However, firms are still reluctant to hire, and the unemployment rate reached 9-1/2 percent in June and will likely further increase through the remainder of the year before it flattens out in 2010.
I don't follow the Mpls rental market closely, although my brother just rented a place in the Como area of St. Paul.
There has been a huge amount of rentals coming into in the Minneapolis market the last 1-2 years, and also lots of condos going rental as well. The rental ask rates are all over the board depending on neighborhood and state of the property.
In general, you should be able to find relatively good deals no matter where you look, but I haven't seen many bargain basement units.
I have no specific advice except that you might want to steer clear of places that look "too good to be true" as it may be an underwater speculator/investor. That said, if you can find a great deal because it's a person who has held the property forever then that would be great.
OT noise:
July 8 (Bloomberg) -- The Federal Deposit Insurance Corp. may relax proposed rules for buying failed banks after some investors said they would block private-equity firms from participating, according to people briefed on the talks.
Regulators may ease a provision that would require private- equity investors to maintain Tier 1 capital ratios of at least 15 percent for lenders they purchase, said the people, who declined to be named because the talks are private. Tier 1 ratios, which measure a lender’s ability to withstand losses, currently must be at least 8 percent for new banks.
Wow, how did they pull of that 10 year? Given the dollars action it does not look like it was done with QE. I guess the sell off in equities did spark a flight to safety. And now, the DOW goes Kermit?
I don't think any of us would be overly surprised if the end of the recession was called in 2H2009 or even early 2010. there are two problems however
1) the risk of "double dip" recession is high
2) the risk of "jobless" recovery is sky high.
3) the risk of double dip recession plus jobless recovery is even high.
the end of recession tells us nothing about the duration of our pain. Didn't Japan's recession end decades ago?
Still curious why no announcement of how much the fed bought at the auction.
Why no mention? What part of the 43.9% of indirect bidders is the fed?
MarketWatch has always made that info available moments after the auction ended ever since the fed started buying.
Why so hush hush?
No dude they will just have rising unemployment and declining asset prices and a crashing dollar and call it a recovery. Ya know, just talk up the market. It's all subjective anyways.
Stupid comments. Obviously she has not taken a look at tax receipts.
Income tax withholdings indicate the economy deteriorated rather than improved in the past three months. Adjusting for the “Making Work Pay” tax credit, withholdings plunged 4.8% y-o-y in May, 5.8% y-o-y in June, and 8.4% y-o-y so far in July.
The depression will not end in the second half. It is only starting. Credit bubbles take a long time to work themselves out, and that's once noncollectable debts start to get written off. We've only kicked the can a little. Filing this one under "another dumb fed shill".
shill (profile) wrote on Wed, 7/8/2009 - 1:27 pm The Baltic Dry Index has fallen over 8% in two days and dropped below key support in so doing. The chart looks ominous. Look out below.
Do people actually trade index derivatives of that thing?
The crazy part is that it ever got up that high. They are going to be running routes from shipyard to scrapper for quite some time. Not even Chinese interventionism in the scrapping market is going to firm dry shipping, not for a good long while. Some people made some really over-optimistic deals for dry haulage lately.
Dryfly, anyone, what's the ship-surge period for US holiday imports? October? So, would this be nearing the end of the 90-day-out reservation period for holiday-period shipping? I'm not sure what dry shipping customary reservation windows are.
Interesting, Scrooge. I thought India was bigger, France has not traditionally been our fiscal friend.
The biggest dominoes are Japan, Saudi Arabia, and Germany. I think even if they all announced tomorrow, it would take a few years to pull it off technically. Maybe it could happen much faster, I don't know.
withholdings plunged 4.8% y-o-y in May, 5.8% y-o-y in June, and 8.4% y-o-y so far in July.
Wow, thanks for hard numbers.
Confirms my intuition.
The job market mirrors this, I think.
I do targeted searches on several sites for my own skill set but I also do a couple of manual look-overs to see what I might be missing.
These are general job ads, not IT-specific, and they seem to have declined significantly in the past 60 days.
Oh yeah right....the Christmas shopping season. You don't think they are seriously going to have one of those this year, do you? Maybe we can double up in 2018.
"Wow, how did they pull of that 10 year? Given the dollars action it does not look like it was done with QE. I guess the sell off in equities did spark a flight to safety. And now, the DOW goes Kermit? "
Right on target.
