Probably tl;dr for most, if so just pass on it.

I've stated this before but I think it's worth repeating, Borodog definitely doesn't get enough acknowledgement for his positions on fractional reserve banking; fiat currency/monetary system & policy; use of credit in USA financial system; government favorable treatment of business debt; government intervention in the market place; among many things.

Look at how the financial system has been shaken including the bank failures as an easy example to show what that his positions have a lot of merit. When I first read his posts I'll admit I had never really considered a lot of alternatives but over the years it's easy to see that:

1) Banks were severely overleveraged. To take this to the extreme, if banks were not leveraged at all does anyone think the melldowns in the financial sector would have unfolded as they did?

2) The Fed's quantative easing in response to the current financial situation is basically printing money that supposedly the Fed will "drain" from the system when the economy improves enough (not a great way to put it but hopefully understandable). A sure way to destroy a society is to destroy it's currency. The risk of that happening has definitely increased.

3) Does anyone doubt that Boros positions on the over use of credit has contributed mightily to the situation we're in? Can anyone doubt that the government's favorable tax treatment of debt has contibuted as well? We can debate that but it seems more than obvious that the extension of too much credit has caused a lot of the problems we're seeing.

4) TARP; the stimulus bill; quantitative easing, punative taxes; bailouts; punative taxes, government picking winners and losers in business; etc. are examples of government intervention that quite frankly seemed to have done nothing more than drive up USA debt and allowed government to usurp more power. I keep thinking that what if the government hadn't intervened with the banks as well as other financial institutions and allowed them to just go belly up. The assets would have been sold off in bankruptcy; private capital would have undoubtedly found it's way to invest in new banks with clean balance sheets; and investors would have demanded better management than existed with the banks that went under. Instead government has propped up the losers and from all reports I've heard and read, money is very, very tight. I mean coming out of massive bank failures I realize that money would be tight but I'm thinking with clean balance sheets not as tight as it is today as a result of government's intervention. I realize also that I've stated that the over use of credit has been destructive but that doesn't mean all lending is destructive.

Also when I started reading Boro's posts I always thought he was exaggerating regarding the loss of freedom that can occur in a time of financial calimity. I don't think so anymore and I get it now.

Thanks, but there is little original in my positions. I read what some very smart people write, and it makes sense to me and I, usually poorly, try to pass it along. There are also many other posters around here who deserve more credit (no pun intended) than me. They post more, they are not *******s, they can make a clearer case, they are not *******s, they understand these things better than I do, and they are not *******s.

But thanks.

This is a weird posts. I would have describe most of those positions as pretty much the consensus on this board.

Correct.

Are you talking about mortgage deductions?

The problem is, that in the interim we would have the second Great Depression. TARP has been successful in that the financial system has not collapsed and indeed is showing signs of recovery: banks have been reporting healthy profits in the 1st quarter.

The junkies cold turky symptoms seem to have abated in the short to medium term now that he has been given more smack.

The government is manufacturing GDII, just as it manufactured the first one through exactly these kinds of moronic policies. Except this time they're really thuper therious.

I could show "healthy profits" too if the government handed me hundreds of billions of taxpayer dollars. A banking system that is prevented from collapsing when a collapse is what is required is not a good thing. The result will be cataclysmically worse, just like the current crisis is vastly greater than the early 2000s recession that Greenspan printed his way out of, leading directly to the current one.

OP left out some of B's best work.

5) Correctly predicted that Bush would declare marshall law and become president for life.

I'm sure there's more . . .

Link it.

You should have picked "Buy gold at $1000/oz" imo.

http://forumserver.twoplustwo.com/41...al-law-315552/

Fail.

Try the Political Punditry thread where I was talking about the Iran war.

Denial ain't just a river in Egypt imo.

He's so humble!

there are reasons for that. their names are borodog and pvn iyam

Your link does not contain (in the first 50 posts):

Not even close.

Ways it's wrong:

• Borodog was reporting, not predicting.
• It was a threat (according to the congressman), not a prediction.
• Congress didn't test the threat -- they passed the bailout. So it isn't even discredited.
• President for life is entirely your creation. Borodog doesn't say anything remotely like that.

econophail

There was this one...

http://forumserver.twoplustwo.com/30...monday-319428/

Honestly, your posts are so spot on and well conveyed that if you weren't off every once in a while it would be scary.

I'm still waiting to see if his inflationary depression prediction pans out.




2008

Unleaded reg gasoline: 3.258

Large Grade A Eggs: 2.203

Whole Fresh Milk: 3.781


2009


Unleaded reg gasoline: 1.949

Large Grade A eggs: 1.693

Whole Fresh Milk: 3.116



As I understand it the inflation will occur when banks start lending again?

Yeah, that was a doozy. I'd blocked that one from my memory.

When it comes to short term market timing, you can pretty much take anything I say and exactly reverse it and not be far off the right track.

Most likely, although that isn't strictly necessary if things get really bad (e.g. government starts directly monetizing to finance its expenditures).

The only other way for the economy to have grown to the point it has without there being as much private sector leverage, is for the government to have borrowed more money. So if your argument is that the government should have borrowed more, that's at least a coherent theory, but it's odd. Financial institutions as a whole cannot be any less leveraged than they are without 1) the general public investing a larger share of the wealth in financial institutions or 2) the government spending a larger share of the wealth.


The Fed has for the most part handled the situation correctly, given their legal and operational limitations.


I don't know who's doubting what, but again, the only way for us to have used credit much less, was to have the government spend more money. The demand for dollars and dollar-denominated debt overseas meant use of credit was economical. If we demanded everyone to have more cash (and less risky, government debt), the only place it could've come from is the US government.

It doesn't follow that the mortgage interest deduction causes people to own homes uneconomically with the mortgage interest deduction intact. Furthermore, there has been much speculation during this boom that had nothing to do with the tax treatment, as investment properties aren't given the same tax treatment.


The #'s don't add up. There simply isn't enough cash around for any of those things to happen without severe deflation. Don't forget that deflation increases the present value of the government's liabilities and to the extent that people whine about the debt, deflation causes the government to be more indebted than before, not to mention the structural economic problems it creates. In fact, allowing severe deflation to take course, to the extent that it massively increases the government debt and destroys the economy and the tax base, would set up a stage for hyperinflation to take place.

Yeah, when I first read your Monarchy/Democracy thread I thought you were some sort of unstoppable genius. This is before I read LRC every day or even knew who Hoppe was. But I do think that you generally do a very good job in passing along other people's original scholarship.

You're probably right that the mortgage interest deduction didn't have any impact on the later stages of the housing bubble. And given the Fed's monetary policy it was inevitable that some sort of bubble would be blown up. But the mortgage interest deduction played a key role in allowing the housing bubble to be blown up, because it essentially destroyed the rental market for single-family homes. You would be a fool to rent a home rather than buy one under the current tax law and lending practices (assuming that there is no housing bubble). So for fifty years no one could compare the rental price and sale price/mortgage payment for comparable homes, which allowed the prices to be bid up to unrealistic levels. No one thinks about the cash flow that a house could generate.