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Old 08-04-2011, 12:55 PM   #71 (permalink)
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Originally Posted by cifex View Post
There are only 3 that matter and none of them have downgraded US debt. China is a junkie for US debt and that isn't changing soon so there will be no downgrade.

Exactly....nothing has changed.

Their interest isn't nefarious, they are interested in manipulating their currency in the manner that most benefits them....same as us.
It's nefarious when your short-term intentions engender a bad overall investment strategy. What is changing about long term US monetary and fiscal policy that would have you believe US Treasuries, when matured, won't be paid back in severely devalued dollars?

Foreign players in the bond market will have to continue to consume bonds at a rate to facilitate our debt needs or the bond market will unwind itself very violently. That doesn't bode well for me, as an investor, considering that the social programs in the United States aren't doing much of anything to make the it more productive.
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Old 08-04-2011, 10:39 PM   #72 (permalink)
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Reserve requirements don't change day to day though, so while it is certainly an influence, it's a set variable for the purposes of analyzing the change of monetary growth and resulting inflation as a funtion of market and political activity.

Cifex:

If I default on you, your losses aren't only the principal, but the amount the principal appreciated. In a deflationary environment, consider the fact you could set on a static instrument and it will appreciate with nearly zero risk. I think it goes without saying that in a deflationary environment, bonds will be worth more upon maturity than in a stagnant or inflationary environemnt. I think we all accept this as a fact of nature about instruments denominated in the nominal currency.

What we have to consider, however is how different vehicles compare to each other the same environment and determine how those vehicles compare to each other another environment, not only how the vehicle compares to itself across different environments.
Are you deliberately restating things I've written as if it were new to me?

You use a great many words to say very little.
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Old 08-05-2011, 12:15 AM   #73 (permalink)
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Yes, but Japan also has a very high savings rate. Their mentality about borrowing money is different. Do you see a culture of savings in the United States? Look how many things you can finance.

Interest rates don't guarantee "inflation" because that would insinuate a specific threshold of monetary growth upon which the state of inflation would depend. It increases inflation. Any monetary growth more than 0 is, by definition, inflation. What low interest rates guarantee, through the function of central fractional reserve banking, higher inflation than without low interest rates.

The reason leaving interest rates to be determined by the market is critical is because monetary growth would control itself. Low interest rates would generate a lower demand for capital investment, driving rates up until more capital was created, driving rates down.
You said previously that higher interest rates solely "WILL" cause inflation. Now that I've pointed out Japan as an example that contradicts you, you have to bring in culture as another factor. While I agree our culture is different from theirs, my point is that higher interest rates doesn't NECESSARILY increase inflation.


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Yes, and the best deal will come with a price the offshoring of jobs because of the greater competitive production environment available elsewhere. That's like arguing that reproducing can't be blamed on humans because it's human nature to reproduce.

Buying domestic obviously comes with a higher cost, but it's a cost that buys something some people are willing to pay. I bought my snowboards from companies that make them in America (with the exception of Capita). I pay more money, obviously, but that extra cost pays for something that I want to buy.

So yes, the blame does rest with the consumer. Either they are too ignorant to understand or do not care. If demand for US made products came in to vogue, do you think more companies would offer American made products and aggressive market this aspect of these products?
Buying domestic doesn't have to come with a higher cost if imported stuff is made more expensive. Thus if imported stuff is made more expensive, more consumers will naturally generally buy the cheaper domestic wares.


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What do tariffs do? They intend to protect domestic producers by making imported wares more expensive, artificially. It stands to reason that the domestic products cannot be made as efficiently, because if they could be, they would be priced as cheap and the need for the tariff wouldn't exist. But this means to buy a ware of a certain type, now the consumer must pay more because they will either have to buy the import with the tariff or the inefficiently made domestic product. This means there are funds that aren't available to spend on other wares from domestic producers of wares in a different trade.

What tariffs do, unintentionally, is protect domestic producers at the expense of other domestic producers.
So I've heard that by the book argument before during my economic courses during college. Lets factor in generous subsidies from foreign governments. Look at our history for proof. Tariffs have helped American manufacturing grow ever since the founding of the nation. Are you saying the rise of America to a world power through domestic manufacturing at the end of the 19th century (in such a short time) would have been possible without tariffs?


