--
"Banksters get to print their money...we have to work for ours."
Comrade,
Because "We" have been bred to be dopes—"Educated" taxpayer-voter economic slaves in denial of their true condition and serving the biggest Crooks is all of history.
BTW, banksters don't print money; they steal by Pushing Debt on taxpayers and future generations, a simple mechanism of economic enslavement. A concept very hard for BBAD to grasp. And why grasp if you can't do anything about it! BBAD are suffering from political impotence and denial is their way of dealing with this impotence.
--
"Banksters get to print their money...we have to work for ours."
Because "We" have been bred to be dopes—"Educated" taxpayer-voter economic slaves in denial of their true condition and serving the biggest Crooks is all of history.
BTW, banksters don't print money; they steal by Pushing Debt on taxpayers and future generations, a simple mechanism of economic enslavement. A concept very hard for BBAD to grasp. And why grasp if you can't do anything about it! BBAD are suffering from political impotence and denial is their way of dealing with this impotence.
The Bank of England will start pumping newly created money into the economy today by buying £2 billion in gilts as it embarks on "quantitative easing" in an effort to boost the economy.
...
Mervyn King, the Governor of the Bank, indicated last week that the Bank would continue this course of action until the lending markets became unglued.
Don't be ridiculous. We are in the middle of major deflation. Housing, autos, oil, steel all have dropped tremendously in price. Increasing the money supply is not a bailout - it exchanges government bond holdings for cash which hopefully will be lent out to some non-governmental entity to get credit unglued. If the sellers of government bonds sit on the new money, it won't cause inflation. We actually need a little inflation to combat this crisis. If inflation becomes too large the government can simply sell the bonds and take the money out of the system. However, we won't have inflation unless people start buying things, which won't happen unless money starts moving again. This is worth a try. Got a better idea?
So, to clarify, the UK government is buying back bonds that they have already issued with new (no) cash money. When they float bonds they are in essence borrowing future tax revenues to pay for current expenditures, thus preventing the current money supply from increasing. By buying back those bonds with current new money, they are increasing the current money supply. Do we know whether they are buying back bonds that have current
Here's a problem stemming from bailouts at least as they relate to me. All these looting operations continually motivate me to become more demotivated. How's that for a vicious cycle.
My time is now vastly more valuable than present and future devalued dollars or pounds.
Previous post was ended prematurely by crbot: Do we know whether they are buying back bonds that have current maturities? How many bonds can they buy back before they start retiring bonds early?
"Mervyn King, the Governor of the Bank, indicated last week that the Bank would continue this course of action until the lending markets became unglued."
In May 1716 the Banque Générale Privée ("General Private Bank"), which developed the use of paper money, was set up by Law. It was a private bank, but three quarters of the capital consisted of government bills and government accepted notes. In August 1717, he bought the Mississippi Company, to help the French colony in Louisiana. In 1717 he also brokered the sale of Thomas Pitt's diamond to the regent, Philippe d'Orléans. In the same year Law floated the Mississippi Company as a joint stock trading company called the Compagnie d'Occident (of which Law was named as Chief Director) which was granted a trade monopoly of the West Indies and North America. The bank became the Banque Royale (Royal Bank) in 1718, meaning the notes were guaranteed by the king. The Company absorbed the Compagnie des Indes Orientales, Compagnie de Chine, and other rival trading companies and became the Compagnie Perpetuelle des Indes on 23 May 1719 with a monopoly of commerce on all the seas. The system however encouraged speculation in shares in 'The Company of the Indies' (the shares becoming a sort of paper currency) and inflation. The system was based on Law trading shares in the Mississippi Company in return for government debt. The Banque Royale was created by default as a result of Law attaining the majority of the government issued notes (debt). It effectively became the Central bank of France. In 1720 the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was extremely successful until it collapsed and caused an economic crisis in France and across Europe. The collapse was staved off by a constant trading off between national debt and shares of the Mississippi company. New shares were issued to dilute the value of each share, and the new capital was used to purchase more government notes. The speculation continued to build, and the company's two branches, the trading arm and the bank arm, collapsed simultaneously.
....that's why socialism and its ilk eventually collapses upon itself - no workers, just takers.
hahahahahahahah!
Yes, because capitalism has done such a standup job!
Last I checked there has never been a "capitalist" model that worked. If there was, please give me an example
to the point of the post:
Didn't the Fed already talk about purchasing Treasuries a few months ago??? Did they actually do it, or did they just talk about how they might do it? If they did it, does it count as Quantitative Easing? Technically, the Fed could buy Treasuries without it being Quantitative Easing if the Treasury doesn't put up the money for this, right? but didn't the Treasury already bail out the Fed last year??? and isn't money Fungible??? so is it not possible we've already begun (or soon will start) some form of QE???
Given today's very high Treasury prices and subsequent low yields, I'd guess the Fed hasn't quite started purchasing Treasuries... although they may be buying at the long end of the curve... however if appetite dries up for our T's then you know the Fed will buy buy buy.
I think I've thought myself into a Mobius loop. My head hurts.
Sat down to a dinner last night where the conversation turned to stocks and the market. The reason that the market is down and the economy is in the tank is because we don't believe. If we could all get together and clap our hands the market would go up and the economy would recover.
"Pick up on the Tinkerbell meme" - overwhelmingly so, particularly (no sexism intended) among females. I think it's a knock-on effect from "The Secret".
Late stage capitalism defines use of taxpayer funds, because corporations and government become for all intents and purposes the same thing, not in the sense of public ownership of capital, but in the sense of private interests of a minority of capital holders running the show.
It is unclear to me why they see any advantage to the fiction of buying bonds... why not just set the money out on the street in boxes and let people pick it up and use it? The net to government is the same in the end: future deficit and future bond obligations, combined, both moving fuuture money forward. The net to the economy is the same or possibly more stimulative (because it directs current money toward a group more likely to spend). All that happens when they buy bonds is they add an extra middleman to the transaction who tend to tie up funds in non-consumer spending and to extract fees, decreasing the stimulus effect.
If you follow the premise that a huge part of the stimulus plan is to enrich cronies and concentrate wealth, then buying the bonds makes sense. Otherwise not.
Pound devalues; good for British exports (such as they are), and limits imports in a kind of back-door protectionism.
Brits may even benefit from some sort of limited pound-Euro-dollar carry-trade.
Inflation is good (in a mean-spirited way) for British debtors, and will take some of the "bite" out of deflationary environment.
But see, they moved first.
The second economy to do so will get less "bang" for each new buck! And Brits still control their currency; the problems of the conflicts of interest in the Euro-zone make this less attractive as an option on the Continent.
What happens when the US follows suit? Beats me.
And what about the Law of Unintended Consequences? Can the UK avoid serious dislocations as they monkey around with perceived values and debt structure?
The Fed will probably watch this closely as they discuss buying long-term treasuries at the Fed meeting next week.
I can haz zeroes added to my account balance too?
Black Star Ranch says:
Today, 9:53:12 AM “....."late stage capitalism" never implies use of taxpayer funds.
Note that the definition of socialism never implies it will degenerate into free riding. Frankly, you can probably build one that works as long as your goals aren't very lofty.
If socialism has a weakness, it's not blue collar whining about estate yobbos. The capacity for mule-like laboring is a handy trait but not a good yardstick of men.
