Great Interview

[briansd1]

[quote=Nor-LA-SD-GUY2]The Real Reason for the Housing bubble,

“Owners Equivalent Rent”

It started the bubble in the eighties just after it was introduced, and it will be the reason for the next one as it keeps policy several years behind housing prices.

BTW the Bubbles and busts were much more severe before the fed believe it or not.

But I do agree with one thing, we don’t need the middle east we have all the energy we need right here, also we definitely don’t need anything from china.[/quote]

Credit society.

American homeowners are in the same boat at Greece and Italy. At least we have the Fed holding down interest rates.

Interesting that I have some friends who think that housing prices are done dropping. But then they believe that our national debt/deficit will cause an economic calamity!??!!

[Arraya]

I’d like to see RP win just to see what the power structure does. I mean, removing the Fed is a swipe at some powerful people. The Fed is not some abstraction – it represents the ruling class. It also represents an arrangement with the other global powers. Of course, a major change like RP is suggesting requires coordination with those other global powers. It makes you wonder if he is talking to anybody behind the scenes.

[The-Shoveler]

That is what I completely don’t get, how anyone worries about the national debt, Personal debt is real, but nation debt is an illusion as long as you control what must be paid back (ie.. U.S.A. DOLLARS).
Literally the Fed could completely pay off all the U.S.A. national debt in one day all 16 or so trillion.
Step 1)Make a rule that all treasuries will expire at a certain date if not redeemed for cash!
Step 2) Fed Just buys all outstanding treasuries and burns them, all done no debt !!

[markmax33]

[quote=gandalf]I like Ron Paul for his consistency, and strongly agree with some of his positions. But he’s completely unfit to serve as President.

His persistent gadfly presence in the Repuglican tent is awesome though. Pisses off the establishment when he wins the straw polls. It’s great.[/quote]

What basis do you have for “But he’s completely unfit to serve as President.” I find that comment hillarious actually. He has more relevant ideas and experience than the rest of the GOP field combined!

[markmax33]

[quote=Nor-LA-SD-GUY2]That is what I completely don’t get, how anyone worries about the national debt, Personal debt is real, but nation debt is an illusion as long as you control what must be paid back (ie.. U.S.A. DOLLARS).
Literally the Fed could completely pay off all the U.S.A. national debt in one day all 16 or so trillion.
Step 1)Make a rule that all treasuries will expire at a certain date if not redeemed for cash!
Step 2) Fed Just buys all outstanding treasuries and burns them, all done no debt !![/quote]

Then the price of bread is $2 on Monday and $10 on Friday. The destruction of the currency through inflation happens very quickly and painfully, and it has happened to every single fiat currency that is much older than 50 years old. The average life span is 27 years and we are at 40 years. We have been lucky so far but we should not be complacent. History always repeats itself.

[Rich Toscano]

[quote=markmax33]
I’m not attacking Rich, I’m just saying that I emailed him and he didn’t seem to think reform of the FED was an important thing.[/quote]

I have no idea where you came up with that. What I said was:

– I am more interested in looking forward at what happens next than doing a post-mortem on something that already happened
– It is a waste of time to argue about policy anyway because everyone is already decided on what’s best and you just end up going in circles
– I don’t have much time to write any more so I focus my housing-related efforts these days on documenting what’s going on in the present

I also pointed you to a couple things I’d written that were in support of the idea that people ought to pay more attention to the Austrian economic framework (that being the topic you emailed me about) in diagnosing the economic cause and effect. So again, I have no idea where you came up with the paraphrase above as I never said anything of the sort.

As for the idea that I am uninterested in or oblivious to the causes: during the bubble I spent a tremendous amount of time discussing and theorizing as to the causes of how the bubble came to be. The conversation has already happened… it’s not a good use of time to rehash something that I’ve already written in the past. Such are the limitations of the blog format that it can be difficult to find older stuff, but just because you didn’t find (or, from the sounds of it, look for) writings on a given topic doesn’t mean you should assume that the topic was never addressed.