It has worked out pretty well, actually. The S&P has only given up 70pts from the high, but we have gained 70bps in the 10 year, and have even crashed oil a bit.
You have to give BB credit, he is a great manipulator.
Currently, core inflation is near 2 percent, a level I generally find acceptable
When did we have a vote authorizing perpetual inflation? As far as I can tell, the fed and the banksters have unilaterally decided that inflation is the default setting. The notion that inflation is a benefit to our country should be publicly debated. And if it is decided that inflation is beneficial, we should discuss the distribution of inflation.
Personally, I'd like to see some "inflation gathering" taxes instituted.
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:37 pm replyIgnore userByzantine Ruins-
Oh yeah right....the Christmas shopping season. You don't think they are seriously going to have one of those this year, do you?
I'm just looking at the baltic dry trying to see, what levitated it up above the rocky bottom. It's volatile and tied to fixes on shipping contracts, so I'm just trying to see what might be causing a moderate bounce (to 1/3 of the previous high -- so, it's the "bounce that bankrupts" if you own any new hulls) . I don't think there's going to be much of a Christmas this year but 300 million+ people living under reduced means is still something. Not everyone is poor. Maybe that's why. Maybe people who should have known better were just very self-deceiving during the "green shoots" mania. Hard to know.
We're definitely heading for the downward-grinding part. As Gavshire said, this has only just begun. It won't be a real party til the sovereigns start cracking.
I think France has a bigger GDP than India. And France is in G8 as well. As to when they're pulling the reserve currency off...who knows. That's the mystery, isn't it I'm just glad I'm out of dollar so I don't have to wake up one day and see dollar drop 40% and have a heartattack.
"RE: the 10 year auction, the Fed has conveniently changed the definition of indirect bidder. "
Yeah, I like this quote:
The matter was technical enough to confuse even industry veterans.
"We are not precisely sure what this all means," said Ward McCarthy, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.
"We spoke with some very seasoned market players with decades of experience on dealer trading floors who were similarly unsure what to make of the contents of the Federal Register."
"The Treasury's changes, contained in a June 1 entry to the Federal Register, relate to what it considers a "guaranteed bid." Under the previous arrangement, once a primary dealer offered securities at a pre-specified level to its customer, that bid was considered to be the dealer's own."
Looks like they are re-classifying some primary dealer bids as indirect bids.
montas ankle (profile) wrote on Wed, 7/8/2009 - 10:22 am
why is 2% inflation acceptable?
how is that price stability?
Think of deflation/inflation as a big nasty bulldog. You have to keep tension on the leash or it can turn on you or get a running start and get away. That's why the Fed is so very afraid of even a little slack (deflation) in the leash.
I still see a deflationary environment. The recent 4% yield on the 10 yr was a deal. The fed is making extraordinary efforts to prevent a system meltdown. That's not the same as creating high or hyper inflation.
No dude they will just have rising unemployment and declining asset prices and a crashing dollar and call it a recovery. Ya know, just talk up the market. It's all subjective anyways.
Perhaps. but I don't necessarily agree with your point.
It is not uncommon for unemployment to continue to rise after the official recession has ceased. This is because typically businesses ramp up production without hiring early in the recovery. Only later when the recovery is more assured to they rehire employees again.
It is also not uncommon for asset prices to fall during the early part of recovery.
A crashing dollar causes semantic issues, since our GDP is calculated in dollars. I would argue that part of the purpose of all of this is to devalue our dollar leading to a rise in nominal GDP. as we all know, a rise in nominal GDP is considered "expansion" and thus the end of recession.
So unfortunately, it would not necessarily be inappropriate to call the end of a recession during a time of rising unemployment, declining asset prices, and dollar devaluation.
Clearly, some of this can be "gamed" by lying governmental agencies. but some of it is just the way we measure recessions.
However, in the end it doesn't really matter much anyway. As I said above, one of the major problems here is that the official end of the recession may not mean that we have recovery. we may have a double dip or a prolonged jobless recovery as example.
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:45 pm
The "downward grinding part" you mention has now been going on in Japan for about 15 years, yes?
That's right, although I don't think we will get 15 years, but the Japanese inability to formulate policy to end their predicatment certainly informs my opinions.
Japan was very lucky in that they are not trying to play the Great Game and had plentiful sources of foreign exchange due to their mercantilist economic policies. The US is a net debtor and up to its ears in machinations.