It's the same thing as in america, powerful individuals who can't hold their own responsible for policy failures and who give themselves outsize rewards for substandard service by defining their failures into excellent from a position of authority. The destructive influence of vested interests is a constant in any complex system. Capitalist, socialist, etc.
I have difficulty understanding your complaints. Was it not agreed that by using in excess of 30/1 leverage, the shadow banking system had greatly explanded the "money supply" ? Has it not been agreed that the shadow banking system collapsed taking the credit increases wtih it ? Is that not the reason for the deflation we have witnessed ?
You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
Exactly. They created a shadow banking system with enormous fractional-reserve money supply multiplication power, with no though whatsoever to how they would deal with a run on it.
Quantitative easing didn't reflate Japan. It could barely slow deflation. When people go into balance sheet repair mode, the money supply multiplication effect of fractional reserve banking stalls.
Over the last few years I have many times recommended that people read former Nomura Securities Chief Economist Richard Koo's "Balance Sheet Recession" account of Japan's difficulties. We are now in the same situation, with US consumers in particular having balance sheets much more in need of repair than those of their Japanese counterparts.
Nobody seems to get it. Yes, we have deflation NOW because of the forced de-leveraging. Yes, stuffing liquidity into the banking system won't force banks to lend or consumers to borrow. But quantitative easing bypasses the banking system and lets the Gubmint "buy" their own bonds with "money" they create out of thin air. And the Gubmint is about to issue a boatload of bonds to fund the ongoing parade of stimulus packages.
Foreign purchases of Treasuries are down 50% vs last year. And if the mantra "we'll do whatever it takes" hasn't registered with you yet, do up your seatbelt.
PS Geithner is starting to look a lot like Sarah Palin, only less mavericky.
I like what I'm seeing with TBT and I'm not gonna be spooked by whatever the Fed does. If they're smart, they will defend the short end of the yield curve so they can still borrow short-term at lower rates. Mortgage rates can stay relatively low, too. The long bond is history because the fed doesn't have unlimited ammunition at this point. At least, I'm betting.
Like I said, average maturity of TBT bonds is 25 years.
Nobody needs long bonds any more. I mean, unless you own them. But you can always dump while there's still time.
popeye says:
Today, 10:04:19 AM You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
No, the labor is Augean, that's why we're wailing.
The problem is as Wally says -- the devaluation is being done on a preferential basis to allow the looting of value from the state before the general value of the currency collapses.
2nd half recovery now being more well defined according to stock marketing gurus on bubblevision, "It's looking like the 4th quarter we'll see improvement".
I like what I'm seeing with TBT and I'm not gonna be spooked by whatever the Fed does. If they're smart, they will defend the short end of the yield curve so they can still borrow short-term at lower rates. Mortgage rates can stay relatively low, too. The long bond is history because the fed doesn't have unlimited ammunition at this point. At least, I'm betting.
Like I said, average maturity of TBT bonds is 25 years.
Nobody needs long bonds any more. I mean, unless you own them. But you can always dump while there's still time.
The risk on TBT is simply flight to the dollar because other options are less stable. For example, it's quite possible that the UK empties out into the dollar in the next few months. It's also possible that Eastern Europe goes down if the Western Europe doesn't come to the rescue, etc...
Longer term, I agree the long bond is likely toast and TBT a great call...
Morocco Bama says:
Today, 10:08:10 AM Dopes, by definition, can not wise up. It's not a temporary condition.
Cost of livin' gets so high,
Rich and poor they start to cry:
Now the weak must get strong;
They say, "Oh, what a tribulation!"
Them belly full, but we hungry;
A hungry mob is a angry mob.
A rain is fall, but the dirt it tough;
A pot is cook, but the food no 'nough.
I bought FCX (huge diversified global miner) and JOYG (mining equipment maker) last week. So far, FCX is up 25% and JOYG is up 23%.
This is happening at the same time metals prices are stagnant. The stocks are a leading indicator for the metals. The metals in turn will be a leading indicator of commodity inflation, probably mostly Asian-driven. I'd say that by late summer, we will see big global scarcities of food and metals.
Alcoa is the most leveraged mining play of all because they need increased demand and prices fast to pay down huge debts as cash is running low. Last week, Alcoa touched a 20-year low at the same time they were voted by their peers as the most outstanding mining company in the world. If metals rise, Alcoa is an easy triple. If not, who knows.
I'd have FCX but looking to sell today wanted to sell at 37 but... I'd stay away from AA and I think its too early to buy Joyg just MO take it or leave it
I have difficulty understanding your complaints. Was it not agreed that by using in excess of 30/1 leverage, the shadow banking system had greatly explanded the "money supply" ? Has it not been agreed that the shadow banking system collapsed taking the credit increases wtih it ? Is that not the reason for the deflation we have witnessed ?
You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
There's a big difference between credit expansion (what the hedge funds were doing) and monetary expansion (what these central banks are apparently doing). Credit expansion makes money more available by making borrowing existing money easier. Monetary expansion makes money more available by making more money.
What the central banks are trying to do is counteract the credit contraction with monetary expansion so money will continue to be available.
The problem is that money creation is an arbitrary redistribution of wealth from the general population to the banks. Your money is devalued as more is printed and given to financial institutions.
Furthermore, increasing the money supply may not cause inflation now, but once credit becomes more available again it may cause severe inflationary consequences. If this inflation begins to manifest in a weak economic environment the central banks may not be able to stop this inflation from accelerating without causing another severe recession. We may get to a point where even generating weak economic growth requires a constant increase in inflation because the inflation has simply been masking structural economic problems that remain unaddressed and unresolved. This could lead to the collapse of our currency and probably political and economic failure.
In the end money has value when it is created to represent and exchang for something of value.
Arbitrarily creating money or handing it out simply destroys the properties that make it useful to economic activity.
I bought FCX (huge diversified global miner) and JOYG (mining equipment maker) last week. So far, FCX is up 25% and JOYG is up 23%.
This is happening at the same time metals prices are stagnant. The stocks are a leading indicator for the metals. The metals in turn will be a leading indicator of commodity inflation, probably mostly Asian-driven. I'd say that by late summer, we will see big global scarcities of food and metals.
I'm not sure I see that. In order for commodity prices to rise you have to have increasing demand and from what we are seeing that isn't on the near term horizon. In fact, there are many who argue that we are seeing long term demand destruction.
Stocks are divorced from reality right now as people buy "great values" in all sectors. I don't see a lot of take away from there.
At the start of the 20th Century, the British pound was worth ~ $5.00. At the end of WW2, the British pound was worth ~$4.00. In 2007, the British pound was worth $2.00. Today, the pound is worth $1.37.
British finance is waning, British North Sea oil is waning and Britain is a net importer.
And Britain thinks printing is the answer? Say good bye to British finance. Hope they enjoy higher and higher import prices.
What the hell is up with all the homophobes in the comment threads lately? Can we get through one thread without the explicit or implicit expression that someone prefering the "intimate company" of a member of their own sex somehow makes them unfit for office or any other work?
"Your money is devalued as more is printed and given to financial institutions."
But doesn't credit expansion do the same thing? The 'value' of my money is expressed in the interest rate, and is not a function it's physical scarcity but the willingness of people to part with it.
Agree with SMS. prices for commodities aren't going to run away here ie rise faster than overall inflation especially steel & aluminum. Copper, and iron ore and maybe coal may rise faster on a nominal basis. Gold is the place to be.
