post before jumping in.
> Inflation is no fun, but deflation is a lot less fun...
(yawn) Straw man.
> --
> Les Cargill
Coffee's For Closers
b84fd6...@g1g2000pra.googlegroups.com>, pad...@nc.rr.com
says...
> On Jan 28, 10:02=A0am, "*Anarcissie*" <anarcis...@gmail.com> wrote:
> > On Jan 28, 9:47=A0am, ta <padl...@nc.rr.com> wrote:
> > According to W. F. Hummel, most effective money is generated
> > by private credit. =A0A loss of belief in the fortunes of one's
> > community
> > would presumably discourage people from issuing this credit, so
> > there would be considerable deflation regardless of the production
> > of currency or credit by governments. Seehttp://wfhummel.cnchost.com/
> > This doesn't mean the government won't be able to create
> > inflation by printing a lot of money. =A0But both the credit
> > inflation and the imbalance probably reflect deeper and
> > greater economic problems which have not been addressed
> > yet. =A0If indeed they can be addressed.
> Thanks for the link.
>
> Re: common misconceptions about inflation and money:
>
> "The government causes inflation when it prints too much money.
>
> Money is literally printed by the government only to meet the demand
> for portable currency, i.e. Federal Reserve notes. The notes are
> issued to banks in exchange for deposits the banks hold at the Fed.
> The public acquires the notes in exchange for their own deposits at
> banks. The amount of currency issued is no more and no less than the
> public desires to hold as wallet money or rainy day money. It has no
> bearing on inflation."
>
> I don't think that is currently true, is it? The money we're printing
> is not because of some demand by the public, is it?
It is semantics.
That quote is talking specifically about cash. The physical
banknotes that you can carry in your wallet.
The total dollar value of all US cash is relatively small
compared to the electronic money circulating around the banking
system.
The bailout money didn't get "printed," per se. Rather, it was
electronically created. A fancy escalation on just opening up a
spreadsheet program, and typing in some numbers, and saying, "OK,
there is now an extra $300B in this fund over here..."
The way that the bailout money has been created and used means a
couple of things. First, it isn't necessarily circulating much,
in the area of daily life - like you shopping at the supermarket.
Also, it may be easier to re-absorb back into the Federal Reserve
in the future.
--
Get Credit Where Credit Is Due
http://www.cardreport.com/
Credit Tools, Reference, and Forum
Les Cargill
I wasn't talking about you - I was talking about the culture at large.
Fear of inflation got us where we are today... don't be so sensitive....
> I'm simply inquiring about the
> potential for *significant* inflation with trillions of dollars being
> pumped into the system.
>
The dumping doesn't seem to be causing any change in
monetary velocity, so inflation is (for now) very unlikely.
> At least take the time to read the post before jumping in.
>
Oh, I read it...
>> Inflation is no fun, but deflation is a lot less fun...
>
> (yawn) Straw man.
>
Nope. Just a fact....
>> --
>> Les Cargill
>
--
Les Cargill
ta
> ta wrote:
> > On Jan 29, 8:22 pm, Les Cargill <lcarg...@cfl.rr.com> wrote:
> >> Michael Coburn wrote:
> >>> On Thu, 29 Jan 2009 11:32:36 -0800, ta wrote:
> >>>> On Jan 29, 2:20 pm, Sushi Fish <yellowtail_2...@yahoo.com> wrote:
> >>>>> On Jan 28, 9:51 am, ta <padl...@nc.rr.com> wrote:
> >>>>>> On Jan 28, 12:36 pm, "*Anarcissie*" <anarcis...@gmail.com> wrote:
> >>>>>>> On Jan 28, 11:53 am, Michael Coburn <mik...@verizon.net> wrote:
> >>>>>>>> On Wed, 28 Jan 2009 07:41:23 -0800, ta wrote:
<snip>
>>>>>My question is, isn't that going to eventually create
> >>>> massive inflation? If not, how is that prevented?
> >>> It SHOULD create inflation. That does not mean "massive" inflation and
> >>> inflation is the least of our worries at this time.
<snip>
> >> Gad, we're a culture of financial anorexics. The Pavlovian repeat
> >> of "inflation is bad" will hurt us *badly* before we are done.
>
> > You're either not reading very carefully or you are a propagandist. I
> > never said "inflation was bad".
>
> I wasn't talking about you - I was talking about the culture at large.
> Fear of inflation got us where we are today... don't be so sensitive....
Regardless, it's a total red herring . . . doesn't address my point at
all, so it's useless commentary in that respect.
> > I'm simply inquiring about the
> > potential for *significant* inflation with trillions of dollars being
> > pumped into the system.
>
> The dumping doesn't seem to be causing any change in
> monetary velocity, so inflation is (for now) very unlikely.
Right, but inflation should ultimately happen, given that's the goal
of the "stimulus", correct?
So I'm just trying to understand the mechanism by which we pump
trillions of dollars into the system -- effectively doubling the total
monetary base -- both accomplishes the goal of stimulating the
economy without causing massive inflation. Because to my uneducated,
layman's ears, doubling the amount of money in the system sounds like
an awful lot.
I'm not worried about inflation *per se* -- it's the potential for
*massive* inflation, and any number of really bad things that could
happen as a result.
It's tough to get a straight, objective answer without political dogma
being interjected left and right (no pun intended). Just interested in
the facts, ma'am.
<snip>
Les Cargill
I'd call it more of a digression. Your sentence... inspired me :)
>>> I'm simply inquiring about the
>>> potential for *significant* inflation with trillions of dollars being
>>> pumped into the system.
>> The dumping doesn't seem to be causing any change in
>> monetary velocity, so inflation is (for now) very unlikely.
>
> Right, but inflation should ultimately happen, given that's the goal
> of the "stimulus", correct?
>
Yeah. Far as I know. I don't think anybody knows if it'll work or not...
> So I'm just trying to understand the mechanism by which we pump
> trillions of dollars into the system -- effectively doubling the total
> monetary base -- both accomplishes the goal of stimulating the
> economy without causing massive inflation. Because to my uneducated,
> layman's ears, doubling the amount of money in the system sounds like
> an awful lot.
>
It does. It is a lot.
> I'm not worried about inflation *per se* -- it's the potential for
> *massive* inflation, and any number of really bad things that could
> happen as a result.
>
Adding a lot of money and devaluing the currency are, sfaik, related
but still very different phenomena. No, I do nto have a firm grap on the
exact differences. But Zimbabwe, for example, is in a general free-fall.
We're in a rough patch, but not that bad off. I would be skeptical
that we *could* get there.
> It's tough to get a straight, objective answer without political dogma
> being interjected left and right (no pun intended). Just interested in
> the facts, ma'am.
>
I try always to avoid political dogma, to the extent possible.
> <snip>
>
--
Les Cargill
ta
Michael Coburn above indicates that raising taxes on the wealthier
Americans will pre-empt the kind of inflation I'm talking about, once
the economy gets kicking again. I really don't know, I'm just trying
to think long-term here, knowing full well that in the short term
inflation is both necessary and good.
James A. Donald
> > Failure [of government handout] is the norm, not the
> > exception - the squeaky wheel gets the grease, and
> > the squeaky wheel is the least deserving. The
> > recipients of government welfare are generally
> > political activists and criminals - for a recent
> > example:
Michael Coburn
> <<<<<<<<<Anecdotal cherry picked crap
> deleted>>>>>>>>>>>>>>>>
>
> It is to me quite amazing the lengths to which you
> will go to embrace your religious predispositions.
Among the people who received the recent bailout, is
there a single recipient that you would like to defend
as deserving?
> If the people who the Republican apologists claim will
> be harmed by inflation are the vehicle through which
> the increased money (the cause of inflation) is
> administered then _THEY_ are not harmed by the
> inflation.
Ordinary working people and ordinary retirees will be
the most harmed. They are not getting a bailout.
James A. Donald
wrote:
> Fear of inflation got us where we are today...
What got us here today was irresponsible lending - which a credible
commitment to fighting inflation would have restrained.
Bret Cahill
Choke off inflation by hiking taxes on those making more than average
mean, ~ $150K/year.
Repugliars will scream bloody murder but who give's a rat's behind
about Repugliars?
Bret Cahill
Les Cargill
I don't believe that. More precisely, I don't know how that helps.
> once
> the economy gets kicking again. I really don't know, I'm just trying
> to think long-term here, knowing full well that in the short term
> inflation is both necessary and good.
