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Author Topic:   Testing The Financial Apologists Conmen
Phat
Member
Posts: 15652
From: Denver,Colorado USA
Joined: 12-30-2003


Message 1 of 38 (888756)
10-03-2021 10:45 AM


In this topic, I wish to present a few of the sources which I listen to and specifically address not only who they are and what their credentials are but what they actually say.

Feel free to comment, but understand that I want to know your sources also. CNN doesn't really count, nor does the mainstream media. They tell us what we want to hear and shelter us from what is really going on.

I will edit this opening post and get the argument going later on after work.


"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


Replies to this message:
 Message 2 by ringo, posted 10-03-2021 11:40 AM Phat has acknowledged this reply
 Message 3 by Percy, posted 10-03-2021 12:52 PM Phat has responded
 Message 5 by Phat, posted 10-05-2021 10:32 AM Phat has acknowledged this reply

  
ringo
Member
Posts: 19260
From: frozen wasteland
Joined: 03-23-2005
Member Rating: 4.4


(2)
Message 2 of 38 (888760)
10-03-2021 11:40 AM
Reply to: Message 1 by Phat
10-03-2021 10:45 AM


Phat writes:

CNN doesn't really count, nor does the mainstream media. They tell us what we want to hear and shelter us from what is really going on.


How do you know you don't have that backwards?

"I call that bold talk for a one-eyed fat man!"
-- Lucky Ned Pepper

This message is a reply to:
 Message 1 by Phat, posted 10-03-2021 10:45 AM Phat has acknowledged this reply

  
Percy
Member
Posts: 20334
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.1


(2)
Message 3 of 38 (888764)
10-03-2021 12:52 PM
Reply to: Message 1 by Phat
10-03-2021 10:45 AM


Phat writes:

CNN doesn't really count, nor does the mainstream media. They tell us what we want to hear and shelter us from what is really going on.

I think you should make this case in another thread before starting this one. So far the only one who's demonstrated he has no idea "what is really going on" is you. Your medicine cabinet must be full of snake oil.

--Percy


This message is a reply to:
 Message 1 by Phat, posted 10-03-2021 10:45 AM Phat has responded

Replies to this message:
 Message 6 by Phat, posted 10-05-2021 11:09 AM Percy has responded

  
jar
Member
Posts: 33445
From: Texas!!
Joined: 04-20-2004
Member Rating: 3.5


Message 4 of 38 (888767)
10-03-2021 4:57 PM


Please don't just give us more of their sideshow spiel; rather please give us reasoned arguments and evidence that might actually support what they are marketing.

My Website: My Website

  
Phat
Member
Posts: 15652
From: Denver,Colorado USA
Joined: 12-30-2003


Message 5 of 38 (888778)
10-05-2021 10:32 AM
Reply to: Message 1 by Phat
10-03-2021 10:45 AM


First Article: Barrons
Barrons recently had a good article on the macro-cosmic efforts of the Fed to control the economy.
The Fed Is Deep in Uncharted Waters. Danger Ahead.

quote:
Fed policy has three key components, none of which have worked as planned. The post-2010 recovery was the weakest since the Second World War; inflation constantly surprises the central bank, and markets keep rising to troubling and sometimes disastrous heights even as U.S. economic inequality gets steadily more acute.

The Fed first relies on ultra-low rates set via its longstanding open-market operations. These low, low rates are making it harder for middle-class families to save while boosting the fortunes of the ultra-rich. And while the Fed won’t own up to its part in inequality, it has set rates so low that there’s no room for error above the “zero lower bound” at which short-term rates would become negative in nominal terms, just the inflation-adjusted ones to which we’ve become all too familiar. It thus added quantitative easing to its toolkit, striding even farther off the shore and from known, safe territory.

In QE, the Fed buys trillions of Treasury and agency assets. Now, these have grown to $8.3 trillion or about one-third of U.S. GDP. The Fed thought that all these trillions would make a major macroeconomic difference in part by giving banks cash with which to lend, thus boosting growth. However, bank lending as a percentage of GDP has gone steadily down even as markets go ever upward. An important study shows that the Fed’s portfolio has had ten times more impact on equity prices than output.