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Yes, but the leaders are chosen and held accountable to the people. It is the duty of the people to make sure the leaders of the country do what is right. I'm not sure what this has to do with the point you're making above, either.
Its kind of hard for people to be exercising it with their best judgement when they are continuously fed a bunch of misinformation through FOX and other extremely nutty outlets. FOX even won the right in court to broadcast misinformation without punishment because it was judged to be free speech.


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This is erroneous. You don't have to be a Democrat to support that. I voluntarily give money through my local charities, I volunteered time in college and today to organizations like Russell House (a local battered woman's shelter), Habitat for Humanity and I volunteer on the holidays at local places (I did Bea Gatty last year, and TBH, it could have been better organized). I am unaffiliated with any party.
I didn't say you have to be a Democrat to support it, that's just one of the reasons why I choose to be a Democrat. But I sure as heck know Democrats overall are much more willing to support it than the current GOP, the extremist Tea Party, and right leaning independents. Mandating certain government programs to help the disenfranchised is a lot better than just letting the disenfranchised depend solely on the charity of the common citizen because (no disrespect to the charitable work you've done) the generosity of citizens is not alike and if a citizen just decides right then and there not to do any charitable work, the disenfranchised got nothing if there is no government programs. Again, one of the reasons why I'm a Democrat.
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Old 08-05-2011, 01:23 AM   #74 (permalink)
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Reserve requirements don't change day to day though, so while it is certainly an influence, it's a set variable for the purposes of analyzing the change of monetary growth and resulting inflation as a funtion of market and political activity.
I would name it catalyst or inhibitor. It really pushes the accelerator of funds multiplication, getting ten-fifteen times larger sums which is false.
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Old 08-05-2011, 09:07 AM   #75 (permalink)
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You said previously that higher interest rates solely "WILL" cause inflation. Now that I've pointed out Japan as an example that contradicts you, you have to bring in culture as another factor. While I agree our culture is different from theirs, my point is that higher interest rates doesn't NECESSARILY increase inflation.
Interest rates *will* cause inflation means interest rates will increase the inflationary forces on prices relative to lower interest rates. It doesn't mean that if interest rates in Japan are lower than in the United States that the Yen will depreciate faster than the dollar. But if interest rates were to lower for central banks in either, the inflationary forces will tend to increase. Japan might have to half their interest rates, hypothetically, to achieve only a 5-10% increase in price indecies whereas a corresponding change might yield a 15% price increase for things denominated in dollars.

The assertion that because Japan has low-ish (comparable to the United States) interest rates and Japan has low amounts of inflation means that lower rates don't cause inflation is incorrect in this regard. What should be asked is if we compared two Japans, which one would tend to experience more currency inflation.

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Buying domestic doesn't have to come with a higher cost if imported stuff is made more expensive. Thus if imported stuff is made more expensive, more consumers will naturally generally buy the cheaper domestic wares.
Of course buying domestic won't cost more imports are subject to tariffs and duties. But both will cost more than imports which are not. These displaced funds would then be unavailable to patronize other wares made by domestic producers.


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So I've heard that by the book argument before during my economic courses during college. Lets factor in generous subsidies from foreign governments.
If foreign governments subsidize certain industries, whose wares we import, they do so through tax revenues. Those are monies taken from their economy not available to patronize their own services.

Let's look at it another way. If another country taxes its citizens to provide us with cheaper than market products, why would we think that is bad? That's literally being given money. Mobilize and restructure to take advantage of this.

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Look at our history for proof. Tariffs have helped American manufacturing grow ever since the founding of the nation. Are you saying the rise of America to a world power through domestic manufacturing at the end of the 19th century (in such a short time) would have been possible without tariffs?
Are you saying the rise to power is solely or partly attributable to protectionism policies? How would American History played out with less or no protectionism? That is, quite frankly, a fallacy of false cause.

By that reasoning, getting cut and scraped learning to snowboard has led to my current riding ability. And if I get cut and scraped more in the future it would advance my riding ability even more.

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Its kind of hard for people to be exercising it with their best judgement when they are continuously fed a bunch of misinformation through FOX and other extremely nutty outlets. FOX even won the right in court to broadcast misinformation without punishment because it was judged to be free speech.
Agreed, Fox isn't that good of a news outlet. What does this have to do with anything?


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I didn't say you have to be a Democrat to support it, that's just one of the reasons why I choose to be a Democrat.
It implies exclusivity by reductive logic, since supporting that idea isn't exclusive to being a Democrat. I wouldn't say I bought a Ford because I wanted a car with wheels, would I?

