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Author Topic:   Testing The Financial Apologists Conmen
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


(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

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


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: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


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

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


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

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


(1)
Message 16 of 38 (888792)
10-05-2021 4:31 PM
Reply to: Message 12 by Phat
10-05-2021 2:31 PM


Re: First Article: Barrons
Quantatative Easing, which is a euphemism for monetizing the debt.

Yeah, that's pretty much it, except I don't think too many people would call QE a euphemism. QE is one form of debt monetization, and debt monetization does have a euphemism: printing money.

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

Barron's articles are likely to make some legitimate points. Your other sources, especially on YouTube, not so much.

The world is always undergoing changes and one of the main problems in this world is greed.

You may as well say that one of the main problems with the world is people.

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!

Apologies for assuming your financial mismanagement was across the board. Should I also assume your condo fees are paid up? How's your credit card debt? Is your vehicle worth less than the loan? Sorry, it's just hard to believe that someone who can be taken in so easily about gold is otherwise spic-n-span financially.

I just Googled the historical annual return for gold, and a lot of sites put it around 10% going back to the 1980's. Other sites say gold has a spotty record as an investment, putting its annualized return at around 3%, though I don't know what time period they're looking at. So I'll do my own calculation using the average annual price from 1979 until 2021 (I was going to start at 1980, but that wouldn't have been fair since gold spiked that year):

YearAverage Price of Gold
1979$307.01
2021$1799.13

Oh, gee, what do you know, the annualized return is only 4.3%. Do you know what the price of gold would be now if the annualized return since 1979 were actually 10%? 18,000/oz! If those YouTube guys have been talking about 10% historical returns then since the current price of gold is not $18,000/oz but only $1800/oz, guess what? They're lying! Even if you go back to 1970 and $32/oz the return is only 8.22%.

You said you bought $40,000 in gold in 1993, so let's look at what the annualized return has been since then:

YearAverage Price of Gold
1993$360.05
2021$1799.13

The return was 5.92%. Not bad, but beaten badly by the stock market as measured by the Dow which has generated an 8.4% return.

But the original point was about inflation. With inflation the big losers are not consumers, whose wages, at least historically, have tended to keep up with inflation (with a lag), but holders of fixed-rate debt.

--Percy

Edited by Percy, : Got a year wrong in one spot.


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

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


Message 17 of 38 (888794)
10-05-2021 6:41 PM
Reply to: Message 14 by Phat
10-05-2021 3:44 PM


Re: Lyn Alden
Phat writes:

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.

Your excerpt from the definition of net interest from Federal Net Interest Costs: A Primer has nothing to do with the arguments Petrou advanced for why the Fed was checkmated (in essence, hemmed in by circumstances and its own responses to them). I'm not going to waste my time explaining why you're wrong and what the correct understanding is because when I do, when anybody does, you just ignore it and repeat your misunderstandings all over again.

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.

There's massive irony here. This is one of the very few times you've quoted a source that actually does support your claim (that rising interest rates cause immediate commensurate increases in interest payments on the national debt), so congratulations, but unfortunately you quoted from a webpage that I already noted had one significant error, and you've managed to find another.

I'm going to regret wasting my time explaining this, but anyway...

Your quote claims that "Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion," and that is obviously false. When interest rates rise then payments on interest can only increase if the debt is refinanced. The average maturity period for financial instruments funding the national debt is over five years, so only about 20% of the debt would be refinanced in any given year. If interest rates were to rise by 1% then over the next year only $5.8 trillion of our national debt would be refinanced, and a year from now our annual service of the debt would only have risen by $58 billion, not $225 billion.

The Committee for a Responsible Federal Budget seems like a reputable and competent organization, I have no idea why this webpage gets things so wrong.

--Percy


This message is a reply to:
 Message 14 by Phat, posted 10-05-2021 3:44 PM Phat has responded

Replies to this message:
 Message 18 by Phat, posted 10-06-2021 11:49 AM Percy has responded

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


Message 20 of 38 (888799)
10-06-2021 12:42 PM
Reply to: Message 18 by Phat
10-06-2021 11:49 AM


Re: Lyn Alden
Phat writes:

Well, what mystifies me is how and why you are so convinced that you have things right.