The reason? The more safe assets the Fed takes out of financial markets, the greater the demand for them, the lower the rates safe issuers such as Treasury need to pay, and the more investors desperate for real returns above zero head into high-risk equity and bond markets. The Fed thought that interest on the reserves banks hold at the Fed in the course of QE would bolster traditional rate-setting operations by placing a floor under short-term rates. But the floor keeps sinking even though the Fed continues to tinker with the rate it pays banks to park funds with the Fed.


I may be no genius, but I can see that the Federal Reserve is essentially in checkmate. By allowing inflation to rise, the Fed may well plan on paying back the U.S. long-term National Debt or at least reducing debt to GDP ratio. In a very real sense, however, inflation is a hidden form of taxation. For the consumer, real purchasing power gets debased.

There is no consensus on whether we will see inflation or deflation, but one point that is repeatedly brought up is the difference between the inflation of the mid 1970's and todays challenges.

quote:
Although Jay Powell delivered his all-important annual address atop a virtual Wyoming mountain, the Federal Reserve is nonetheless mired in the Big Muddy. This mythical river was described in a high-impact Pete Seeger song mobilizing Vietnam War opposition. In it, soldiers led by politicians start out in a small, clear stream, wade on and, as the waters rise and the mud deepens, keep going because they don’t and then can’t turn around. All they do is march on to a surely-grim fate. So too with U.S. monetary policy: It’s past time to turn around but still critical that the Fed quickly do so.(...)Does the Fed like getting this wet and dirty? Of course not. It wants banks to lend out their cash and knows that savings—not speculation—best ensures financial stability. It also knows that its huge portfolio distorts markets, making them far more dependent on utterances from central bank officials than any profit-or-loss fundamental. And the Fed also knows that backing markets with billions and trillions encourage behavior that is at best unwise from yield-chasing investors.

What it doesn’t know is how to step back, turn around, and go back to the shallow waters in which its presence made a meaningful difference toward ensuring shared prosperity and financial stability.

There are, though, ways to the shallow end. First, the Fed should understand the U.S. economy as income and wealth inequality has now come to define it. It should set employment and price-stability goals that reflect the nation as a whole, not the segments of it that speak through financial markets.

Second, it should go quickly beyond Powell’s August promise of some sort of suspension of some amount of new Fed asset purchases sometime soon. The distortions due in large part to these purchases are pushing key markets to dangerous heights—see for example the price of U.S. homes, which grew 17.4% year-over-year and an astonishing 4.9% from just the first to the second quarter. Tapering the Fed’s huge holdings would help rates to rise a bit because the artificial demand created by the Fed’s trillions of bond purchases would ease. More normal rates mean more normal markets, bringing the U.S. further from the dangerous dividing line beyond which lies real negative rates and the harm these would do to so many investors and to anyone still foolish enough to contemplate saving for the future.


Some of the financial apologists whom I will quote own their own firms...so some bias is likely in what they say, though I would not discount what they say (and all loosely agree upon) as outright deception. We know that the Fed has made an art form of saying that they may do something (raising or lowering interest rates, for example) and then letting the markets react to their announcement without actually carry the action through.

The problem with inflation was finally halted in the late 1970s through the actions of Paul Volker. He raised interest rates to nearly 20%. This halted the runaway inflation. The Fed can not do this now, with a National Debt approaching 29 trillion dollars. The interest on such a debt would exceed the total tax revenues of the Federal Government.

quote:
The problem with policy quagmires isn’t knowing you should get out; it’s getting out. Like the U.S. presidents who confronted Vietnam, Iraq, and—now and at least as tragic—Afghanistan, the Fed knows it needs to get out of the Big Muddy. Each way out seems blocked so it gets in ever deeper, but ever deeper is ever more dangerous. The more the Fed perpetuates markets that depend only on central-bank largesse, not price discovery and disciplinary correction, the greater the risk that inescapable retreat leads to costly casualties.

Edited by Phat, : No reason given.


"A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
***
“…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

“The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
- Criss Jami, Killo

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
(1894).


