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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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An Authoritative Viewpoint
"The continuous injection of additional amounts of money at points of the economic system where it creates a temporary demand, which must cease when the increase of money stops or slows down, together with the expectation of a continuing rise in prices, draws labor and other resources into employments which can last so long as the increase of the quantity of money continues at the same rate...or perhaps even only so long at it continues to accelerate at a given rate...would rapidly lead to a disorganization of all economic activity."...F. A Von Hayek "The Pretence of Knowledge" Nobel Memorial Lecture 12/11/74
In other words failing the US consumer to continue consumption due to being tapped out and thusly keep Demand up, the FED and US Treasury has had to step into the breach to continue to juice the system or else... From this one can see why the FED quickly backed off it raising of interest rates and reducing it's balance sheet in December 2018. The Equity market telegraphed just how quickly the economy was moving south in light of the FED not juicing the system with low interest rates and continuing with a sea of liquidity. Both the FED and US Treasury have embarked on a path of no return since the economic system went default in the last quarter of 2008. Now it is only a matter of when they reach the limits of debt creation and currency debasement. What is interesting is the continuing foreign attraction for USD and US Debt Instruments. One is that foreign economics (if the US cant consume foreign workers are unemployed) are in worse shape than the US which will be the last high ground to be inundated, two that foreign capital is used to continue to juice the US economy so that foreign economies do not tank with the American economy. Notable is the fact that the major economies of the world continue to juice their own systems, printing money, creating deb and lending with easy terms. This is seen as a measure to keep an economic equilibrium in the face of USD currency debasement (the value of their currency also falls). Also as a measure to keep their own work force employed in the face of falling US demand.
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03-21-2019, 11:52 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The United States has long manipulated the USD to it's own advantage. By increasing the supply of USD it debases the USD's or aggregates being held in foreign hands, which is virtually everybody as the USD is the settlement currency for oil trades. This then is a defacto tax on foreign USD holders. If foreign currencies fall in value at the same rate as the USD through their own program of currency debasement (maintaining a USD/foreign currency equilibrium) then the United States is no longer collecting that de facto tax which is used to partially fund US military spending.
Here one can see why the Trump administration has been so adamant in wanting it's Allys to pay their fair share for their defense. The United States is no longer collecting the de facto tax via manipulating the USD.
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Copyright "Some Observer" Last edited by tabs; 03-21-2019 at 12:28 PM.. |
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03-21-2019, 12:23 PM
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Read that lecture, thanks; So, you're saying the FED and US Treasury are more into carpentry, and that they should perhaps be more like a gardener?
"If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. " |
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03-21-2019, 12:31 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Quote:
The appropriate environment is to curtail both governmental and consumer spending so as to not spend more than you make. Which means a severe economic retraction. Then there is nearly 50 years of deficit spending both public and private. All in the face of a nation that is facing ever increasing global competition including wage competition. The real.envirnoment is not going to be to your liking. The repo man is going to come and collect everything you have. You can not afford what you already have. It was all.bought on ever expanding credit. Which without the further expansion there of you can not make the payments. You see you were the rube who for the past 50 years has cosigned on those loans. Since no body wants to face such a harsh reality they live in denial which becomes an ever more absurd fiction while the social stress builds exponentially. Last edited by tabs; 03-21-2019 at 10:37 PM.. |
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03-21-2019, 10:23 PM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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In 2009 the "conventional wisdom" by the powers that be expected that with the turning on of the presses to increase monetary supply that inflation would kick back in and it would become business as usual again.
Yet the unexpected happened and that is for all the kings men and horses fixes inflation never reasserted itself because demand has remained moribund. It has taken all the juicing of the system by the Central Banks and Treasuries just to keep Demand on an even keel. The fatted calf American consumer is tapped out, broke. They have lower relative incomes from more unstable employment, have no reserves nor savings and are in debt up to their eyeballs. They have virtually hit the wall as consumers. In a sense all the juice is being thrown into the black hole of deflation just to keep Demand steady and the lights on. So the only thing anyone has to show for all the juicing is the hangover of all the debt created. |
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03-22-2019, 01:50 AM
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Join Date: Apr 2002
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Seems to me you left out something .....or maybe I missed it.....
Dec 4th.....early afternoon, as I recall, when the bull sheet hit the fan....I'm a tariff man  .Well....I misjudged the unanimous consensus of the Fed voting members back then...I was wrong too  I've been on the sidelines, doing nicely.....but just dabbled back in... Nary a fiscal conservative to be found anymore imo....except in a mirror? I dunno... Cheap, easy credit forever? I'm goin' fishin' on somebody else's dime..... I defended the Fed's "printing of $" (3T?), 'cause they were gonna pay it back....or so they said. They lied.....and I fell for it...I'm on my sofa and I am king
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03-22-2019, 02:01 AM
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03-22-2019, 02:46 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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03-22-2019, 03:21 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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03-22-2019, 03:29 AM
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03-22-2019, 03:38 AM
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Join Date: Apr 2001
Location: Linn County, Oregon
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Yep, cash is still accepted in most places. But it sure seems to take more of it for the same goods.