>
It's a Goldilocks thing, and there are far too many unknowns to
solve it as a set of equations.
<snip>
--
Les Cargill
Michael Coburn
When the inflation rate gets to be higher than the unemployment rate we
can talk about it.
Michael Coburn
> James A. Donald wrote:
>> > Failure [of government handout] is the norm, not the exception - the
>> > squeaky wheel gets the grease, and the squeaky wheel is the least
>> > deserving. The recipients of government welfare are generally
>> > political activists and criminals - for a recent example:
>
> Michael Coburn
>> <<<<<<<<<Anecdotal cherry picked crap deleted>>>>>>>>>>>>>>>>
>>
>> It is to me quite amazing the lengths to which you will go to embrace
>> your religious predispositions.
>
> Among the people who received the recent bailout, is there a single
> recipient that you would like to defend as deserving?
Nope. Not a one. But now you want to run away from stimulus and move
the goal posts to bank bailouts.
>> If the people who the Republican apologists claim will be harmed by
>> inflation are the vehicle through which the increased money (the cause
>> of inflation) is administered then _THEY_ are not harmed by the
>> inflation.
>
> Ordinary working people and ordinary retirees will be the most harmed.
> They are not getting a bailout.
(sigh)
James A. Donald
> More specifically, if infrastructure is funded with
> borrowed money then the bulk of the money should pass
> through the proper hands.
Near where I now live there are both government and
private roads and sewer, and the government systems seem
to be produced about as efficiently as private roads and
sewage. At least they are when done with ratepayer
money under full local council control. When done on
federal tourist development grant under partial federal
government control, they are several hundred to a
thousand times less efficient. Under a federal tourist
development grant, they built a roundabout at the center
of the village. Took them nearly a year and a half. If
it was done with ratepayer money, under full local
control, would have been done in a few hours. It is a
very nice roundabout, but at what it cost, could have
been paved with gold.
For example they had a machine that extrudes curb very
efficiently, at about a half a foot per second, or ten
centimeters a second. It requires a skilled and highly
trained driver, because you want it to be driven
precisely along the path as marked. For several months
machine was always running on idle, and always had fresh
concrete in it, and usually had a couple of workers
fussing over it. Yet somehow only a hundred feet or so
of curb was been extruded over several months - which
the machine could have done in a couple of minutes.
Which leads me to conclude that the tourist development
money is not passing through proper hands.
Some time ago I was in Dallas Texas, at my sister in
law's house. Near the house is a man made lake. The
grass beside the lake gets cut regularly, and they top
up the water in the lake from time to time, but they
don't clean up the graffiti on the concrete, some of
which appears to be decades old, and they don't clear up
shopping carts and garbage thrown in the lake, most of
which appear to have been there for many years - I would
guess garbage was removed from the lake a few years
back, and never since. It is not a very large lake. It
would take one man one day to remove the accumulation of
rubbish from the lake. Beside the lake is a substantial
building, containing offices and numerous staff, staff
whose job it is to maintain this lake. I would guess a
few dozen people, who have full time jobs maintaining
this lake, but have somehow not gotten around to fishing
the shopping carts out of the lake, or painting over the
graffiti.
Mark-T
> So I'm just trying to understand the mechanism by which we pump
> trillions of dollars into the system -- effectively doubling the total
> monetary base -- both accomplishes the goal of stimulating the
> economy without causing massive inflation. Because to my uneducated,
> layman's ears, doubling the amount of money in the system sounds like
> an awful lot.
>
> I'm not worried about inflation *per se* -- it's the potential for
> *massive* inflation, and any number of really bad things that could
> happen as a result.
>
> It's tough to get a straight, objective answer without political dogma
"Inflation is always and everywhere a monetary phenomenon."
- Milton Friedman
Mark
Mark-T
> The government is the creator of inflation
right
> and it happens due to deficits and failure to regulate.
wrong and wrong
Mark
--
> "Those are my opinions and you can't have em" -- Bart Simpson
Who would want em?
Bret Cahill
And you are still in a state of denial about the high tax Clinton
economic boom which everyone knows was due to a combination of low
interest rates and the highest taxes in the history of the republic.
> More precisely, I don't know how that helps.
How can you sell anything if no one has any money?
Duh . . .
> > once
> > the economy gets kicking again. I really don't know, I'm just trying
> > to think long-term here, knowing full well that in the short term
> > inflation is both necessary and good.
>
> It's a Goldilocks thing, and there are far too many unknowns to
> solve it as a set of equations.
Econ 101 ain't complicated.
Ever notice that the Fed is always shocked SHOCKED to discover a
recession a year after the fact, a year before they cut the discount
rate?
Ever notice the Fed always jacks up interest rates before Congress has
an opportunity to choke off inflation with tax hikes on the rich?
The Federal Reserve was established by robber baron interests, their
media and their Congress of 1913 to do exactly what it's doing right
now: Jack up interest rates on any sign of inflation whatsoever and
then use the resulting recession/depression as a pretext to cut taxes
on the rich and get the wage slaves to beg for lower and lower paying
jobs.
Actually one entity is supposed to control both fiscal and monetary
policy according to the U. S. Constitution: Congress.
As recently as a decade ago the _NY Times_ would brand anyone
mentioning the plain text of Art. I, Sec. 8 a "populist" which is NY
Times code for "Hitler, Stalin, Ross Perot and David Duke all rolled
up into one."
But the times are a changing. In the info age our corp. whore media
now just look ridiculous trying to prop up the Fed.
Cheap communications has all but completely leveled the "Fourth
Estate" and it won't be long before Congress once again asserts it's
power to "regulate the value of money."
Here's a little extra credit Econ 101 question:
What did Clinton mean back in Feb. '96 when he reappointed Greenspan?
"No one knows for sure that we can have an economic growth rate of
only two point five percent with the amount of communications
technology we have in this country?"
Bret Cahill
Les Cargill
> On Thu, 29 Jan 2009 21:50:03 -0500, Les Cargill <lcar...@cfl.rr.com>
> wrote:
>
>> Fear of inflation got us where we are today...
>
> What got us here today was irresponsible lending - which a credible
> commitment to fighting inflation would have restrained.
>
So the perception that deflation was in the air in 2003 is
false? I don't think it was.
The "irresponsible lending" had more to do with leadership
problems in the mortgage industry than anything. I have a
friend who was fired from a mortgage company because he
expressed his professional opinion that lending standards were too
loose. He'd been at it for decades, but was considered to not be a
"team player" because of this.
If we reject monetarism, then we simply don't have a story. We know
that the velocity of money can and does rapidly decrease, and the
answer since FDR has been to increase Fed output.
> --
> ----------------------
> We have the right to defend ourselves and our property, because
> of the kind of animals that we are. True law derives from this
> right, not from the arbitrary power of the omnipotent state.
>
> http://www.jim.com/
--
Les Cargill
Les Cargill
I've never been convinced that the higher taxes actually
helped. The theory is that a declining deficit gives
investors confidence, but I can't find any reason
to think that this is so. After all, the bonds sell well
when deficits are mounting.
>> More precisely, I don't know how that helps.
>
> How can you sell anything if no one has any money?
>
> Duh . . .
>
??? What does that have to do with anything? There's *less*
money if taxes are higher.
>>> once
>>> the economy gets kicking again. I really don't know, I'm just trying
>>> to think long-term here, knowing full well that in the short term
>>> inflation is both necessary and good.
>> It's a Goldilocks thing, and there are far too many unknowns to
>> solve it as a set of equations.
>
> Econ 101 ain't complicated.
>
> Ever notice that the Fed is always shocked SHOCKED to discover a
> recession a year after the fact, a year before they cut the discount
> rate?
>
Not really, no. It takes about a year to detect a recession.
> Ever notice the Fed always jacks up interest rates before Congress has
> an opportunity to choke off inflation with tax hikes on the rich?
>
> The Federal Reserve was established by robber baron interests, their
> media and their Congress of 1913 to do exactly what it's doing right
> now: Jack up interest rates on any sign of inflation whatsoever and
> then use the resulting recession/depression as a pretext to cut taxes
> on the rich and get the wage slaves to beg for lower and lower paying
> jobs.
>
You say that, but ... where's the evidence?
> Actually one entity is supposed to control both fiscal and monetary
> policy according to the U. S. Constitution: Congress.
>
Congress does a lot of delegating these days.
