US running out of cash? - Page 5 - Snowboarding Forum - Snowboard Enthusiast Forums
 
 
LinkBack Thread Tools Display Modes
Old 08-03-2011, 09:44 AM   #41 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

Quote:
Originally Posted by cifex View Post
Those of you who are complaining about 3% inflation have no idea what you are talking about. Inflation is by design. If you have a situation where there is deflation, everyone holds their money instead of reinvesting into projects that create jobs. That inflation is a little cattle prod to induce the rich to reinvest their money in something that will return more than 3%. The jobs that are created give the rest of us a chance to get rich. During the mid and late 70s, inflation in the US was well over 10% annually.
Inflation isn't 3%. Core CPI numbers use hedonic regression and substitutions to engineer inflations numbers that politically expedient. For a real idea of inflation, look at some of the way commodity and money market indecies are trading, things like precious metals and the US Dollar Index, for example. Also, the bond market tends to react inversely to the strength of the dollar and dollar strength is inversely proportional to inflation. The bond market is strongly influenced by inflation.

People who put money in banks provide the capital formation necessary to create actual disciplined credit so it can be loaned out. Money doesn't just sit in the bank. Our banks have a 10% fractional reserve requirement on all non cash-on-demand acounts. This would actually reduce interest rates (and naturally, not through quantitative easing) which would increase the availability of capital for investment.
CheeseForSteeze is offline  
Old 08-03-2011, 11:03 AM   #42 (permalink)
-LIFETIME MEMBER-
 
baldylox's Avatar
 
Join Date: Dec 2007
Location: New York
Posts: 3,112
Default

Quote:
Originally Posted by CheeseForSteeze View Post
Inflation isn't 3%. Core CPI numbers use hedonic regression and substitutions to engineer inflations numbers that politically expedient. For a real idea of inflation, look at some of the way commodity and money market indecies are trading, things like precious metals and the US Dollar Index, for example. Also, the bond market tends to react inversely to the strength of the dollar and dollar strength is inversely proportional to inflation. The bond market is strongly influenced by inflation.
You're splitting hairs based on your opinion of which measure of inflation is best. For my, money, I prefer the analysis of the Board of Governors. Inflation is low and very much under control, thus the minimal interest rate.


Quote:
Originally Posted by CheeseForSteeze View Post
People who put money in banks provide the capital formation necessary to create actual disciplined credit so it can be loaned out. Money doesn't just sit in the bank. Our banks have a 10% fractional reserve requirement on all non cash-on-demand acounts. This would actually reduce interest rates (and naturally, not through quantitative easing) which would increase the availability of capital for investment.
The capital will ultimately reside in banks regardless of whether it is individuals putting it there or businesses. In a deflationary environment there is far less incentive to keep your money in a bank. It will gain value under your mattress.

The lower interest rates would be offset by the fact that the value of the dollars you pay back would be greater than the value of the dollars you borrowed.

Deflation stifles growth. It is as simple as that.
__________________

Last edited by baldylox; 08-03-2011 at 11:09 AM.
baldylox is offline  
Old 08-03-2011, 11:16 AM   #43 (permalink)
-LIFETIME MEMBER-
 
baldylox's Avatar
 
Join Date: Dec 2007
Location: New York
Posts: 3,112
Default

Quote:
Originally Posted by CheeseForSteeze View Post
Again, we can't obssess with the idea of consumption being needed to patronize production. A commonly used analogy is a small farming community that produces everything it needs. Everyone eats slightly less than they produce except for one member who eats the aggregate balance. Obviously, this means he has to consume more than he produces. If he suddenly were to be removed from the economy, would the economy fall apart because he's no longer there to provide consumption to patronize their production?
Are you going to use him to fertilize the soil?
__________________
baldylox is offline  
Old 08-03-2011, 01:17 PM   #44 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

You assert inflation leads to low interest rates. Again, the tail does not wag the dog. Low interest rates are how inflation is achieved. Central lending rates (discount rates and overnight rates) lead to creation of commercial money driving up money supply and causing inflationary forces on prices. If inflation were low, interest rates would respond by increasing because interest rates simply are the supply/demand of capital liquidity.

