[kewp]

[quote=patientrenter]Why isn’t deflation or inflation a choice that government can make at will, through the magic of the many money creation tools at the government’s disposal?

Am I missing something here?[/quote]

You are missing that our currency is based on debt and all the ‘inflation’ of the past decade was via borrowed money.

So those inflated assets have to deflate as they are either sold of or defaulted on to service the same debt that was used to purchase them with. Or the debt itself is defaulted on and the banks get stingy and refuse to lend out money for further inflation.

The Fed is pushing on a string. They can print new money but they can’t force what lenders/borrowers do with it. And apparently the lenders are just buying treasuries (which should surprise no one).

It boggles my mind that this is so hard for people to understand. Debt deflation is the natural result of a credit bubble. It is unavoidable.

Japan is different in a very fundamental way as they tend to honor their debts more. There are many Japanese that are servicing mortgages for properties that are only worth a fraction of what they paid for them. Its part of their culture.

That won’t happen here so the correction should be much swifter. Look at the recent news that over 50% of loan mods fail. Of course they do, as you can’t force someone to pay more for an asset than what its worth if they don’t have to. They will just walk away.

The only alternative to this is hyperinflation, where the government just gives people cash right from the printing press. Thank God this hasn’t happened yet, but who know what the future may bring.

[kewp]

[quote=patientrenter]Why isn’t deflation or inflation a choice that government can make at will, through the magic of the many money creation tools at the government’s disposal?

Am I missing something here?[/quote]

You are missing that our currency is based on debt and all the ‘inflation’ of the past decade was via borrowed money.

So those inflated assets have to deflate as they are either sold of or defaulted on to service the same debt that was used to purchase them with. Or the debt itself is defaulted on and the banks get stingy and refuse to lend out money for further inflation.

The Fed is pushing on a string. They can print new money but they can’t force what lenders/borrowers do with it. And apparently the lenders are just buying treasuries (which should surprise no one).

It boggles my mind that this is so hard for people to understand. Debt deflation is the natural result of a credit bubble. It is unavoidable.

Japan is different in a very fundamental way as they tend to honor their debts more. There are many Japanese that are servicing mortgages for properties that are only worth a fraction of what they paid for them. Its part of their culture.

That won’t happen here so the correction should be much swifter. Look at the recent news that over 50% of loan mods fail. Of course they do, as you can’t force someone to pay more for an asset than what its worth if they don’t have to. They will just walk away.

The only alternative to this is hyperinflation, where the government just gives people cash right from the printing press. Thank God this hasn’t happened yet, but who know what the future may bring.

[kewp]

[quote=patientrenter]Why isn’t deflation or inflation a choice that government can make at will, through the magic of the many money creation tools at the government’s disposal?

Am I missing something here?[/quote]

You are missing that our currency is based on debt and all the ‘inflation’ of the past decade was via borrowed money.

So those inflated assets have to deflate as they are either sold of or defaulted on to service the same debt that was used to purchase them with. Or the debt itself is defaulted on and the banks get stingy and refuse to lend out money for further inflation.

The Fed is pushing on a string. They can print new money but they can’t force what lenders/borrowers do with it. And apparently the lenders are just buying treasuries (which should surprise no one).

It boggles my mind that this is so hard for people to understand. Debt deflation is the natural result of a credit bubble. It is unavoidable.

Japan is different in a very fundamental way as they tend to honor their debts more. There are many Japanese that are servicing mortgages for properties that are only worth a fraction of what they paid for them. Its part of their culture.

That won’t happen here so the correction should be much swifter. Look at the recent news that over 50% of loan mods fail. Of course they do, as you can’t force someone to pay more for an asset than what its worth if they don’t have to. They will just walk away.

The only alternative to this is hyperinflation, where the government just gives people cash right from the printing press. Thank God this hasn’t happened yet, but who know what the future may bring.

[kewp]

[quote=patientrenter]Why isn’t deflation or inflation a choice that government can make at will, through the magic of the many money creation tools at the government’s disposal?

Am I missing something here?[/quote]

You are missing that our currency is based on debt and all the ‘inflation’ of the past decade was via borrowed money.

So those inflated assets have to deflate as they are either sold of or defaulted on to service the same debt that was used to purchase them with. Or the debt itself is defaulted on and the banks get stingy and refuse to lend out money for further inflation.

The Fed is pushing on a string. They can print new money but they can’t force what lenders/borrowers do with it. And apparently the lenders are just buying treasuries (which should surprise no one).

It boggles my mind that this is so hard for people to understand. Debt deflation is the natural result of a credit bubble. It is unavoidable.

