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#141
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Posted 2014-February-05, 06:16
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#142
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Posted 2014-February-11, 03:56
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#143
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Posted 2014-February-12, 13:05
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#144
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Posted 2014-February-19, 12:34
I thought I could be strong, have a quick look on the WC and then go home. But here I am. Sucked in Again.
(1) The US does not have a debt problem. It never did. Its deficits are down to manageable levels because the economy has recovered, and that was all that it needed. It will likely be in surplus next year because of the cuts and the rebounding economy. There is some level of debt at which one can have a problem, but countries have survived, even thrived, with much higher debt levels than the US. See the UK following WW2 where debt was somewhere in the region of 300% of GDP. That level depends a lot on the expectations of your creditor base, especially following the war the creditor base was the UK people, so from a broad perspective paying of the debt cost nothing, it was just redistribution. The US is in a similar position, with 60% of the debt owed to US citizens.
(2) Currency has at least one useful function over a barter economy which noone has alluded to, but which is arguably the most important: it allows one to defer consumption. A coin earned today can be spent next year, an apple bartered today must be consumed before it perishes.
(3) Debt in the current finanical system is essential because it forms the basis of capital ratios for banks and other institutions, without it they would be unable to meet the BASEL regulations. The financial system with zero public debt would necessarily look very different from today.
The main problem with the discussion of debt in this thread is that it seems deeply wedded to the money illusion (look it up). The economy is about making real stuff, but financial flows are about nominal quantities. One of the primary aims of government and the Fed is to control these nominal flows such that the real economy underneath them continues to produce at its maximum potential come rain or shine. Printing money/fiscal expansion, really does improve the general welfare if it reduces a production shortfall, and achieves nothing except inflation if there is no production shortfall.
Multipliers are not stable, they depend on the size of the output gap. At the height of the recession QE and fiscal expansion were helpful, but 2013 more or less showed that monetary dominance has reasserted itself, and the fed is back in control of the economy, that is why everyone talking about how the fiscal headwinds of 3.9% of gdp due to austerity were going to cause a new recession looked pretty silly when GDP growth accelerated in the UK/US, and the answer is because the fed was steering the economy through QE, so the fiscal multiplier was essentially zero in 2013, or much smaller than those people predicting disaster thought based on 2008-2012 data.
It really has been the case that QE has been a free lunch for the US. They got to effectively decrease their debt, and close the output gap. If you want to know what would have happened without QE, just look at the ECB. The eurozone continues to grind into deflation, its a F****** disaster, and Draghi continues to refuse QE, mostly because that would involve admitting that he had been wrong all this time. The lost output in the eurozones long since passed a trillion euros. The greek economy is still in freefall.
and there continues to be no hope of any improvement. I could put up a similar graph for other countries like spain, portugal etc.
This recession would have been over much faster if the Fed had done more QE sooner, and combined it with a stronger forward guidance policy, preferably some type of level target, either for inflation or for NGDP.
Those poor misguided souls who think that a gold backed currency is better need to read about the insane Bank of France in the 1930's, and how it exported deflation throughout the world by buying all the gold it could lay its hands on. This make the depression much worse, partly because other central banks seemed to see no need to counteract this insane member by selling gold on the open market. This is not unlike what the ECB has been doing with its insanely tight policy. CHeck out this graph of UK and Euro exchange rates vs the US dollar
The scale is the number of dollars which 1 unity of currency cost. Blue is the UK and black is the Euro. See how much weaker the pound became? This is one measure of how much easier policy was in the UK with QE than in the EU, and the result has been that accomoadation led to expansion, as it should. Now the UK and the US are recovering, but the EU is still grinding into a death spiral with its tight policy.
(1) The US does not have a debt problem. It never did. Its deficits are down to manageable levels because the economy has recovered, and that was all that it needed. It will likely be in surplus next year because of the cuts and the rebounding economy. There is some level of debt at which one can have a problem, but countries have survived, even thrived, with much higher debt levels than the US. See the UK following WW2 where debt was somewhere in the region of 300% of GDP. That level depends a lot on the expectations of your creditor base, especially following the war the creditor base was the UK people, so from a broad perspective paying of the debt cost nothing, it was just redistribution. The US is in a similar position, with 60% of the debt owed to US citizens.