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Mandating certain government programs to help the disenfranchised is a lot better than just letting the disenfranchised depend solely on the charity of the common citizen because (no disrespect to the charitable work you've done) the generosity of citizens is not alike and if a citizen just decides right then and there not to do any charitable work, the disenfranchised got nothing if there is no government programs. Again, one of the reasons why I'm a Democrat.
Which people are disenfranchised, though? What amount of help do they need? What is help? I find the problem with public charity (i.e. welfare) to be, that the definition of what those things are is constantly in flux and will always slide toward full redistribution of everything and state ownership is achieved.

There was an article I read the other day about free cell phones available to the "needy" in Philadelphia. On one hand, I support welfare at the State level since this is fully Constitutional and well within the means of a State to control. On the other hand, I find this to be despicable. I put myself through college to get where I am today and did so without the use of a cell phone, a car or many luxuries. Is a cell phone something people should be given? Is it really something people need and can't get by without? Or is it more of a convenience and luxury.

This is an example of the sliding effect I'm speaking about.
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Old 08-05-2011, 09:11 AM   #76 (permalink)
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I would name it catalyst or inhibitor. It really pushes the accelerator of funds multiplication, getting ten-fifteen times larger sums which is false.
Yes, I would agree, since fractional reserve systems aren't likely to undergo spontaneous manipulation to achieve certain economic milestones in a centrally planned system.

And yes, this is because the effect of changing the reserve requirement is quite dramatic. As you point out, it's exponentional in nature because commercial money leads to the creation of additional commercial money.
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Old 08-05-2011, 09:14 AM   #77 (permalink)
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Are you deliberately restating things I've written as if it were new to me?

You use a great many words to say very little.
If I'm "restating" what you said, then you are agreeing that deflationary environments dissuade malinvestment?

They do so by greatly increasing the *relative* credit risk to maturity value between "savings" vehicles and "investment" vehicles.
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Old 08-05-2011, 11:04 AM   #78 (permalink)
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Yes you have; both to me and to Donutz because YOU took offense to "the plain English adjectives used to defame the characters". You took offense because I and others are calling out SOME of these people like the Koch brothers for what they are. Instead of understanding that these "plain English adjectives" are used as result of their "actual behaviors", you have made this your central point. I don`t know how many times I have said repeatedly, that I am no vilifying Capitalism, but I see the need to regulate it. I guess in your world, that is "character assassination". Again, anything said that goes against YOUR views on the subject becomes a "character assassination....
I'm not offended by it. I'm just pointing out that attacking the character of the system you are trying to provide points against doesn't provide points against it.


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Just because I don`t share the same view about the motifs of the Capitalist, you take that as a non rational "character assassination?
I don't particularly care what anyone's emotional stakes are for or against different economic models. I don't disagree with your view or find it non rational because it's contrary to mine. I find it some of the elements to be non pertinent because it's not particularly germane to discuss the character quality of the parties in question.

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Think outside the engineering box for a second and don't take every single tiny point to literal extremes. Again, your central point that you have brought up in every post...you don't like my choice of wording so you refuse to talk about the subject; just go on and on about the way i said something....
See above. We aren't discussing the quality of their character.

Taking "tiny points to literal extremes" is nothing more than trying to denounce the idea of logical extension. Ideas can exist within certain bounds, but we have to discuss the boundaries themselves to know what different models are capable of.

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I don`t need to have friends and family there to know their track record on the way they treat the worker in those countries. Add muddy water to clean water and you end up with more muddy water. I don`t care about their "progress", I have no desire to reverse the strides that the worker has made in this country and become like them just so big business can earn more profit.
You're shifting goalposts now. I didn't say we had to regress to where they are. I'm pointing out that in terms of great economic progress, it exists in places that may not yet reflect the standard of living in the places you are pointing out (Germany).

Also, how much progress was made in workers rights is actually attributable to regulation and how much is due simply to just breakthroughs which make working environments less dangerous? Would any employer make conditions much more dangerous if it saved no money?

We still have environments which would be considered incredibly safe by late 19th century standards, yet they are 100% safe. Remember that incremental gains in safety might cost exponentially more money. Whether we like it or not, safety will cost money and we can't make things 100% safe or we wouldn't have any ability to do anything.

A perfect example is a small side project I'm working on now to install safety machine guards on some equipment to meet some 29 CFR regulations (OSHA). Installation of these guards will cost significant time, money and resources and the gain in safety is nearly insignificant because these machines are in a location where no personnel are allowed to be when they are operating. Those that are there when they are operating are doing so to perform tests and therefore, are required to know the risks working around moving machinery.