This message is a reply to:
 Message 1 by Phat, posted 10-03-2021 10:45 AM Phat has acknowledged this reply

Replies to this message:
 Message 8 by Percy, posted 10-05-2021 12:15 PM Phat has responded

  
Phat
Member
Posts: 15652
From: Denver,Colorado USA
Joined: 12-30-2003


Message 6 of 38 (888779)
10-05-2021 11:09 AM
Reply to: Message 3 by Percy
10-03-2021 12:52 PM


Lies, Damned Lies and Statistics
Percy writes:

I think you should make this case in another thread before starting this one. So far the only one who's demonstrated he has no idea "what is really going on" is you. Your medicine cabinet must be full of snake oil.

I can go with CNN or Yahoo Finance or other news media, but I want to present some arguments that counter what you claim to be common sense but which I continually hear to be dangerous economic policies. One example: Fiat Currencies. Money cannot simply be backed by future promises. The Central Banks own Gold for a reason. Do you have any idea why they own gold at all?

Gold Investing News writes:

There are three primary reasons why gold is the reserve commodity of choice for national banks.

  • To mitigate risk
    Gold is a well-known safe haven investment prone to acting positively in times of uncertainty and market volatility. It is viewed as an asset that holds no liability, adding to its ability to mitigate risk.
    American banker and financier JP Morgan is famously quoted as saying: “Gold is money. Everything else is credit,” highlighting another intrinsic benefit of gold, which is its sustained purchasing power.
    Central banks look to purchase gold as a hedge against a weakening dollar or any other fiat currency.
  • To hedge against inflation
    Hedging against the effects of inflation is another reason why central banks buy gold. In its simplest terms, inflation is the rise in price of a basket of goods.
    In order for inflation to not dramatically impact a country’s economy, the nation requires investments that are not tied to the dollar. Enter gold and the other precious metals.
    Many view gold as a barometer of the value of foreign exchange instruments. Gold’s rising value is viewed as evidence that currencies are becoming devalued.
  • To facilitate stability and growth
    The primary function of central banks is to promote stability and foster economic growth. As currencies become increasingly devalued, banks must ensure their respective economies don’t flounder. As such, gold is used to control the size and speed of market growth.
    Using Chinese and Russian central bank gold buying as an example, a Global Bullion report explains that emerging economies are especially exposed to free-market excesses and use gold to offset the risk.
  • Granted my source is an investment newsletter but does it not make sense? I have found very few who disagree with the premise that fiat currencies inflate over time and that their value in real purchasing power continually drops.

    What is the role of Central Banks?

    Is it not wrong for the purchasing power of the middle class to become continually eroded?

    Why must we be fed this lie that encourages us to invest our retirements in stocks when it appears clear (at least to me) that the markets themselves are in a Fed-generated bubble? And why is it that the insiders always know when to take their profits and get out and leave the rest of us(even those with strong investment brokers) holding the bag?

    Finally, why is it that politicians from both sides of the aisle seem unable to stop borrowing (and/or allowing the Fed to "print" more and more money?)Inflation is a very real tax.

    Edited by Phat, : punctuation


    "A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
    ***
    “…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

    “The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
    - Criss Jami, Killo

    “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
    (1894).


    This message is a reply to:
     Message 3 by Percy, posted 10-03-2021 12:52 PM Percy has responded

    Replies to this message:
     Message 9 by Percy, posted 10-05-2021 12:22 PM Phat has acknowledged this reply

      
    Phat
    Member
    Posts: 15652
    From: Denver,Colorado USA
    Joined: 12-30-2003


    Message 7 of 38 (888782)
    10-05-2021 11:59 AM


    Lyn Alden
    Percy writes:

    I might tend to include more links than other people, but I don't think my opinion differs from anyone else's. The only thing you know about the "global money system" is how to use words like "global" and "money" in a sentence.

    You've been given accurate information about how things work over and over again and never given any indication of understanding it.

    Using information from the sights that you have provided, I found consensual agreement that supports my basic arguments.

    In addition, I cite several "financial apologists" whom I believe have enough solid credentials that they are worth a listen. Granted some of their YouTube titles are clickbait!

    To Wit:
    Lyn Alden
    From Open Transcript:

    00:49-1:11 writes:

    The United States military is doing a really good job of making sure that China is able to access all the oil they want and so basically it's one of those things where the cost has gone up and up and over time whereas the groups who are benefiting the most from the system has actually shifted away from the United States and so right now you know it's basically (that) we're paying for the system but it's not necessarily benefiting us in the same way that it did decades ago

    So who pays? Who gets the bill for the US Military helping Global Commerce?