To me, the question is not necessarily when people can afford to cut us loose in a carefully stage-managed fashion, but if we'll be kicked over the side in a moment of desperation when people have to impose capital controls rather than feeding our endless appetite for debt we can't pay back.
Understand your points, I'm just pointing out that the central bankers are manipulating the economy so much you can call it whatever you want to and it is at this point pretty much meaningless. Seriously, explain $70/barrel oil in the period of the lowest demand in 30 years.
OT:
WASHINGTON (Reuters) - Enrollment in the major U.S. antihunger program, food stamps, grew by 1.2 million people in two months and stands at a record 33.8 million people, the government said on Wednesday.
Food stamps helped one in nine Americans buy groceries during April, according to Agriculture Department figures. The average benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
What do you think the likelihood of capital controls is? I have about half of my money overseas and can't decide whether to move it back. The FDIC does not really exist in Dubai, you know.
more than one for every four non-farm payroll jobs. when that ratio hits one to two (and it will, though it may take a decade or more), i'll be more interested in 'second derivative' theories.
The average [food stamp] benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative
Really?
I agree that maybe free bus passes aren't stimulative, but it would seem to me that food stamps are.
People take food stamps and IMMEDIATELY spend them on food.
this also gives them more disposable income (since food stamps/dollars are somewhat interchangeable) which allows them to buy more stuff elsewhere.
that increases spending.
consumer spending is 70% of GDP.
thus it would be stimulative, no?
I think someone needs to tell the FED, the gag is up, people know this has all been about blowing hope up our behinds. Now don't patronize us, and give us these optimistic views on 2nd half recovery when we are dangling by a thread above the abyss.
Dryfly, anyone, what's the ship-surge period for US holiday imports? October? So, would this be nearing the end of the 90-day-out reservation period for holiday-period shipping? I'm not sure what dry shipping customary reservation windows are.
I don't know for sure because I'm on the other end of the pipeline from 'finished goods go to stores' but my guess & belief is that October is pretty close to the peak Asian offload for Xmas season delivery. If the stuff isn't in the warehouses by early Nov they won't be on the shelves on Black Friday - that would be considered a killer.
"Think of deflation/inflation as a big nasty bulldog. You have to keep tension on the leash or it can turn on you or get a running start and get away. That's why the Fed is so very afraid of even a little slack (deflation) in the leash."
The problem with leaning so hard to one side to counter the bulldog's current momentum is that he's got 4-wheel drive and he turns on a dime. When the rabbit behind you catches his attention, you're going to fall on your ass and then get your face dragged across the pavement at high speed.
"I'm not saying these things are "bad" but they are not stimulative"
the sad thing is that our wars of choice, continuing IVs into the veins of AIG/FRE/FNM/C/BAC and outright gifts to GS mean that we may run out of crumbs to throw at things like food stamps, FDIC and PBGC sooner rather than later.
the idea that any policy from the fed or treasury can be genuinely stimulative for anything except the back pocket of GS (or the beneficiaries of asset and/or commodity inflation) is utter crap, however, those basic elements of the safety net are real.
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:51 pm
Byzantine-
What do you think the likelihood of capital controls is?
I am not an investment advisor or anything like that. I have virtually no money. So you are asking someone with no skin in the game who can't really give you "advice" or anything that could be construed as such.
My feeling as a private person is that it isn't a party til the sovereign fiscal crises start, and these big international crises always lead to capital controls. I also, just sharing my ignoprant opinion, think the people most likely to keep paying their debts in something recognizable as an exchangeable currency for the forseeable future are the Germans.
I have about half of my money overseas and can't decide whether to move it back. The FDIC does not really exist in Dubai, you know.
Good luck gaming it. Tell me how it works out for you.
I spent all my money so I couldn't get robbed. Seemed easier to have a retirement when I was young enough to enjoy it and pick up more money when I was more sure what "money" would mean than to cry tears of blood watching it get debased or stolen.
"gosh, an awful lot of gold bugs on here again of late."
Are you a dollar bug?
No. I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around.
we had major economic dislocations WORSE than we do now pre-Fed and pre-fiat currency. The panic of 1873 for instance.
