Where exactly would this family have to live in order for $250,000 to not be "rich" anyway?

Answer questions raised earlier in the thread. Who are those people? M0 being created doesn't benefit anyone directly and M1-Mx is all created through private sector transactions. You seem to be having a lot of trouble following this conversation (though I realize you're probably only hear because you've been mentioned). How does this counterfeiting (one person lending to another) help those people and why can't you do the same (that is, borrow and lend) if it is so beneficial?

Why can't you get government contracts/money or buy shares of companies that do get government contracts/money? Who are these mythical people/companies? And how do we know they didn't pay market price for these privileges? And what do government contracts/money have to do with inflation or money creation? Did we not have government contracts or money influencing market prices when we had gold standard or whatever it was that was supposed to prevent inflation?

How is this any different from any other market actor? Whether banks, government contractors, etc, etc. Does anyone else not play the same game?

lolol

You are almost as good at MissileDog at this.

Nice to see people understanding thymology Zygote.

i havent nearly read this whole thread nor did i notice a name drop. just a coincidence i ended up here.

m0 being created does benefit people directly. are you saying if i start exclusively counterfeiting bills in my apartment without fear of prosecution, and in fact rather protection from the authorities, i can in no way benefit at the expense of others when i spend those dollars?

the higher Ms i agree anyone could technically do, but the difference is in the downside protection. growth in the higher Ms only is just an increase in credit risk which anyone can try, but it changes when the fed stands behind a portion of this and we can expect them to monetize the downside of those credit risks. it is this access that makes those firms special. the fed supports these firms in their maturity and liquidity mismatches by providing newly created funds and financing to support the obvious hiccups. at the end of everyday firms use the overnight lending market to meet their demands, and this markets liquidity is strictly controlled and supported by the fed. what these firms do would not be sustainable otherwise and this is not a controversial point.

new money is executed through primary dealers, an exclusive club, not open to everybody. government contracts are also handed out exclusively based on political means. not all government contracts are fairly bid for or are provided with equal access to all takers like you imply. investing in these firms is also only useful if you know about their contracts before others do. still its only useful if you feel those contracts benefit shareholders relative to current prices being offered rather than other parties in the capital structure, or within the firm.

there was never a real gold standard, so yes there has always been government contracts and money influencing market prices and allocations. even with a gold standard government contracts can still be exclusively handed out, and the financing for such contracts is stolen from the public at large via taxation.

in that sense yes. we all have equal access to speculate. though if i want to my ability to borrow is more determined by the market. unsecured loans are not given to me so cheaply and loans secured by **** assets are not given to me so cheaply either. in fact the people lending to me are middle manning the process in that they get access to the cheap stuff and pass it on to me at a more expensive clip.

NYC for example.

You're confused. You kids use the term "counterfeiting" to refer to fractional reserve banking, thus M1 through Mn.


So counterfeiting doesn't prefer anyone?


Why does it matter? A bid is a bid is a bid. At this level, market prices propagate instantly to everyone with credit. If your bank can borrow from the Fed at some rate, if your credit is just as good, you can borrow at basically the same rate. If the Fed buys securities at some price, you can sell those securities at the same price. This was explained earlier in the thread. And again, who are these very specific people you can point to as beneficiaries of this process? You can buy shares of these primary dealers. So not even owners of these companies? You know, the whole point was this idea that we know exactly who benefits. Even if dealers are privileged in some way, it seems obvious that anyone could get a job at or buy shares of these companies.


Are people born with government contracts? To the extent that political means can be attained and passed on to children, they are largely economic goods. And if it's not owners that benefit, who are these specific people at these companies that benefit? How did they get there? Is it due to some government intervention that you're not able to become a partner-MD at Goldman?


So you're now saying that that part of your rant had nothing to do with money creation and inflation? Stick to the topic.


Again, your inability to access wholesale prices is a free market result.


What is counterfeiting that Zygote was referring to?

what do you mean im confused? counterfeiting in this sense i use it is at its heart the expansion of spendable currency. fractional reserve banking is not counterfeiting. its fraud in a sense, that people are reported liquid balances when really their balance depends on a portfolio of assets, but this is irrelevant. fractional reserve banking is only counterfeiting to the extent it forces the fed to create money.

see above as i think you were confused. counterfeiting clearly benefits early receivers over late receivers. simple thought experiments can reveal this much.

this is not always true. often banks dont cut their rates with cheaper cb rates. sure they usually transfer over but not always. and still the banks are given a base layer to make money from. their financing is extra market. they get the government to subsidize their deposit insurance allowing them to get cheap financing with deposits. also, they have a big security in that they are able to practice fractional reserve banking so smoothly. in addition they are aided with accounting rules and other federal protection to help them keep borrowing costs lower than would otherwise be determined.