It isn't that I'm so sure I'm right as that I'm able to muster facts and reason in support of what I think true and you're not.

1) Do you believe and/or agree that the purchasing power of your money is decreasing year by year? If not, why? I have seen statistics that essentially say that a 1940 dollar is worth 5 cents in today's money.

Are you seriously asking if I know there's inflation every year (deflation is rare - we had a deflationary year in 2010 after the mortgage security financial collapse). Here's a chart of real wages in constant 2017 dollars, it's the red line. There's inflation every year, and there's wage increases every year. Sometimes wage increases keep up with inflation, sometimes they don't:

No one here thinks inflation doesn't exist. Everyone here thinks your prognostications about the coming inflationary apocalypse are driven by your susceptibility to YouTube snake oil salesmen.

--Percy

Edited by Percy, : 1917 => 2017


This message is a reply to:
 Message 18 by Phat, posted 10-06-2021 11:49 AM Phat has not yet responded

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


Message 23 of 38 (888804)
10-07-2021 9:49 AM
Reply to: Message 22 by AZPaul3
10-06-2021 7:09 PM


Re: Lyn Alden
In 1969 Hess gas was 29.9¢/gallon, they pumped it for you, checked the oil and tire pressure if you wanted, and gave you a free glass. There was a gas station in Freehold (NJ) that had gas for 25.9¢/gallon.

Things are much better now. Gas is $3.099/gallon, you have to pump it yourself and check your own oil, and good look finding an air pump.

--Percy


This message is a reply to:
 Message 22 by AZPaul3, posted 10-06-2021 7:09 PM AZPaul3 has not yet responded

Replies to this message:
 Message 34 by Phat, posted 10-09-2021 3:22 PM Percy has responded

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


(2)
Message 32 of 38 (888826)
10-08-2021 8:40 PM
Reply to: Message 25 by Phat
10-08-2021 1:29 PM


Re: Nomi Prins
Your "ignore responses, repeat claims" approach is a waste of people's time. You've been doing this for a while now, for my own posts most recently completely ignoring Message 16 and Message 20, and responding to Message 17 but not addressing a single point. If you're not going to respond to what people say, why should anyone respond to you?

You remind me of people who don't realize they've been idiots until they end up on ventilators and realize that maybe they should have listened and gotten the vaccine. In your case I don't think it's that you haven't learned to listen but that you haven't learned how to achieve an understanding of things you don't yet understand. Instead of expending the effort necessary to understand something you follow whoever captures your fancy. Entire industries have been built upon reliance that people like you exist, like religion, Dutch tulip futures, and South Sea Company stock.

--Percy


This message is a reply to:
 Message 25 by Phat, posted 10-08-2021 1:29 PM Phat has acknowledged this reply

  
Percy
Member
Posts: 20411
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.7


(2)
Message 37 of 38 (888845)
10-10-2021 12:42 PM
Reply to: Message 34 by Phat
10-09-2021 3:22 PM


Re: Addressing Old Posts
Phat writes:

OK Percy I will give it the old college try.

In your response you only quoted me to launch into remaking your old points. You never addressed anything I said.

Message 16-- I own my car, though it is a clunker and a money pit. (2002 Buick). The price of used cars has shot up exponentially just in the past year and I don't have much of a nest egg.

If you "don't have much of a nest egg" then you have no business messing with speculative financial vehicles like gold. Gold mostly makes money for dealers, not their customers.

Gold is not an investment. It is an insurance policy to protect against bad investments and financial corrections.

Since you "don't have much a nest egg", you have no meaningful investments that need protection from financial corrections.

I'm better off buying stable groceries to save up and use once inflation does its work on our prices.

One of the significant contributors to inflation is wages. If inflation causes significant price increases, wages will increase, too.

Consider this. Too many dollars chasing too few goods causes price inflation. Once prices have increased to the point where excess dollars have been soakded up then sales decrease because there's no longer any excess dollars. Decreasing sales cause prices to drop or at least stop rising. Price inflation is self limitiing.