Other topics:
– I suggest you familiarize yourself with the political threadjacking policy of this site: http://piggington.com/threadjackers_will_be_persecuted_maybe_even_prosecuted . I agree with you that discussing the causes of the bubble is a valid topic, and that the Austrian economic framework has a lot to offer in that regard. But that’s different than spamming the forums with political cheerleading posts. So please try to keep the discussions more oriented towards causes and less towards Ron Paul boosterism.
– Sorry, but this is a peeve of mine: it’s “Fed,” not “FED” — the word “Fed” is not an acronym; it’s a shortened version of “Federal Reserve.”
– As for how I feel about the Fed, I think the quote sdduuude dug up sums it up pretty nicely.

Rich

PS – my thanks to sdduude and patientrenter, both of whom I respect a lot and value highly as forum participants, for the kind words.

[briansd1]

[quote=Arraya]I’d like to see RP win just to see what the power structure does. I mean, removing the Fed is a swipe at some powerful people. The Fed is not some abstraction – it represents the ruling class. It also represents an arrangement with the other global powers. Of course, a major change like RP is suggesting requires coordination with those other global powers. It makes you wonder if he is talking to anybody behind the scenes.[/quote]

I feel the same way. But I don’t think that RP it talking to anybody behind the scenes.

Money is a human construct which could be done away as Nor-LA suggested, but money represents claims on physical assets.

The arrangement with other world powers you allude to is interesting. Nations have gone to war in the past because of money and debts.

For the benefits of all, it’s better to keep the wheels of commerce turning than have everything seize up.

[ucodegen]

[quote Rich Toscano]I also pointed you to a couple things I’d written that were in support of the idea that people ought to pay more attention to the Austrian economic framework (that being the topic you emailed me about) in diagnosing the economic cause and effect.[/quote]
I assume that the items you wrote were referenced in an Email as opposed to anywhere else.. is there a possibility of sharing those ‘more publicly’?? Sounds in like an interesting topic.

[Rich Toscano]

Sure, ucodegen, I can share. Markmaxx wrote me suggesting that I write more about the Fed as the cause of the bubble and he clearly hewed to the Austrian framework. I replied to explain why I probably wasn’t going to write any further on that topic (basically, what I said above), but thought he’d be interested in a couple things I wrote:

1. A letter to the Economist – http://www.economist.com/node/14164057
(in response to this article: http://www.economist.com/node/14030288 )
2. A bailout-era rant at Voice of SD – http://www.voiceofsandiego.org/toscano/article_cafc616f-234a-5649-8df2-c56c650f4f35.html

[markmax33]

[quote=Rich Toscano][quote=markmax33]
I’m not attacking Rich, I’m just saying that I emailed him and he didn’t seem to think reform of the FED was an important thing.[/quote]

I have no idea where you came up with that. What I said was:

– I am more interested in looking forward at what happens next than doing a post-mortem on something that already happened
– It is a waste of time to argue about policy anyway because everyone is already decided on what’s best and you just end up going in circles
– I don’t have much time to write any more so I focus my housing-related efforts these days on documenting what’s going on in the present

I also pointed you to a couple things I’d written that were in support of the idea that people ought to pay more attention to the Austrian economic framework (that being the topic you emailed me about) in diagnosing the economic cause and effect. So again, I have no idea where you came up with the paraphrase above as I never said anything of the sort.

As for the idea that I am uninterested in or oblivious to the causes: during the bubble I spent a tremendous amount of time discussing and theorizing as to the causes of how the bubble came to be. The conversation has already happened… it’s not a good use of time to rehash something that I’ve already written in the past. Such are the limitations of the blog format that it can be difficult to find older stuff, but just because you didn’t find (or, from the sounds of it, look for) writings on a given topic doesn’t mean you should assume that the topic was never addressed.