A lof of Austrian economic theory is well done, and I have read and studied much of it and agree with much (but not all) of it. (De Soto's Money, Bank credit, and economic Cycles is on my desk).
but the problems in our current society go much further than the Federal Reserve, or the removal of the Gold Standard.
If I were to obliterate something, I would obliterate or at least severely curtail fractional reserve lending and leverage.
the Federal reserve is an agent of fractional reserve lending, and thus I would cripple it for that reason.
FWIW: there was massive fractional reserve lending done by the first Italian banks hundreds of years ago while on the gold standard which led to bank runs. This is what led to the first reserve banking system.
Got your point about spending it while you're young but I'm in real estate development and when this job ends I could be out of work for a really, really, really long time. Besides, what is the fun of shorting my former US commercial real estate employers without some cash on me?
Someone with a lot of money needs to take front page ads out in a paper people still read and just print the various statements from 2007, 2008, and 2009 from government officials that are the exact same thing over and over again. No need for comment or editorial, would speak for itself.
"A crashing dollar causes semantic issues, since our GDP is calculated in dollars. "
The wealth of 99% of Americans is measured in dollars.
That is the problem. Americans think they have been getting wealthier for years, when in fact their wealth is being confiscated by central bankers and friends.
Forget about GDP, it is meaningless in the lives of most people. Forget about deflation/inflation. It is all about wealth:
Are jobs being created or destroyed?
Are you more or less likely to pay higher taxes in the future?
Are you more or less likely to collect Social Security under its current terms by the time you retire?
Do you have more or less leisure time?
Etc.
There is only one road to wealth (as a nation): produce more than you consume. There is only one road to increasing wealth: improve productivity.
Anything measured in USD can be manipulated by altering the value of those dollars.
Evergreen Marine said today it plans to reduce the size of its global container fleet by a sixth over the next four years as it sees no clear signs of an economic recovery.
Other than stimulus, this is total rear view projection. It's idiotic. This guy seriously must have trouble sleeping at night. I'd quit before I had to get up there and regurgitate this rubbish.
Not a mention of CRE going into the crapper and what that will do for construction and employment. No clue about the next wave of foreclosures, the effects on lending and the banking sector, the impact of still lower home prices on consumer balance sheets. Nothing about spending cuts, higher taxes and layoffs from state and local govt. Add those to still coming job losses elsewhere and all you are looking at is continued deleveraging.How does one delever? A higher saving rate. And that only breeds more asset price declines.
These guys truly do not get it. It's sad. This is deflation short term, and they keep talking about what's going to happen when inflation returns...uh, newsflash...that is NOT the problem to be worrying about right now.
by the way, the link on the CR page to the speech is broken.
"Have you ever heard of Plato, Aristotle, Socrates...? Morons.
"I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around."
no one does. but fractional games based on something imaginary are a bit easier to engineer than ones based on something exceedingly rare and desirable which is a royal pain in the ass to pull out of the ground, no?
do you really think that the imaginary nyfed balance sheet would be able to keep on ballooning to ten TRILLION if there was any kind of commodity-related brake on the ability to print? and, more interestingly, do you think they would be so arrogant if they weren't literally sitting on well over a half-trillion in gold in the basement?
now go reread "gold and economic freedom" and give me five 'our fathers'.
The panic of 1873 is a prime example of messing with the money supply.
The point of a "hard" currency is you don't contract and expand the money supply. The panic of 1873 would never have happened with a stable money supply.
@Yearning - I believe that they aren't exactly "stimulative" for a couple reasons. First, food is an entirely essential item. Either you get it, or you die. So, the baseline consumption of ANYONE is going to involve food thus providing the ability for a person to not die and nothing more is not going to add "growth" to consumption numbers. Second, it's just a transferrence of tax dollars from the future to now or, if you prefer, a redistribution from a wealthier person to one less fortunate.
I think gold is a way better vehicle to retain your wealth, as opposed to dollar (or other fiats), in these troubled time. As for gold as a fractional lending vehicle....that I agree with you to a degree.
I'm with H-Hack. Without fiat currency central bankers would be irrelevant. And let's face it they run the world. That's like Soviet Union without its nuclear arsenal. Seriously, why would they give up their big gun. This little charade will go until no one has the slightest clue of what things are worth anymore.
Rob Dawg (homepage, profile) wrote on Wed, 7/8/2009 - 1:52 pm
* reply
* Ignore user
The average [food stamp] benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative.
curious- what spending do you consider to be stimulative?