Inflation, as reflected in prices, is only "under control" because it be exported through issuance of bonds and T-bills. In terms of the amount of commercial money that exists, you would have to know the total unfunded liabilities in terms of issued debt obligations and somehow extrapolate how much of the budget will be continue to be financed in this manner.

Inflation nor deflation stifle growth. Malinvestment is what destroyles growth and inflation tends to exacerbate malinvestment while deflation can stifle all investment. Deflationary scenario also will result (necessarily) from healthy interest rates, driving up capital demand. Once capital demands are satisfied, interest rates will respond by tapering off and deflationary forces will be weakened. It is a negative-feedback mechanism in this manner.

The problem is that inflation is far too high but it is masked because it is able to be exported. Yet, this will come to an end. Debt cannot be used to drive a society forward because it creates undisciplined investment.

And regardless if the 5th member spreads fertilizer or becomes it, you still have a situation where 4 can do the work of 5.
CheeseForSteeze is offline  
Old 08-03-2011, 01:59 PM   #45 (permalink)
Senior Member
 
Join Date: Apr 2009
Location: Houston
Posts: 509
Default

Quote:
Originally Posted by CheeseForSteeze View Post
Again, we can't obssess with the idea of consumption being needed to patronize production. A commonly used analogy is a small farming community that produces everything it needs. Everyone eats slightly less than they produce except for one member who eats the aggregate balance. Obviously, this means he has to consume more than he produces. If he suddenly were to be removed from the economy, would the economy fall apart because he's no longer there to provide consumption to patronize their production?
No one should be eating 500 times more than anyone else. If the big eater is removed, economy will not fall apart and will rebalance itself eventually as long as we prevent these big greedy eaters. The problem is that the big eaters have too much control of the economy. They actually can decide how much everyone else will eat. The idea is so simple, the rich gets richer and the poor gets poorer.
yusoweird is offline  
Old 08-03-2011, 02:46 PM   #46 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

We do have people who eat much more than they produce. It's called people on welfare.
CheeseForSteeze is offline  
Old 08-03-2011, 03:10 PM   #47 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

Corporatism is obviously a problem. I'm not sure why you're so exasperated over it, though. I favor market capitalism where neither the poor nor the wealthy would be subsidized. I like how you want a strong middle class though but don't seem to have any problem with supply side theory, inflation driven central economic planning models.

Inflation is what drives the working class into poverty. It undermines their primary mode of ganerning wealth (working for wage) and forces the working into a model of leveraging future wages (future work which will be performed) in order NOT to be milled into oblivion by inflation.
CheeseForSteeze is offline  
Old 08-03-2011, 03:19 PM   #48 (permalink)
Drunk with power...er beer.
 
Donutz's Avatar
 
Join Date: May 2010
Location: Vancouver, BC, Canada
Posts: 4,595
Blog Entries: 217
Default

Quote:
Originally Posted by CheeseForSteeze View Post
We do have people who eat much more than they produce. It's called people on welfare.
And what percentage of the budget would you say that they affect? If you wipe out the welfare rolls, will the USA suddenly have tons of cash?

Yes, I know there are people abusing welfare. Right-wingers always use that tired canard as the basis for a rant against social programs. The trouble is generally A) the cheaters form a small fraction of the total, and B) the total forms a very small part of the total budget. This is nothing more than argument by distraction.

Then there's the moral issue. Maybe you live in a universe where it's ok to kick someone to the curb as soon as they can't pull their weight. Some of us feel differently.

As to the rich and CEOs and such -- yes, they've generally earned their money (except the ones who inherited it), but demanding that they be allowed to keep more of their money, and at the same time demanding that some guy practically living in a cardboard box should have his $200 a month cut off to balance off those tax cuts, doesn't do much to make you look credible. Or human.
__________________

In retrospect, "Let's get the goat drunk"
should have been my cue to leave the party.
Donutz is offline  
Old 08-03-2011, 03:47 PM   #49 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

Quote:
Originally Posted by Donutz View Post
And what percentage of the budget would you say that they affect? If you wipe out the welfare rolls, will the USA suddenly have tons of cash?