not necessarily, but sure thats likely. last price does not determine the next price. but who cares? this doesnt prove anything.

one fact of the matter is banking shares do a lot better than they would otherwise without government support. thats all that really matters.

it doesnt mean they are necessarily the best opportunity, and sometimes they have been and for those who can anticipate those times they will do well. The nature of the way banks success trends in cycles is part of the problem for long term share holders as huge trading profits are leaked out in bonuses in good times but there is no equal compensatory force when those profits decline. the success of leverage and cheap borrowing also encourages low cash balances which put shareholders at signficant risk always. also just because banks get an advantage doesnt mean they will use it effectively and be worth tagging along with. someone can be benefiting and still squabbling the benefits.

to tag the people who benefit you just need to follow the spending line or circulation of money. From its inception as a fed liability down the line, the early receivers benefit in a zero sum sense from the late receivers or non-recipients. this is obvious. i know you know enough to figure this out.

these banks are old and their ties and connections are deep. they are largely exclusive and the merits for entry play a large part in who you know from the get-go. also what if my specialty isnt finance? the fact that finance is an area the government choses to subsidize is already a disadvantage to me in favor of someone else who is in finance. the government choses which area of contracts to favor. its not a free market when there is a government forcefully managing massive parts of the process. your argument just seems to be that we are free to exploit the government so we're just as free and should stop complaining. correct?

lobbying the government is not a free market process. your assumption of this is what hinges your whole argument.

Don't forget Monaco.

Monaco is certainly another example. I'm not sure why you think that I have forgotten it, it isn't the most relevant example since the discussion has mostly been about people working and living in the United States.

anywhere imo

again rich is not the word you are looking for

ZOMG stop being silly, your definition of rich is different from mine!!! WORDS HAVE MEANING IMO!

no u!

lol

let's try defining Greed next

Words do indeed have meaning, and the notion that a person with the exact same possessions and material wealth can meet the definition of "rich" in poughkipsee and not meet it in manhattan is ludicrous, given the plain meaning of the word.

People who think $250K isn't "rich" have never, ever been poor IMO.

You dispute that different cities have different cost of livings? Is your definition of a rich person the same for someone living in Honduras and the US? If not, why is Manhattan and Poughkipsee different?

Oh, and someone living in Manhattan making the same as someone living in Poughkipsee couldn't have the same material possessions and material wealth. That's the whole point; many of the material possessions cost more in Manhattan.

What does "$250k" even mean?

Early on in this thread we were talking about a family with a combined gross income of $250k. It's unlikely but possible for such a family to have a negative net worth. As ElliotR pointed out, words do have meaning, and the meaning of rich is "possessing great material wealth". Can it be said that a person with a negative net worth possesses great material wealth?

I find it presumptuous to consider a person rich based on expected future pay checks/etc.

Depends on how secure their future pay is. I would generally consider a radiologist just coming out of residency and entering private practice with a net worth of -100k to be rich.

No.

yes

n/a

Now you answer some:

1) Do you dispute that differences in cost of living reflect differences in the demand for living in given areas?

2) Would you rather be in the 66th percentile of wealth (i.e., 1/3 of the people are richer than you, 2/3rds are poorer) in Guangdong Province in China or in the 33rd percentile of wealth in Monaco?

3) Who is richer, someone in the 66th percentile of of wealth (i.e., 1/3 of the people are richer than you, 2/3rds are poorer) in Guangdong Province in China or in the 33rd percentile of wealth in Monaco?

You may be shocked to learn that there are indeed ways to value future streams of income. Even those that are uncertain.

Sure. Although much of this effect is due to the proximity of the area to high-paying jobs.

Monaco

Monaco.

Sure. Although much of this effect is due to the proximity of the area to high-paying jobs.

Monaco

Monaco.

So all those people in Honduras who make 60k a year and think they are rich are idiots, Elliot?

So, since you are acknowledging that different cities have different costs of living, I'm not sure how you can say that I'm saying this:

The things in Manhattan cost more; the two people will not have the same possessions and material wealth.

Whatever difference you think they have is the difference in the value of living in one place vs. another.

Put another way, a guy fresh out of grad school no debt no assets gets a job in midtown Manhattan for $250k a year. IOW, his only asset is his future income stream. His level of "richness" does not depend on whether he chooses to live on the upper West Side or in Queens or in Mineola or in Hoboken or in Newark or in Poughkipsee. Same guy except this time in addition to his expected future income stream he has a $10MM trust fund. Same answer.