(2) Currency has at least one useful function over a barter economy which noone has alluded to, but which is arguably the most important: it allows one to defer consumption. A coin earned today can be spent next year, an apple bartered today must be consumed before it perishes.
(3) Debt in the current finanical system is essential because it forms the basis of capital ratios for banks and other institutions, without it they would be unable to meet the BASEL regulations. The financial system with zero public debt would necessarily look very different from today.
The main problem with the discussion of debt in this thread is that it seems deeply wedded to the money illusion (look it up). The economy is about making real stuff, but financial flows are about nominal quantities. One of the primary aims of government and the Fed is to control these nominal flows such that the real economy underneath them continues to produce at its maximum potential come rain or shine. Printing money/fiscal expansion, really does improve the general welfare if it reduces a production shortfall, and achieves nothing except inflation if there is no production shortfall.
Multipliers are not stable, they depend on the size of the output gap. At the height of the recession QE and fiscal expansion were helpful, but 2013 more or less showed that monetary dominance has reasserted itself, and the fed is back in control of the economy, that is why everyone talking about how the fiscal headwinds of 3.9% of gdp due to austerity were going to cause a new recession looked pretty silly when GDP growth accelerated in the UK/US, and the answer is because the fed was steering the economy through QE, so the fiscal multiplier was essentially zero in 2013, or much smaller than those people predicting disaster thought based on 2008-2012 data.
It really has been the case that QE has been a free lunch for the US. They got to effectively decrease their debt, and close the output gap. If you want to know what would have happened without QE, just look at the ECB. The eurozone continues to grind into deflation, its a F****** disaster, and Draghi continues to refuse QE, mostly because that would involve admitting that he had been wrong all this time. The lost output in the eurozones long since passed a trillion euros. The greek economy is still in freefall.
and there continues to be no hope of any improvement. I could put up a similar graph for other countries like spain, portugal etc.
This recession would have been over much faster if the Fed had done more QE sooner, and combined it with a stronger forward guidance policy, preferably some type of level target, either for inflation or for NGDP.
Those poor misguided souls who think that a gold backed currency is better need to read about the insane Bank of France in the 1930's, and how it exported deflation throughout the world by buying all the gold it could lay its hands on. This make the depression much worse, partly because other central banks seemed to see no need to counteract this insane member by selling gold on the open market. This is not unlike what the ECB has been doing with its insanely tight policy. CHeck out this graph of UK and Euro exchange rates vs the US dollar
The scale is the number of dollars which 1 unity of currency cost. Blue is the UK and black is the Euro. See how much weaker the pound became? This is one measure of how much easier policy was in the UK with QE than in the EU, and the result has been that accomoadation led to expansion, as it should. Now the UK and the US are recovering, but the EU is still grinding into a death spiral with its tight policy.
The physics is theoretical, but the fun is real. - Sheldon Cooper
#145
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Posted 2014-February-20, 01:21
FaceBook announces 19 billion WhatsApp deal.
Here is an extract from the article:
"How the service will pay for itself is not yet clear.
Zuckerberg and Koum on the conference call did not say how the company would make money beyond a $1 annual fee, which is not charged for the first year. "The right strategy is to continue to focus on growth and product," Zuckerberg said.
Zuckerberg and Koum said that WhatsApp will continue to operate independently, and promised to continue its policy of no advertising."
Question:
How many years do you think it is going to take you to recover your investment in FaceBook in the form of dividends?
Answer:
Never (read the full article yourself).
Here's a free tip. Get rid of your Facebook shares while you can.
Here is an extract from the article:
"How the service will pay for itself is not yet clear.
Zuckerberg and Koum on the conference call did not say how the company would make money beyond a $1 annual fee, which is not charged for the first year. "The right strategy is to continue to focus on growth and product," Zuckerberg said.
Zuckerberg and Koum said that WhatsApp will continue to operate independently, and promised to continue its policy of no advertising."
Question:
How many years do you think it is going to take you to recover your investment in FaceBook in the form of dividends?
Answer:
Never (read the full article yourself).
Here's a free tip. Get rid of your Facebook shares while you can.
Website: www.andrewswebcorner.co.za
#146
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Posted 2014-February-20, 01:58
phil_20686, on 2014-February-19, 12:34, said:
I thought I could be strong, have a quick look on the WC and then go home. But here I am. Sucked in Again.