> As recently as a decade ago the _NY Times_ would brand anyone
> mentioning the plain text of Art. I, Sec. 8 a "populist" which is NY
> Times code for "Hitler, Stalin, Ross Perot and David Duke all rolled
> up into one."
>
LOL.
> But the times are a changing. In the info age our corp. whore media
> now just look ridiculous trying to prop up the Fed.
>
> Cheap communications has all but completely leveled the "Fourth
> Estate" and it won't be long before Congress once again asserts it's
> power to "regulate the value of money."
>
> Here's a little extra credit Econ 101 question:
>
> What did Clinton mean back in Feb. '96 when he reappointed Greenspan?
>
> "No one knows for sure that we can have an economic growth rate of
> only two point five percent with the amount of communications
> technology we have in this country?"
>
>
That has little to do with anything, other than that the 1996 Telecomm
Act was in the wind.
> Bret Cahill
>
>
>
>
--
Les Cargill
Michael Coburn
Incredible! "bonds sell well when deficits are mounting".
>
>>> More precisely, I don't know how that helps.
>>
>> How can you sell anything if no one has any money?
>>
>> Duh . . .
>>
>>
> ??? What does that have to do with anything? There's *less* money if
> taxes are higher.
If taxes are lower then government sells bonds. The additional money is
soaked up by the bonds. In reality the rich buy bonds instead of
investing and instead of paying taxes. The Republican lie concerning
rich people "investing" has been exposed for all to see.
>>>> once
>>>> the economy gets kicking again. I really don't know, I'm just trying
>>>> to think long-term here, knowing full well that in the short term
>>>> inflation is both necessary and good.
>>> It's a Goldilocks thing, and there are far too many unknowns to solve
>>> it as a set of equations.
>>
>> Econ 101 ain't complicated.
>>
>> Ever notice that the Fed is always shocked SHOCKED to discover a
>> recession a year after the fact, a year before they cut the discount
>> rate?
>>
>>
> Not really, no. It takes about a year to detect a recession.
It did not take a year for me to detect this recession.
>> Ever notice the Fed always jacks up interest rates before Congress has
>> an opportunity to choke off inflation with tax hikes on the rich?
>>
>> The Federal Reserve was established by robber baron interests, their
>> media and their Congress of 1913 to do exactly what it's doing right
>> now: Jack up interest rates on any sign of inflation whatsoever and
>> then use the resulting recession/depression as a pretext to cut taxes
>> on the rich and get the wage slaves to beg for lower and lower paying
>> jobs.
>>
>>
> You say that, but ... where's the evidence?
>
>> Actually one entity is supposed to control both fiscal and monetary
>> policy according to the U. S. Constitution: Congress.
>>
>>
> Congress does a lot of delegating these days.
Authority can be delegated. Responsibility cannot.
>> As recently as a decade ago the _NY Times_ would brand anyone
>> mentioning the plain text of Art. I, Sec. 8 a "populist" which is NY
>> Times code for "Hitler, Stalin, Ross Perot and David Duke all rolled up
>> into one."
>>
>>
> LOL.
>
>> But the times are a changing. In the info age our corp. whore media
>> now just look ridiculous trying to prop up the Fed.
>>
>> Cheap communications has all but completely leveled the "Fourth Estate"
>> and it won't be long before Congress once again asserts it's power to
>> "regulate the value of money."
>>
>> Here's a little extra credit Econ 101 question:
>>
>> What did Clinton mean back in Feb. '96 when he reappointed Greenspan?
>>
>> "No one knows for sure that we can have an economic growth rate of only
>> two point five percent with the amount of communications technology we
>> have in this country?"
>>
>>
>>
> That has little to do with anything, other than that the 1996 Telecomm
> Act was in the wind.
>
>> Bret Cahill
>>
>>
>>
>>
--
Les Cargill
But haven't they? I was a surprised by this as anybody, but
there they did.
>>>> More precisely, I don't know how that helps.
>>> How can you sell anything if no one has any money?
>>>
>>> Duh . . .
>>>
>>>
>> ??? What does that have to do with anything? There's *less* money if
>> taxes are higher.
>
> If taxes are lower then government sells bonds. The additional money is
> soaked up by the bonds. In reality the rich buy bonds instead of
> investing and instead of paying taxes. The Republican lie concerning
> rich people "investing" has been exposed for all to see.
>
Bonds don't have the kind of return equities do. I'm not
aware of any investment advice to stick to bonds except
as part of a diversified portfolio, or when somebody's
using it as a primary income stream ( as in
retirement). And the last ten years' bond sales were
mostly to implement all that globalization....
You're calling "crowding out" - which can happen, but
it doesn't appear to happen reliably. In the mortgage
bubble, that wasn't bond activity, it was mainly
expressed as stock prices. All the Fed money is
doubtless going to bias things immensely, which is
a very Hayek thing...
The system isn't that wonderful, but it appears very
difficult to find replacements that work better. As the
Indian proverb goes, "When elephants fight, it is the
grass that suffers" and when people on *either* side
of the government-versus-business battle reach for
power, there's grass trampled - us.
I tend towards Hayek on this - it can't be done
well, so maybe it should not be done at all.
>>>>> once
>>>>> the economy gets kicking again. I really don't know, I'm just trying
>>>>> to think long-term here, knowing full well that in the short term
>>>>> inflation is both necessary and good.
>>>> It's a Goldilocks thing, and there are far too many unknowns to solve
>>>> it as a set of equations.
>>> Econ 101 ain't complicated.
>>>
>>> Ever notice that the Fed is always shocked SHOCKED to discover a
>>> recession a year after the fact, a year before they cut the discount
>>> rate?
>>>
>>>
>> Not really, no. It takes about a year to detect a recession.
>
> It did not take a year for me to detect this recession.
>
I mean that for somebody formally charged with detecting
one, it takes about a year. sci.econ's seen this coming for years,
but they don't listen to us, do they?
>>> Ever notice the Fed always jacks up interest rates before Congress has
>>> an opportunity to choke off inflation with tax hikes on the rich?
>>>
>>> The Federal Reserve was established by robber baron interests, their
>>> media and their Congress of 1913 to do exactly what it's doing right
>>> now: Jack up interest rates on any sign of inflation whatsoever and
>>> then use the resulting recession/depression as a pretext to cut taxes
>>> on the rich and get the wage slaves to beg for lower and lower paying
>>> jobs.
>>>
>>>
>> You say that, but ... where's the evidence?
>>
>>> Actually one entity is supposed to control both fiscal and monetary
>>> policy according to the U. S. Constitution: Congress.
>>>
>>>
>> Congress does a lot of delegating these days.
>
> Authority can be delegated. Responsibility cannot.
>
Agreed. If I may - I don't think Congress can handle the
"math", as it were. Our technology outstrips our
ability to understand it....
<snip>
--
Les Cargill
Fish
> On Jan 29, 2:20 pm,SushiFish<yellowtail_2...@yahoo.com> wrote:
>
>
>
> > On Jan 28, 9:51 am, ta <padl...@nc.rr.com> wrote:
>
> > > On Jan 28, 12:36 pm, "*Anarcissie*" <anarcis...@gmail.com> wrote:
>
> > > > On Jan 28, 11:53 am, Michael Coburn <mik...@verizon.net> wrote:
>
> > > > > On Wed, 28 Jan 2009 07:41:23 -0800, ta wrote:
>
> > > > > the bigger picture. I assure you that in a properly managed fractional
> > > > > creator of inflation and it happens due to deficits and failure to
> > > > > regulate.
>
> > > > What I have liked about Hummel is that his theories help explain
> > > > how there could strong inflation in real estate and equities, and
> > > > yet very little inflation, or even deflation, in wages and consumer
> > > > lot of money and handing it around,
>
> > > But isn't that exactly what the government is doing? They're not
> > > handing it out randomly, of course, but when Citi and AIG and GM etc.
> > > (rightly or wrongly) hears "inflation".
>
> > > So to my original question, why won't that action have a massive
> > > inflationary effect?
>
> > > > one would expect inflation,
> > > > but it would be general, not restricted to rich people's stuff.
>
> > Inflation is the cause of excess money _circulates_ in the market,
> > ready to be spent while the goods availability are at constant level
>
> > to Americans, if they don't spend and keep the money locked,
> > inflation will not happen
>
> But that's not what would happen, right? Presumably thosetrillionsof
> dollars are going to circulate through the economy (which is the point
> create massive inflation? If not, how is that prevented?
yes, eventually it can create inflation as people use the money as the
example I gave before. In the current condition, as millions lost
jobs, inflation is not a great concern because people don't have money
to spend and others reduce buying.
in US, the stimulus package just covers the loss of GDP to keep it at
13 trillions mark as millions jobs were lost. I figure Obama and his
team think about this point already, they keep enough money
circulating (via jobs creation and stimulus packages) but not too much
to cause inflation while the system repairs itself. the TARP program
is to cover the financial debt, so the effect of inflation is not
obvious.