Japan is different in a very fundamental way as they tend to honor their debts more. There are many Japanese that are servicing mortgages for properties that are only worth a fraction of what they paid for them. Its part of their culture.

That won’t happen here so the correction should be much swifter. Look at the recent news that over 50% of loan mods fail. Of course they do, as you can’t force someone to pay more for an asset than what its worth if they don’t have to. They will just walk away.

The only alternative to this is hyperinflation, where the government just gives people cash right from the printing press. Thank God this hasn’t happened yet, but who know what the future may bring.

[kewp]

[quote=patientrenter]Why isn’t deflation or inflation a choice that government can make at will, through the magic of the many money creation tools at the government’s disposal?

Am I missing something here?[/quote]

You are missing that our currency is based on debt and all the ‘inflation’ of the past decade was via borrowed money.

So those inflated assets have to deflate as they are either sold of or defaulted on to service the same debt that was used to purchase them with. Or the debt itself is defaulted on and the banks get stingy and refuse to lend out money for further inflation.

The Fed is pushing on a string. They can print new money but they can’t force what lenders/borrowers do with it. And apparently the lenders are just buying treasuries (which should surprise no one).

It boggles my mind that this is so hard for people to understand. Debt deflation is the natural result of a credit bubble. It is unavoidable.

Japan is different in a very fundamental way as they tend to honor their debts more. There are many Japanese that are servicing mortgages for properties that are only worth a fraction of what they paid for them. Its part of their culture.

That won’t happen here so the correction should be much swifter. Look at the recent news that over 50% of loan mods fail. Of course they do, as you can’t force someone to pay more for an asset than what its worth if they don’t have to. They will just walk away.

The only alternative to this is hyperinflation, where the government just gives people cash right from the printing press. Thank God this hasn’t happened yet, but who know what the future may bring.

[kewp]

[quote=meadandale]kewp you need to practice what you preach…

Didn’t you just get hired at UCSD? The UC system is a poster child for government largess and excess. Apparently you don’t follow the news about the institution you work for.[/quote]

Everyone I know in the UC system work their butts off. The starting salaries for many of the faculty are under 50k a year. And these are all Phd’s of course. None of them are here to make bank or slack off. They want to teach.

And trust me, nobody hates public sector dead wood more than the staff that have to cover for them. Hence my enthusiasm for budget cuts; as it might give some departments the leverage with HR to get rid of the poor performers.

For myself personally, I know that replacing me with a private sector consultant would cost the Uni at least 3-5 times my salary on an annual basis. And that is a conservative estimate.

So apparently either I am grossly underpaid or the public sector is much more efficient than the private sector in my case. Take your pick.

[kewp]

[quote=meadandale]kewp you need to practice what you preach…

Didn’t you just get hired at UCSD? The UC system is a poster child for government largess and excess. Apparently you don’t follow the news about the institution you work for.[/quote]

Everyone I know in the UC system work their butts off. The starting salaries for many of the faculty are under 50k a year. And these are all Phd’s of course. None of them are here to make bank or slack off. They want to teach.

And trust me, nobody hates public sector dead wood more than the staff that have to cover for them. Hence my enthusiasm for budget cuts; as it might give some departments the leverage with HR to get rid of the poor performers.

For myself personally, I know that replacing me with a private sector consultant would cost the Uni at least 3-5 times my salary on an annual basis. And that is a conservative estimate.

So apparently either I am grossly underpaid or the public sector is much more efficient than the private sector in my case. Take your pick.

[kewp]

[quote=meadandale]kewp you need to practice what you preach…

Didn’t you just get hired at UCSD? The UC system is a poster child for government largess and excess. Apparently you don’t follow the news about the institution you work for.[/quote]

Everyone I know in the UC system work their butts off. The starting salaries for many of the faculty are under 50k a year. And these are all Phd’s of course. None of them are here to make bank or slack off. They want to teach.

And trust me, nobody hates public sector dead wood more than the staff that have to cover for them. Hence my enthusiasm for budget cuts; as it might give some departments the leverage with HR to get rid of the poor performers.

For myself personally, I know that replacing me with a private sector consultant would cost the Uni at least 3-5 times my salary on an annual basis. And that is a conservative estimate.

So apparently either I am grossly underpaid or the public sector is much more efficient than the private sector in my case. Take your pick.

[kewp]

[quote=meadandale]kewp you need to practice what you preach…

Didn’t you just get hired at UCSD? The UC system is a poster child for government largess and excess. Apparently you don’t follow the news about the institution you work for.[/quote]

Everyone I know in the UC system work their butts off. The starting salaries for many of the faculty are under 50k a year. And these are all Phd’s of course. None of them are here to make bank or slack off. They want to teach.