(1) The US does not have a debt problem. It never did. Its deficits are down to manageable levels because the economy has recovered, and that was all that it needed. It will likely be in surplus next year because of the cuts and the rebounding economy. There is some level of debt at which one can have a problem, but countries have survived, even thrived, with much higher debt levels than the US. See the UK following WW2 where debt was somewhere in the region of 300% of GDP. That level depends a lot on the expectations of your creditor base, especially following the war the creditor base was the UK people, so from a broad perspective paying of the debt cost nothing, it was just redistribution. The US is in a similar position, with 60% of the debt owed to US citizens.
(2) Currency has at least one useful function over a barter economy which noone has alluded to, but which is arguably the most important: it allows one to defer consumption. A coin earned today can be spent next year, an apple bartered today must be consumed before it perishes.
(3) Debt in the current finanical system is essential because it forms the basis of capital ratios for banks and other institutions, without it they would be unable to meet the BASEL regulations. The financial system with zero public debt would necessarily look very different from today.
The main problem with the discussion of debt in this thread is that it seems deeply wedded to the money illusion (look it up). The economy is about making real stuff, but financial flows are about nominal quantities. One of the primary aims of government and the Fed is to control these nominal flows such that the real economy underneath them continues to produce at its maximum potential come rain or shine. Printing money/fiscal expansion, really does improve the general welfare if it reduces a production shortfall, and achieves nothing except inflation if there is no production shortfall.
Multipliers are not stable, they depend on the size of the output gap. At the height of the recession QE and fiscal expansion were helpful, but 2013 more or less showed that monetary dominance has reasserted itself, and the fed is back in control of the economy, that is why everyone talking about how the fiscal headwinds of 3.9% of gdp due to austerity were going to cause a new recession looked pretty silly when GDP growth accelerated in the UK/US, and the answer is because the fed was steering the economy through QE, so the fiscal multiplier was essentially zero in 2013, or much smaller than those people predicting disaster thought based on 2008-2012 data.
It really has been the case that QE has been a free lunch for the US. They got to effectively decrease their debt, and close the output gap. If you want to know what would have happened without QE, just look at the ECB. The eurozone continues to grind into deflation, its a F****** disaster, and Draghi continues to refuse QE, mostly because that would involve admitting that he had been wrong all this time. The lost output in the eurozones long since passed a trillion euros. The greek economy is still in freefall.
and there continues to be no hope of any improvement. I could put up a similar graph for other countries like spain, portugal etc.
This recession would have been over much faster if the Fed had done more QE sooner, and combined it with a stronger forward guidance policy, preferably some type of level target, either for inflation or for NGDP.
Those poor misguided souls who think that a gold backed currency is better need to read about the insane Bank of France in the 1930's, and how it exported deflation throughout the world by buying all the gold it could lay its hands on. This make the depression much worse, partly because other central banks seemed to see no need to counteract this insane member by selling gold on the open market. This is not unlike what the ECB has been doing with its insanely tight policy. CHeck out this graph of UK and Euro exchange rates vs the US dollar
The scale is the number of dollars which 1 unity of currency cost. Blue is the UK and black is the Euro. See how much weaker the pound became? This is one measure of how much easier policy was in the UK with QE than in the EU, and the result has been that accomoadation led to expansion, as it should. Now the UK and the US are recovering, but the EU is still grinding into a death spiral with its tight policy.
(1) The US does not have a debt problem. It never did. Its deficits are down to manageable levels because the economy has recovered, and that was all that it needed. It will likely be in surplus next year because of the cuts and the rebounding economy. There is some level of debt at which one can have a problem, but countries have survived, even thrived, with much higher debt levels than the US. See the UK following WW2 where debt was somewhere in the region of 300% of GDP. That level depends a lot on the expectations of your creditor base, especially following the war the creditor base was the UK people, so from a broad perspective paying of the debt cost nothing, it was just redistribution. The US is in a similar position, with 60% of the debt owed to US citizens.
(2) Currency has at least one useful function over a barter economy which noone has alluded to, but which is arguably the most important: it allows one to defer consumption. A coin earned today can be spent next year, an apple bartered today must be consumed before it perishes.
(3) Debt in the current finanical system is essential because it forms the basis of capital ratios for banks and other institutions, without it they would be unable to meet the BASEL regulations. The financial system with zero public debt would necessarily look very different from today.
