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Is it time for the FED to restore interest rates?

Discussion in 'Economics, Business, and Taxes' started by Days, Oct 14, 2015.

  1. EatTheRich

    EatTheRich President

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    Not only did it not happen, but the dollar is in fact unusually strong. If interest rates are increased, it will become stronger. Part of the problem for U.S. industry is that they can't find a (reasonable) monetary policy that will weaken the dollar enough to boost export sales.

    It happened dramatically. The discussion was about interest rates and someone asked me how many cycles did I think the dollar had left before rates would totally collapse and not be able to rise again. And I said, "one cycle, then it collapses to zero and stays there." That was ten years ago. and that was exactly what happened, Bernanke rose the rates 1/4% at a time for like 14 straight meetings and then POW rates collapsed in dramatic fashion right to zero for both target rates and have stayed there for both target rates. Being able to predict that; when it had never happened before, and nailing the cycle for it to happen in, and predicting the aftermath on top of that... okay, I think that says I knew the system and the times we lived in better than all the idiots in BOTF that claimed to understand it better than me. Eventually Cicero posted, "Days got it right"... but none of my foes ever admitted it.

    Let's explain what the value of our synthetic money is comprised of:

    No, that was an industrial collapse. And its ongoing nature reflects the fact that even when money is practically being given away to industrialists they still think hoarding a dollar (or gambling it on leveraged debt, corporate restructuring, or real estate, but only if the profits promised are utterly unsustainable) is more worthwhile than investing it in expanding production.
     
  2. EatTheRich

    EatTheRich President

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    Printing money in limited quantities can be a good idea. But it's not a panacea, especially if that money is just handed over to bankers, when the real crisis is that industry has little incentive to produce because poor people can't afford the goods that are rotting in warehouses or destroyed to increase prices.
     
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  3. EatTheRich

    EatTheRich President

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    We should have a massive public works program to create jobs. With affirmative action in hiring, with strict quotas to ensure success.
     
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  4. EatTheRich

    EatTheRich President

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    I do not think Bernie Sanders getting elected would do more than the election of Obama to solve the fundamental problems facing us. And I find some of his jingoism abhorrent. I am intrigued, though, by the possibility that his campaign will get more people talking about socialism and socialistic policies.
     
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  5. EatTheRich

    EatTheRich President

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    Assuming there is any inflation, the GSE will require a subsidy which will, in effect, assume the shape of interest payments. If the treasury just issues the money the money supply goes up and you get inflation ... not necessarily a bad thing if it counterbalances strong deflationary tendencies ... but not sustainable long-term either.
     
  6. EatTheRich

    EatTheRich President

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    Silver is no more "real money" than paper money or electronic credits.

    You think the banks are AGAINST the government giving them a bunch of money (by printing notes to pay off the debt owed to them)? And you think that the effect of doing so won't be to encourage them to loan out more money?

    1. For the record, the FED does not buy bonds directly from the Treasury.
    2. Generally speaking, credit makes commerce possible.
    3. The income tax is specifically authorized after passing due to popular pressure.
    4. A state that relied solely on printing money and going into debt and not at all on taxes would quickly see its money become worthless. Not a big deal if you don't have any but definitely a big deal for those on fixed incomes.
     
  7. EatTheRich

    EatTheRich President

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    I like your thinking but why would you leave the jails alone?
     
  8. EatTheRich

    EatTheRich President

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    A lot of them were actually on the slaveowners' side, both because they profited from cheap cotton and because they wanted to reduce competition by establishing a balkanized, weak, backward United States.
     
  9. EatTheRich

    EatTheRich President

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    Wages shouldn't be taxed. "Capital" does not mean "gold" or "specie." It means "wealth that is used to generate more wealth for its owner." I'm not sure what the quote means, and neither is anyone who doesn't know the specific context.
     
  10. EatTheRich

    EatTheRich President

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    Huey Long is an attractive political figure in a way. Not his dictatorial political machine. Not his quack monetary nostrums. Not his association with fascist figures like Charles Coughlin. But I do like that he was not afraid to engage in government spending for infrastructure improvement. He also had a relatively good record on civil rights for a southern governor/senator of his time.
     