Credit expansion makes money more available by making borrowing existing money easier. Monetary expansion makes money more available by making more money.
Except when you expand credit based on a faulty premise (like the value of California housing, or a AAA rating from S&P). It all looks like inflation from ground level.
"Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system... The FDIC receives no federal tax dollars...."
Byz and AC,
Thank you for your responses. I continue to consider your points - which raise multiple carry on issues in my mind. I'll let it rest for now.
On the subject of long bonds, if you expect inflation to kick in over the next 2-3 years and rates to rise, then the government is quite canny to sell as many of these puppies to all takers right now. The same would be true if you expect a devaluation to occur.
The problem comes in with the use of funds by the govt. of course. =-O
I am in better shape than most to weather it. It is a real kick to the head. Though if they had offered the severance, I would have taken it, as my job sucked.
Consumer prices in Japan are approximately the same today as they were a decade ago. Wages in Japan have have increased approximately 2% in the past decade.
We'll be lucky to get an outcome like Japan imo. I think the average American will continue to suffer a declining standard of living over the next decade. 2000 was a peak for BBAD. Of course that peak was mostly an illusion as the debts were real, but the asset values were fiction. The housing bubble magnified the problems.
All for the greater glory of the finance industry!
Selling FCX buying some GDX.
Demand isn't going to fall off a cliff from here either like some have been saying. It will be low but steady
The puzzler for me is that in my neck of the woods -- Central California -- we're really not seeing things go to pieces. I'd go with a mid sized recession at this point but nothing more severe.
So, claims of demand destruction on a large scale can't be verified by walking down to the retail areas.My sneaking fear is that there will just be a continual pull down as each option shows itself to be ineffectual.
In effect, I'm in your camp on this one until I see otherwise.
"Your money is devalued as more is printed and given to financial institutions."
But doesn't credit expansion do the same thing? The 'value' of my money is expressed in the interest rate, and is not a function it's physical scarcity but the willingness of people to part with it.
That really depends on whether the credit is used responsibly or not. With credit expansion, more and more individuals and businesses exchange their money for promises that this money (and then some) will be returned to them in the future (by the borrower).
With credit expansion the money isn't being created, so existing money isn't devalued (ignoring the fractional reserve system for a moment), money is moved around more rapidly from those who don't currently need it to the hands of those who do.
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
If, on the other hand, this credit is used to engage in ponzi finance and the creation of wealth illusions (e.g. the whole housing and mortgage hedge fund mess) then the opposite happens. Lenders lend out their wealth, it is squandered on useless activity, no net wealth is created in the economy and the lenders lose the wealth they lent out, so they stop lending and credit contracts (as is happening now).
The point is credit is like any other tool - you can use a saw to build a house or to cut your hands off.
SMS- are u in slo, I was there week ago and downtown is definitely slower...Cousin lives there, owned first mexican rest. in slo in 50s and says it's definitely feeling pain..
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
I've got your picture
Of me and you
You wrote "I love you"
I love you too
I sit there staring and there's nothing else to do
Oh it's in color
Your hair is brown
Your eyes are hazel
And soft as clouds
I often kiss you when there's no one else around
I think I'm turning Japanese
I think I'm turning Japanese
I'm turning Japanese
I really think so
I've got your picture, I've got your picture
I'd like a million of them all over my cell
I want the doctor to take your picture
So I can look at you from inside as well
You've got me turning up and turning down
And turning in and turning 'round
You've got me turning up and turning down
And turning in and turning 'round
I think I'm turning Japanese
I think I'm turning Japanese
Turning Japanese
I really think so
I think I'm turning Japanese
I think I'm turning Japanese
I'm turning Japanese
I really think so
No sex, no drugs, no wine, no women
No fun, no sin, no you, no wonder it's dark
Everyone around me is a total stranger
Everyone avoids me like a psyched lone ranger
Everyone
That's why I'm turning Japanese
I think I'm turning Japanese
I really think so
SMS- are u in slo, I was there week ago and downtown is definitely slower...Cousin lives there, owned first mexican rest. in slo in 50s and says it's definitely feeling pain..
\t
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I'm further north in Santa Cruz. People here are feeling the "SLO" down no doubt. But it's not your friends on the street can you give them a room time yet. The three focusing factors around here are a) Silicon Valley layoffs and b) months/years of savings, c)mortgage rate resets if and when.
So far, everyone is hanging in there. In other words, the stress is predictive rather than actual.
These things look faster when you study it as history. I would think a lot of historic events seemed to progress a lot slower than we think for those actually living in those times.
Re: the long decline of the pound since 1900.. historic transfers (or potential transfers) of economic power are almost always accompanied by all-out war. Not sure that portends good things for the U.S. and China
All is well. GS is back over $90 on all the free money provided through the AIG conduit. Nice to get a $BILLIONS taxpayer handout with no requirement to pay any of it back! More for the executives!
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
AC,
We largely gave up on self liquidating credit in the 1960s. That led to the abandonment of the gold standard in the early 1970s. Ever since, the majority of available credit is used to dilute the value of existing money. By example, 70% of ALL private lending is against property. Of the remaining 30%, more and more is used for corporate buyouts, stock buybacks and refinancing of existing debt. Very little credit is actually used for innovation or productive purposes.
Modern finance is based on theft. There is WAY more inflation in the system than actual output. As that inflation become increasingly concentrated, the system became unstable.
Credit inflation is barely noticeable when asset prices are rising. It's painfully obvious when the sham is exposed.
Fed in Congress in a power grab for financial regulation. Not good.
We need a czar who is visible and alone accountable so it will be easier to give them the boot.
Very little credit is actually used for innovation or productive purposes.
Many small businesses put up their house for collateral when they are first starting out. There was a scene in ghostbusters where Dan Akroyd takes out a third mortgage to start the business and that was i the 80's with a minimum of 8% interest.
"If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole."
How do we assure that this happens?
Over the past couple of hundred years or so we (in the US) have used credit very effectively on the whole, with some notable exceptions (like recently).
I think these periods of credit abuse are largely due to complacency caused by long periods of economic prosperity as the last episode of credit problems passes out of memory. Political forces generally act to artificially extend these periods of prosperity by encouraging the continued abuse of credit.
Personally I think the key is not to try so hard to avoid recessions and depressions. People are always going to abuse credit at some point and create economic cycles. But usually these are tolerable and people learn their lesson and start behaving more responsibly again.
It seems the real catastrophes occur when special interests and the government act to encourage the use of credit beyond what the markets on their own would do. We've seen this phenomenon prior to every major bubble disaster in the past century or so.
We need to stop doing this.
And we need to get past the idea that recessions are something to be avoided at all costs.
Recessions get rid of bad businesses, bad business practices, bad debt. They stress test the economy and show where it's weaknesses are, and they give people the practical experience and sensibility needed to behave more responsibly and constructively. So long as they are not catastrophic, recessions make the economy healthier, leaner, more intelligent, and more robust.
The kind of economy we have has proven to work just fine.
The Federal Reserve, the special interest groups, and the politicians need to just stop stepping in and breaking it.
--
""Your money is devalued as more is printed and given to financial institutions.""
