1. Haha, yeah... TS can be annoying sometimes but he means well (I think). It is just that he spreads misinformation, it is like he works for the BLS or something.

2. I may have responded a little harshly. I was kind of annoyed after having had to read BTM and TS's posts.

My point was just that they weren't all predictions. But I am comfortable saying, yeah we will burn hyrdo carbons as our energy source for all of eternity. It doesn't make sense for like a million reasons.

*not burn hydro...

You misread. I think TS and BTM contribute a lot. I think you mean well, but I'd hate if anyone thinks I agree even a little with you.

Wait. Huh? What?

I didn't say they don't contribute. Nor did I say you agree with me.

In TS's case I did say, somewhat in jest, that he contributes misinformation.

Most poignantly he said (in another thread), "no body leases gold." And he said, "economics has nothing to do with moral philosophy." He said these as if they were facts, obvious facts.

He could not be more wrong. That is why I had so many responses to him in this thread. I was correcting what he said so that people who don't know any better don't take it as fact.

Fools rush in...

Yuan will never be backed by gold. That's ****ing ridiculous. They would make a mess of their economy, diminish their own power, and make other countries rich for no reason at all. If backing your country with gold made you stronger, why aren't all the two bit clown shows doing it to shore up their economy and currency?

The US dollar, like all currencies, has power because of the producing capacity of the US economy. That's it. Gold, not gold, fiat, not fiat, it's all nonsense. What matters is how much stuff the US produces that's paid for with dollars. US dollars are good as long as the US economy keep producing. And it will (see below).
The world will go on like it always has. Nothing is going to change short of another world war.

You see, you don't understand how the world works. Your focus so incredibly strongly on money and gold and collapse and disaster and all of that ****, but it has nothing to do with anything.

The world is far more fundamental than your out there ideas. People attempt to satisfy their wants. Getting their kids educated. Obtaining food. Having a house. Enjoying Christmas. Buying stuff they like. Going on holidays.

They have the factories, planes, cars, crops, buildings, computers and know how to do all of these things. As years have gone by, we've gotten better and better at doing these things and making these systems robust. Nothing is going to change, man. People are still going to get up, go to their factories and offices, make stuff, drive it to shops, and pay a percentage to the government (in the denominated dollars of the day). That's what an economy is. This is a process that goes on and on and on all the time, and has continuously for hundreds of years. The only thing that disrupts it is major war, and deflation (see:Japan). Famine and plague used to, but we have these under control. When we had a gold standard, liquidity and confidence crises (via deflation) used to, but we got rid of that in return for something more stable. State bankruptcy used to, but we've gotten richer and richer and can afford a lot more. The whole financial system froze up eight years ago and we came out of that just fine as well.

All of your believing in the financial apocalypse is a massive amount of wasted energy. The world is just fine, and will continue to be just fine. We get better and better at making stuff and organizing stuff and measuring stuff and controlling unpredictable events. We're getting wealthier and wealthier, and technology is about to take that into new realms in the coming decades. Autonomous cars, robotics, new materials, are going to make us richer and richer.

Relax. Live your life as if the world is going to be ok, because baring war with China, which is over a decade away should it come to pass, everything is going to be ok.

We live in a far, far better and safer world than anyone before us. The world has been wracked with strife and disaster and fear for a long time. WWI, WWII, the Cold War, stagflation, the oil shock, the Arab-Jew wars, climate cooling fears of the 70s, peak oil, the Great Depression, the rise of fascism all over the world, the rise of communism, nuclear meltdown fears, global food shortage/capacity fears, plague fears, nuclear war fears, and so on are just a few of things that are far worse/more scary than anything we face today.

Your problem is that you understand too little history. You need to read a lot more, and not the filtered worldviews of people like Rand or Mises who built beautiful, deeply intellectually compelling but ultimately imaged worlds with little reality. You've created wonderful and seemingly structurally sound bridges to nowhere in your mind, and you need to be whacked in the face with the wet fish of reality. Go buy this: Chronicle of the 20th Century and see the panic, fear and (genuine) risk in the world in newspaper articles month by month and year by year. We live in extraordinarily safe and prosperous times.
What the **** do these have to do with Keynesian policy? Tribes, kings and countries have been borrowing and bankrupting themselves to wage wars for millennia. The modern age is far more restrained. World War I, for example, cost the US government 40x its yearly budget. Iraq, in comparison, cost about 20% of the yearly budget and 3% of a year's GDP.