The main problem with the discussion of debt in this thread is that it seems deeply wedded to the money illusion (look it up). The economy is about making real stuff, but financial flows are about nominal quantities. One of the primary aims of government and the Fed is to control these nominal flows such that the real economy underneath them continues to produce at its maximum potential come rain or shine. Printing money/fiscal expansion, really does improve the general welfare if it reduces a production shortfall, and achieves nothing except inflation if there is no production shortfall.
Multipliers are not stable, they depend on the size of the output gap. At the height of the recession QE and fiscal expansion were helpful, but 2013 more or less showed that monetary dominance has reasserted itself, and the fed is back in control of the economy, that is why everyone talking about how the fiscal headwinds of 3.9% of gdp due to austerity were going to cause a new recession looked pretty silly when GDP growth accelerated in the UK/US, and the answer is because the fed was steering the economy through QE, so the fiscal multiplier was essentially zero in 2013, or much smaller than those people predicting disaster thought based on 2008-2012 data.
It really has been the case that QE has been a free lunch for the US. They got to effectively decrease their debt, and close the output gap. If you want to know what would have happened without QE, just look at the ECB. The eurozone continues to grind into deflation, its a F****** disaster, and Draghi continues to refuse QE, mostly because that would involve admitting that he had been wrong all this time. The lost output in the eurozones long since passed a trillion euros. The greek economy is still in freefall.
and there continues to be no hope of any improvement. I could put up a similar graph for other countries like spain, portugal etc.
This recession would have been over much faster if the Fed had done more QE sooner, and combined it with a stronger forward guidance policy, preferably some type of level target, either for inflation or for NGDP.
Those poor misguided souls who think that a gold backed currency is better need to read about the insane Bank of France in the 1930's, and how it exported deflation throughout the world by buying all the gold it could lay its hands on. This make the depression much worse, partly because other central banks seemed to see no need to counteract this insane member by selling gold on the open market. This is not unlike what the ECB has been doing with its insanely tight policy. CHeck out this graph of UK and Euro exchange rates vs the US dollar
The scale is the number of dollars which 1 unity of currency cost. Blue is the UK and black is the Euro. See how much weaker the pound became? This is one measure of how much easier policy was in the UK with QE than in the EU, and the result has been that accomoadation led to expansion, as it should. Now the UK and the US are recovering, but the EU is still grinding into a death spiral with its tight policy.
Once we you accept the usa does not have debt problem the discussion changes.
Once you say the numbers say we have a debt problem the discussion changes.
#147
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Posted 2014-February-20, 09:13
phil_20686, on 2014-February-19, 12:34, said:
The financial system with zero public debt would necessarily look very different from today.
Would that necessarily be a bad thing? If so, why?
--------------------
As for tv, screw it. You aren't missing anything. -- Ken Berg
I have come to realise it is futile to expect or hope a regular club game will be run in accordance with the laws. -- Jillybean
As for tv, screw it. You aren't missing anything. -- Ken Berg
I have come to realise it is futile to expect or hope a regular club game will be run in accordance with the laws. -- Jillybean
#148
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Posted 2014-February-20, 10:08
blackshoe, on 2014-February-20, 09:13, said:
Would that necessarily be a bad thing? If so, why?
1. Counter cyclical investment policies have been extremely successful in mitigating large swings in the economy
2. Government's can often borrow at rates significantly less than the hurdle rate for investments
Alderaan delenda est
#149
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Posted 2014-February-20, 10:51
sfi, on 2014-January-10, 00:37, said:
1835 was the only time the US had a zero national debt. Shortly after that the country went into the longest depression in the nation's history.
Planet Money discussed this in 2011.
Planet Money discussed this in 2011.
I read, and listened to, this story. It's very interesting, regardless of what we might think current policy should be.
Ken
#150
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Posted 2014-February-20, 11:11
I think of the zero debt issue as being like the 155 pound weight issue. I'm a little over 5'-10" and, back when I was at 175 or so, I had a doc tell me I should get down to 155. If I get below 170 I get very hyper, Still, perhaps he is right. But right now, it's a non-issue. Getting down to 185 would be good. If I ever reach that we will see about 175. I have serious doubts that getting down to 155 will ever be even a mirage.
Exercise is good, eating sensibly is good, and so it is with money. There are plenty of worthwhile ways to spend some money. And plenty of stupid ways. If we could get that part right, I suspect the debt problem will not bother us that much. Art might well be right that we don't have a debt problem but it feels like a debt problem. I'll keep an open mind on that, for now I suggest we eat our veggies, build some new bridges, support basic research, etc.