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money. "Printing Money" inflation dopes (PMIDs) simply don't understand what is going on. We ARE heading into a Deflationary Depression. Almost there, but it wouldn't show up in data for approx. 9 months. That is when people like CR will acknowledge after the fact.
Everything is collapsing - property, stocks, commodities, trade, manufacturing, employment.
I don't see how more debt/credit will fix the problem. A depression of some sort is definitely a possibility. I don't foresee soup lines, but I do see a declining standard of living.
I also post comments to an irc channel as they appear on haloscan. Click for a web irc interface: Mibbit IRC client widget (Or join the irc server directly: irc.realize.org:9996 #calculatedrisk)
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Chicken-fried Obama fingers. Geeze, how uncool. They should have shown a little deference and coolness to political correctness by calling them instead, "Negro Toes"
Jas writes:
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money.
Do the principles of inflation apply to catchphrases as well...
or is it countered here because you too are making up for a loss?
--
""Your money is devalued as more is printed and given to financial institutions.""
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money. "Printing Money" inflation dopes (PMIDs) simply don't understand what is going on. We ARE heading into a Deflationary Depression. Almost there, but it wouldn't show up in data for approx. 9 months. That is when people like CR will acknowledge after the fact.
Jas
We may be headed for a deflationary depression in the short term due to credit contraction and severe inflation 5, 10, 20 years out.
Whether this happens or not is going to depend on what actions our government takes. If the congress decides to send a check for $1,000,000 to every person in the US next month we will have a hyperinflationary depression.
I'm not suggesting that an increase in the money supply now will lead to near-term inflation.
You are a banker. You've just taken major losses on your loan portfolio. Interest rates are at all-time lows, and your central bank is firing up the printing press. Your propensity to lend has just become (a) positive and improving, or (b) less than zero and you're converting your vault into a bunker? Pandora's box is now wide open, and it's going to take a generation to mop up the unintended consequences.
Banks hold the equivalents of trillions of snowball.com shares. Individuals who bought these stocks can write these losses off over time, 10 years I think. Banks don't have a ten year time frame to get rid of these losses... wait Congress says its okay.
Probably a stupid question but here goes anyway. Are they not in essence printing the 3 Trillion the banks lent out that didn't exist in the M2 money supply anyway? Why does 3 Trillion seem to be the magic number that keeps popping up?
Scots housebuyers to benefit as RBS makes £1.7bn available for borrowing - Scotsman.com Business
business.scotsman.com
Scots housebuyers to benefit as RBS makes £1.7bn available for borrowing
Published Date: 11 March 2009
By HAMISH MACDONELL
THE beleaguered Scottish housing market is expected to receive a major boost following the announcement today that the Royal Bank of Scotland is to make £1.7 billion available for new borrowing this year and next.
The RBS Group, which has been effectively nationalised by the government, disclosed that it is to free up £9 billion for the housing market across the UK in 2009, £1.7 billion of which will go to Scottish customers.
(comment section included)
The British interest rate on the British bonds dropped on this news. If investors fear inflation, won't their interest rates have to eventually increase markedly to attract non-central bank buyers?
Don't forget that the Fed now pays interest to these banks so they have even more incentive to not lend what they say they have out.
Key point that....
That needs to be removed post haste...but no one seems to want to touch it as a contributory factor. Wait until they start taking credit cards away from us as a society...that's coming some time next year.
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Another pounding in the offing?
And in suppository form, too.
Wsj has an article today mentioning the Fed watching this with curiosity.
Printing money will, at some point, cause gold to skyrocket.
Forget money. Let's just print confidentally confident CEO memos and leak 'em.
Banksters get to print their money...we have to work for ours.
--
"Banksters get to print their money...we have to work for ours."
Comrade,
Because "We" have been bred to be dopes—"Educated" taxpayer-voter economic slaves in denial of their true condition and serving the biggest Crooks is all of history.
BTW, banksters don't print money; they steal by Pushing Debt on taxpayers and future generations, a simple mechanism of economic enslavement. A concept very hard for BBAD to grasp. And why grasp if you can't do anything about it! BBAD are suffering from political impotence and denial is their way of dealing with this impotence.
Jas
--
"Banksters get to print their money...we have to work for ours."
Because "We" have been bred to be dopes—"Educated" taxpayer-voter economic slaves in denial of their true condition and serving the biggest Crooks is all of history.
BTW, banksters don't print money; they steal by Pushing Debt on taxpayers and future generations, a simple mechanism of economic enslavement. A concept very hard for BBAD to grasp. And why grasp if you can't do anything about it! BBAD are suffering from political impotence and denial is their way of dealing with this impotence.
Jas
CR's quote of the article:
The Bank of England will start pumping newly created money into the economy today by buying £2 billion in gilts as it embarks on "quantitative easing" in an effort to boost the economy.
...
Mervyn King, the Governor of the Bank, indicated last week that the Bank would continue this course of action until the lending markets became unglued.
SO TRUE!
LMAO! Didn't quite take full notice of that phrase my first read-through.
The UK starts down the path to ruin. The UK begins a theft operation via the printing press.
How will they ever put the genie back in the bottle? Why work when the printing press steals your labor?
The Pound will become the ounce.
Don't be ridiculous. We are in the middle of major deflation. Housing, autos, oil, steel all have dropped tremendously in price. Increasing the money supply is not a bailout - it exchanges government bond holdings for cash which hopefully will be lent out to some non-governmental entity to get credit unglued. If the sellers of government bonds sit on the new money, it won't cause inflation. We actually need a little inflation to combat this crisis. If inflation becomes too large the government can simply sell the bonds and take the money out of the system. However, we won't have inflation unless people start buying things, which won't happen unless money starts moving again. This is worth a try. Got a better idea?
"until the lending markets became unglued."
LOL, yeah, another instance of being separated by a common language...
So, to clarify, the UK government is buying back bonds that they have already issued with new (no) cash money. When they float bonds they are in essence borrowing future tax revenues to pay for current expenditures, thus preventing the current money supply from increasing. By buying back those bonds with current new money, they are increasing the current money supply. Do we know whether they are buying back bonds that have current
Wasn't it just a matter of time before someone other than Zimbabwe fired up the printing presses? It's just the next step in a series.
Here's a problem stemming from bailouts at least as they relate to me. All these looting operations continually motivate me to become more demotivated. How's that for a vicious cycle.
My time is now vastly more valuable than present and future devalued dollars or pounds.
"My time is now vastly more valuable than present and future devalued dollars or pounds."
Amen.
your perpetual petulant snit is starting to wear thin.
Previous post was ended prematurely by crbot: Do we know whether they are buying back bonds that have current maturities? How many bonds can they buy back before they start retiring bonds early?
"Don't cry for me Zimbabwe.."
"All these looting operations continually motivate me to become more demotivated. How's that for a vicious cycle."
....that's why socialism and its ilk eventually collapses upon itself - no workers, just takers.
"Mervyn King, the Governor of the Bank, indicated last week that the Bank would continue this course of action until the lending markets became unglued."
Poor choice of words if I may say so myself.
Angry Saver says:
Today, 9:32:39 AM
How will they ever put the genie back in the bottle?
They won't.
Why work when the printing press steals your labor?
No reason other than you're a born and bred dope of some sort. Eventually even they'll wise up. Then Babylon falls.
