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Old 12-30-2018, 09:57 AM
 
8,492 posts, read 3,625,737 times
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Quote:
Originally Posted by LifeIsGood01 View Post
The problem is that not only do the Feds create money, but banks create money by lending 90% of what they take in and relending part of that and so on. We are a nation mired in debt with nothing to back up our currency besides the fact that if we go under so does the rest of the world.
This is not how modern money and banking works! Fractional reserve is essentially passe'.

Banks do not need our money to lend. Banks create loans, and the loans are the deposits.

Banks first make a loan, then find the funds.

https://www.theguardian.com/commenti...land-austerity

And the reason it is so important to the USA, is what we can do!

We can create funds to help solve some serious issues. Like shoring up our middle class. HC and infrastructure.

https://ellenbrown.com/2018/02/27/fu...round-america/

We can and should understand and do so called people's QE. Because we the people should control and benefit, not just those who understand (the rich).
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Old 12-30-2018, 11:05 PM
 
812 posts, read 450,053 times
Reputation: 1206
Quote:
Originally Posted by Hoonose View Post
Read my last post and then try again.

Any new moneys that the Fed created for QE will be neutralized after the unwinding. No taxpayers were or will be needed to complete this. $4-5T's of new USD/debt will all disappear as it gets swept back to the Treasury.

QE's and and the Feds actions in saving financial institutions all over the world definitely helped equities supremely and at least assisted with the worlds general economy's recovery. That resultant stock bull market may be over, but it was very real.
Clearly, without FED spending (we used to call it printing) there would be no Bull Market. So was this really a Bull Market? Yes, clearly stocks have gone up. But this was the only Bull Market in stock market history that has been quite literally subsidized by FED or Government Spending.

Where did the FED get the money to subsidize this Bull Market? Well, they printed it (even though they didn't really print it, they 'spreadsheeted it'). Does that make the money free? Do you really believe that this extra, created, subsidy is free? If the FED subsidy to the markets to avoid the Bear Market from 2001-PRESENT was free money, then I have no arguments with the FED. Hell why don't they subsidize the markets all the time, creating millionaires and billionaires all the time with their free money? It sounds like a good idea. There is no money to pay back. It is make believe money in a way. But does that make the stock market gains 'make believe money' also? Does all this 'make believe money' simply vanish when we wake up? Do we ever have to wake up? Or can we just go spending make believe (FED printed or not printed free money) through the rest of our history, everybody happy, no one punished for this 'adventure in creative government'?


Powell seems to understand that debt is a problem for America, and for the world. His UNWIND of the balance sheet has only just begun and it has not been kind to world markets. The alternative is bankruptcy.
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Old 12-30-2018, 11:16 PM
 
812 posts, read 450,053 times
Reputation: 1206
Quote:
Originally Posted by LifeIsGood01 View Post
The problem is that not only do the Feds create money, but banks create money by lending 90% of what they take in and relending part of that and so on. We are a nation mired in debt with nothing to back up our currency besides the fact that if we go under so does the rest of the world.

Many middle class people want to live beyond their means, poor people have no choice to live beyond their means and borrow on credit cards to survive. The rich run this nation and they don't care about the poor or that fact that medical costs and prescription prices for medications are out of control or that most families are on catastrophic illness or injury away from bankruptcy. The rest are living paycheck to paycheck, and those who have saved and have a few hundred thousand will lose it in one or two years should they ever need nursing home care .

60% of people don't have $500 for an emergency which is crazy.

Our Country is run by big business and unless we can get lobbyists and corporate campaign contributions out of out elections we will be doomed more than we can imagine. We are living in an imaginary economy where the dollar is not worth anything.
We have too much DEBT everywhere. We need to get rid of a lot of debt. We won't be able to service all this debt at higher rates - but we don't have the option of lowering rates again, and encouraging more debt (unless we are mad - and refuse to look at anything except the short-term, which means we may not survive as a nation) - so defaults and bankruptcies of all the zombie consumers and corporations start coming in to view.