Exercise is good, eating sensibly is good, and so it is with money. There are plenty of worthwhile ways to spend some money. And plenty of stupid ways. If we could get that part right, I suspect the debt problem will not bother us that much. Art might well be right that we don't have a debt problem but it feels like a debt problem. I'll keep an open mind on that, for now I suggest we eat our veggies, build some new bridges, support basic research, etc.
Ken
#151
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Posted 2014-February-23, 00:18
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#152
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Posted 2014-February-26, 04:43
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#153
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Posted 2014-February-27, 04:30
Calm urged as investors pull out of local bonds.
A couple of extracts from the article:
1. Newly appointed chief economist for the South African Institute of Race Relations, Ian Cruickshanks, on Wednesday called the South African market "heck of expensive". "There is huge risk in the market, with current valuations not reasonable."
2. Dreadnought Capital CEO and former JSE director Allan Thomson says a crash is not around the corner, but he does not expect the market to hit recent "giddy heights" of growth close to 30% either.
Bullshit...The crash is a disaster waiting to happen. If you have any common sense, get out while you can. The NYSE hit a fresh high yesterday. On exactly what you may rightly ask? Corporate earnings are currently lagging WWWWAAAAAAAAYYYYYYYYYYYY behind current stock prices!
A couple of extracts from the article:
1. Newly appointed chief economist for the South African Institute of Race Relations, Ian Cruickshanks, on Wednesday called the South African market "heck of expensive". "There is huge risk in the market, with current valuations not reasonable."
2. Dreadnought Capital CEO and former JSE director Allan Thomson says a crash is not around the corner, but he does not expect the market to hit recent "giddy heights" of growth close to 30% either.
Bullshit...The crash is a disaster waiting to happen. If you have any common sense, get out while you can. The NYSE hit a fresh high yesterday. On exactly what you may rightly ask? Corporate earnings are currently lagging WWWWAAAAAAAAYYYYYYYYYYYY behind current stock prices!
Website: www.andrewswebcorner.co.za
#154
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Posted 2014-February-28, 08:42
One thing about the debt from interest payments (servicing national debts to central (private?) banks(?) Doesn't this suck up a lot of resources that might otherwise benefit the people rather than the bankers? Fractional reserve banking being what it is, what might also happen were the banks only allowed to charge interest on ACTUAL reserves and only able to charge a minimal fee for any "lending" of money that they create on their books without real depositor backing?
The Grand Design, reflected in the face of Chaos...it's a fluke!
#155
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#156
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Posted 2014-March-13, 06:54
The Grand Design, reflected in the face of Chaos...it's a fluke!
#157
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Posted 2014-March-13, 08:12
When the stock markets crumble
The word of Yahweh will stand
Stock prices may rise and fall
But his word will endure
Though the investors may stumble
The word of Yahweh is strength
I will not be shaken
I will not be moved
I will not be shaken
I’ve had a vision
That we are living
In strange times
Everything is shaking
The whole earth is quacking
Can you hear it?
Can you hear it?
Victory’s in the air!
The word of Yahweh will stand
Stock prices may rise and fall
But his word will endure
Though the investors may stumble
The word of Yahweh is strength
I will not be shaken
I will not be moved
I will not be shaken
I’ve had a vision
That we are living
In strange times
Everything is shaking
The whole earth is quacking
Can you hear it?
Can you hear it?
Victory’s in the air!
Website: www.andrewswebcorner.co.za
#158
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Posted 2014-March-13, 08:27
32519, on 2014-March-13, 08:12, said:
The whole earth is quacking
Big year for ducks.
The growth of wisdom may be gauged exactly by the diminution of ill temper. — Friedrich Nietzsche
The infliction of cruelty with a good conscience is a delight to moralists — that is why they invented hell. — Bertrand Russell
The infliction of cruelty with a good conscience is a delight to moralists — that is why they invented hell. — Bertrand Russell
#159
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Posted 2014-March-13, 08:30
Which Psalm is that?
I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones -- Albert Einstein
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Occupation - Tax Attorney in Atlantic City, NJ.
Posted 2014-March-13, 10:24
Vampyr, on 2014-March-13, 08:30, said:
Which Psalm is that?
Psalm 2014.72 (based on its Star Date).