    The jury is still out on whether I have an intuitive sense or simply falling for snake oil. The arguments seem sound. The Bill is getting paid through inflationary pressures on the U.S.Middle Class.


    "A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
    ***
    “…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

    “The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
    - Criss Jami, Killo

    “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
    (1894).


    Replies to this message:
     Message 10 by ringo, posted 10-05-2021 12:24 PM Phat has responded
     Message 11 by Percy, posted 10-05-2021 12:33 PM Phat has responded

      
    Percy
    Member
    Posts: 20334
    From: New Hampshire
    Joined: 12-23-2000
    Member Rating: 4.1


    Message 8 of 38 (888783)
    10-05-2021 12:15 PM
    Reply to: Message 5 by Phat
    10-05-2021 10:32 AM


    Re: First Article: Barrons
    Phat writes:

    Barrons recently had a good article on the macro-cosmic efforts of the Fed to control the economy: The Fed Is Deep in Uncharted Waters. Danger Ahead.

    Barron's? You're citing Barron's? And a written article at that! What happened to Fred's Fly-by-night Filching Free-for-all video set?

    The author, Karen Petrou, is a member of the Federalist Society, a staunchly conservative organization. Other members of the society are Brett Kavanaugh, Neil Gorsuch, Clarence Thomas, John Roberts, Samuel Alito, and Amy Coney Barrett, otherwise known as the conservative super-majority wing of the Supreme Court. I say this not as a way to dismiss her opinion out of hand but only to make clear that she has a distinctly strong conservative perspective.

    I'm a financial conservative myself, but the Federalists tend toward extreme perspectives like originalism, the view that the constitution contains the wisdom of the ages, if only read correctly, and still perfectly applicable today, and so it's fine to let any untrained unlicensed wackadoodle walk around with any kind of gun. But I digress.

    After reading the portions of the article you quoted my first reaction is that there's no way you understood it. Did you, for example, pick up on what QE refers to?

    I may be no genius, but I can see that the Federal Reserve is essentially in checkmate. By allowing inflation to rise, the Fed may well plan on paying back the U.S. long-term National Debt or at least reducing debt to GDP ratio. In a very real sense, however, inflation is a hidden form of taxation. For the consumer, real purchasing power gets debased.

    There is no consensus on whether we will see inflation or deflation, but one point that is repeatedly brought up is the difference between the inflation of the mid 1970's and todays challenges.

    These comments have nothing to do with the quoted portion of the article they follow. The 1970's aren't mentioned once. Inflation is not "a hidden form of taxation" and she never says that it is. It is a cost, and not a hidden one. It's probably better described as indirect.

    If we do enter a period of sustained inflation then, like past inflationary periods, wages will be one of the rising costs. The big losers when inflation begins rising are holders of fixed-rate debt. If you truly believe we're about to enter a sustained inflationary period then borrow as much money at fixed-rates as you can because you'll be able to invest it at higher rates and pay off the loans in cheaper dollars. The easiest way to do this is to mortgage your condo, though my guess is that it's already mortgaged to the max, probably at least a couple mortgages, am I right?

    We know that the Fed has made an art form of saying that they may do something (raising or lowering interest rates, for example) and then letting the markets react to their announcement without actually carry the action through.

    We know this? Really? How do we know this? It certainly isn't something Petrou wrote in her article.

    The problem with inflation was finally halted in the late 1970s through the actions of Paul Volker. He raised interest rates to nearly 20%. This halted the runaway inflation. The Fed can not do this now, with a National Debt approaching 29 trillion dollars. The interest on such a debt would exceed the total tax revenues of the Federal Government.

    Petrou said nothing remotely like this. Higher interest would only be paid on new debt, not existing debt, and if inflation occurs for a sustained period then the government would be paying off old debt in cheaper dollars.

    --Percy

    Edited by Percy, : Punctuation.


