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Arraya
Participant[quote=markmax33]EXACTLY – for most of our early years we didn’t have a central bank. Our rise was directly do to monetary policy. [/quote]
Again, extremely loose correlations does not equal a scientific rule. We also had wide open land, abundant with natural resources and a consecutive boom economy(cattle, gold, silver, railroads oil(the US was the saudi arbia of the 40s ). It was the industrial revolution. Making a comparison regarding a central banks positive or negative role in the economy is futile.
[quote=markmax33]
If the Austrian school of economics was able to predict the housing bubble and there was evidence of that, would you even listen to those guys? If the Austrians predicted the financial bubble, would you even listen to them? How many times do they have to be right before the event occurs to be empirical data? Please give me a number.[/quote]I did not need austrian economics to predict and see the housing bubble.
Participant[quote=markmax33]
Well I have an Engineering, my father has a PHD in meteorology and my mother has a masters in physics. I was raised in a family of science and numbers. I know empirical data. 775 currencies and history that has repeated itself hundreds of times = valid empirical data. How much data do you need for it to be empirical sir?[/quote]
And that is the nature of money – collapse and crisis are built into it. How this is evidence that what the Fed is doing is making things worse, I’m not sure? It looks to me like the system will naturally collapse by it’s own inertia and the fed is just there slowing it down. It’s systemic NOT due to a bad policy or organization
Participant[quote=markmax33][quote=Arraya]
I say it will get much worse and it has zero to do with what the Fed is doing now, or at least very little.[/quote]The fed loaned $16T and they have no power? How much would they have to print in order to have influence? The GOV only makes $2.5T per year in taxes remember…[/quote]
Who said they don’t have influence? Though, I will say, I think you have it backwards – the Fed does not control the market and market controls the Fed.
I said their “printing” can not be measured in “making things worse”.
Participant[quote=markmax33]
Arraya,
If I pointed you to an Austrian model that protected from major failures and led the most prosperous country through 200 years of unprecedented growth into the biggest super power ever known would you use that as evidence that model worked or would you just shrug your shoulders and disregard it?
[/quote]huh? Are you are pointing to this rise of the US as empirical evidence of Austrian economics working?
[quote=markmax33]
If the fed had let the tech bubble burst and didn’t blow up the housing bubble we would have MASSIVE GROWTH BY NOW AND WOULD HAVE EASILY ECLIPSED WHERE WE WERE! Don’t you get it? When you let a sector fail, the people leave and get retrained and the rest of the economy is fine. If you blow up a bigger bubble you crush more people. The next bubble is currency bubble and that destroys everyone.[/quote]Again, this is a statement based on loose correlations of things that sometimes happen under certain circumstances – that’s it.
If we did not have the housing bubble we have no idea what would have happened. In my estimation if we did not have the bubble and the war we would have been in depression along time ago.
Participant[quote=markmax33][quote=Arraya]It’s a tautology – it goes back to the same conclusion of intervention = makes things worse – without being the slightest empirical.[/quote]
This is the flaw in your argument. There are hundreds of pieces of empirical evidence that prove this. I’ve listed them on the blog and you haven’t looked at one of them because you have blinders on. We will never get anywhere until you are ready to look at and consider empirical evidence.[/quote]
Maybe our definitions of empirical evidence is different.
Participant[quote=sdduuuude]
Almost a strawman argument. You suggest that most such advocates think the market would be beautiful and stable. I’m not one of them. I do think, however, it would be better in the long-run.[/quote]
Ok, it was slightly a strawman. But this is an unprovable statement.
[quote=sdduuuude]If we weren’t so far in debt, we wouldn’t need the intervention.[/quote]
This is systemic. It goes along with debt based currency and how the banking system works. It’s a paradox – if we were not so far in debt we would have a smaller economy. Debt = money[quote=sdduuuude]The cost of short-term stability is long-term disaster.[/quote]
By all accounts we avoided a disaster. Do you mean the next one will be worse than what an un-intervened 2008 would have been. See where I am going – it’s all just mental masturbation. The next hypothetical crisis will be worse than the un-intervened hypothetical crisis of 2008 because of the intervention. It’s a tautology – it goes back to the same conclusion of intervention = makes things worse – without being the slightest empirical.