Your ideas don't make sense when actually looked at critically.

No, they don't add value in the short run. But I think WWII's effect on America and its industrialization proves that bridges to nowhere do indeed have major positive flow ons.
You're conflating weapons capabilities with economic stability.
[quote]Hahaha, careful now. You may have stepped on a land mine here. Ever heard of Adam Smith? Widely considered the first and perhaps greatest economist ever?

Einstein would have called himself a moral philosopher too. It doesn't mean that his work on relativity had anything to do with moral philosophy.
I have read it. Unfortunately you're conflating multiple ideas. Economics has nothing to do with moral philosophy. All men who strive to do things, or argue about how to organize human affairs, argue from a basis of what is desired. Hitler thought the world would be better if Jews and Romas and ******s were wiped out. Mao's supporters thought the end of "bourgeois rightism" and capitalism would emancipate the worker.

Adam's Smith argument is that prosperity is made greater by specialization (on all levels). Whether it does depends on data. This is an economic question, and it has nothing to do with morality. The "moral" argument is that because of this economic fact/theory (which he espoused), we should let go of nationalism and allow specialization, since it is better for all. But that has nothing to do with the economic elements. He simply used them to add weight to the moral argument.

You need to unwind all the things you've conflated in your head. It's natural to build bridges and strengthen them, but that's also how confirmation bias works.

As for Keynesian data, I've been really busy, I'll post some of the data that underpins it shortly.

I was wondering if you were going to chime in. It will take me a while to read this and reply to your obvious errors.

It is not ridiculous, nor is it my theory. The first time I heard was from Chuck Butler of Everbank.

I am not saying it makes you stronger, I am saying it makes holding the currency more appealing to international investors. Because their share, their claim on that country's production, can not be diluted in the same fashion that fiat currency can be. This is fairly obvious...

In the case of China and Russia it would make them stronger because US military power is clearly tied to US economic power. The USD, the SWIFT payment system, w.e., can be used as weapons. Supplanting the USD as the world reserve currency is likely at the forefront of Sino-Russian goals.

Backing the Yuan with gold would go a long way in the eyes of many.



Haha, well...again you are seriously wrong. Actually a great deal of the "power" of the USD comes from the Petro-Dollar and its role as the world's reserve currency. Neither of which are really the "producing capacity of the US economy."

It has to do with supply and demand and history...wouldn't expect you to understand.

Haha, surely you must see the irony? My ideas are not out there theories...Keynes ideas are the out there theories...

The Austrian school predates Keynes and was much more a continuation of classical economics than Keynes' theories were.

I am not saying society is going to collapse, or that the world is going to end. I do, however, think that all the borrowing will come home to roost. I do believe that we (the US) made a mistake in Vietnam, in coming off the gold standard, and in most of the things we have done since.

[QUOTE=ToothSayer;48892699]
They have the factories, planes, cars, crops, buildings, computers and know how to do all of these things. As years have gone by, we've gotten better and better at doing these things and making these systems robust. Nothing is going to change, man. People are still going to get up, go to their factories and offices, make stuff, drive it to shops, and pay a percentage to the government (in the denominated dollars of the day). That's what an economy is. This is a process that goes on and on and on all the time, and has continuously for hundreds of years. The only thing that disrupts it is major war, and deflation (see:Japan).

LOL, I did not know that we have factories, cars and planes. Nor did I know that it made sense to say that "The only thing that disrupts it is major war, and deflation (see:Japan)." but to omit (hyper) inflation.

It seems to make sense to me that if you would include the one as disruptive that you should include the other.

Here is a did you know for you: did you know that you can die of both not enough water and too much water?

LOL, you are niave to think that we have those under control. You left out draught, which can effect crops (didn't know we had those). Less crops and more people can lead famine. Have you been to California recently?

Nonsense. The Euro isn't the global petrodollar, but it has plenty of strength too. Why is the Yuan rising in power so rapidly - and despite a very closed, controlled market? Because the Chinese economy is producing more and more. It will rise to be a reserve currency, and alternative petrodollar, because of China's economic strength. Do you think Turkmenistan's dollar could ever do that?