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  11. EatTheRich

    EatTheRich President

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    [​IMG]
     
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  12. georgephillip

    georgephillip Governor

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    I'm not sure Bernie would have responded to the economic collapse of 2008 in the same way Obama did. In general, Bernie seems to understand the role government plays in wealth distribution while Obama (and the Clintons) ignore it.
    http://www.washingtonsblog.com/2015...us-obama-the-clintons-the-big-difference.html
    "The entire careers of Bernie Sanders, versus Barack Obama and both Bill and Hillary Clinton, display a stark difference.

    "Whereas Obama and the Clintons were trying to win the votes of Democrats while secretly supporting Republican policies to redistribute even more wealth upward from the public to the aristocracy (and they did so) (and how!), Sanders has consistently been trying — and helping — to do the exact opposite: to redistribute wealth downward, from the aristocracy to the public.

    "Taxes, and all of government policies, are inevitably wealth-distributional (who pays how much, and who gets how much of the benefits; and what benefits pay needs, versus what benefits pay mere wants).

    "Any politician who says that government isn’t largely about the distribution of wealth, knows that what he is saying is false — he or she is lying about government. (Only their suckers can believe it.) The question isn’t whether government should redistribute wealth; it’s how. That’s reality, and every public official knows it."
     
  13. georgephillip

    georgephillip Governor

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    England abolished slavery in 1833 with its Slavery Abolition Act. It was widely understood illiterate workers would be of limited usefulness after the Industrial Revolution took off. King Cotton decreed the shackles come off the ankles and go on the mind.
     
  14. georgephillip

    georgephillip Governor

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    Do you see any contemporary political figures reminiscent of Huey? I think Long would have been undone by Power had he ever reached the White House, but I agree with him on some of his civil rights and economic positions.
     
  15. EatTheRich

    EatTheRich President

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    I think that if he were elected Wall Street might be more constrained than under Obama just by the expectations people (especially those mobilized to support him) had of him. Just as to a much lower extent they were more constrained under Obama than under Bush, where it was considered a foregone conclusion that we would all get hosed.

    He did give a strong denunciation of the bailout for a senator.
    http://www.amazon.com/The-Speech-Historic-Filibuster-Corporate/dp/1568586841
     
  16. EatTheRich

    EatTheRich President

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    Interesting question. How about Nicolas Maduro? Of American figures I can think of right now, I see resemblances in Obama (the machine politics, "smartest guy in the room" syndrome, welfare-statism and power lust) and Huckabee (economic populism, rural support base). But honestly I think Donald Trump, for all the differences, is the most prominent Huey Long-like American figure today.
     
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  17. Days

    Days Governor

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    If you do this, you have to do it all the way. You have to build a new infrastructure with a real money base. Since the banks would pull out of the system (as if they hadn't already done that) it will be dependent upon the government to rebuild the industrial infrastructure. I'm of the opinion that it is already the case, no one is going to do this, so it is already dependent upon the government to do it. I don't give a damn what the economic theory is behind such a system, the bottom line is we have zero options, the only economic force capable of building industry and commerce is our central government; of course we would need a bloody revolution to get this govt to do it, or a military coup d'etat that forced the White House, Congress, and courts to act in the interests of the people, I really don't know what it would take, but it wouldn't come easy.
     
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  18. Days

    Days Governor

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    This was hard to read, but I want to make clear that I was speaking of the dollar in terms of the fuel for the nation's economic engine. When the two main FED spigots from which banks get the fuel are both at zero octane; how else to phrase that? When the air pressure that drives the turbine from the two main jets is zero... when you have no steam up, the engine has died, it is shut off.
     
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  19. EatTheRich

    EatTheRich President

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    It sounds as if we're in agreement then ... the U.S. today is in the position of Japan about 15 years ago. https://en.wikipedia.org/wiki/Lost_Decade_(Japan)

    Except Japan had strong growth in the U.S., EU, and China to re-stimulate commerce eventually ... while the U.S. is being pulled down by the EU, getting no relief from China, and pulling Japan and the rest of the world down with it.
     
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  20. georgephillip

    georgephillip Governor

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    The US military played a prominent role in building the Transcontinental Railroad in the 19th century and organized crucial aspects of FDR's New Deal in the 20th. If some Pentagon thinkers believe climate change represents a legitimate national security risk, the US military could direct a 21st century Green New Deal program capable of providing jobs for millions of unemployed young people from Yucatan to the Yukon. Perhaps the US Constitution could be amended to permit the Pentagon to partially fund its operations with revenues received from new infrastructure projects once they go into operation?
     
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