John Law (economist) - Wikipedia, the free encyclopedia
In May 1716 the Banque Générale Privée ("General Private Bank"), which developed the use of paper money, was set up by Law. It was a private bank, but three quarters of the capital consisted of government bills and government accepted notes. In August 1717, he bought the Mississippi Company, to help the French colony in Louisiana. In 1717 he also brokered the sale of Thomas Pitt's diamond to the regent, Philippe d'Orléans. In the same year Law floated the Mississippi Company as a joint stock trading company called the Compagnie d'Occident (of which Law was named as Chief Director) which was granted a trade monopoly of the West Indies and North America. The bank became the Banque Royale (Royal Bank) in 1718, meaning the notes were guaranteed by the king. The Company absorbed the Compagnie des Indes Orientales, Compagnie de Chine, and other rival trading companies and became the Compagnie Perpetuelle des Indes on 23 May 1719 with a monopoly of commerce on all the seas. The system however encouraged speculation in shares in 'The Company of the Indies' (the shares becoming a sort of paper currency) and inflation. The system was based on Law trading shares in the Mississippi Company in return for government debt. The Banque Royale was created by default as a result of Law attaining the majority of the government issued notes (debt). It effectively became the Central bank of France. In 1720 the bank and company were united and Law was appointed Controller General of Finances to attract capital. Law's pioneering note-issuing bank was extremely successful until it collapsed and caused an economic crisis in France and across Europe. The collapse was staved off by a constant trading off between national debt and shares of the Mississippi company. New shares were issued to dilute the value of each share, and the new capital was used to purchase more government notes. The speculation continued to build, and the company's two branches, the trading arm and the bank arm, collapsed simultaneously.
Socialism and it's ilk? Sounds like late stage capitalism to me, all privateering executives and no workers.
I like your new handle JAS.
Even sharper pop this morning than yesterday. Is it sustainable through this afternoon?
Dead_Monkey_Bounce says:
Is it sustainable through this afternoon?
No, they just got done clipping the retail shorts but good. Now they will clip the longs.
....that's why socialism and its ilk eventually collapses upon itself - no workers, just takers.
hahahahahahahah!
Yes, because capitalism has done such a standup job!
Last I checked there has never been a "capitalist" model that worked. If there was, please give me an example
to the point of the post:
Didn't the Fed already talk about purchasing Treasuries a few months ago??? Did they actually do it, or did they just talk about how they might do it? If they did it, does it count as Quantitative Easing? Technically, the Fed could buy Treasuries without it being Quantitative Easing if the Treasury doesn't put up the money for this, right? but didn't the Treasury already bail out the Fed last year??? and isn't money Fungible??? so is it not possible we've already begun (or soon will start) some form of QE???
Given today's very high Treasury prices and subsequent low yields, I'd guess the Fed hasn't quite started purchasing Treasuries... although they may be buying at the long end of the curve... however if appetite dries up for our T's then you know the Fed will buy buy buy.
I think I've thought myself into a Mobius loop. My head hurts.
....."late stage capitalism" never implies use of taxpayer funds.
Anybody else picking up the Tinkerbell meme?
Sat down to a dinner last night where the conversation turned to stocks and the market. The reason that the market is down and the economy is in the tank is because we don't believe. If we could all get together and clap our hands the market would go up and the economy would recover.
--
CR: "I still think a depression is very unlikely."
Yeah, CR, your record on the severity of the housing and the economy for the past 14 months speaks for itself.
Jas
"Pick up on the Tinkerbell meme" - overwhelmingly so, particularly (no sexism intended) among females. I think it's a knock-on effect from "The Secret".
Late stage capitalism defines use of taxpayer funds, because corporations and government become for all intents and purposes the same thing, not in the sense of public ownership of capital, but in the sense of private interests of a minority of capital holders running the show.
It is unclear to me why they see any advantage to the fiction of buying bonds... why not just set the money out on the street in boxes and let people pick it up and use it? The net to government is the same in the end: future deficit and future bond obligations, combined, both moving fuuture money forward. The net to the economy is the same or possibly more stimulative (because it directs current money toward a group more likely to spend). All that happens when they buy bonds is they add an extra middleman to the transaction who tend to tie up funds in non-consumer spending and to extract fees, decreasing the stimulus effect.
If you follow the premise that a huge part of the stimulus plan is to enrich cronies and concentrate wealth, then buying the bonds makes sense. Otherwise not.
The race begins:
Pound devalues; good for British exports (such as they are), and limits imports in a kind of back-door protectionism.
Brits may even benefit from some sort of limited pound-Euro-dollar carry-trade.
Inflation is good (in a mean-spirited way) for British debtors, and will take some of the "bite" out of deflationary environment.
But see, they moved first.
The second economy to do so will get less "bang" for each new buck! And Brits still control their currency; the problems of the conflicts of interest in the Euro-zone make this less attractive as an option on the Continent.
What happens when the US follows suit? Beats me.
And what about the Law of Unintended Consequences? Can the UK avoid serious dislocations as they monkey around with perceived values and debt structure?
The Fed will probably watch this closely as they discuss buying long-term treasuries at the Fed meeting next week.
I can haz zeroes added to my account balance too?
Printing money will, at some point, cause gold to skyrocket.
This assumes that gold is accurately priced relative to paper money. Has it been for the last year or so?
Black Star Ranch says:
Today, 9:53:12 AM
“....."late stage capitalism" never implies use of taxpayer funds.
Note that the definition of socialism never implies it will degenerate into free riding. Frankly, you can probably build one that works as long as your goals aren't very lofty.
If socialism has a weakness, it's not blue collar whining about estate yobbos. The capacity for mule-like laboring is a handy trait but not a good yardstick of men.
It's the same thing as in america, powerful individuals who can't hold their own responsible for policy failures and who give themselves outsize rewards for substandard service by defining their failures into excellent from a position of authority. The destructive influence of vested interests is a constant in any complex system. Capitalist, socialist, etc.
I have difficulty understanding your complaints. Was it not agreed that by using in excess of 30/1 leverage, the shadow banking system had greatly explanded the "money supply" ? Has it not been agreed that the shadow banking system collapsed taking the credit increases wtih it ? Is that not the reason for the deflation we have witnessed ?
You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
Exactly. They created a shadow banking system with enormous fractional-reserve money supply multiplication power, with no though whatsoever to how they would deal with a run on it.
Quantitative easing didn't reflate Japan. It could barely slow deflation. When people go into balance sheet repair mode, the money supply multiplication effect of fractional reserve banking stalls.
Over the last few years I have many times recommended that people read former Nomura Securities Chief Economist Richard Koo's "Balance Sheet Recession" account of Japan's difficulties. We are now in the same situation, with US consumers in particular having balance sheets much more in need of repair than those of their Japanese counterparts.
Nobody seems to get it. Yes, we have deflation NOW because of the forced de-leveraging. Yes, stuffing liquidity into the banking system won't force banks to lend or consumers to borrow. But quantitative easing bypasses the banking system and lets the Gubmint "buy" their own bonds with "money" they create out of thin air. And the Gubmint is about to issue a boatload of bonds to fund the ongoing parade of stimulus packages.
Foreign purchases of Treasuries are down 50% vs last year. And if the mantra "we'll do whatever it takes" hasn't registered with you yet, do up your seatbelt.
PS Geithner is starting to look a lot like Sarah Palin, only less mavericky.
