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a great, although difficult, read! (it might take more than one sitting, especially with the comment links ) one of the best paragraphs:
Finally, the idea that to destroy the allocative ability of markets for capital means by suppressing interest rates, subsidising asset prices, and condoning false accounting is in some way a panacea (because it will delude people into making the very same misapprehension of their means as was the initial cause of their woes, while allowing the marooned owners of overindebted property to offset their very real legacy of losses with new, fictional gains) is also to risk burning down the entire house lest the embers in the grate of an unoccupied room flicker and go out, untended.
also, for those who don't have the time now the comments are hilarious and interesting, as always. i liked i-dogs comment:
Hmmmm, I wonder what they're up to:
•burning potential food as vehicle fuel
•forcing more borrowing to pave roads to nowhere
•burdening the young with cheap student loans (while destroying jobs through outsourcing, regulations and taxes)
•burdening the poor with cheap car loans (on a depreciating 'asset')
•burdening the middle class with cheap housing loans (on a depreciating 'asset')
•fleecing private investors through money supply inflation, HFTs and massive naked shorts
•ramping up internal security in the wake of the OBL farce
Almost makes you think that they're not really trying to get us out of the mess they've created, doesn't it?
the EPA regulation of "dust" is outrageous! we are going so far in the wrong direction now!
oh, and happy mother's day to all you mothers.
Last edited by floridasandy; 05-08-2011 at 05:17 AM..
"a great, although difficult, read! (it might take more than one sitting, especially with the comment links ) one of the best paragraphs:
Finally, the idea that to destroy the allocative ability of markets for capital means by suppressing interest rates, subsidising asset prices, and condoning false accounting is in some way a panacea (because it will delude people into making the very same misapprehension of their means as was the initial cause of their woes, while allowing the marooned owners of overindebted property to offset their very real legacy of losses with new, fictional gains) is also to risk burning down the entire house lest the embers in the grate of an unoccupied room flicker and go out, untended."
Horsehockey. That paragraph is the sign of a totally inept writer inebriated with his own verbosity. Further, basic spell check shows three erroneous spellings in it. He probably gets paid per word and uses obfuscation to keep editors at bay.
are you implying that we don't have BS statistics anymore, that the government isn't falsely trying to prop up housing prices to keep the wild spending spree going, and that interest rates are being kept artificially low (which intentionally hurts anybody trying to save any money in this country)?
which part of the article is factually incorrect?
if the reading is too difficult, then this sums it up:
Essentially it says there is no free lunch, you can't get something for nothing, and money does not grow on trees - but printing money will make it appear, for a while, that these real truths are false.
if money could actually be printed to replace the shrinking private sector, then nobody would have to work, and their "paychecks" would just be printed out so they could go on spending sprees to prop the economy up, but in the real world it doesn't work that way at all.
what happens when the printing stops being effective?
ps, i think what you perceive as "typos" might be the king's english spelling of words.
Last edited by floridasandy; 05-09-2011 at 04:05 AM..
A guy who has a pseudonym of Tyler Durden from fight club...a character that wanted to obliterate modern financial markets using violent means. Sounds more like the incarnation of Shiva to me.
The article isn't in itself incorrect, largely because the guy doesn't seem to know what in the hell he is talking about in the first place. Posting random graphs of unrelated things, comparing items/words that he seems to have creatively redefined (curiously not telling anyone else), and hurtling from topic to topic like a crazed hummingbird on meth is laughable at best. It shows more of a need of powerful anti-psychotics.
The writing reminded me of a time many years ago, when I worked at a state hospital and we used to put straw hats on all the patients capable of going for a walk, then take them out for a stroll around the streets. A few of them would be talking to their inner demons, a few would be semi-catatonic but have the trace of a smile on their faces, and a few would hold a semi-lucid conversation. More than one of them would comment that it was a nice day out.
I would never take their analysis of the world around them as a basis for investment or governmental policy, even though they had the basic concept of their immediate environment correct.