You know what creates supply and demand for dollars? US economic strength. How long do you think the Bhutanese Ngultrum would last as the world's reserve currency, or petrodollar? It would be replaced in weeks by the Euro or something else that has an economy to back it.

You're confusing cause and effect.

It is called hubris. And to be frank, you reek of it. It is what brought down Rome. All the things you say now, were true then. There were getting better and better at "stuff" then too.

I didn't say they were the only things contributing to USD strength. I said you were wrong to say that the productive capacity of the US economy was the only things contributing to USD strength.

The Euro Zone has an economy and a currency...I didn't say a petro currency or world reserve status were necessary to a strong currency.

I said, YOU WERE WRONG to omit them. And, were the US to lose them, (all else being equal) the value of the USD would go down.

[QUOTE=rand;48892898] Hyperinflation - the bogeyman of the Austrians - doesn't exist in normal economies, and means nothing. Moreover, it's not even disastrous.

Hyperinflation is the end stage of having an economy that can't meet its external obligations. A strong world leading economy can never be in this situation.
Rome was an inherently unstable situation - a vast empire of hostile peripheral colonies, too far given the technology of the day for effective administration, centrally controlled. It was a miracle that it lasted as long as it did.

What brought down Rome was the revolt of distantly conquered lands, initially resulting from social fracturing, which itself resulted from letting in very large numbers of refugees who had different values and cultures. This might happen in Europe - demographic trends mean it will be Islamic in <50 years if nothing changes - but it has nothing to do with economic collapse.

Might I also remind you that Rome had coinage?

I think you misunderstand and misrepresent me. I don't believe in a financial apocalypse. I believe the equities markets are due for a correction. And I also believe that hyper inflation and social unrest are possibilities.

I believe interest rates are a real problem. They are a real problem if they go up and they are a real problem if they stay where they are. LOL, 0% interest, negative interest rates? You realize people like Yellen and Draghi discuss negative interest rates with a straight look on their face right? Negative interest rates are laughable...

Maybe, maybe they can engineer a soft landing. IDK. But it is like one possibility in a million. Why are we even in this position. Does it not upset you that the government and the banks are both gambling with your future and betting the farm?

If they get it right, great. But if they get it wrong...They should not even be in a position to get it wrong. They are not the masters of the universe. Supply and demand should determine the interest rate. Not some "academic" who is guessing...

Wait what? You might be right about "normal economies." I don't think this is a normal economy.

Do you not see the feedback loop? It is already baked into the cake...If rates go up the cost of servicing our debt goes up. If the cost of servicing our debt goes up they have to borrow more.

I do not believe that the market for US debt is very strong. In no small part because of all the printing. The value of an asset goes down when you increase supply...Which means that if the US has to expand its issues the Fed will have to keep buying...The Fed buying Treasury debt is money printing.

So if they raise rates they will likely have to expand the national debt.

And if they don't raise rates they will have expand the national debt to keep them down. Or maybe you think 0% interest is natural?

You are mistaken if you do not think that US policy is imperialistic and colonial. I would say the situation in the ME looks very much like hostile colonies...

Sure looks to me that distantly conquered lands are revolting. We occupy so many countries its not even funny. I think Germany is still occupied. I think we alienated Merkel and Germany by spying on her.

I think that Germany requested to repatriate their gold and we told them it would take 7 years.

The US military could move however many tons of gold Germany wanted in a week or two if they tried. Now what is a good reason that it is going to take 7 years?

https://www.youtube.com/watch?v=WrILn0dLVyA

Surely though, there is gold in Fort Knox...

I know, they diluted their gold coins towards the end of the empire...sound familiar?

I am sorry I misunderstood you. A plain reading of this, however, makes your claims of "misunderstanding and misrepresenting" you a little strong though I think:

The free market is robust and can route around what politicians do. For example, try getting a loan under 3%. I find it bizarre that people simultaneously say that Keynesian setting of interest rates are a disaster that put everything at risk, while at the same time believing that the free market can handle every other type of problem better than central planners. Seems odd, no?

Especially since the free market apparently can't handle itself. The 2007 financial crisis happened at approximately historically correct interest rates. The free market created it. Free agents decided to loan the money to subprimes who could never pay. Other free agents packaged this up into MBS products. Yet other free agents sold these MBS products on to suckers who wanted high returns and weren't too bright.