But wage increases can keep price inflation going by providing an increasing number of dollars to chase the price of inflated goods. It's known as an inflationary spiral. Artificially slowing business activity by raising interest rates is the way inflationary spirals have traditionally been halted, as you yourself note later.

Current conservative predictions average 6% a year for 3 years...

Here's an inflation projection from Statista - The Statistics Portal showing nothing higher than 2.5% for the next five years. This projection is from April and likely the projections are a little higher now, but not by much:

You're being scaremongered, and even if inflation ever did rise to 5% or 10% annually your wages would rise, too.

Message 17 --
Percy writes:

Your quote claims that "Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion," and that is obviously false. When interest rates rise then payments on interest can only increase if the debt is refinanced. The average maturity period for financial instruments funding the national debt is over five years, so only about 20% of the debt would be refinanced in any given year. If interest rates were to rise by 1% then over the next year only $5.8 trillion of our national debt would be refinanced, and a year from now our annual service of the debt would only have risen by $58 billion, not $225 billion.

I learn slowly through trial and error...etc...

None of that and what follows has anything to do with what I said. I explained in pretty good detail why that article is wrong. Look at it this way. Say you buy a nice used car for $20,000 and finance it with a fixed-rate 5% 5-year loan that costs you $377/month. But let's say that by the end of the year inflation has really taken hold and car loans go up to 10%. How much will you then pay on your car loan. Still $377/month, right? It's not going to change, right?

So if interest rates rise, why do you think the federal government's loan payments would increase for existing loans? Yes, it would increase for loans that mature and have to be refinanced, but less than 20% of the federal governments loan portfolio has to be refinanced every year. The interest rate would only increase on less than 20% of the national debt, not all of it.

...but I also am intuitive beyond what most critical thinkers dare not do.

You are not intuitive. All you do is respond to emotional appeals like scare mongering ("the coming inflationary apocalypse will destroy civilization"), and that's how you decide who to listen to.

For reasons having nothing to do with facts or rational thinking you've decided that the YouTube guys are right, and nothing can talk you out of it. In particular facts and reason cannot talk you out of it because it wasn't facts and reason that talked you into it in the first place. You find these YouTube guys appealing, and because you lack the math skills and reasoning capabilities to see the fallacious nature of what they're telling you, and because they're skilled at making emotional appeals, you fall for it, and then you come here and fill posts with their lines of malarkey.

You'd probably find my arguments a lot more appealing if they were accompanied by predictions of the end of civilization.

Granted I am anxious yet fascinated by doomsday prognostications for reasons yet unknown.

You're aware you're a sucker for "doomsday prognostications" yet you come here and repeat the nonsense anyway, and then defend it here at length for days and days on end. Please stop.

It feels good thinking that the majority of people do not see what I see.

You've just defined delusional.

My challenge now is figuring out what if anything I actually DO see. So lets keep talking.

There is no point in continued discussion with you about gold and inflation. Your blood sugar addled brain is hopeless on this topic.

Message 20--
Percy writes:

It isn't that I'm so sure I'm right as that I'm able to muster facts and reason in support of what I think true and you're not.

Im still learning which facts are relevant and which are part of a con.

A lifetime spent in puzzlement at what makes the world work is unlikely to be remedied now.

I think that you think that everything is cyclical and that life goes on year after year with out any major reset, apocalyptic or otherwise.

Yeah, right, I never heard of WWI, the Depression, WWII, the Vietnam War, the World Trade Center attack, Iraq, Afghanistan, or the Great Recession of 2008.

But we can both agree that global warming is potentially apocalyptic and they seem slow at addressing that.

Climate change has the potential to end "life as we know it" in many parts of the world. The world lacks the resolve to cut back on greenhouse gases in the necessary timeframe. We're going to need other solutions, and radical ones may have to be considered, like space sunshades.

I don't want to see the US middle class and myself suffer.

Who does, but your messianic mission is misinformed.

We have gone off the rails since 2007 and I'm not sure we will ever return to where we were as a nation and indeed globally with secure financial resources.

You're ranting again.

--Percy


This message is a reply to:
 Message 34 by Phat, posted 10-09-2021 3:22 PM Phat has acknowledged this reply

  
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