I think of all the government spending this is the most stimulative of all- the recipients spend it they don't use it to repay debt or increase savings. I think most economists agree that this kind of spending has the greatest multiplier effect which is what "deficit spending" is all about.
HollywoodHack (homepage, profile) wrote (in reply to...) on Wed, 7/8/2009 - 10:58 am
...the idea that any policy from the fed or treasury can be genuinely stimulative for anything except the back pocket of GS (or the beneficiaries of asset and/or commodity inflation) is utter crap, however, those basic elements of the safety net are real.
There's lots of stimulative policies. We just choose to not implement them. Accelerated depreciation on asset classes is a good one. Tax credits for small renewable energy projects would work. We could jumpstart a domestic PV industry and if my calculations are correct replace 1/3rd of our fossil fuel electrical generation for less than 1/2 a TARP.
We are borrowing the stimulus money. More stimulus is equivalent to throwing gasoline on the fire. We can't possible pay the debt back... legitimately. The government will use inflation to cheapen the debt. Unfortunately, this will hurt the poor, the working class, and the elderly on fixed income. Reckless government spending is not an American value. Interesting Finance & Economic articles
Stimulus is a joke of a concept; it doesn't end up with real economic growth in the long term. Even the New Deal failed to increase private investment. It wasn't until 1941 that domestic private investment reached 1929 levels. The fact that the first stimulus has failed to stop the bleeding yet isn't surprising. Our government deficit for the year which is over 20% of GDP (when the omnibus bill, first stimulus, bailouts, and on-budget deficit are summed) is unsustainable and something's gotta give, whether it be the lenders or the interest rates.
"and, more interestingly, do you think they would be so arrogant if they weren't literally sitting on well over a half-trillion in gold in the basement?"
Well, now, that is a good point, isn't it? If gold were so "useless", why does our government hold so much of it still? Shouldn't we sell some of it to fund the debt?
They have it, because they might need it. Shouldn't we all have some, then?
No. I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around.
I'll even go one step farther... fiat makes gold even better. The real power of holding physical gold in a fiat system is it lets you play both games simultaneously. If I were a gold bug I would never ever want to see a gold standard ever again.
BTW real gold bugs could care less what happens to gold vs USD, sterling, yuan etc. The only metrics that matter are ounces per barrel, ounces per bushel, ounces per square foot - etc. - OR ounces per hour and ounces returned per ounces invested. If somebody says they are a 'gold bug' and convert all their gold gains to fiat for 'calculation' then they aren't really that tied to gold.
Personally I love fiat - if it weren't invented I'd try to patent the concept. I am also real glad it is lawful & acceptable to own physical gold even if I currently don't. That might change and soon.
We could jumpstart a domestic PV industry and if my calculations are correct replace 1/3rd of our fossil fuel electrical generation for less than 1/2 a TARP.
Dawg, I would love to see that calculation. Every time I sit down and work out PV numbers, I can't see how it's an honest-to-god business. (And I'm doing this as an entrepreneur with an eye to making a buck.)
PVs with realistic assumptions about sunshine just ain't cheap compared to oil, and I keep getting reminded of that fact.
“AsiaNews had also received similar reports: one of the two Japanese arrested in Chiasso and then released is Tuneo Yamauchi, is the brother of Toshiro Muto, until recently vice governor of the Bank of Japan….
“These photos reveal that the securities under discussion are not bonds but Treasury Notes, because they are securities that can be immediately exchanged for their worth in goods or services and because they are devoid of interest coupons.”
Central bankers aren't giving up their power short of a world war. They are a one-world government that would make Roman emperors envious. I don't think the topic is worth discussing on this board.
Followup: Unless you are considering the TARP money to be lit up in flames (probably not a bad assumption), so you are arguing for spending the cash by buying PVs rather than in banker's love nests. That would certainly be an interesting case to consider.
BTW real gold bugs could care less what happens to gold vs USD, sterling, yuan etc. The only metrics that matter are ounces per barrel, ounces per bushel, ounces per square foot - etc. - OR ounces per hour and ounces returned per ounces invested. If somebody says they are a 'gold bug' and convert all their gold gains to fiat for 'calculation' then they aren't really that tied to gold.
Thank The Maker that someone has made this point.
