Forum Replies Created
-
AuthorPosts
-
DomoArigato
ParticipantRich’s article is retarded. If interest rates go up, the value of existing U.S. debt will go down and the Federal Reserve can actually buy that old debt back at a cheaper overall cost than if interest rates were to go down or stay the same. This is just a simple present value analysis.
If interest rates stay the same or go down there is also no debt crisis.
All that’s needed is for taxes on the criminal super-rich to go up a bit. Not a big deal.
Rich’s article is just a reiteration of the tired, old ‘invisible bond vigilantes’ argument that Paul Krugman has shot down a zillion times. If you really want to learn about economics (as opposed to poorly-written deficit fear-mongering), read Paul Krugman’s blog:
January 22, 2012 at 8:21 PM in reply to: OT – Who will run for President on the Republican side? #736579ParticipantThe Republican candidate who scares the people I know teh most is Ron Paul. They see some of the absolutely mindless, nonsensical, and tyrannical posts made online by his fanatical supporters and they feel like they’ve been transported back in time to Nazi Germany.
As a limousine liberal who has a very comfortable life, I give thanks to the Ron Paul nutjobs who help to ensure that Obama will be re-elected in 2012.
January 22, 2012 at 8:13 PM in reply to: OT – Who will run for President on the Republican side? #736577ParticipantIt’s amazing to me how far to the right and how nutty the Republican candidates are. It’s almost as if the Republicans are running right-wing nutjobs for rightwingnutjobs.
A very interesting strategem indeed.
January 14, 2012 at 9:14 AM in reply to: OT- CONTEST!!! Guess public sector household earnings #735887ParticipantOne societal leech complaining about another societal leech? Yawn. Wake me when it’s Tebowtime.
January 8, 2012 at 9:19 AM in reply to: OT: LOL… All you folks that are trying to eat organic from places like Whole Foods…. #735521ParticipantThe lastest ‘innovation’ from the world of genetially-modified organisms is genetically-modified corn that can withstand being sprayed with Agent Orange:
While the USDA attempts to assure the public that 2,4-D is safe, scientists have raised serious concerns about the safety of this herbicide, which was used as a key ingredient in “Agent Orange,” used to defoliate forests and croplands in the Vietnam War.
2,4-D is a chlorophenoxy herbicide, and scientists around the world have reported increased cancer risks in association with its use, especially for soft tissue sarcoma and malignant lymphoma. Four separate studies in the United States reported an association with chlorophenoxy herbicide use and non-Hodgkin lymphoma.
“The concern is that, just like Monsanto’s genetically engineered corn that is resistant to RoundUp™ (glyphosate) herbicide, the approval of a cultivar resistant to 2,4-D will cause an exponential increase in the use of this toxic agrichemical,” Kastel stated.
Research by the EPA found that babies born in counties with high rates of 2,4-D application to farm fields were significantly more likely to be born with birth defects of the respiratory and circulatory systems, as well as defects of the musculoskeletal system like clubfoot, fused digits and extra digits. These birth defects were 60% to 90% more likely in counties with higher 2,4-D application rates.
The results also showed a higher likelihood of birth defects in babies conceived in the spring, when herbicide application rates peak.
Who wouldn’t want to chow down on some frankencorn that has been sprayed with Agent Orange? Yummy!
ParticipantThe Federal Reserve provided $15 trillion in bailout funds to the criminal banksters, so it’s only right that defrauded homeowners should also get a bailout. Plus, the Federal Reserve is sitting on $1.5 trillion in Treasury bills that they can sell to offset any rise in inflation that a trillion-dollar bailout to homeowners might cause.
If this trillion-dollar bailout goes through, I expect we’ll see a nice rise in the stock market this year and we’ll see interest rates start to rise as the Fed sells Treasuries.
Keynes was right.
Participant[quote=KSMountain]
Still not clear? Why not print $330Q? We could distribute that money and every man, woman, and child in the US would instantly be a billionaire! Problem solved?[/quote]Since the Federal government doesn’t want to prosecute any of the fraud that occurred during the bubble years, this would actually be an easy way to equalize the wealth of those who didn’t commit fraud against those who grew insanely wealthy via fraudulent means as any existing individual wealth would instantly be made insignificant.
Here’s another thought experiment for you: If interest rates do go up, what does that do to the value of the $15+ trillion in federal debt outstanding?
Hint: It goes down.
ParticipantPer the Wall Street Journal, The Fed owns $1.672 trillion in Treasury securities.
http://online.wsj.com/article/BT-CO-20111229-708182.html
The current US National Debt is around $15.17 trillion and appears to be climbing at a rate of a few tens of thousands of dollars per second. If the federal debt were a sprinter it would be Ben Johnson with a jet (debt?) pack.