Yes, I know there are people abusing welfare. Right-wingers always use that tired canard as the basis for a rant against social programs. The trouble is generally A) the cheaters form a small fraction of the total, and B) the total forms a very small part of the total budget. This is nothing more than argument by distraction.
It doesn't matter if they are "abusing" it or not since abuse is just a matter of perception and opinion. This is why public social programs are doomed to failure from inception, because the arbitrary line that seperates the qualifying from the abusive becomes a weapon manipulated by politicians to get re-elected and a cause championed indignantly socially righteous in order to appear fashionable.

It is only an argument by distraction if you errorneously assume that I was stastically exaggerating the affect of the "abusive" population. I'm not. The concept of public works is doomed to failure by its very nature.

Quote:
Then there's the moral issue. Maybe you live in a universe where it's ok to kick someone to the curb as soon as they can't pull their weight. Some of us feel differently.
Who said anything about kicking anyone? Are you inventing my argument for me?

This is about public policy, not a campaign to abolish any and all charity Since it seems you like to invent arguments based on positions you assumed which were never even taken, I'll point out it's an oft-touted mantra of the Left to completely deny that private charity or works of good faith to the public take place without government coercion and that such works contribute to a large amount of the help the needy receive. It is also a logically fallacy of the Left to assume that these program wouldn't increase in capacity as funding was withdrawn from the Federal level, reallocating previously taxed dollars towards such ends.

Also, why do you phrase everything as an emotional bludgeon? I have no emotional investment in this matter. Are there emotional stakes for you to take the position you do?

Quote:
As to the rich and CEOs and such -- yes, they've generally earned their money (except the ones who inherited it), but demanding that they be allowed to keep more of their money, and at the same time demanding that some guy practically living in a cardboard box should have his $200 a month cut off to balance off those tax cuts, doesn't do much to make you look credible. Or human.
Appeal to emotion. Nothing about this scenario you've constructed (nor your efforts to buffer it an emotionally dramatic light) speaks to my credibility on the subject being discussed. It only does so if you've constructed some fallicious environment whereby championing any platform contrary to yours is grounds for being incredulous.
CheeseForSteeze is offline  
Old 08-03-2011, 04:25 PM   #50 (permalink)
With extra cheese.
 
CheeseForSteeze's Avatar
 
Join Date: May 2011
Posts: 1,750
Default

Quote:
There are states within this country where environmental regulations are very poor and wages are sub par(the deep south for example) , yet even that is not an incentive for these corporations. Organized labor? that is a joke. Since Reagan, the unions have become impotent and inconsequential. You seem to be making the same argument that the Capitalist makes against sensible regulation and fair worker treatment. Do you REALLY believe that no environmental, safety or labor regulations will make for a good situation? You almost seem to be advocating that Americans should go back to the old days of child labor and sweat shops since after all, it is only the rich who matter.
I'm demonstrating, through anecdotal example, WHY labor and manufacturing is being offshored. You asked why, and that's why. Don't attach some emotional attachment to the situation on my part.

Quote:
Fact of the matter is, these ultra wealthy Capitalists are obsesses with greed and profit.
So is everyone in this country. So is everyone, period. We want things cheap, we want them quality and want them on demand. But greed isn't an adverse quality when it comes to economic exchange. Greed isn't enough. Greed might constitute one part of economic demand, but the other, purchasing power, is what facilitates actual economic prosperity when economic trade occurs.

You act like these large conglomerates literally take money out of people's pockets. They provide products in exchange for your money. Obviously, it benefits you economically, because you are trading your labor for something you need but they can produce more efficiently than you could.

Quote:
When Nike closes a plant in Portland Oregon to make shoes in Vietnam, does the price of a pair of shoes go down? does the American and international consumer reap a reward? No! every cent of increased profit through forced Asian labor and inhumane treatment goes straight into the Capitalist`s pocket. Without regulation, Capitalism becomes a self destructive predatory monster that feeds off of death and utter destruction.
Then people should stop patronizing Nike, buying Nike corporate bonds, and purchasing equity in Nike. You act like Nike can just be evil. It takes the greed of the consumer to enable them to do so. If consumers weren't so greedy and wanted were willing to pay for a product produced with the blood of poor, would Nike have a market for the product?

Do you buy value branded items? If you so, you are JUST as guilty as everyone else for enabling the abuse of the poor. Share some of the responsibility.