To summarize - the writer is a self-absorbed twit. Writing is all about communication. If you cannot manage to communicate clearly then your other thought processes are also suspect. There is a huge difference between the writings in a profession like advanced electronics, math, or metallurgy, where very specific terms are used to denote an exact concept or material, and the writing is necessarily dense to an outsider because of the educational leap required to converse knowledgeably on the subject, and some twit bandying big words to attempt to impress.
Simply put, I have no time for such nonsense. The very fact that you can interpret and come up with a more lucid summary proves my point that clearer writing IS possible. If I want to play puzzle games, I'll go muse over some cartouche or Mayan glyph, not attempt to decoct the essence of meaning from some incoherent pot-stirrer's pot of herbs and eyes Of Newt.
A guy who has a pseudonym of Tyler Durden from fight club...a character that wanted to obliterate modern financial markets using violent means. Sounds more like the incarnation of Shiva to me.
The article isn't in itself incorrect, largely because the guy doesn't seem to know what in the hell he is talking about in the first place. Posting random graphs of unrelated things, comparing items/words that he seems to have creatively redefined (curiously not telling anyone else), and hurtling from topic to topic like a crazed hummingbird on meth is laughable at best. It shows more of a need of powerful anti-psychotics.
actually the writer was sean corrigan. i just posted it from zero hedge, but it is available at other sources.
maybe you want sean's simplified version:
savings and idle capital will be better protected if they are denominated in gold, silver, etc. If you are going to play with fiat, recognize that the game is complex. The economy will not be homogenous, it will contain areas of growth and loss. Further, as this money creation mechanism overheats, there will serious consequences and the value of your fiat will be compromised.
Finally, regardless of central bank shenanigans, production of goods and services (Asia, Brazil, etc.) will continue to create real wealth. The currency that wealth is denominated in will increase in value.
Consumption through credit creation will consume wealth and diminish the value of the currency that participates.
For all those traders that hope to profit through the misallocations of capital and regulatory graft that accompany them: your proximity to the center of power will determine your ultimate success.
that should be clearer. the only thing that i might agree with is that shiva the transformer might not be a great analogy, but certainly would be designed to draw attention from people who might not otherwise be interested in an austrian economics discussion. you can't blame the guy for trying to open up the discussion to others.
i imagine that everyone else has already formed their opinion on the bernanke money printing /inflation inducing shenanigans. maybe a better title for them would be bernanke, destroyer of savings and real production.
Last edited by floridasandy; 05-09-2011 at 01:07 PM..
That takes 1 point from not even wrong, to very wrong and disproved 1,000 times.
Quote:
Originally Posted by floridasandy
savings and idle capital will be better protected if they are denominated in gold, silver, etc. If you are going to play with fiat, recognize that the game is complex. The economy will not be homogenous, it will contain areas of growth and loss. Further, as this money creation mechanism overheats, there will serious consequences and the value of your fiat will be compromised.
No, wrong. With a static money supply and an increasing population (or economic activity), you will get deflation. Gold becomes more scarce as more people demand it, which would bring a 100% stable rate of return without investment. Debt, the stock market, mortgages would all pretty well stop...and people would only buy the necessary to survive (why buy a chair when next year you can buy a chair and something). People who have debt would be screwed, as the dollar next year you pay back will be worth more then...plus an increasing interest rate.
Savings value would increase for those who already have it, while making each proceeding generation poorer then the one before it. Wages would decline as goods become cheaper, saving less money in value now as the generation before it, while increasing the value of money people already have it each year.
Fiat money management is more complex and fluid, which is why those with more teeth then brain cells can't cope with the concept.
That doesn't mean I don't like the concept. I have a ton of cash/equivalents and no debt, so it I would come out better off. If you don't, you are voting to bone yourself.
Quote:
Originally Posted by floridasandy
Finally, regardless of central bank shenanigans, production of goods and services (Asia, Brazil, etc.) will continue to create real wealth. The currency that wealth is denominated in will increase in value.
Production of goods and services in other countries produce wealth, but not in the US? Let's take Brazil for example. Brazil has a much higher rate of inflation then the US. You can't have one country stated as losing value to inflation, and compare it to another stating it is gaining value ...that is inflating it's own currency at twice the rate the first country is.