Other topics:
– I suggest you familiarize yourself with the political threadjacking policy of this site: http://piggington.com/threadjackers_will_be_persecuted_maybe_even_prosecuted . I agree with you that discussing the causes of the bubble is a valid topic, and that the Austrian economic framework has a lot to offer in that regard. But that’s different than spamming the forums with political cheerleading posts. So please try to keep the discussions more oriented towards causes and less towards Ron Paul boosterism.
– Sorry, but this is a peeve of mine: it’s “Fed,” not “FED” — the word “Fed” is not an acronym; it’s a shortened version of “Federal Reserve.”
– As for how I feel about the Fed, I think the quote sdduuude dug up sums it up pretty nicely.

Rich

PS – my thanks to sdduude and patientrenter, both of whom I respect a lot and value highly as forum participants, for the kind words.[/quote]

Rich,
Alright my applogizies. I have been reading your blog pretty religously since day 1 even though I never posted. I came to the same conclusions you did around the same time and was going to start a blog, but you beat me to it basically. I think it has been a great source of real time information on the market and I highly value it.
When I said, “I’m just saying that I emailed him and he didn’t seem to think reform of the FED was an important thing.” It was based on your email because you implied you had better things to do and were putting me off politely, alot of meanings are lost through email though.
I think taking it one step further and discussing the fed and background on the fed would have greatly benefited the blog audience and it would not have ended up political. I’m not challenging you but I never saw an article or post dedicated to the topic and it seems like the root cause and I read your blog all the time. The financial system is far from a political topic, atleast in theory. I didn’t understand why it wouldn’t be discussed in depth, but obviously you are busy and I can respect that. I was also getting attacked by SK and probably lashed out a little bit too hard.
What were those articles you wrote about Austrian economics again? I can’t seem to find your email. I’m sure the readers would like to see them. I found a few:

http://www.safehaven.com/article/15977/inflation-risk-and-the-mythical-gold-bubble

You actually call out the guy Ron Paul would appoint as the fed chairman:

“I will once again invoke the inestimable Jim Grant, who wrote the following on this topic…”

http://www.pcasd.com/short_term_gain_long_term_pain_from_the_biggest_stimulus_ever

[Rich Toscano]

Thank you for the nice compliments on the blog. I didn’t really write about Austrian economics (the exception being that super short Economist letter, which btw they edited down), but I have written about the cause of the bubble in a way that’s been influenced by Austrian thought, eg in the other article I linked to for ucodegen above. Unfortunately, like I mentioned, the blog format makes it hard to home in on topics like that (tagging might have been good? oh well…), so I’m afraid google is the only option.

[briansd1]

Just because the Fed facilitated the bubble doesn’t mean that it should be done away with.

Austrian or Keynesian is an interesting debate, but not as important as the policies that work in the time frame that we need them to work.

Given enough time, it doesn’t matter because things will normalize.

If a patient lead a clean life, doesn’t smoke, drink or over-eat, he’ll be healthier (and arguably would not have enjoyed life as much). But he didn’t, and now he’s sick. Do we intervene at a cost to society and the next generation? Or do we let him die?

The economy is sick. People are suffering. Do we just tell them to eat Baklava?

[afx114]

[quote=Rich Toscano]I’m afraid google is the only option.[/quote]

Here’s a Google tip that comes in handy for these situations, use the “site:” operator to search, eg:

site:piggington.com fed

[SK in CV]

[quote=markmax33] I was also getting attacked by SK and probably lashed out a little bit too hard.
[/quote]
I didn’t attack you. I attacked the lack of logic in your arguments. And the faulty assumptions and evidence used to reach your unsupported assertions. That’s all.

[Aecetia]

Brian,

I almost spit wine on the computer. That was the funniest thing you have written. You might get your own thread if you keep this up: “The economy is sick. People are suffering. Do we just tell them to eat Baklava?”

[Author]

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