So the Fed has at least temporarily monetized 11% of the debt. Core inflation has remained under 3% and the value of the US dollar is near where it was at the beginning of the year. Unemployment is starting to head down.
If you are concerned about the value of the US dollar, based on a 1967 value of one dollar = $1.00, the dollar fell in value from 19.4 cents to 15.5 cents from 2000 to 2008 (a 20% drop). From 2008 to 2010, the dollar fell in value from 15.5 cents to 15.3 cents (a 1% drop).
http://mykindred.com/cloud/TX/Documents/dollar/
In my opinion, the Federal Reserve and Federal Government stimulus measures have been helpful. I would like to see more stimulus specifically directed towards helping those in poverty.
Participant[quote=UCGal]
I read something a few weeks ago that made sense to me. With the fed doing the massive QE – which in theory should have an inflationary effect, why haven’t we seen massive inflation. [/quote]
Paul Krugman has done an excellent job of explaining the economics of our current situation on his blog:
http://krugman.blogs.nytimes.com/
I have this Allan character on mute as I find him to be too trollish for my tastes, but insolvency is a ridiculous concept when applied to countries with currency denominated in fiat issued by that same country. How would that conversation even go anyway?
Collective Creditors of the U.S.: You’re insolvent!
The U.S. Government in collusion with the Fed: Just a sec.
[Tim Geithner presses button that starts the printing press and a $15.436 trillion dollar bill rolls off the press.]
Here you go!
While you’re here, may we interest you in our shiny new $1.6 trillion dollar debt offering?Participant[quote=briansd1]It’s interesting the see the two arguments.
A/ In the US we have had more government and Fed interventions.
B/ In Europe, governments have been cutting back and the ECB has not intervened as aggressively as the Fed.
Anyone wants to make a $10,000 bet on which solution will be more successful in terms of growth and prosperity?
I’m thinking solution A will prove superior.[/quote]
It’s certainly starting to look that way. You can see in this chart that EU unemployment is heading up while unemployment in the U.S. is starting to edge down:
Of course Japan (twice the debt-to-GDP ratio as the U.S.!) has the lowest unemployment rate at around 4%.
Participant[quote=SD Realtor]Of course interest rates are determined by many things, not just the size of the debt. However by all of the factors that are used to determine those rates, we don’t really measure up very well.
You seem to have an attitude that we are untouchable, that the USA is this economic force with no soft underbelly. That there are simplistic solutions like hitting a reset button and printing money or buying our own debt and retiring it will work out. What you fail to see is that there is not an easy solution, and you can convince yourself that there is. Good man.
Doesn’t seem like many people are buying into your logic.
Once upon a time the US dollar was not the reserve currency of the world. Our relative dominance as an economic force has been a blink of an eye temporally. It can be screwed up pretty damn quickly.[/quote]
So you can’t show me an example of a country that was similarly situated as the U.S. and that ended up destroyed due to large deficits (Japan is a very good counterexample), but you are certain that large deficits in the U.S. will lead to disaster. Your logic is bulletproof.
Participant[quote=sreeb]Hyperinflation is directly related to money creation. You can’t get one without the other. All other aspects of Zimbabwe relate only to the motivation of the government to create the money.
[/quote]Half the country was destroyed. You can’t analogize Zimbabwe’s situation to the U.S. situation. Japan is a much better country to look to and their debt-to-GDP ratio is twice that of the U.S.
[quote=sreeb]
Do you believe that the EUROZONE can solve its collective problems by simply creating money and buying up the debt?
[/quote]It would be a much easier way out. The ECB could buy debt of the countries in trouble. This would drive down interest rates and devalue the Euro which would further help the economies of the countries at risk.
[quote=sreeb]
It is certainly possible that we may get a ring side seat on the result in the next year or two. Why do you think it hasn’t occured to them?
[/quote]Because the entire world is infatuated with deficits. Paul Krugman has been saying that the ECB should buy the debt of the countries in trouble. It makes a lot of sense to do so which is probably why the ECB isn’t doing it.
Participant[quote=SD Realtor]What do you mean in the US?
The jury is still out. The question about the US will not be resolved for years. Check back with me in 20 years about the US.
[/quote]Can you show me a country that had its debt denominated in its own currency where a high debt-to-GDP ratio led to large increases in interest rates? Maybe interest rates are dependent on something other than just the size of the public debt?
Participant[quote=SD Realtor]At some point, our creditors will no longer tolerate the situation and the cost of our credit will run much higher. [/quote]
Yes, I suspect that Bernanke let’s the U.S. Government know just how intolerable the U.S. debt situation is every time the Treasury pays interest on that debt to the Fed (right before handing that interest payment right back to the Treasury).
OH SHIT! BEHIND THAT BUSH! INVISIBLE BOND VIGILANTES! RUN!
-
AuthorPosts