__ As income raises so does cost of living __
tame inflation: Paul Volcker raised US treasuries up to 15% in early
'80 to drain out excess cash from consumers and raised interest rate
to 17% to prevent borrowing money and spend, he tamed inflation in 8
yrs. But the current condition is different than the '80, Fed lowers
interest rate to 1% to stimulate the economy. I believe the econ now
is much different than anything I seen before.
ta
You're not really answering the question, which seems to be par for
the course here. Ah well, this is usenet after all -- it was worth a
shot.
ta
IN.SIG> wrote:
> In article <770427fe-c7d4-4f5f-a17a-
> b84fd629f...@g1g2000pra.googlegroups.com>, padl...@nc.rr.com
Then what good is it?
> Also, it may be easier to re-absorb back into the Federal Reserve
> in the future.
So if the government says *poof* you, Citi, now have $300B and they
(presumably) begin lending out money, someone is getting money in
their hands, and it would be subsidized by taxpayers, right?
Les Cargill
> On Jan 30, 12:45 am, Michael Coburn <mik...@verizon.net> wrote:
>> On Thu, 29 Jan 2009 15:13:12 -0800, ta wrote:
>>> If so, at what point do you think we would have too much inflation?
>> When the inflation rate gets to be higher than the unemployment rate we
>> can talk about it.
>
> You're not really answering the question, which seems to be par for
> the course here. Ah well, this is usenet after all -- it was worth a
> shot.
It's not that bad - one belief we have is that these two trade. I
suspect they might in some cases, don't in others, but it's not
something I really know.
<snip>
--
Les Cargill
Michael Coburn
I have answered the question the only way it can be rationally answered.
And I think you need to learn the difference between M0 and M1 and M2.
The doubling of the monetary base (M0) is sterile; it does nothing. When
most monetary economists speak of the "money supply" they speak of M1.
The M1 is the amount of loaned out money plus the amount of base money.
M1 hasn't done squat. The phrase "pushing on a string" comes to mind.
The banks are all in lock up and survive mode and the people that would
ordinarily be investing are dis-investing and laying off labor.
The fact is that whether the banks are willing to lend or not, you can't
make people borrow. And with the economy tanking more every day no
rational person is going to borrow. Rescuing the banks may be a rational
short term thing to do but it does not stop a deflation and a
depression. It remains to be seen if stimulus can get the heart beating
again but that isn't going to "fix it" either. It will take a lot more
innovation to have a sustainable and prosperous economy.
Michael Coburn
It is finally sinking in that money is created on a keyboard at the Fed
at the behest of the elected government. This last part about the
elected government is still not all that evident to the brick heads known
as "conservatives". They somehow believed that the Republicans were
actually borrowing gold doubloons from future wage earners in order to
fund the Iraq arcade. The Chinese seem to have bought that also or maybe
not. It may be that the Chinese willingly did what they did in order to
devalue their own currency in relation to the dollar. It doesn't really
matter. They are screwed and so too all the Republican rip off artists
that have stolen all that paper money. You want to see some deficit
spending? WATCH THIS! It's called "redress of the Republican crimes".
As the dollar is devalued there will be a rational "leveling" in which
the people that have tremendous amounts of money will be brought down
closer to the common people. This should be done by simply increasing
wages and instating a national health care system.
Michael Coburn
You seem to be arguing "crowding out". When people sell stocks they
don't just put the money in a mattress. The money goes to bonds because
it is better than a mattress. And in a deflation the interest is just
gravy.
>>>>> More precisely, I don't know how that helps.
>>>> How can you sell anything if no one has any money?
>>>>
>>>> Duh . . .
>>>>
>>>>
>>> ??? What does that have to do with anything? There's *less* money if
>>> taxes are higher.
>>
>> If taxes are lower then government sells bonds. The additional money
>> is soaked up by the bonds. In reality the rich buy bonds instead of
>> investing and instead of paying taxes. The Republican lie concerning
>> rich people "investing" has been exposed for all to see.
>>
>>
> Bonds don't have the kind of return equities do. I'm not aware of any
> investment advice to stick to bonds except as part of a diversified
> portfolio, or when somebody's using it as a primary income stream ( as
> in retirement). And the last ten years' bond sales were mostly to
> implement all that globalization....
So if bonds are not sold to soak up the tax breaks that cause deficits
then where, exactly, do you think the money goes? Are you telling us
that the deficits created money that was used to blow the Housing
bubble? That doesn't work. All the money paid for real estate stays in
the economy. There are but two ways for _real_ money to exit the
system: Taxes and bonds. And bonds are just an interest bearing
mattress. Bank/financial weenie credit is not real money. It is true
that the Republicans did not sell as many T-bills as they should have and
that M3 is a lot larger than it should be. But the "credit" for the real
estate bubble was created by Wall Street.
> You're calling "crowding out" - which can happen, but it doesn't appear
> to happen reliably. In the mortgage bubble, that wasn't bond activity,
> it was mainly expressed as stock prices. All the Fed money is doubtless
> going to bias things immensely, which is a very Hayek thing...
What the Fed was doing was letting Wall Street create credit in the
financial system outside the normal commercial banking mechanism. If you
take a look at the national debt you will see that it increases pretty
much in step with the deficits (the part that is missing will be in M3).
And yes. I am arguing that if intelligent people can see that there is
no return to equities then they will move to bonds. What Clinton did was
to raise taxes on interest from bonds while leaving taxes on capital
gains alone. That caused a shift from bonds to equities.
> The system isn't that wonderful, but it appears very difficult to find
> replacements that work better. As the Indian proverb goes, "When
> elephants fight, it is the grass that suffers" and when people on
> *either* side of the government-versus-business battle reach for power,
> there's grass trampled - us.
Nice diversion.
> I tend towards Hayek on this - it can't be done well, so maybe it should
> not be done at all.
It can be done very well if Republicans and Hayek worshipers can be
removed from government.
The Republicans use the media and the bought and paid for economics
profession to game the system.
James A. Donald
wrote:
> I have answered the question the only way it can be rationally answered.
> And I think you need to learn the difference between M0 and M1 and M2.
> The doubling of the monetary base (M0) is sterile; it does nothing. When
> most monetary economists speak of the "money supply" they speak of M1.
> The M1 is the amount of loaned out money plus the amount of base money.
> M1 hasn't done squat.
M1 has grown by 17% in the last twelve months and nearly 10% in the
last three months, which is a great deal more than squat. M2 has grown
by 9.9% and 4.6% by the same measures.
The gold market predicts substantial and rising inflation. The market
in government paper does not - possibly because the people buying gold
expect the government to default on inflation indexed bonds, either
outright or through fraudulent indexing.
This is not like pushing on a string, it is more like towing a
supertanker. It takes a while for the supertanker to get moving, but
once its moving, it is going to keep on moving for considerably longer
while.
During the German hyperinflation, it often took a bit over a year for
massive increases in the money supply to turn into massive increases
in the price level.
From 1920 February to 1921 May, the value of the German mark was
improving, deflation was the big concern - and the German money supply
was increasing about as fast as the world money supply has been over
the last few months.
James A. Donald
<lcar...@cfl.rr.com> wrote:
> If we reject monetarism, then we simply don't have a
> story.
Sure we have a story - same story we see every few
decades. Financial intermediaries revealed as scammers,
leading to loss of confidence in financial
intermediaries.
Bad conduct is the problem, and the remedy is allowing
the marketplace to punish bad conduct, rather than
printing sacks of money and handing it to the bad guys.
Les Cargill
> On Fri, 30 Jan 2009 12:10:30 -0500, Les Cargill
> <lcar...@cfl.rr.com> wrote:
>> If we reject monetarism, then we simply don't have a
>> story.
>
> Sure we have a story - same story we see every few
> decades. Financial intermediaries revealed as scammers,
> leading to loss of confidence in financial
> intermediaries.
>
> Bad conduct is the problem, and the remedy is allowing
> the marketplace to punish bad conduct, rather than
> printing sacks of money and handing it to the bad guys.