Wait...is that what they call inflation? But the government says inflation is low. Our government wouldn't lie to us, would it?
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"Now, to put a water-cooled engine in the rear and to have a radiator in the front, that's not very intelligent." -Ferry Porsche (PANO, Oct. '73) (I, Paul D. have loved this quote since 1973. It will remain as long as I post here.) |
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03-22-2019, 08:11 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
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03-22-2019, 08:35 AM
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I actually did pay twice as much fer a critter than I inended to yesterday..soft assets are where it's at now....I ain't wrong on this one
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03-22-2019, 08:43 AM
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It's high deflation mebbe.... Speaking of flation...is there such a thing? |
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03-22-2019, 08:46 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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On some items demand is quite strong as it is seen as a place to park extra cash in a more or less appreciating envirnoment. This spring Spoon prices at auction are once again sizzling. So to some extent we see a dictomy of in some areas tepid pricing and in others aggressive pricing. |
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03-22-2019, 08:54 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The 10 yr T inverted with the 3 month T on 3/22/19. The FED says no more rate hikes for this year and they ain't takin no more money off the table to shrink the balance sheet. Mfg is down in the EU and US for March. The word recession is creeping back into the lexicon.
Meanwhile the farce in Rome continues with the corrupt investigating the corrupt. Where economic proposals whose absurdity is staggering are being taken seriously as whole cloth by the leading lights of one party. Hitler at the end in the bunker moved phantom armies on the map to. The American people should look at themselves in the mirror and realize this isn't the vibrant nation that once was but one that is standing on the prepice of the greatest default in the history of mankind. You cant go home to a home that no longer exists. |
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03-23-2019, 01:37 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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The US is making Bernie Madoff look like a two bit chisler..your portfolios like Madoff client statements are pure fiction. Being composed of FED monopoly money backed by a mountain of debt that makes Everest look like a mole hill.*
Americans have lived large on the credit card for near 50 years. All the while deluding yourselves that you were the most with it and prosperous nation that has ever been. Americans were sold a real.load of hooey by that great and now sainted communicating actor in the WH. Americans sold their souls for a load of useless crap from China and elsewhere, most of which is now in landfills, the 3rd world or floating on or is at the bottom of the ocean. You have sold future generations of Americans birth rights out for your own immediate narcisstic pleasures. Where slavery will look like a good career choice to those future generations. So have at your debauchery and delusions while the music still plays. * Btw it does not matter one whit if you are completely solvent when the money you are playing with is monopoly money. Everything around you is going to be wiped clean and you are going to be dragged down in the vortex because everything you are holding valuation is based upon that fake money. At least 5000 years of human history says that precious metals Gold Silver and Platium will be the only money that has value. The Chinese seem to believe that when they back their Rmb based.oex exchange with Gold. Last edited by tabs; 03-23-2019 at 02:17 AM.. |
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03-23-2019, 02:02 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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You folks should read your history to find that one of the first things FDR did as President was close the banks and outlaw the holding of gold by Americans. My mother told me as a child that they had to turn in their gold coins. The rational was to stop a run on the paper currency in favor of gold.
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03-23-2019, 02:25 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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No one is going to intrude upon your delusions so long as most everybody believes the delusion. But when someone stops taking those Greenbacks for payment of goods and services the spell will have been broken. Meanwhile the delusion becomes evermore absurdly farcial as reality intrudes upon Alice.
But I say nothing new and am not exactly the first to lay most all of it out. What i can say for myself is that i came by my perceptions on my own hook, i figured it out on my own and as such know the subject inside out. Maybe I put a couple of pieces together that were only infered and not fully developed before. The Great conventional wisdom in 09 was that hyper inflation would take place with the massive sea of liquidity that was printed. That never took place because all that liquidity was used to fill the great abyss of deflation. Last edited by tabs; 03-23-2019 at 03:22 AM.. |
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03-23-2019, 02:54 AM
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A Man of Wealth and Taste
Join Date: Dec 2002
Location: Out there somewhere beyond the doors of perception
Posts: 51,063
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Quote:
So long as the roots are not severed, all is well, all will be well in the garden. In the garden, growth has its seasons. First comes spring and summer, but then we have fall and winter. Then comes spring and summer again. |
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03-23-2019, 03:53 AM
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