A LOT of companies survived in the last decade because they could borrow money at 0% interest and pretend they still had earnings. If they bought back shares, it was made to look even better. When the next recession comes are we going to have the tax payers bail out the corporations again??? If so, then the taxpayers should own all the shares of the companies, or at least the % of the shares the bailout comprises. WELFARE FOR THE RICH, what a concept.
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Old 12-31-2018, 08:27 AM
 
3,292 posts, read 2,826,038 times
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Quote:
Originally Posted by MrRational View Post
And ever rising birth numbers -mostly by the cohort of the least able- requiring ever rising levels of assistance.
Modern evolution rewards promiscuity and carelessness, especially when combined.
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Old 12-31-2018, 09:18 AM
 
8,492 posts, read 3,625,737 times
Reputation: 1657
Quote:
Originally Posted by C2BP View Post
Clearly, without FED spending (we used to call it printing) there would be no Bull Market. So was this really a Bull Market? Yes, clearly stocks have gone up. But this was the only Bull Market in stock market history that has been quite literally subsidized by FED or Government Spending.

Where did the FED get the money to subsidize this Bull Market? Well, they printed it (even though they didn't really print it, they 'spreadsheeted it'). Does that make the money free? Do you really believe that this extra, created, subsidy is free? If the FED subsidy to the markets to avoid the Bear Market from 2001-PRESENT was free money, then I have no arguments with the FED. Hell why don't they subsidize the markets all the time, creating millionaires and billionaires all the time with their free money? It sounds like a good idea. There is no money to pay back. It is make believe money in a way. But does that make the stock market gains 'make believe money' also? Does all this 'make believe money' simply vanish when we wake up? Do we ever have to wake up? Or can we just go spending make believe (FED printed or not printed free money) through the rest of our history, everybody happy, no one punished for this 'adventure in creative government'?


Powell seems to understand that debt is a problem for America, and for the world. His UNWIND of the balance sheet has only just begun and it has not been kind to world markets. The alternative is bankruptcy.
You still do not get it.

The Fed did indeed create $T's out of thin air. ABSOLUTELY free!

Yes the QE helped with the post crash Bull Market.

It was not subsidized by Federal Gov't spending or our taxpayers.

The new money was not a market subsidy. Although over time there had to be some leakage, the bulk of the money sat as excess bank reserves.

QE lowered interest rates and THAT helped the equities.

Equity investments thus created rich folks, not the Fed money per se.

The Fed moneys were absolutely real. They will cease to become real when unwinding ends.

The Fed obviously won't go bankrupt. The Federal Gov't cannot go bankrupt except by choice of 'we the people' or our elected officials. The Federal gov't can created all the USD it wants, so it should be obvious that it cannot inherently go bankrupt.

Of course this is not obvious to many many people.
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Old 01-04-2019, 07:30 PM
 
221 posts, read 106,479 times
Reputation: 606
Powell buckeled. Too bad he didn't stand his ground. More proof of the wall street casino is bought and paid for by politicians.
One day it will unfold.
C2pb is correct.
Mathjakhole will be along shortly to get the last word in.
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Old 01-05-2019, 06:37 PM
 
Location: Ohio
18,456 posts, read 13,556,876 times
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Quote:
Originally Posted by C2BP View Post
Our economy stopped expending in 2001.
Actually, no, but my hope is that one day you'll graduate from reading milk cartons to reading the back of cereal boxes to gain knowledge.

Quote:
Originally Posted by davebarnes View Post
Including your meds.
Hahahaha...

Quote:
Originally Posted by Hoonose View Post
Cognitive dissonance.

Creating money causes inflation. Period.
No, it doesn't.

Quote:
Originally Posted by Returning2USA View Post
I'm not disagreeing with you CB but I've been hearing about the coming deflation for about 10 years.

Has it started yet?

Stats?
You'll be hearing about it for the next 20+ years until it actually occurs, and then he'll have the audacity to claim he was right.

Quote:
Originally Posted by homelessinseattle View Post
C2pb is correct.
No, he isn't. You're confused. He's C2BP, not R2D2.
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Old 01-05-2019, 07:18 PM
 
8,492 posts, read 3,625,737 times
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Quote:
Originally Posted by Mircea View Post
Quote:
Originally Posted by Hoonose View Post
Cognitive dissonance.