    This message is a reply to:
     Message 5 by Phat, posted 10-05-2021 10:32 AM Phat has responded

    Replies to this message:
     Message 12 by Phat, posted 10-05-2021 2:31 PM Percy has responded

      
    Percy
    Member
    Posts: 20334
    From: New Hampshire
    Joined: 12-23-2000
    Member Rating: 4.1


    Message 9 of 38 (888784)
    10-05-2021 12:22 PM
    Reply to: Message 6 by Phat
    10-05-2021 11:09 AM


    Re: Lies, Damned Lies and Statistics
    Phat, I've offered explanations, several times, for why modern currencies cannot be based upon gold. You haven't responded to any of them. What would be the point of explaining again?

    You're quoting people who are trying to sell you gold. You're a rube.

    --Percy


    This message is a reply to:
     Message 6 by Phat, posted 10-05-2021 11:09 AM Phat has acknowledged this reply

      
    ringo
    Member
    Posts: 19260
    From: frozen wasteland
    Joined: 03-23-2005
    Member Rating: 4.4


    Message 10 of 38 (888785)
    10-05-2021 12:24 PM
    Reply to: Message 7 by Phat
    10-05-2021 11:59 AM


    Re: Lyn Alden
    Phat writes:

    quote:
    The United States military is doing a really good job of making sure that China is able to access all the oil they want and so basically it's one of those things where the cost has gone up and up and over time whereas the groups who are benefiting the most from the system has actually shifted away from the United States and so right now you know it's basically (that) we're paying for the system but it's not necessarily benefiting us in the same way that it did decades ago
    The arguments seem sound.

    The first bit is sarcastic and the rest trails off into incoherence. It will be nice when sentences are invented.

    "I call that bold talk for a one-eyed fat man!"
    -- Lucky Ned Pepper

    This message is a reply to:
     Message 7 by Phat, posted 10-05-2021 11:59 AM Phat has responded

    Replies to this message:
     Message 13 by Phat, posted 10-05-2021 2:46 PM ringo has responded

      
    Percy
    Member
    Posts: 20334
    From: New Hampshire
    Joined: 12-23-2000
    Member Rating: 4.1


    Message 11 of 38 (888786)
    10-05-2021 12:33 PM
    Reply to: Message 7 by Phat
    10-05-2021 11:59 AM


    Re: Lyn Alden
    Phat writes:

    Using information from the sites that you have provided, I found consensual agreement that supports my basic arguments.

    Really? Quote them.

    In addition, I cite several "financial apologists" whom I believe have enough solid credentials that they are worth a listen. Granted some of their YouTube titles are clickbait!

    Stop watching YouTube videos. Your quote from the video is gobbledygook. I can't wait to hear the explanation for how our military ensures Chinese oil imports.

    --Percy


    This message is a reply to:
     Message 7 by Phat, posted 10-05-2021 11:59 AM Phat has responded

    Replies to this message:
     Message 14 by Phat, posted 10-05-2021 3:44 PM Percy has responded

      
    Phat
    Member
    Posts: 15652
    From: Denver,Colorado USA
    Joined: 12-30-2003


    Message 12 of 38 (888787)
    10-05-2021 2:31 PM
    Reply to: Message 8 by Percy
    10-05-2021 12:15 PM


    Re: First Article: Barrons
    Percy writes:

    After reading the portions of the article you quoted my first reaction is that there's no way you understood it. Did you, for example, pick up on what QE refers to?

    QE refers to Quantatative Easing, which is a euphimism for monetizing the debt. Barrons explains what the Fed does and why it is risky.

    And I argue that regardless of my sources, these sources have some points that are true. You can argue otherwise. Lets see the documentation.

    The world is always undergoing changes and one of the main problems in this world is greed. Developing nations are initiating actions that can and will adversely impact our planet in negative ways.
    The World’s Second Largest Rainforests Are In Danger!

    quote:
    The world's most extensive tropical peatlands were discovered in the Congo Basin's swamp forests in 2012. These habitats are estimated to sequester up to 30 billion metric tons of carbon; disturbing them could result in massive carbon releases.
    It is not fair for the developing world to make the same mistakes that the United States and other industrialized Western nations have already made and corrected. The whole planet will end up in a massive war of diminishing global resources. The financial apologists, unlike you and other financial conservatives, know that the debt is approaching unsustainability and there will be some major corrections. Im not sure why you label me as delusional when you cant see the obvious handwriting on the wall! Oh, and about the global warming---who is gonna get stuck with that bill? Any way you cut it, the Western Middle and working class will get stuck with the bill. Which is the essence of my whole obsessive concern.