Don’t get me wrong – I don’t think throwing more debt on top of a debt crisis will “solve” anything. But I don’t think these actions are quantifiably making things worse. Besides the obvious confidence erosion. Technically, IMO, the whole system is dead.
Participant[quote=markmax33]
No the diffrence is you deal with the failures at the time they occur under Austrian/gold/competeing currencies and you delay it and build a bigger bubble that will destroy the entire country with Keynes. [/quote]I’m no neoclassical economist apologist(and I don’t see much difference between Austrian and monetarist economics) but I don’t believe Keynes said blow bubbles to keep an economy going. I agree, keeping the bubble, or trying to keep going will eventually destroy the currency. I also think letting it pop now will destroy the country too – that is just the nature of bubbles and this is the biggest one in history. The whole banking system is bankrupt on many levels. The planet is bankrupt
[quote=markmax33]
Please get it right. You just want to push the pain off to your children. It’s going to hurt much worse.[/quote]Nope – you got me wrong. I want to see the global economy collapse. But first, your theory that it will be “much worse” is faith based. Much worse than what? It’s an unprovable statement which you can always go back to a say see I told you – if the economy gets worse – which it will.
I say it will get much worse and it has zero to do with what the Fed is doing now, or at least very little.
Participant[quote=sdduuuude][quote=Arraya] … throwing money at where the system is seizing up.[/quote]
Dude – that IS Keynsian economics ![/quote]
Yeah, in a very general sense. Then again, it is avoiding a revolutionary change/collapse. Just letting the “market” work things out would not manifest how the laissez faire advocates think. In fact, it would be the opposite. Keynes essentially said the state has to invest at certain times to avoid certain serious instability. He was correct. If it was not for intervention unemployment levels would be double and there would be serious unrest. Not to say, it’s not coming – but that has little to do with government intervention – the USG is keeping the whole thing from imploding.. The difference with fiat/fractional reserve vs gold backed/non-fractional reserve is the size and frequency of the crises
ParticipantWe used to have depressions every 5 years with the gold standards and according to some economic historians, the international gold standard, pushed us to two world wars.
Now, this does not mean I don’t understand the systemic risk with how money/banking works now. In fact, we are in the midst of one now – a systemic crisis. But, IMO, it goes deeper than replacing fiat with gold.
Also, enough with the misplaced demonization of dead money market theorists. This isn’t “keynesian” economics, it’s economics to keep the whole shebang from collapsing. I guarantee Bernanke is not referring to Keynes literature to make decisions. They are not sitting back there with some Keynes manual for monetary policy. They are treating it like a system and throwing money at where the system is seizing up. That’s it.
ParticipantThere is no inflation. Tradition measures of money supply don’t tell the whole story. Until deflation runs it’s coarse there no threat of inflation. We are few years from that. The fed wishes it could inflate and people will be begging for it
ParticipantYeah. come on man the number of employees working for the government(size) has zilch to do with the housing bubble. The people that aided and encouraged the bubble working in the government did not do so because they were misguided government technocrats – they were aiding in the process of capital accumulation for the ones with the most capital.
Besides every government “regulator” comes from the private sector. Just look at the list of treasury secretaries, look at who’s on the board of the Fed?
ParticipantI just feel bad for all the financial personal who enriched themselves through the government. They must feel awful. We need to have sympathy for them and understand they are just victims.
November 29, 2011 at 1:40 PM in reply to: Bloomberg story: Feds loaned $7.77 Trillion to banks #733542ParticipantAlmost 8 trillion and they still can’t mark to market. That is one big black hole of bad debt.
ParticipantI think it has something to do with getting a government paycheck. It perverts morals. Whenever good banking and corporate folk (who rotate in and out of government agencies)work for the government they do things they would not normally do. The only solution to this state driven moral perversion, is to keep it as small as possible.
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