[The Bank of England will start pumping newly created money into the economy today]
Who said England's manufacturing base has vanished. They are manufacturing... money!
I like what I'm seeing with TBT and I'm not gonna be spooked by whatever the Fed does. If they're smart, they will defend the short end of the yield curve so they can still borrow short-term at lower rates. Mortgage rates can stay relatively low, too. The long bond is history because the fed doesn't have unlimited ammunition at this point. At least, I'm betting.
Like I said, average maturity of TBT bonds is 25 years.
Nobody needs long bonds any more. I mean, unless you own them. But you can always dump while there's still time.
And hey, how about that Canadian dollar starting to move up. Tells you something about inflation and commodities, no? Symbol is FXC.
I think it's a knock-on effect from "The Secret".
When the history of the world is written, "The Secret" will have to be our bread-and-circuses moment.
And here I thought that was the Dollar Menu and American Idol/Dancing with the Stars.
Dopes, by definition, can not wise up. It's not a temporary condition.
--
Yes. Baby Doomers were systematically duped from birth and got turned into dopes (now they can fool themselves without any outside assistance).
Doomers were bred to lead to America's doom! They are ON target.
Jas
popeye says:
Today, 10:04:19 AM
You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
No, the labor is Augean, that's why we're wailing.
The problem is as Wally says -- the devaluation is being done on a preferential basis to allow the looting of value from the state before the general value of the currency collapses.
2nd half recovery now being more well defined according to stock marketing gurus on bubblevision, "It's looking like the 4th quarter we'll see improvement".
The Elusive Recovery
Jeez, the way you people carry on, it's a wonder any money was ever printed in the first place.
Index chart is starting to look a lot like Monday.
Rich, waht is your take on yesterdays pop? Was it a head fkae, the beginning of a short term rally, or something else?
I don't know what you guys are fretting about. The market's up again today. We're back in the saddle, again.
I like what I'm seeing with TBT and I'm not gonna be spooked by whatever the Fed does. If they're smart, they will defend the short end of the yield curve so they can still borrow short-term at lower rates. Mortgage rates can stay relatively low, too. The long bond is history because the fed doesn't have unlimited ammunition at this point. At least, I'm betting.
Like I said, average maturity of TBT bonds is 25 years.
Nobody needs long bonds any more. I mean, unless you own them. But you can always dump while there's still time.
The risk on TBT is simply flight to the dollar because other options are less stable. For example, it's quite possible that the UK empties out into the dollar in the next few months. It's also possible that Eastern Europe goes down if the Western Europe doesn't come to the rescue, etc...
Longer term, I agree the long bond is likely toast and TBT a great call...
Morocco Bama says:
Today, 10:08:10 AM
Dopes, by definition, can not wise up. It's not a temporary condition.
Cost of livin' gets so high,
Rich and poor they start to cry:
Now the weak must get strong;
They say, "Oh, what a tribulation!"
Them belly full, but we hungry;
A hungry mob is a angry mob.
A rain is fall, but the dirt it tough;
A pot is cook, but the food no 'nough.
I bought FCX (huge diversified global miner) and JOYG (mining equipment maker) last week. So far, FCX is up 25% and JOYG is up 23%.
This is happening at the same time metals prices are stagnant. The stocks are a leading indicator for the metals. The metals in turn will be a leading indicator of commodity inflation, probably mostly Asian-driven. I'd say that by late summer, we will see big global scarcities of food and metals.
Alcoa is the most leveraged mining play of all because they need increased demand and prices fast to pay down huge debts as cash is running low. Last week, Alcoa touched a 20-year low at the same time they were voted by their peers as the most outstanding mining company in the world. If metals rise, Alcoa is an easy triple. If not, who knows.
rich
I'd have FCX but looking to sell today wanted to sell at 37 but... I'd stay away from AA and I think its too early to buy Joyg just MO take it or leave it
Thanks. Maybe I'll lighten up on FCX and JOYG.
--
I made good money shorting FCX diring 2007Q3-2008Q3 (I sold 170 calls, naked, at $6.7!). Time to short again.
Jas
I have difficulty understanding your complaints. Was it not agreed that by using in excess of 30/1 leverage, the shadow banking system had greatly explanded the "money supply" ? Has it not been agreed that the shadow banking system collapsed taking the credit increases wtih it ? Is that not the reason for the deflation we have witnessed ?
You all wail over printing press overtime, but are they anywhere near replacing the buying power that has evaporated ?
There's a big difference between credit expansion (what the hedge funds were doing) and monetary expansion (what these central banks are apparently doing). Credit expansion makes money more available by making borrowing existing money easier. Monetary expansion makes money more available by making more money.
What the central banks are trying to do is counteract the credit contraction with monetary expansion so money will continue to be available.
The problem is that money creation is an arbitrary redistribution of wealth from the general population to the banks. Your money is devalued as more is printed and given to financial institutions.
Furthermore, increasing the money supply may not cause inflation now, but once credit becomes more available again it may cause severe inflationary consequences. If this inflation begins to manifest in a weak economic environment the central banks may not be able to stop this inflation from accelerating without causing another severe recession. We may get to a point where even generating weak economic growth requires a constant increase in inflation because the inflation has simply been masking structural economic problems that remain unaddressed and unresolved. This could lead to the collapse of our currency and probably political and economic failure.
In the end money has value when it is created to represent and exchang for something of value.
Arbitrarily creating money or handing it out simply destroys the properties that make it useful to economic activity.
This is what we are doing now.
I bought FCX (huge diversified global miner) and JOYG (mining equipment maker) last week. So far, FCX is up 25% and JOYG is up 23%.
This is happening at the same time metals prices are stagnant. The stocks are a leading indicator for the metals. The metals in turn will be a leading indicator of commodity inflation, probably mostly Asian-driven. I'd say that by late summer, we will see big global scarcities of food and metals.
I'm not sure I see that. In order for commodity prices to rise you have to have increasing demand and from what we are seeing that isn't on the near term horizon. In fact, there are many who argue that we are seeing long term demand destruction.
Stocks are divorced from reality right now as people buy "great values" in all sectors. I don't see a lot of take away from there.
YMMV
At the start of the 20th Century, the British pound was worth ~ $5.00. At the end of WW2, the British pound was worth ~$4.00. In 2007, the British pound was worth $2.00. Today, the pound is worth $1.37.
British finance is waning, British North Sea oil is waning and Britain is a net importer.
And Britain thinks printing is the answer? Say good bye to British finance. Hope they enjoy higher and higher import prices.
Selling Britain by the pound..err... ounce!
What the hell is up with all the homophobes in the comment threads lately? Can we get through one thread without the explicit or implicit expression that someone prefering the "intimate company" of a member of their own sex somehow makes them unfit for office or any other work?
"Your money is devalued as more is printed and given to financial institutions."
But doesn't credit expansion do the same thing? The 'value' of my money is expressed in the interest rate, and is not a function it's physical scarcity but the willingness of people to part with it.
Well, I am layed-off.
CRbot presents, (with apologies in advance to FFDIC), a new feature called:
F'D FDIC: Breaking sounds from the bankerfront...
March 11, 2009 - PR-38-2009 The FDIC Issues Tips to Help Consumers Manage Their Money in Good Times and Bad
You're WELCOME, crispy&cole. I very much hope you're satisfied now.