    However...

    Percy writes:

    The big losers when inflation begins rising are holders of fixed-rate debt. If you truly believe we're about to enter a sustained inflationary period then borrow as much money at fixed rates as you can because you'll be able to invest it at higher rates and pay off the loans in cheaper dollars. The easiest way to do this is to mortgage your condo, though my guess is that it's already mortgaged to the max, probably at least a couple of mortgages, am I right?

    Not even close. I owe nothing...nada...zero on this condo and I intend for it to stay that way. I may have been born at night but not last night!

    Do you disagree that quantitative easing is simply a euphemism for monetizing the debt? Helicopter money. Ben Bernanke was known as helicopter Ben, but his actions were those of a piker compared to Powell and Janet Yellin.

    Edited by Admin, : Fix quoting.


    "A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
    ***
    “…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

    “The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
    - Criss Jami, Killo

    “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
    (1894).


    This message is a reply to:
     Message 8 by Percy, posted 10-05-2021 12:15 PM Percy has responded

    Replies to this message:
     Message 15 by PaulK, posted 10-05-2021 4:02 PM Phat has acknowledged this reply
     Message 16 by Percy, posted 10-05-2021 4:31 PM Phat has acknowledged this reply

      
    Phat
    Member
    Posts: 15652
    From: Denver,Colorado USA
    Joined: 12-30-2003


    Message 13 of 38 (888788)
    10-05-2021 2:46 PM
    Reply to: Message 10 by ringo
    10-05-2021 12:24 PM


    Re: Lyn Alden
    ringo writes:

    It will be nice when sentences are invented.

    I know...it is an auto-generated transcript....yet people often talk incoherently in run-on sentences. Grammar is dead these days.

    Lyn Alden is not simply slanging gold, however. (He *does* have an investment service.) So what?
    Sovereign Default, the Debt Ceiling, and the $1 Trillion Coin

    quote:
    Congress is the political body that authorizes spending by the US federal government.

    Prior to 1917, Congress authorized individual bond issuance to supplement tax revenue to fulfill specific spending allocations. Eventually, beyond a certain scale for fiscal spending during World War I, this practice became administratively unsustainable.

    From 1917 onward, Congress instead would allow the US Treasury Department to issue bonds as it sees fit, albeit constrained by a Congressionally-set debt ceiling. Put simply, Congress (the Legislative Branch) stopped micromanaging Treasury bond issuance to fund spending authorizations (thus leaving it as a function of the Executive Branch) but still retained its authority to ensure a division of powers by limiting the total amount of debt issuance, and still has to authorize federal spending.

    According to data going back to 1960 by the US Treasury, Congress has raised or extended the debt ceiling 78 times, including 29 times under Democratic presidents and 49 times under Republican presidents.

    A handful of times in recent years, most notably in 2011 but a few other times as well, Congress used the debt ceiling in order to pressure a presidential administration to either extract a bargain or for narrative gain.

    Often, when politicians oppose raising the debt ceiling, they do so within the narrative of fiscal constraint, but that is mostly political theater.
    The debt ceiling on its own is a separate concept from new spending authorization, although it can be combined into the same piece of legislation. Raising the debt ceiling itself doesn’t authorize new spending; it merely allows the government to continue paying its previously-authorized spending obligations. To not raise the debt ceiling means the government either has to not pay previously-authorized spending obligations, or default on its national debt, which is accumulated over time from previously authorized spending obligations.

    In other words, logically speaking, the idea of fiscal constraint is relevant when deciding on new spending and taxation plans, but not relevant during debt ceiling disputes, which are about prior spending plans. To promote fiscal constraint, politicians can vote against increases in spending, or propose new legislation that reduces existing ongoing spending obligations.


    Lyn is no huckster nor an economic idiot.

    She essentially says the same thing Percy told me.

    quote:
    Decades and centuries ago, when dollars were backed by gold, the US could potentially run out of gold.