That defines logic, and mathematics.
Quote:
Originally Posted by floridasandy
Consumption through credit creation will consume wealth and diminish the value of the currency that participates.
No &#%$ sherlock, welcome to public economics 101. Too much debt to buy crap causes bad things, which is why financial control is necessary. Take it away and you get a credit crisis, which is what happened now. Debt itself is not the problem, badly managed debt is...like food. Eat what you need to survive and thrive, but binge on it and you because a fat bastard waiting to die.
That takes 1 point from not even wrong, to very wrong and disproved 1,000 times.
No, wrong. With a static money supply and an increasing population (or economic activity), you will get deflation. Gold becomes more scarce as more people demand it, which would bring a 100% stable rate of return without investment. Debt, the stock market, mortgages would all pretty well stop...and people would only buy the necessary to survive (why buy a chair when next year you can buy a chair and something). People who have debt would be screwed, as the dollar next year you pay back will be worth more then...plus an increasing interest rate.
Savings value would increase for those who already have it, while making each proceeding generation poorer then the one before it. Wages would decline as goods become cheaper, saving less money in value now as the generation before it, while increasing the value of money people already have it each year.
Fiat money management is more complex and fluid, which is why those with more teeth then brain cells can't cope with the concept.
That doesn't mean I don't like the concept. I have a ton of cash/equivalents and no debt, so it I would come out better off. If you don't, you are voting to bone yourself.
Production of goods and services in other countries produce wealth, but not in the US? Let's take Brazil for example. Brazil has a much higher rate of inflation then the US. You can't have one country stated as losing value to inflation, and compare it to another stating it is gaining value ...that is inflating it's own currency at twice the rate the first country is.
That defines logic, and mathematics.
No &#%$ sherlock, welcome to public economics 101. Too much debt to buy crap causes bad things, which is why financial control is necessary. Take it away and you get a credit crisis, which is what happened now. Debt itself is not the problem, badly managed debt is...like food. Eat what you need to survive and thrive, but binge on it and you because a fat bastard waiting to die.
you are arguing deflation with monetization of debt?
i have to say that our current fiat money managers that we have now are doing a swell job, don't you think?
riots everywhere in the world just about
government overthrow attempts just about everywhere
a frozen housing market
increasing gas prices
increasing food prices
loss of consumer confidence
i am not seeing deflation, but ramping up of prices of things people actually need to live and unrest because of it.
you are arguing deflation with monetization of debt?
i have to say that our current fiat money managers that we have now are doing a swell job, don't you think?
riots everywhere in the world just about
government overthrow attempts just about everywhere
a frozen housing market
increasing gas prices
increasing food prices
loss of consumer confidence
i am not seeing deflation, but ramping up of prices of things people actually need to live and unrest because of it.
Are you serious? I stated what would happen if a country with a growing population went to a pure gold based monetary system...that's extremely clear in the quote and the first sentence. Deflation would not happen when you have central inflation, that doesn't even make any sense.
Do you have any idea what these words actually mean? I have never seen anyone take 2 terms that mean opposite things and mash them together like that. No one with even the most elementary knowledge of the subjects being presented would (or even could) do that.
I feel stupider for even reading your post, and seeing a glimpse into what you believe.
Are you serious? I stated what would happen if a country with a growing population went to a pure gold based monetary system...that's extremely clear in the quote and the first sentence. Deflation would not happen when you have central inflation, that doesn't even make any sense.
Do you have any idea what these words actually mean? I have never seen anyone take 2 terms that mean opposite things and mash them together like that. No one with even the most elementary knowledge of the subjects being presented would (or even could) do that.
I feel stupider for even reading your post, and seeing a glimpse into what you believe.
we don't have a static money supply so i didn't understand what you were even trying to argue in that post. for someone who didn't even recognize who wrote the article, i wouldn't be throwing stones at other posters.
Last edited by floridasandy; 05-10-2011 at 08:58 PM..
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