When it all started going south, the free market then voluntarily choked off all liquidity. This was caused by free agents refusing to do business with anyone out of self protection, which is a classic free market confidence trap. So then the government stepped in to keep the money flowing, which has lasted to this day.

Was this government action bad? I don't know. I see no evidence that it was bad. I see no evidence that it was good, beyond the common sense arguments. I'm not a fan of central banks getting involved. But I also don't think they're a disaster. The economic engine seems to run just fine. The banks and policy makers merely tweak around the edge. Innovation continues. Corporate profits - which is what drive innovation - continue as well. A lot of the free money from QE has flowed into corporate profits, which is a *wonderful* thing. Money taken from the common man and given to the innovators and designers and researchers makes America stronger. And we're moving about as fast as we can into new fields and new technologies.

Everything seems to be working just fine. I agree that debt and overspending is a problem, but that's a political problem, not a problem with monetary policy, and it has nothing to do with QE, since governments have overspent for millenia even when gold was the unit of account.

So yeah, that was a hypothetical. If things don't change I think it will lead more and more unrest.

We have it in fits and spurts now...St. Louis, Baltimore.

As for the second part of your post. That is the point. They aren't free markets... They are managed markets...

Capitalism without bankruptcy is like Catholicism without hell. It just doesn't work.

That is my whole point. The government didn't fix anything. They simply transferred the problem from the private sector to the public sector.

You can call the public sector robust if you like, but they can't keep doing that indefinitely. The problem is so much deeper than money market funds or Ferguson MO. Those are just symptoms...

QE = monetizing treasury notes...

It is printing the debt away, just like kings of old would tear up the sticks. Ever wonder where the expression "the short end of the stick" comes from?

And believe me, there were repercussions for dong that. Like people stopped lending to those governments money...

I'm not a doom and gloomer but there is certainly a strong case to be made that interest rates being cut so drastically after 9/11 is what spurred the demand in housing. Then coupled with laxxed lending standards/gov't mandates is what caused all of the malinvestment and bad loans.

I think it is tough to say the government didn't play a very big role in the housing/finance collapse.

Banking panics pre Federal Reserve were all handled just fine. There were a plethora in the 1800s. In the 1907 panic JP Morgan stepped in to provide liquidity as the last resort. They waited until the strongest ones were the last standing then provided liquidity. The weak just failed. Before he did what the FED does today many trusts and banks failed the 1907 panic.

Failure was the cost of making bad loans in a free market. Like Bear Sterns and Lehman of recent. Only in 2008 there weren't any strong ones left actually (see links below). The 1907 panic prompted the creation of the FED. There is no free market post Fed. Take a trip back to the https://en.wikipedia.org/wiki/Savings_and_loan_crisisSavings and Loans crisis and Long Term Capital to see if government intervention helped. The precedent was actually set back in the 90s. Government action then began to big to fail.

This is really a key point.

It wasn't a problem for the private sector. They just chose not to provide the service. And maybe in this case the gov shouldn't have filled the void i dont know, but there're clearly a lot of things that private interests won't cater to that offer considerable value generally because the benefits are difficult to monetize. And in the same way that factories that pollute are obliged to pay abatement fees to compensate surrounding areas that were negatively affected (and in so forcing them to internalize the true cost of production), they also subsidize commerce that has a positive social impact - which in this example would take the form of reduced interest rates.

UPDATE: Met with a financial adviser today. Main thing I took away from our meeting was that taking my cash and buying my brother out in his opinion is bad. Better to buy my brother out via a loan and use my cash to invest. 2nd take away which is more a question is that 146k is in annuities which will be taxed. Am I better taking the lump sum and paying the tax or spread it out over 5 years? Was not sold anything but did discuss investing in the market and 4-6% return seemed to be the numbers I recall. We spoke of the rule of 72 and used 6% to come up with 12 years. Sorry for the rambling but just wanted to get this thread back on track and get some feedback from you all.

Can that really be true. Economic goals and their measure can't be separated from moral philosophy. e.g. how much and what types of poverty is GDP worth? Is less relative poverty a better economic result than people generally being slightly wealthier with more relative poverty?

You could ague a very dry point that that's politics not economics but they're not separable in any meaningful way and the politics aspect is steeped in moral philosophy.