    Indeed, the US eventually did default on those gold standard systems by devaluing the dollar relative to gold in 1934 and outright eliminating any gold-backing of the dollar whatsoever in 1971, without compensating the existing holders of dollars and Treasuries for these sudden changes of contract. The government didn’t have enough gold to keep up with the spending plans they wanted to do without changing the definition of what a dollar is. In the age of fiat currency since 1971, where a dollar is not directly backed by anything in particular or guaranteed to have any specific value, the government can’t run out of its own printed dollars. That says nothing about the value of those dollars, however. If too much money is printed, it can result in price inflation or in extreme cases, hyperinflation. For a monetarily sovereign country, debts can always be paid back nominally, but not necessarily with the same purchasing power as when they were issued. For example, the purchasing power of US Treasuries fell rapidly in the 1940s inflationary decade and the 1970s inflationary decade.


    Sometimes I think that you liberals could care less about the US Middle Class when you can help the world. The thing is, the world is connected to the dollar...though this is decoupling. Both Russian and China do not buy their oil (nor sell it) in US Dollars.

    Edited by Phat, : No reason given.


    "A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
    ***
    “…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

    “The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
    - Criss Jami, Killo

    “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
    (1894).


    This message is a reply to:
     Message 10 by ringo, posted 10-05-2021 12:24 PM ringo has responded

    Replies to this message:
     Message 19 by ringo, posted 10-06-2021 11:57 AM Phat has acknowledged this reply

      
    Phat
    Member
    Posts: 15652
    From: Denver,Colorado USA
    Joined: 12-30-2003


    Message 14 of 38 (888789)
    10-05-2021 3:44 PM
    Reply to: Message 11 by Percy
    10-05-2021 12:33 PM


    Re: Lyn Alden
    Phat writes:

    Using information from the sites that you have provided, I found consensual agreement that supports my basic arguments.

    Percy writes:

    Really? Quote them.

    From Message 105

    quote:
    The federal government’s interest payments depend largely on interest rates and the amount of debt held by the public. Other factors, such as the rate of inflation and the maturity structure of outstanding securities, also affect interest costs. (For example, long-term bonds generally carry higher interest rates than do short-term bills.) Interest rates are determined by market forces, such as the supply and demand for Treasury securities, and the policies of the Federal Reserve.
    This is why the Fed has been checkmated. They cannot afford to raise interest rates, which was the main way that Volcker fought inflation in the late seventies early eighties.

    History shows that inflation was only contained through rising interest rates.

    From Message 107
    Committee for a Responsible Federal Budget

    quote:
    Despite historically low-interest rates, this significant interest cost is the result of high levels of debt. This cost could be even worse if interest rates rise. Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion at today’s debt levels. Growing debt levels not only add to the likelihood of such increases, but also the cost and risk associated with them.

    "A lie can travel half way around the world while the truth is putting on its shoes." ~Mark Twain "
    ***
    “…far from science having buried God, not only do the results of science point towards his existence, but the scientific enterprise itself is validated by his existence.”- Dr.John Lennox

    “The whole war between the atheist and the theist comes down to this: the atheist believes a 'what' created the universe; the theist believes a 'who' created the universe.”
    - Criss Jami, Killo

    “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” — Leo Tolstoy, The Kingdom of God is Within You
    (1894).


    This message is a reply to:
     Message 11 by Percy, posted 10-05-2021 12:33 PM Percy has responded

    Replies to this message:
     Message 17 by Percy, posted 10-05-2021 6:41 PM Phat has responded

      
    PaulK
    Member
    Posts: 17009
    Joined: 01-10-2003
    Member Rating: 2.7


    (1)
    Message 15 of 38 (888790)
    10-05-2021 4:02 PM
    Reply to: Message 12 by Phat
    10-05-2021 2:31 PM


    Re: First Article: Barrons
    quote:
    QE refers to Quantatative Easing, which is a euphimism for monetizing the debt. Barrons explains what the Fed does and why it is risky.

    More importantly Quantitative Easing is an alternative to reducing interest rates when there’s no room to cut them.

    In your last post you assert that the trouble is that there’s no room to increase interest rates.

    These are contradictory. The Fed can’t desperately need to reduce interest rates AND increase them.

    You wanted to know why Percy says that you are delusional! There’s a reason right there.

    It looks to me as if you have your doom scenario in mind and “see” it everywhere - even in sources that contradict it. That sounds pretty delusional to me.


    This message is a reply to:
     Message 12 by Phat, posted 10-05-2021 2:31 PM Phat has acknowledged this reply

      
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