And trust me, nobody hates public sector dead wood more than the staff that have to cover for them. Hence my enthusiasm for budget cuts; as it might give some departments the leverage with HR to get rid of the poor performers.

For myself personally, I know that replacing me with a private sector consultant would cost the Uni at least 3-5 times my salary on an annual basis. And that is a conservative estimate.

So apparently either I am grossly underpaid or the public sector is much more efficient than the private sector in my case. Take your pick.

[kewp]

[quote=meadandale]kewp you need to practice what you preach…

Didn’t you just get hired at UCSD? The UC system is a poster child for government largess and excess. Apparently you don’t follow the news about the institution you work for.[/quote]

Everyone I know in the UC system work their butts off. The starting salaries for many of the faculty are under 50k a year. And these are all Phd’s of course. None of them are here to make bank or slack off. They want to teach.

And trust me, nobody hates public sector dead wood more than the staff that have to cover for them. Hence my enthusiasm for budget cuts; as it might give some departments the leverage with HR to get rid of the poor performers.

For myself personally, I know that replacing me with a private sector consultant would cost the Uni at least 3-5 times my salary on an annual basis. And that is a conservative estimate.

So apparently either I am grossly underpaid or the public sector is much more efficient than the private sector in my case. Take your pick.

[kewp]

[quote=sdduuuude]No. Ron Paul’s KoolAid is sdduuuude flavored. Get it right 😉

So, kewp, you think we should bail out these banks or not ?[/quote]

Nope, no bail-outs. Let the market figure out how much these turds are worth.

I’ve worked in the private sector enough to know that businesses don’t fail because of lousy employees (they tend to get fired) but because of bad management.

And bad management tends to promote themselves and hire more bad management. The only solution is a good, old-fashioned purge.

I would only support a bailout under the following conditions.

1. Salary cap at 5X the lowest wage.

2. No dividends or bonuses until the taxpayers are paid back, with interest.

[kewp]

[quote=sdduuuude]No. Ron Paul’s KoolAid is sdduuuude flavored. Get it right 😉

So, kewp, you think we should bail out these banks or not ?[/quote]

Nope, no bail-outs. Let the market figure out how much these turds are worth.

I’ve worked in the private sector enough to know that businesses don’t fail because of lousy employees (they tend to get fired) but because of bad management.

And bad management tends to promote themselves and hire more bad management. The only solution is a good, old-fashioned purge.

I would only support a bailout under the following conditions.

1. Salary cap at 5X the lowest wage.

2. No dividends or bonuses until the taxpayers are paid back, with interest.

[kewp]

[quote=sdduuuude]No. Ron Paul’s KoolAid is sdduuuude flavored. Get it right 😉

So, kewp, you think we should bail out these banks or not ?[/quote]

Nope, no bail-outs. Let the market figure out how much these turds are worth.

I’ve worked in the private sector enough to know that businesses don’t fail because of lousy employees (they tend to get fired) but because of bad management.

And bad management tends to promote themselves and hire more bad management. The only solution is a good, old-fashioned purge.

I would only support a bailout under the following conditions.

1. Salary cap at 5X the lowest wage.

2. No dividends or bonuses until the taxpayers are paid back, with interest.

[kewp]

[quote=sdduuuude]No. Ron Paul’s KoolAid is sdduuuude flavored. Get it right 😉

So, kewp, you think we should bail out these banks or not ?[/quote]

Nope, no bail-outs. Let the market figure out how much these turds are worth.

I’ve worked in the private sector enough to know that businesses don’t fail because of lousy employees (they tend to get fired) but because of bad management.

And bad management tends to promote themselves and hire more bad management. The only solution is a good, old-fashioned purge.

I would only support a bailout under the following conditions.

1. Salary cap at 5X the lowest wage.

2. No dividends or bonuses until the taxpayers are paid back, with interest.

[kewp]

[quote=sdduuuude]No. Ron Paul’s KoolAid is sdduuuude flavored. Get it right 😉

So, kewp, you think we should bail out these banks or not ?[/quote]

Nope, no bail-outs. Let the market figure out how much these turds are worth.

I’ve worked in the private sector enough to know that businesses don’t fail because of lousy employees (they tend to get fired) but because of bad management.

And bad management tends to promote themselves and hire more bad management. The only solution is a good, old-fashioned purge.

I would only support a bailout under the following conditions.

1. Salary cap at 5X the lowest wage.

2. No dividends or bonuses until the taxpayers are paid back, with interest.

[Author]

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