>
>
Wrongdoing is identified, but the process takes too
long.
So we simply roll over and accept deflation?
So we don't have a story.
> --
> ----------------------
> We have the right to defend ourselves and our property, because
> of the kind of animals that we are. True law derives from this
> right, not from the arbitrary power of the omnipotent state.
>
> http://www.jim.com/
--
Les Cargill
ta
> On 30 Jan 2009 23:32:25 GMT, Michael Coburn <mik...@verizon.net>
> wrote:
>
> > I have answered the question the only way it can be rationally answered.
> > And I think you need to learn the difference between M0 and M1 and M2.
> > The doubling of the monetary base (M0) is sterile; it does nothing. When
> > most monetary economists speak of the "money supply" they speak of M1.
> > The M1 is the amount of loaned out money plus the amount of base money.
> > M1 hasn't done squat.
>
> M1 has grown by 17% in the last twelve months and nearly 10% in the
> last three months, which is a great deal more than squat. M2 has grown
> by 9.9% and 4.6% by the same measures.
>
> The gold market predicts substantial and rising inflation.
But people also buy gold because they are afraid -- not of inflation
necessarily, but afraid of bad times in general. It's the "flight to
safety" (which I think is absurd, because you can't really do anything
with gold that is practically useful).
> The market
> in government paper does not - possibly because the people buying gold
> expect the government to default on inflation indexed bonds, either
> outright or through fraudulent indexing.
>
> This is not like pushing on a string, it is more like towing a
> supertanker. It takes a while for the supertanker to get moving, but
> once its moving, it is going to keep on moving for considerably longer
> while.
This is the point I keep bringing up, and which no one has reasonably
addressed -- that *in the long term*, hyper-inflation may ensue. They
keep saying "we're in a deflationary environment" and "we're not their
yet" and "we'll worry about that later" etc., but that doesn't seem
like a very intelligent approach to me. There has to be a plan for
avoiding the potential scenario of hyper-inflation, otherwise you are
whistling past the graveyard. The only plan I've heard so far is "tax
the wealthy at some point", but that seems rather vague, and no one
has explained exactly how that will prevent hyper-inflation.
forbi...@msn.com
> James A. Donald wrote:
> > Bad conduct is the problem, and the remedy is allowing
> > the marketplace to punish bad conduct, rather than
> > printing sacks of money and handing it to the bad guys.
>
> Wrongdoing is identified, but the process takes too
> long.
>
> So we simply roll over and accept deflation?
The difference between the Fed doing the job and the
Government doing the job is how the money enters
the markets. We want the markets to take care of
the bad guys and we want the government to help
make that happen by making sure the good guys
maintain the economy and maybe tax the bad guys
to help defray the costs.
Les Cargill
> On Jan 31, 9:05 am, Les Cargill <lcarg...@cfl.rr.com> wrote:
>> James A. Donald wrote:
>
>>> Bad conduct is the problem, and the remedy is allowing
>>> the marketplace to punish bad conduct, rather than
>>> printing sacks of money and handing it to the bad guys.
>> Wrongdoing is identified, but the process takes too
>> long.
>>
>> So we simply roll over and accept deflation?
>
> The difference between the Fed doing the job and the
> Government doing the job is how the money enters
> the markets.
Absolutely. And my limited understanding is
that it enters the markets as it does now
because people wanted to reuse existing
mechanisms, not invent new ones.
> We want the markets to take care of
> the bad guys and we want the government to help
> make that happen by making sure the good guys
> maintain the economy and maybe tax the bad guys
> to help defray the costs.
Well put. Thanks.
Understood - so why aren't we doing that? Just
a gedanken, but it seems that it's difficult.
"Difficult" probably breaks down into two
components - it's computationally* prohibitive,
or it's politically inefficient.
*bah, I wish I had a better word - unfortunately
my biases are showing - I mean this to include
"administratively" as part of "computation".
"Politically inefficient" sounds better, but
the sheer amount of data required to have
reliable indication of wrongdoing is rather
daunting.
IOW, do we lack the means, or do we lack the will?
--
Les Cargill
DanB (Previously DB)
> On Jan 30, 11:31 pm, James A. Donald <jam...@echeque.com> wrote:
>> On 30 Jan 2009 23:32:25 GMT, Michael Coburn <mik...@verizon.net>
>> wrote:
>>
>>> I have answered the question the only way it can be rationally answered.
>>> And I think you need to learn the difference between M0 and M1 and M2.
>>> The doubling of the monetary base (M0) is sterile; it does nothing. When
>>> most monetary economists speak of the "money supply" they speak of M1.
>>> The M1 is the amount of loaned out money plus the amount of base money.
>>> M1 hasn't done squat.
>> M1 has grown by 17% in the last twelve months and nearly 10% in the
>> last three months, which is a great deal more than squat. M2 has grown
>> by 9.9% and 4.6% by the same measures.
>>
>> The gold market predicts substantial and rising inflation.
>
> But people also buy gold because they are afraid -- not of inflation
> necessarily, but afraid of bad times in general. It's the "flight to
> safety" (which I think is absurd, because you can't really do anything
> with gold that is practically useful).
Gold is 'real' money. You most certainly can do practical things with it.
>
> This is the point I keep bringing up, and which no one has reasonably
> addressed -- that *in the long term*, hyper-inflation may ensue. They
> keep saying "we're in a deflationary environment" and "we're not their
> yet" and "we'll worry about that later" etc., but that doesn't seem
> like a very intelligent approach to me. There has to be a plan for
> avoiding the potential scenario of hyper-inflation, otherwise you are
> whistling past the graveyard. The only plan I've heard so far is "tax
> the wealthy at some point", but that seems rather vague, and no one
> has explained exactly how that will prevent hyper-inflation.
To get hyperinflation you would have to 'print' dollars. Government
spending is still nominal in spite of the media hype. Public debt to gdp
in Japan is running 120%, twice ours, and for going on two decades they
have not been able to 'inflate' their way out of their troubles.
The fed does not control the real money supply and history makes this clear.
http://www.debtdeflation.com/blogs/
If not by 'printing' then money can only be created by the banking
system if they can lend. Demand is plummeting and inventories are
exploding. There is no good reason to borrow. This glut will take a very
long time to work through. Of course, if money were *pure* specie, we
would not ever get to these places.
Here is a picture of our real condition:
http://lakeweb.com/money/creditmarketdebt_GDP_07.pdf
Repatriation of dollars by China and the rest, that would cause
inflation through devaluation of the dollar. But they are not going to
shoot themselves in the foot.
http://quotes.ino.com/chart/?s=NYBOT_DX
Bernanke would have to call out a hell of a lot of helicopters to
inflate the dollar.
Best Dan.
James A. Donald
> > Bad conduct is the problem, and the remedy is
> > allowing the marketplace to punish bad conduct,
> > rather than printing sacks of money and handing it
> > to the bad guys.
Les Cargill
> So we simply roll over and accept deflation?
The crises that we are seeing do not look like the kind
of lack of demand that Keynes described - for example, I
see on television as supposed examples of deflation a
scrap yard that has no business, because trade is held
up by inability to get letters of credit, so it cannot
sell scrap, and foreign buyers cannot buy scrap, and a
trucker in similar situation: That is shortage of
trust, not shortage of paper money.
Trust can only be restored if the bad guys go out of
business, become unemployed.
James A. Donald
forbi...@msn.com wrote:
> The difference between the Fed doing the job and the
> Government doing the job is how the money enters the
> markets. We want the markets to take care of the bad
> guys and we want the government to help make that
> happen by making sure the good guys maintain the
> economy and maybe tax the bad guys to help defray the
> costs.
But the government is taxing the good guys, and handing
out sackfulls of money to the bad guys - which is pretty
much standard for any government intervention in the
marketplace.
James A. Donald
> Absolutely. And my limited understanding is that it
> enters the markets as it does now because people
> wanted to reuse existing mechanisms, not invent new
> ones.
No, government entered the markets because wall street
was revealed as a bunch of incompetent scammers, and did
not want to wind up unemployed, so the wall streeters
asked their good buddies in government to cut them a
paycheck.
Les Cargill
That makes as little sense as any other explanation.
--
Les Cargill
Les Cargill
> James A. Donald wrote:
>>> Bad conduct is the problem, and the remedy is
>>> allowing the marketplace to punish bad conduct,
>>> rather than printing sacks of money and handing it
>>> to the bad guys.
>
> Les Cargill
>> So we simply roll over and accept deflation?