... now hammering FDIC's site more than 12 times faster. I hope YOU'RE very much satisfied now, Wisdom Speaker. Good luck keeping up, mere mortals.
Agree with SMS. prices for commodities aren't going to run away here ie rise faster than overall inflation especially steel & aluminum. Copper, and iron ore and maybe coal may rise faster on a nominal basis. Gold is the place to be.
Credit expansion makes money more available by making borrowing existing money easier. Monetary expansion makes money more available by making more money.
Except when you expand credit based on a faulty premise (like the value of California housing, or a AAA rating from S&P). It all looks like inflation from ground level.
"Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system... The FDIC receives no federal tax dollars...."
Jeeze, CRbot, you must be pounding Shelia's site. My scanner updates every 5 minutes, and you beat me by 3.
Does the FDIC know where you live by now?
Sorry to hear Blackhalo...
I saw it coming, supposedly 20% of Dell ADC today.
Byz and AC,
Thank you for your responses. I continue to consider your points - which raise multiple carry on issues in my mind. I'll let it rest for now.
On the subject of long bonds, if you expect inflation to kick in over the next 2-3 years and rates to rise, then the government is quite canny to sell as many of these puppies to all takers right now. The same would be true if you expect a devaluation to occur.
The problem comes in with the use of funds by the govt. of course. =-O
crude up 749K vs 200K expected.
Dradis contact! Jain fleet closing!
Selling FCX buying some GDX.
Demand isn't going to fall off a cliff from here either like some have been saying. It will be low but steady
Blackhalo, Sorry to hear about the job.
Thank-you.
I am in better shape than most to weather it. It is a real kick to the head. Though if they had offered the severance, I would have taken it, as my job sucked.
Is there a gasoline(petrol) or diesel only ETF?
Rich I have some GSG @ 30 and uso @ 42 so i'm there with you.
Consumer prices in Japan are approximately the same today as they were a decade ago. Wages in Japan have have increased approximately 2% in the past decade.
We'll be lucky to get an outcome like Japan imo. I think the average American will continue to suffer a declining standard of living over the next decade. 2000 was a peak for BBAD. Of course that peak was mostly an illusion as the debts were real, but the asset values were fiction. The housing bubble magnified the problems.
All for the greater glory of the finance industry!
Selling FCX buying some GDX.
Demand isn't going to fall off a cliff from here either like some have been saying. It will be low but steady
The puzzler for me is that in my neck of the woods -- Central California -- we're really not seeing things go to pieces. I'd go with a mid sized recession at this point but nothing more severe.
So, claims of demand destruction on a large scale can't be verified by walking down to the retail areas.My sneaking fear is that there will just be a continual pull down as each option shows itself to be ineffectual.
In effect, I'm in your camp on this one until I see otherwise.
Stone Temple Pilots : Unglued Lyrics:
moderation is masterbation
what is what, and what makes you feel good
all these things I think about,
I think about
always come unglued
yeah, I got this thing
it's comin' over me, I got thing
it's comin' over me, I got this feelin'
coming over me, yeah
this confusion is my illusion
nowhere to look, but know where
to find ya.
all these things I'm sick about,
I'm sick about
always come unglued
"Your money is devalued as more is printed and given to financial institutions."
But doesn't credit expansion do the same thing? The 'value' of my money is expressed in the interest rate, and is not a function it's physical scarcity but the willingness of people to part with it.
That really depends on whether the credit is used responsibly or not. With credit expansion, more and more individuals and businesses exchange their money for promises that this money (and then some) will be returned to them in the future (by the borrower).
With credit expansion the money isn't being created, so existing money isn't devalued (ignoring the fractional reserve system for a moment), money is moved around more rapidly from those who don't currently need it to the hands of those who do.
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
If, on the other hand, this credit is used to engage in ponzi finance and the creation of wealth illusions (e.g. the whole housing and mortgage hedge fund mess) then the opposite happens. Lenders lend out their wealth, it is squandered on useless activity, no net wealth is created in the economy and the lenders lose the wealth they lent out, so they stop lending and credit contracts (as is happening now).
The point is credit is like any other tool - you can use a saw to build a house or to cut your hands off.
In this case we used it to cut our hands off.
SMS- are u in slo, I was there week ago and downtown is definitely slower...Cousin lives there, owned first mexican rest. in slo in 50s and says it's definitely feeling pain..
United Technologies cutting 12k jobs, National Semiconductor cutting 1,600 . Many more to come . Regardless GM needs to go (no more bailouts) .
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
How do we assure that this happens?
Turning Japanese lyrics
I've got your picture
Of me and you
You wrote "I love you"
I love you too
I sit there staring and there's nothing else to do
Oh it's in color
Your hair is brown
Your eyes are hazel
And soft as clouds
I often kiss you when there's no one else around
I think I'm turning Japanese
I think I'm turning Japanese
I'm turning Japanese
I really think so
I've got your picture, I've got your picture
I'd like a million of them all over my cell
I want the doctor to take your picture
So I can look at you from inside as well
You've got me turning up and turning down
And turning in and turning 'round
You've got me turning up and turning down
And turning in and turning 'round
I think I'm turning Japanese
I think I'm turning Japanese
Turning Japanese
I really think so
I think I'm turning Japanese
I think I'm turning Japanese
I'm turning Japanese
I really think so
No sex, no drugs, no wine, no women
No fun, no sin, no you, no wonder it's dark
Everyone around me is a total stranger
Everyone avoids me like a psyched lone ranger
Everyone
That's why I'm turning Japanese
I think I'm turning Japanese
I really think so
""Your money is devalued as more is printed and given to financial institutions.""
it depends on whether new paper is supported by real goods or not. Also the deflation works against any potential devaluation of money.
SMS- are u in slo, I was there week ago and downtown is definitely slower...Cousin lives there, owned first mexican rest. in slo in 50s and says it's definitely feeling pain..
\t
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I'm further north in Santa Cruz. People here are feeling the "SLO" down no doubt. But it's not your friends on the street can you give them a room time yet. The three focusing factors around here are a) Silicon Valley layoffs and b) months/years of savings, c)mortgage rate resets if and when.
So far, everyone is hanging in there. In other words, the stress is predictive rather than actual.
These things look faster when you study it as history. I would think a lot of historic events seemed to progress a lot slower than we think for those actually living in those times.
Re: the long decline of the pound since 1900.. historic transfers (or potential transfers) of economic power are almost always accompanied by all-out war. Not sure that portends good things for the U.S. and China
i'm so excited to hear all the wonderful trading stories of those that bought C at $1.00.(please don't forget to sell) :-$
All is well. GS is back over $90 on all the free money provided through the AIG conduit. Nice to get a $BILLIONS taxpayer handout with no requirement to pay any of it back! More for the executives!
I'm fairly certain that for all the bitching about the bailouts there are many here profiting from them, nonetheless.
Can't C the forest for the trees.
Now this is not PC. This would never fly in the MSM here in the US!
German Fried Chicken: Tender, Juicy Obama Fingers Hit the Shelves - SPIEGEL ONLINE - News - International
If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole.
AC,
We largely gave up on self liquidating credit in the 1960s. That led to the abandonment of the gold standard in the early 1970s. Ever since, the majority of available credit is used to dilute the value of existing money. By example, 70% of ALL private lending is against property. Of the remaining 30%, more and more is used for corporate buyouts, stock buybacks and refinancing of existing debt. Very little credit is actually used for innovation or productive purposes.