Yet, we are meeting this requirement just to satisfy the letter of the law. And who checks OSHA? What controls them? They have no oversight because they are the oversight.

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"right" as in "correct", "necessary". Re read what I wrote, I said the the laws passed were right and necessary; I didn't say they were "a right"...come on man, think a little broader here, you are tedious.....
But right as in correct and necessary actually extend from the idea of human rights. Think about it. What makes something the "right" thing to do? If an action does or does not engender an environment where someone's state of well being (their RIGHTS) are or are not improved.

Laws are not right because they restrict rights (natural rights) in order to protect rights. They engender an environment where someone's state of well being is compromised to protect another's. This goes back to our idea if it is morally "correct" and "necessary".

Speaking of thinking more broadly, consider this. The etymology of the word "right" (correct and human rights) and the link between these two seemingly foreign concepts, which upon further inspection are actually quite closely linked, is NOT coincidental for the reasons I describe above.

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Again, you seem to be being deliberately obtuse...when I or someone says "Capitalism becomes..." we of course are talking about the players within the system. Some of us can actually interpret meaning from words and statements while it appears that you must have every minute detail specifically spelled out.
Obviously not, because the system you propose exists with the same players having the same capacity to carry out the same amount of "good" or "bad". Yet, for some reason, you arbitrarily assert your system protect against evil more.

So which is it? Do the participants provide evil or is it the medium itself.

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Okay then,......"If left unregulated, the owners of companies and people sitting on the boards of directors will result to predatory behavior that eventually places unfair and unreasonable leverages upon the society they operate within. In fact, without regulation, the free market ceases to exist in favor of monopolistic mega entities and people who use their current economic power to unfairly gain advantage over smaller entities trying to compete in that market".... sorry bro, if you can`t just interpret and extrapolate meaning from plain, common speech, you are too tedious to talk to...
Just quoting something doesn't make it true. At best, that's a bare assertion fallacy. The difference, once again, is I'm willing to delve into the dynamics behind consequences while you simply just assert the consequences..

If left unregulated, why does this necessarily happen? Are there not philanthropic organizations that exist solely within the state of market? My company matches my voluntary donations, organizes volunteer work for us to participate in, adopts several families every Christmas, provides an environmental committee you may become a member of to start Green initiatives and countless other likewise activities.

So the assertion if left alone, these entities will necessarily engage in this type of behavior is patently false. Maybe, perhaps just maybe, their capacity to engage in unsavory behavior isn't a function of them being left alone, but rather their character. Do you not doubt they would find means to commit other modes of evil under other systems?

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I never said that every aspect of unionization was perfect now did I?
Who said you did? I asserted unions don't exist where I work and the working conditions seem to be adequate, as evidenced by the normal amount of turnover and prospective new employees.

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Capitalism in its pure form is certainly market driven and is a failed idea much like true Communism because of human nature and without regulation and protections, both system become a form of tyranny. Problem is, there are many who still believes that unregulated free market capitalism does work and serves the society best.
No one said unregulated markets are what the goal is. What we want to do is establish an environment where total and a total lack of regulation exists (using theoretical models extrapolated from many real world economies along this spectrum) and understand what effects there are moving along this spectrum. This is probably not a 2 or even 3 dimensional spectrum, but a multi-dimensional surface map.

I've not argued for no regulation, I've argued for less regulation, for a strict and stark understanding of what the total effects of any regulation are and a very sound argument for implementing it. I also believe regulation is much better achieved on smaller scales because it can tailor made to suit each environment.

The reason we discuss the bounding extremes is because that is how you study things quantitatively, even if it's a quantitative study of human behavior.

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Yes the free market is a useful and necessary aspect of any economy and it can exist in type of government from democracy to fascism. Like Communism though, pure free market Capitalism cannot work without regulation. But that I am sure you will take as another "character assassination".
No, because there weren't any such thing. There weren't any attempts to paint anything as evil or monolithic or helpless and deserving of care.

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In any event, Cheese...nothing personal here and It has been a thought provoking debate; thanks! We will have to agree to disagree on our views about this. Not discounting your opinions at all, I just disagree with them....cheers....
Of course I don't take this personally. People might think so because I write and halting, discrete manner but believe me, I've been doing this well over 10 years and with people from every manner of every political and personal spectrum, from the most inflammatory to the most rigorous and impersonal.
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