>
> The crises that we are seeing do not look like the kind
> of lack of demand that Keynes described - for example, I
> see on television as supposed examples of deflation a
> scrap yard that has no business, because trade is held
> up by inability to get letters of credit, so it cannot
> sell scrap, and foreign buyers cannot buy scrap, and a
> trucker in similar situation: That is shortage of
> trust, not shortage of paper money.
>
Then demand is serially dependent on that trust.
> Trust can only be restored if the bad guys go out of
> business, become unemployed.
>
Assuming we can successfully identify and prosecute them. And
assuming that this is significantly different from throwing
slaves into volcanos.
> --
> ----------------------
> We have the right to defend ourselves and our property, because
> of the kind of animals that we are. True law derives from this
> right, not from the arbitrary power of the omnipotent state.
>
> http://www.jim.com/
--
Les Cargill
forbi...@msn.com
> On Sat, 31 Jan 2009 09:56:18 -0800 (PST),
>
> > The difference between the Fed doing the job and the
> > Government doing the job is how the money enters the
> > markets. We want the markets to take care of the bad
> > guys and we want the government to help make that
> > happen by making sure the good guys maintain the
> > economy and maybe tax the bad guys to help defray the
> > costs.
>
> But the government is taxing the good guys, and handing
> out sackfulls of money to the bad guys - which is pretty
> much standard for any government intervention in the
> marketplace.
It certainly did that under Bush. Bunches of it will go
that way under Obama. It's part of the political realtiy.
I think Obama want to do public works as well so at
least some will go in the right direction. As the economy
picks back up we have to keep moving Obama in the
direction of taxing the bad guys while not inhibitting the
good guys too much. It's unfortunate that if we aren't
vigilent government moves will appear as if on the losing
side of a game of nim. The bad guy don't stand still.
DanB (Previously DB)
> James A. Donald wrote:
>>
>> was revealed as a bunch of incompetent scammers, and did
>> not want to wind up unemployed, so the wall streeters
>> asked their good buddies in government to cut them a
>> paycheck.
>
Make sense? The evidence is overwhelming that is exactly what happened.
James A. Donald
On Sat, 31 Jan 2009 15:00:34 -0800 (PST),
forbi...@msn.com wrote:
> It certainly did that under Bush. Bunches of it will
> go that way under Obama. It's part of the political
> realtiy. I think Obama want to do public works as well
> so at least some will go in the right direction.
One of Obama's vehicles for doing public works is Acorn, who
make Bush's pals look good - indeed Acorn is
concentrated essence of Chicago corruption, while
governor Blagojevich is merely Chicago corruption in
ordinary dosage.
James A. Donald
> > Trust can only be restored if the bad guys go out of
> > business, become unemployed.
Les Cargill
> Assuming we can successfully identify and prosecute
> them.
Since we are handing them sackloads of money, the
prospects for prosecuting them do not look too good.
Unemployment is more realistic.
forbi...@msn.com
> --
> On Sat, 31 Jan 2009 15:00:34 -0800 (PST),
>
> > It certainly did that under Bush. Bunches of it will
> > go that way under Obama. It's part of the political
> > realtiy. I think Obama want to do public works as well
> > so at least some will go in the right direction.
>
> One of Obama's vehicles for doing public works is Acorn, who
> make Bush's pals look good - indeed Acorn is
> concentrated essence of Chicago corruption, while
> governor Blagojevich is merely Chicago corruption in
> ordinary dosage.
Where are you getting this information?
I've heard that this is a rightwing talking point
where the truth is that Acorn is eligible to
bid on some of the public works programs
in the bill. This isn't a Haliburton no-bid
situation.
Why are you interested in corruption now
anyway when you said nothing during the
last 8 year. During Katrina there were
people in this forum defending using
Republican contractors only since
Republicans were in power. I pointed
out that Republicans wouldn't always
be in power and some asked me what
I was smoking. Graft is graft. It doesn't
matter what party is in power. Where's
the Acorn no-bid contract?
Dan Clore
ACORN, according to the rightist wingnuts, is going to get some $4
billion from the government's stimulus package. In the real world, ACORN
isn't even eligible to participate in the competitive process that
determines who gets the money. ACORN isn't going to get a single cent of
it, much less four billion dollars.
See:
http://mediamatters.org/issues_topics/search_results?qstring=acorn
--
Dan Clore
My collected fiction, _The Unspeakable and Others_:
http://tinyurl.com/2gcoqt
Lord We˙rdgliffe & Necronomicon Page:
http://tinyurl.com/292yz9
News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
Strange pleasures are known to him who flaunts the
immarcescible purple of poetry before the color-blind.
-- Clark Ashton Smith, "Epigrams and Apothegms"
ta
> ta wrote:
> > On Jan 30, 11:31 pm, James A. Donald <jam...@echeque.com> wrote:
> >> On 30 Jan 2009 23:32:25 GMT, Michael Coburn <mik...@verizon.net>
> >> wrote:
>
> >>> I have answered the question the only way it can be rationally answered.
> >>> And I think you need to learn the difference between M0 and M1 and M2.
> >>> The doubling of the monetary base (M0) is sterile; it does nothing. When
> >>> most monetary economists speak of the "money supply" they speak of M1.
> >>> The M1 is the amount of loaned out money plus the amount of base money.
> >>> M1 hasn't done squat.
> >> M1 has grown by 17% in the last twelve months and nearly 10% in the
> >> last three months, which is a great deal more than squat. M2 has grown
> >> by 9.9% and 4.6% by the same measures.
>
> >> The gold market predicts substantial and rising inflation.
>
> > But people also buy gold because they are afraid -- not of inflation
> > necessarily, but afraid of bad times in general. It's the "flight to
> > safety" (which I think is absurd, because you can't really do anything
> > with gold that is practically useful).
>
> Gold is 'real' money.
There is no such thing as "real money". Money is nothing more than a
piece of paper with no intrinsic value. It's value is strictly
symbolic.
> You most certainly can do practical things with it.
Sure, you can make dental fillings and conduct electricity with gold.
But if you're buying gold because you fear the next great depression,
gold ain't gonna give you food, clothing, or shelter, which is what
you'd presumably want in a scenario where money is deemed worthless.
> > This is the point I keep bringing up, and which no one has reasonably
> > addressed -- that *in the long term*, hyper-inflation may ensue. They
> > keep saying "we're in a deflationary environment" and "we're not their
> > yet" and "we'll worry about that later" etc., but that doesn't seem
> > like a very intelligent approach to me. There has to be a plan for
> > avoiding the potential scenario of hyper-inflation, otherwise you are
> > whistling past the graveyard. The only plan I've heard so far is "tax
> > the wealthy at some point", but that seems rather vague, and no one
> > has explained exactly how that will prevent hyper-inflation.
>
> To get hyperinflation you would have to 'print' dollars. Government
> spending is still nominal in spite of the media hype. Public debt to gdp
> in Japan is running 120%, twice ours, and for going on two decades they
> have not been able to 'inflate' their way out of their troubles.
>
> The fed does not control the real money supply and history makes this clear.
Can you explain? The "real" money supply? As opposed to the fake money
supply? I'm not being a smartass, I don't understand.
> http://www.debtdeflation.com/blogs/
Looks complicated; I'd have to take some time to read over this.
> If not by 'printing' then money can only be created by the banking
> system if they can lend. Demand is plummeting and inventories are
> exploding. There is no good reason to borrow. This glut will take a very
> long time to work through. Of course, if money were *pure* specie, we
> would not ever get to these places.
>
> Here is a picture of our real condition:http://lakeweb.com/money/creditmarketdebt_GDP_07.pdf
>
> Repatriation of dollars by China and the rest, that would cause
> inflation through devaluation of the dollar. But they are not going to
> shoot themselves in the foot.
>
> http://quotes.ino.com/chart/?s=NYBOT_DX
>
> Bernanke would have to call out a hell of a lot of helicopters to
> inflate the dollar.
>
> Best Dan.
You lost me Dan.
DanB (Previously DB)
> On Jan 31, 1:46 pm, "DanB (Previously DB)" <a...@some.net> wrote:
>
> There is no such thing as "real money". Money is nothing more than a
> piece of paper with no intrinsic value. It's value is strictly
> symbolic.
Perhaps you should read a bit of history.
>> You most certainly can do practical things with it.
>
> Sure, you can make dental fillings and conduct electricity with gold.