Creating money causes inflation. Period.



No, it doesn't.


And that is what I meant.
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Old 01-06-2019, 02:17 PM
 
Location: Silicon Valley
3,086 posts, read 1,352,496 times
Reputation: 5478
Quote:
Originally Posted by mysticaltyger View Post
Even though our CD prognosticators of doom are almost certainly wrong with their specifics and timing...I think they are directionally correct. The U.S. and most other developed countries have oversized bureaucracies, aging populations, sluggish economic growth, low birth rates, massive money printing, and high and increasing debt levels. These are not good signs.
I would be interested in a discussion there, because I too believe that a shrinking base of credit worthy population will inevitably be the root cause of forced deleveraging of economies.

I've been intrigued to a point on where this strange insistence comes from. Historically, there was a wax/wane economically, though it's really hard to know as records are so open to interpretation and as most everything was micro based, you need to take pretty giant leaps of faith. However, a couple of items:

The world started growing, economically, much faster as it got freer. I mean, if you were a slave, or a serf or in a place where you would never have capital or could safely keep capital....there wouldn't be much point in improving things. It could be downright dangerous even.....ehh that's the guy that made that crossbow thing isn't it....kill him so he doesn't show anyone else how to make one, I want the only one.... While they weren't called the same, IP rights were important. Later they became regulated by guilds.

So in the place of a slow innovation environment, a seasonality is possible. Why? War of course.

Well, wars with higher percentage of totality involvement would come, trim a generation and innovative productivity gains were relatively slow (who innovates when their King/Owner owns everything?), and then await the next generation....when there's relatively few workers after a war, wages are high for workers free enough to set their own price. As the population grows, the price of labor begins to decrease, and the utility value derived from set labor begins to decrease....whether by using less fertile soil, or embarking on project of lesser utility all while inflation kicks in as consumption costs with increased demand and high capital fixed capacity points cannot find a way to suffice all demand.

Hence the phrase, when the economy is terrible, unleash the dogs of war, as it shifts all into a new occupation...warfare. It may be costly, but at one point the dead were free, so if you won, you had the spoils of war to pay. If you lost...it didn't matter anyway. End the war season, start the spring.

Now along comes the US and all her freedom loving filth. They innovate....there's honestly no more fixed capacity standpoints that build up a huge population of unutilized people....instead it's the other way....the innovation starts making human labor less valuable relative to the growing value of automation. As such, we experience a capital boom unlike the rest of the world. As a bonus, we have two giant oceans between us and any military power in our development phase that could destroy the place. Essentially we have the civil war....and while capital allocation is certainly affected in military spend, we've succeeded in keeping all the big destructive wars off US soil.

The population of the US grows unchecked. Continued peace and tranquility becomes self-assured. Is a middle class member of America not more credit-worthy than the richest merchant in war-torn Syria at the moment?

I mean, when we look at the economic powers, one would have thought that the Netherlands with her freedoms and proximity to major cities would be central power, but there's no defense. The European financial markets developed....in London. Taiwan developed far before modern China. Japan, has long dominated in Asia prior to her debilitating depopulation.

So I think this is where you start shifting from happenstance correlation between generation ebb and flow and economic growth in areas. This is why you have seen a historical boom. The population of the world is busy engaging in commerce instead of war. The global marketplace is now huge. There are a lot more creditworthy market participants than there used to be.

Now, if continued innovation reaches a point where it begins to shrink the market of credit worthy participants, by virtue of their human labor value becomes too low...this would bring us down from our lofty peaks. If a trade war that is expected to turn into a multigenerational cold war carves out a segment of once creditworthy market participants, this could potentially turn our market economies of scale into reverse....but likely just cause a new market winner.

As for prices being too high or low, caused by cheap credit....this seems unlikely. It may misallocate capital, but it won't derail the whole thing but temporarily. So long as there's freedom that is. Hence where socialism fails....it never gets around the genius of market mechanism. It can't self-repair like capitalism does.
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Old Yesterday, 02:59 PM
 
1,167 posts, read 358,406 times
Reputation: 2315
Why do people think putting certain words in all capital letters makes their point more compelling?

It really DOES not.
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