You are literally blaming the gun for the killing.

Quote:
Again, adamantly disagree. Without someone, somewhere to consume the goods and services that industry provides, no economic transactions take place.
So what? That is good. It means the capacity for that good has been fulfilled and society can use the excess labor resources for other things it needs. I'll write it yet again. If humans biologically didn't require nourishment, would society be better or worse off despite the fact that farmers would not be unemployed?

Quote:
Consumerism absolutely is a crucial ingredient to economic health. What good is simple wealth if there is no eceonomic activity in which to utilize wealth?. I can sit on a gold mine with 500 metric tons of pure grade gold and it is totally useless unless there is economic activity in which I can use that gold to trade for goods and services.
That's like complaining if no one will buy your service of digging and filling up holes that it's not valuable. Of course it's true. It's not if something can or will be consumed, its whether or not society has need to consume it or not. That IS the problem. Regulations in the market create distortions which means producers cannot know (through the price mechanism and forces of supply/demand) which goods society actually needs for consumption.

Quote:
Okay, again, without goods and services (Which directly relates to job creation and retention) how does wealth get generated???? The wealthy person has got to provide some tangible good or service that others pay for in order to remain wealthy.
I'm not sure, whatsoever, what you are talking about. Who said anything about abolishing goods and services? I suggested that if a job is destroyed because what it produces can't be consumed, that is good because it means the need for that good has been fulfilled. That labor can be reallocated elsewhere where demand hasn't been fully supplied.

Quote:
Yes, because if half of the people are unemployed, society has to support them one way or the other. Whether through welfare or through the penal system when these people resort to crime to survive. There is value in maintaining the strength, health and education of a society. Sadly, the Capitalist sees only profit and does not value the society he feeds off of like a leech.
So these now free individuals can't turn their attention to new ventures? New services society could utilize? If what you are suggesting is true, we'd have enough farmers to feed us and the rest of us would sit there, waiting for our portion of food. We wouldn't have any other industry outside of the first one to arise.

Like Donutz, I see you like to assume a demographic and assign assumed positions based on it. It's often the Socialists inability to see things like unemployment and periods of economic downturn have essential roles in refocusing and reestablishing an absolute reference to work from.

Quote:
It is relevant because it clearly shows this upward redistribution of wealth and the unwillingness of the upper class to reinvest into the system that got them wealthy in the first place. These salaries are voted on not by the middle class, they are voted on by millionaires sitting on these boards who demand ever increasing profits
Once again, they are enable by consumers. If the middle class weren't so busy obsessing over "need" to have gadgets and trinkets, they would stop patronizing the companies producing them so the super, unfair mega-corporate board lording over their piles of cash wouldn't be able to do so anymore.

Quote:
Instead of multi million dollar bonuses, if these elites would instead share the wealth just a little, the entire economy of the country would benefit.
The entire economy already benefits. It benefits because in order for them to make money, they had to provide a service or good in the first place. They didn't just take money by threat of force. That's what the Government does. You act like they just take money but don't provide anything. Apple makes enormous profits because every year, they make a new phone everyone is willing to pay hundreds of dollars for.

Quote:
The country cannot pay its debts because these Oligarchs have seized the wealth of the country and are hording it.
They didn't seize anything. The middle class continually purchases goods enabling their own captivity within an inflation driven serfdom.

Quote:
They don't care about anything but gaining more and more and more and wont stop until the entire planet is a clear cut, strip mined, polluted slag heap and humanity is reduced to starving zombies so long as they have theirs.
They cannot DO this with a market to demand that services/products that create those effects. Stop painting everything as a melodramatic appeal to emotion and make your point with logic and reasoning.
CheeseForSteeze is offline  
 

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On



All times are GMT -5. The time now is 03:45 AM.



Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
Content Relevant URLs by vBSEO 3.6.0 PL2
VerticalSports
Baseball Forum Golf Forum Boxing Forum Snowmobile Forum
Basketball Forum Soccer Forum MMA Forum PWC Forum
Football Forum Cricket Forum Wrestling Forum ATV Forum
Hockey Forum Volleyball Forum Paintball Forum Snowboarding Forum
Tennis Forum Rugby Forums Lacrosse Forum Skiing Forums