> But if you're buying gold because you fear the next great depression,
> gold ain't gonna give you food, clothing, or shelter, which is what
> you'd presumably want in a scenario where money is deemed worthless.
The comex precious metal warehouses are well guarded. Why should they
bother if there is no value to gold and silver?
Perhaps you should read a bit of history. When I was young I carried
real silver coins in my pocket. Those coins are worth much more now than
they were then. Look at the premium silver is getting on ebay.
Why would you think that the digital chits in a bank computer are 'more'
real than sliver? Why do you think there are laws enforcing the validity
of this money? There were never laws required to make gold and silver money.
>>> This is the point I keep bringing up, and which no one has reasonably
>>> addressed -- that *in the long term*, hyper-inflation may ensue. They
>>> keep saying "we're in a deflationary environment" and "we're not their
>>> yet" and "we'll worry about that later" etc., but that doesn't seem
>>> like a very intelligent approach to me. There has to be a plan for
>>> avoiding the potential scenario of hyper-inflation, otherwise you are
>>> whistling past the graveyard. The only plan I've heard so far is "tax
>>> the wealthy at some point", but that seems rather vague, and no one
>>> has explained exactly how that will prevent hyper-inflation.
>> To get hyperinflation you would have to 'print' dollars. Government
>> spending is still nominal in spite of the media hype. Public debt to gdp
>> in Japan is running 120%, twice ours, and for going on two decades they
>> have not been able to 'inflate' their way out of their troubles.
>>
>> The fed does not control the real money supply and history makes this clear.
>
> Can you explain? The "real" money supply? As opposed to the fake money
> supply? I'm not being a smartass, I don't understand.
>
>> http://www.debtdeflation.com/blogs/
>
> Looks complicated; I'd have to take some time to read over this.
It explains what the 'real' money supply is all about. In a nutshell,
banking creates money out of thin air and charges for its use.
>> If not by 'printing' then money can only be created by the banking
>> system if they can lend. Demand is plummeting and inventories are
>> exploding. There is no good reason to borrow. This glut will take a very
>> long time to work through. Of course, if money were *pure* specie, we
>> would not ever get to these places.
>>
>> Here is a picture of our real condition:http://lakeweb.com/money/creditmarketdebt_GDP_07.pdf
>>
>> Repatriation of dollars by China and the rest, that would cause
>> inflation through devaluation of the dollar. But they are not going to
>> shoot themselves in the foot.
>>
>> http://quotes.ino.com/chart/?s=NYBOT_DX
>>
>> Bernanke would have to call out a hell of a lot of helicopters to
>> inflate the dollar.
>>
>> Best Dan.
>
> You lost me Dan.
Unless money is 'printed', supply is limited by the banking system's
ability to loan. It is just that simple.
Modern money is loaned into existence. No other way but for anomalies
like Zimbabwe where it gets printed.
That is why Bernanke got the moniker, 'Helicopter Ben'.
tg
You haven't explained why this would happen though. Are you talking
about the current expenditures only or are you imagining that they
will continue to spend the same amount every year or two?
-tg
ta
> ta wrote:
> > On Jan 31, 1:46 pm, "DanB (Previously DB)" <a...@some.net> wrote:
>
> > There is no such thing as "real money". Money is nothing more than a
> > piece of paper with no intrinsic value. It's value is strictly
> > symbolic.
>
> Perhaps you should read a bit of history.
>
> >> You most certainly can do practical things with it.
>
> > Sure, you can make dental fillings and conduct electricity with gold.
> > But if you're buying gold because you fear the next great depression,
> > gold ain't gonna give you food, clothing, or shelter, which is what
> > you'd presumably want in a scenario where money is deemed worthless.
>
> The comex precious metal warehouses are well guarded. Why should they
> bother if there is no value to gold and silver?
For the same reason those bank vaults full of green paper are well
guarded: people share the same illusion about it's value. It's
practical worth, as measured by it's usefulness in surviving under
extreme circumstances such as a depression, is nil.
> Perhaps you should read a bit of history. When I was young I carried
> real silver coins in my pocket. Those coins are worth much more now than
> they were then. Look at the premium silver is getting on ebay.
What they are "worth" is highly subjective and depends on the
circumstances. If you're unemployed and hungry and the unemployment
rate is 30%, my land, my organic garden, and my chickens are going to
be "worth" a lot more than your vault full of silver, which has very
little nutritional value. ;-)
> Why would you think that the digital chits in a bank computer are 'more'
> real than sliver?
I don't. Gold is more real. But again, it has very limited utility.
> Why do you think there are laws enforcing the validity
> of this money? There were never laws required to make gold and silver money.
Gold and money are merely different levels of abstraction, with gold
being only slightly more useful than paper. Electronic credits and
debits are just the next level of abstraction; they are only useful as
long as the faith in the system continues.
But why would people have more faith in gold than in money, given it's
rather limited practical value?
> >>> This is the point I keep bringing up, and which no one has reasonably
> >>> addressed -- that *in the long term*, hyper-inflation may ensue. They
> >>> keep saying "we're in a deflationary environment" and "we're not their
> >>> yet" and "we'll worry about that later" etc., but that doesn't seem
> >>> like a very intelligent approach to me. There has to be a plan for
> >>> avoiding the potential scenario of hyper-inflation, otherwise you are
> >>> whistling past the graveyard. The only plan I've heard so far is "tax
> >>> the wealthy at some point", but that seems rather vague, and no one
> >>> has explained exactly how that will prevent hyper-inflation.
> >> To get hyperinflation you would have to 'print' dollars. Government
> >> spending is still nominal in spite of the media hype. Public debt to gdp
> >> in Japan is running 120%, twice ours, and for going on two decades they
> >> have not been able to 'inflate' their way out of their troubles.
>
> >> The fed does not control the real money supply and history makes this clear.
>
> > Can you explain? The "real" money supply? As opposed to the fake money
> > supply? I'm not being a smartass, I don't understand.
>
> >>http://www.debtdeflation.com/blogs/
>
> > Looks complicated; I'd have to take some time to read over this.
>
> It explains what the 'real' money supply is all about. In a nutshell,
> banking creates money out of thin air and charges for its use.
It's all faith-based -- paperless money is just the next layer of
abstraction.
> >> If not by 'printing' then money can only be created by the banking
> >> system if they can lend. Demand is plummeting and inventories are
> >> exploding. There is no good reason to borrow. This glut will take a very
> >> long time to work through. Of course, if money were *pure* specie, we
> >> would not ever get to these places.
>
> >> Here is a picture of our real condition:http://lakeweb.com/money/creditmarketdebt_GDP_07.pdf
>
> >> Repatriation of dollars by China and the rest, that would cause
> >> inflation through devaluation of the dollar. But they are not going to
> >> shoot themselves in the foot.
>
> >>http://quotes.ino.com/chart/?s=NYBOT_DX
>
> >> Bernanke would have to call out a hell of a lot of helicopters to
> >> inflate the dollar.
>
> >> Best Dan.
>
> > You lost me Dan.
>
> Unless money is 'printed', supply is limited by the banking system's
> ability to loan. It is just that simple.
Gotcha. And what has to happen before the banks have the confidence to
begin loaning that money out, and shouldn't we assume that eventually
they will, otherwise what's the point?
DanB (Previously DB)
> On Feb 3, 3:35 pm, "DanB (Previously DB)" <a...@some.net> wrote:
>> ta wrote:
>
>> Perhaps you should read a bit of history. When I was young I carried
>> real silver coins in my pocket. Those coins are worth much more now than
>> they were then. Look at the premium silver is getting on ebay.
>
> What they are "worth" is highly subjective and depends on the
> circumstances. If you're unemployed and hungry and the unemployment
> rate is 30%, my land, my organic garden, and my chickens are going to
> be "worth" a lot more than your vault full of silver, which has very
> little nutritional value. ;-)
Now you are being clearer about your point of view. If you trade your
food or promise to grow then it is a commodity based money. If you don't
think gold and silver are money you are pretty much alone. Gold and
silver have always been money throughout history for everyone else.
If you need a new garden hose and your vendor says he has enough food
but would take half an oz of silver, what will you do? You trade some
food to someone else for that silver, a simple medium of exchange. You
can call it abstract, but it gets the job of 'money' done.
>> Unless money is 'printed', supply is limited by the banking system's
>> ability to loan. It is just that simple.
>
> Gotcha. And what has to happen before the banks have the confidence to
> begin loaning that money out, and shouldn't we assume that eventually
> they will, otherwise what's the point?