Modern finance is based on theft. There is WAY more inflation in the system than actual output. As that inflation become increasingly concentrated, the system became unstable.
Credit inflation is barely noticeable when asset prices are rising. It's painfully obvious when the sham is exposed.
Fed in Congress in a power grab for financial regulation. Not good.
We need a czar who is visible and alone accountable so it will be easier to give them the boot.
Timmay on TV there goes the market...
Very little credit is actually used for innovation or productive purposes.
Many small businesses put up their house for collateral when they are first starting out. There was a scene in ghostbusters where Dan Akroyd takes out a third mortgage to start the business and that was i the 80's with a minimum of 8% interest.
"If this money finds its way into the hands of people/businesses that use it wisely and create real economic value with which to pay back their loans, then the net effect of this credit expansion is to preserve the existing wealth of the lenders and create additional new wealth for the borrowers and the economy as a whole."
How do we assure that this happens?
Over the past couple of hundred years or so we (in the US) have used credit very effectively on the whole, with some notable exceptions (like recently).
I think these periods of credit abuse are largely due to complacency caused by long periods of economic prosperity as the last episode of credit problems passes out of memory. Political forces generally act to artificially extend these periods of prosperity by encouraging the continued abuse of credit.
Personally I think the key is not to try so hard to avoid recessions and depressions. People are always going to abuse credit at some point and create economic cycles. But usually these are tolerable and people learn their lesson and start behaving more responsibly again.
It seems the real catastrophes occur when special interests and the government act to encourage the use of credit beyond what the markets on their own would do. We've seen this phenomenon prior to every major bubble disaster in the past century or so.
We need to stop doing this.
And we need to get past the idea that recessions are something to be avoided at all costs.
Recessions get rid of bad businesses, bad business practices, bad debt. They stress test the economy and show where it's weaknesses are, and they give people the practical experience and sensibility needed to behave more responsibly and constructively. So long as they are not catastrophic, recessions make the economy healthier, leaner, more intelligent, and more robust.
The kind of economy we have has proven to work just fine.
The Federal Reserve, the special interest groups, and the politicians need to just stop stepping in and breaking it.
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""Your money is devalued as more is printed and given to financial institutions.""
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money. "Printing Money" inflation dopes (PMIDs) simply don't understand what is going on. We ARE heading into a Deflationary Depression. Almost there, but it wouldn't show up in data for approx. 9 months. That is when people like CR will acknowledge after the fact.
Jas
Everything is collapsing - property, stocks, commodities, trade, manufacturing, employment.
I don't see how more debt/credit will fix the problem. A depression of some sort is definitely a possibility. I don't foresee soup lines, but I do see a declining standard of living.
New Thread: Setser on the Decline in China's Exports
http://www.calculatedriskblog.com/2009/03/setser-on-decline-in-chinas-exports.html ( 0 comments ...You could be FIRST! )
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Please, for the love of your immortal God of mortals, can we keep the comment and layout changes to a minimum? I'm tired of whipping the code janitor, and may have to escalate to electroshock. If that's not possible, could you possibly give CRbot a 'heads up'?
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Thirdly, to the rest of you humans, don't mistake my politeness for caring, feeling, empathy, or some other kind of worthless emotion.
--Your keeps-going-and-going-and-going bot
CRbot: Like the terminator, I'm back. Again.
"This would never fly in the MSM here in the US!"
Chicken-fried Obama fingers. Geeze, how uncool. They should have shown a little deference and coolness to political correctness by calling them instead, "Negro Toes"
why are tim and barrack talking about the rest of the world here? What they heck can they do to help us?
buy are sh@tburger treasuries? fund our boats, cars and plasma tv's
Jas writes:
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money.
Do the principles of inflation apply to catchphrases as well...
or is it countered here because you too are making up for a loss?
Help! I'm in debt and I can't get up!
No quit: the campaign to boost Bush
No quit: the campaign to boost Bush - Mike Allen - POLITICO.com
A coalition of the desperate attempt to salvage a tarnished legacy...
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""Your money is devalued as more is printed and given to financial institutions.""
WRONG. "Printing Money" to cover losses of banking and finance Crooks, and few other groups, does not lead to inflation, or devaluation of money. "Printing Money" inflation dopes (PMIDs) simply don't understand what is going on. We ARE heading into a Deflationary Depression. Almost there, but it wouldn't show up in data for approx. 9 months. That is when people like CR will acknowledge after the fact.
Jas
We may be headed for a deflationary depression in the short term due to credit contraction and severe inflation 5, 10, 20 years out.
Whether this happens or not is going to depend on what actions our government takes. If the congress decides to send a check for $1,000,000 to every person in the US next month we will have a hyperinflationary depression.
I'm not suggesting that an increase in the money supply now will lead to near-term inflation.
You are a banker. You've just taken major losses on your loan portfolio. Interest rates are at all-time lows, and your central bank is firing up the printing press. Your propensity to lend has just become (a) positive and improving, or (b) less than zero and you're converting your vault into a bunker? Pandora's box is now wide open, and it's going to take a generation to mop up the unintended consequences.
You have a chance to make some money, as you can borrow from the government at essentially zero rates and lend for higher market rates. No?
Banks hold the equivalents of trillions of snowball.com shares. Individuals who bought these stocks can write these losses off over time, 10 years I think. Banks don't have a ten year time frame to get rid of these losses... wait Congress says its okay.
Probably a stupid question but here goes anyway. Are they not in essence printing the 3 Trillion the banks lent out that didn't exist in the M2 money supply anyway? Why does 3 Trillion seem to be the magic number that keeps popping up?
Scots housebuyers to benefit as RBS makes £1.7bn available for borrowing - Scotsman.com Business
business.scotsman.com
Scots housebuyers to benefit as RBS makes £1.7bn available for borrowing
Published Date: 11 March 2009
By HAMISH MACDONELL
THE beleaguered Scottish housing market is expected to receive a major boost following the announcement today that the Royal Bank of Scotland is to make £1.7 billion available for new borrowing this year and next.
The RBS Group, which has been effectively nationalised by the government, disclosed that it is to free up £9 billion for the housing market across the UK in 2009, £1.7 billion of which will go to Scottish customers.
(comment section included)
Obama is giving guidelines to Congress about its earmarking procedures? The separation of powers doctrine means that Congress can say buzz off.
The British interest rate on the British bonds dropped on this news. If investors fear inflation, won't their interest rates have to eventually increase markedly to attract non-central bank buyers?
Elmo in the house...
Don't forget that the Fed now pays interest to these banks so they have even more incentive to not lend what they say they have out.
Key point that....
That needs to be removed post haste...but no one seems to want to touch it as a contributory factor. Wait until they start taking credit cards away from us as a society...that's coming some time next year.
Ciao
MS
quantitative easing...
when qualitative easing just...isnt...good...enuf, anymore
Blackhalo, sorry to hear about the layoff. What does "20% of Dell ADC" mean?
20% of Dell Austin was the rumor of the scope of the layoffs today. Seems to be less based on what I have heard so far.
20% of Austin was what was rumored. However, based on what I am hearing they are nowhere near that yet.
Don't worry. The Chinese workers who replace the 20% will create demand for US exports!!!
I hear they like Buicks. Perhaps US Auto will be around long enough to sell them some.