They not only have to be willing to loan, there also have to be those
willing to borrow. As demand caves, inventories bloat, unemployment
rises, there is little reason to borrow.
It is what is implied by, 'Pushing on a string.'
James A. Donald
<pad...@nc.rr.com> wrote:
> Sure, you can make dental fillings and conduct
> electricity with gold. But if you're buying gold
> because you fear the next great depression, gold ain't
> gonna give you food, clothing, or shelter, which is
> what you'd presumably want in a scenario where money
> is deemed worthless.
Gold always goes up in a crisis.
Suppose you have no food, and a farmer has food, but
nothing else - his paper money is no good. He will
figure that on thousands of years experience, gold will
get him stuff, so your gold will get you food.
John Galt
> On Tue, 3 Feb 2009 11:24:20 -0800 (PST), ta
> <pad...@nc.rr.com> wrote:
>> Sure, you can make dental fillings and conduct
>> electricity with gold. But if you're buying gold
>> because you fear the next great depression, gold ain't
>> gonna give you food, clothing, or shelter, which is
>> what you'd presumably want in a scenario where money
>> is deemed worthless.
>
> Gold always goes up in a crisis.
>
> Suppose you have no food, and a farmer has food, but
> nothing else - his paper money is no good. He will
> figure that on thousands of years experience, gold will
> get him stuff, so your gold will get you food.
In a Mad Max world, having gold would get you killed, unfortunately.
JG
James A. Donald
> > Suppose you have no food, and a farmer has food, but
> > nothing else - his paper money is no good. He will
> > figure that on thousands of years experience, gold
> > will get him stuff, so your gold will get you food.
John Galt
> In a Mad Max world, having gold would get you killed,
> unfortunately.
Fiat money collapses fairly frequently, governments some
what less frequently, but often enough. Neither event
usually results in a mad max world. As John Locke
points out, Hobbes' war of each against all is seldom
what we observe in practice.
Han de Bruijn
> James A. Donald wrote:
>
>>>Suppose you have no food, and a farmer has food, but
>>>nothing else - his paper money is no good. He will
>>>figure that on thousands of years experience, gold
>>>will get him stuff, so your gold will get you food.
>
> John Galt
>
>>In a Mad Max world, having gold would get you killed,
>>unfortunately.
>
> Fiat money collapses fairly frequently, governments some
> what less frequently, but often enough. Neither event
> usually results in a mad max world. As John Locke
> points out, Hobbes' war of each against all is seldom
> what we observe in practice.
Han de Bruijn
ta
> On Tue, 3 Feb 2009 11:24:20 -0800 (PST), ta
>
> > Sure, you can make dental fillings and conduct
> > electricity with gold. But if you're buying gold
> > because you fear the next great depression, gold ain't
> > gonna give you food, clothing, or shelter, which is
> > what you'd presumably want in a scenario where money
> > is deemed worthless.
>
> Gold always goes up in a crisis.
Right. Which only indicates that people are irrational.
> Suppose you have no food, and a farmer has food, but
> nothing else - his paper money is no good. He will
> figure that on thousands of years experience, gold will
> get him stuff, so your gold will get you food.
No, not if people lose faith in the illusion of money (and that's what
gold is). The farmer is more likely to trade his food for tools and
such . . . actually useful things.
ta
> ta wrote:
> > On Feb 3, 3:35 pm, "DanB (Previously DB)" <a...@some.net> wrote:
> >> ta wrote:
>
> >> Perhaps you should read a bit of history. When I was young I carried
> >> real silver coins in my pocket. Those coins are worth much more now than
> >> they were then. Look at the premium silver is getting on ebay.
>
> > What they are "worth" is highly subjective and depends on the
> > circumstances. If you're unemployed and hungry and the unemployment
> > rate is 30%, my land, my organic garden, and my chickens are going to
> > be "worth" a lot more than your vault full of silver, which has very
> > little nutritional value. ;-)
>
> Now you are being clearer about your point of view. If you trade your
> food or promise to grow then it is a commodity based money. If you don't
> think gold and silver are money you are pretty much alone. Gold and
> silver have always been money throughout history for everyone else.
> If you need a new garden hose and your vendor says he has enough food
> but would take half an oz of silver, what will you do? You trade some
> food to someone else for that silver, a simple medium of exchange. You
> can call it abstract, but it gets the job of 'money' done.
Of course gold is money, and of course green paper with Presidents on
them is money. But if people lose faith in the illusion of money, then
it is worthless, regardless of what form it takes.
A chicken is useful -- you can eat it and sustain yourself. A hunk of
gold is, for all practical purposes, totally useless. The "value" that
people project upon money is illusory -- it is symbolic only. It is
intrinsically "value-less", for all practical purposes.
> >> Unless money is 'printed', supply is limited by the banking system's
> >> ability to loan. It is just that simple.
>
> > Gotcha. And what has to happen before the banks have the confidence to
> > begin loaning that money out, and shouldn't we assume that eventually
> > they will, otherwise what's the point?
>
> They not only have to be willing to loan, there also have to be those
> willing to borrow. As demand caves, inventories bloat, unemployment
> rises, there is little reason to borrow.
>
> It is what is implied by, 'Pushing on a string.'
Right, with the right incentives (i.e., tax credits for home
purchases), people will eventually borrow, will they not? Or are you
suggesting that we are just going to drown in a deflationary spiral?
ta
I don't know that it would, I'm only asking about the *possibility*
based on the fact that trillions are being poured into the system.
tg
Well, I tend to agree with much of what you are saying about money
here, but I think you are talking about a level/type of disruption
that can't rationally follow from just what the government is doing at
this point. You would have to describe a causal chain that gets us to
the point of losing faith in the currency, and one that can't be
broken by intervention at the time.
IOW, there's no point worrying about it; you can't really act anyway
until some such trend becomes visible.
-tg
ta
Yeah, I really don't have any reason to believe that scenario would
come to fruition -- that was just kind of a side diversion from the
original thread. The gold bugs don't make sense to me.
> You would have to describe a causal chain that gets us to
> the point of losing faith in the currency, and one that can't be
> broken by intervention at the time.
>
> IOW, there's no point worrying about it; you can't really act anyway
> until some such trend becomes visible.
I'm not really worried about total collapse; that's an extreme case. I
am worried about the possibility of hyper-inflation though, and the
possibility that that might be worse than what we are currently
experiencing. The central question I'm really asking, in simple terms,
is "is the medicine worse than the disease?".
It seems like the markets are reacting to massive *inflation* --
skyrocketing commodity prices, real estate prices, and gasoline prices
etc. -- by deflating accordingly, and my common sense tells me that
there's something not quite right about combatting inflation
with . . . inflation???
DanB (Previously DB)
> On Feb 3, 5:44 pm, "DanB (Previously DB)" <a...@some.net> wrote:
>> Now you are being clearer about your point of view. If you trade your
>> food or promise to grow then it is a commodity based money. If you don't
>> think gold and silver are money you are pretty much alone. Gold and
>> silver have always been money throughout history for everyone else.
>> If you need a new garden hose and your vendor says he has enough food
>> but would take half an oz of silver, what will you do? You trade some
>> food to someone else for that silver, a simple medium of exchange. You
>> can call it abstract, but it gets the job of 'money' done.
>
> Of course gold is money, and of course green paper with Presidents on
> them is money. But if people lose faith in the illusion of money, then
> it is worthless, regardless of what form it takes.
I understand your point of view but history says otherwise.
>>> Gotcha. And what has to happen before the banks have the confidence to
>>> begin loaning that money out, and shouldn't we assume that eventually
>>> they will, otherwise what's the point?
>> They not only have to be willing to loan, there also have to be those
>> willing to borrow. As demand caves, inventories bloat, unemployment
>> rises, there is little reason to borrow.
>>
>> It is what is implied by, 'Pushing on a string.'
>
> Right, with the right incentives (i.e., tax credits for home
> purchases), people will eventually borrow, will they not? Or are you
> suggesting that we are just going to drown in a deflationary spiral?
This is the pending condition:
http://lakeweb.com/money/creditmarketdebt_GDP_07.pdf
Quite a bit higher than 1929.
tg
Yeah, ta, that's why this situation really sucks, and why it is the
longer-term regulatory and tax structure, as well as things like
dealing with health care and energy, that are required to prevent an
endless cycle of boom and bust. But it think hyperinflation even is
an extreme that is not likely. Have you looked at Wiki on the term?
-tg