The arguments Pro/Con PM are complete noise unless you compare it against other commodities, items, and services. Arguing that Silver should go higher than 20 USD or gold should hit 2,000 USD is a complete waste of time and typing without the context of what that USD can buy in regards to other things.
Wow thanks for the find! amazing.....so that means that Japan was trying to get rid of its bonds. (shocking, I know) Me thinks they'll be the next to sponsor the new reserve currency
There is only one road to wealth (as a nation): produce more than you consume. There is only one road to increasing wealth: improve productivity.
Anything measured in USD can be manipulated by altering the value of those dollars.
not true. You can take the wealth from others as well. (wars).
otherwise I agree.
However, part of the problem is that everybody wants to produce more than they consume right now. that is just as unhealthy as consuming more than you produce.
A better path would be for all to produce as much as they consume.
====== The panic of 1873 is a prime example of messing with the money supply.
The point of a "hard" currency is you don't contract and expand the money supply. The panic of 1873 would never have happened with a stable money supply.
Ah, so you agree with me and you help prove MY point.. Going to a gold standard does not prevent a government from "messing" with the money supply. I'm sorry to have to be the one to tell you this, but the CREDIT monster is out of the bag. You can't put it back in. we had the CREDIT monster back in 1873 while we were on the gold/silver standard. Being on a "hard" currency DID NOT STOP the government from changing the money supply. it DID NOT STOP speculators from messing with the value "of money". it DID NOT STOP farmers from going into too much debt. it DID NOT STOP us from going into what is likely the worst depression we've ever had.
so you are proving my point. As I said above, going to the gold standard helps us how, except by a fantasy in your head?
additionally, there was no Federal Reserve in 1873. and there you have it.
You search for easy answers to complicated problems.
the issue is leverage and fractional reserve lending, not "hard" currency which is a figment of your imagination.
hundreds of years ago we saw bank runs in early Italy since the goldsmiths were lending out more "notes" than they had gold to cover in their vaults.
gold standard is a fine idea. but it isn't going to help us much.
I'll leave you with 2 quotes. the second is an original from me that I've said before
"All Fiat eventually goes to zero."
and YTL's corrolary "All gold/metal backed currencies eventually go to fiat"
Forget about PV. Check out CSP. Look at http://www.csptoday.com Lots of CSP underway today but it is only getting equity from stimulus money. There's a $2.1B deal in Arizona....world's largest.
I say forget everything that's being said by anyone and just put a chart of the yen-dollar exchange rate on your screen. Huge move today. Biggest gain for the yen since early October 2008, and we all know what was happening to the market at that time. If this flashing-yellow risk appetite indicator still means anything, strange things may be afoot at the Circle K again.
HollywoodHack (homepage, profile) wrote (in reply to...) on Wed, 7/8/2009 - 2:01 pm
i'm sure you still have a few buckets of ducats lying around, byz...
I wish I had some buckets of ducats. I would buy a bucket of beer and a bucket of chicken with it and then I'd be just about set. I only started my ass moving on making more geld once the great deleveraging started, and it'll be a few more months at minimum til that starts to pay off.
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
And here's the worst part. The "welfare" of the state has increasingly gone to the wealthy cronyists.
Food stamps are not "stimulative" in that they do nothing to create wealth. i.e., they do nothing to create production, they are pure consumption.
What is that saying about teaching a man to fish?
I disagree. Food can increase productivity.
How much work can a starving man do?
How much work can a man do with a full belly?
I find it interesting that people only see "investment" in terms of technologies or equipment. But they ignore the "investment" into human capital.
====
I personally see 2 "stimulation" arguments here, and thus definitions are in order.
definition 1: stimulation as in to stimulate our economy, as in to increase GDP:
as already discussed, GDP is a construct that uses nominal dollars. consumption is roughly 70% of GDP
Food Stamps are immediately spent into the economy which raises consumption which then raises GDP.
definition 2: stimulation as in to stimulate growth and/or wealth.
even here, I would argue that food stamps are an investment into our labor resources. and thus also count as stimulus.
Lots of CSP underway today but it is only getting equity from stimulus money.
Many thanks for the link, and I'll do more digging there. I've done the bigass equity raising before (which I assume is required for CSP), and I was hoping that PV was going to be more scalable.
What exactly did you mean: " it is only getting equity from stimulus money" ??
Was Mr Evans singing Good Day in the NeighborHood while pulling his big coat off and putting on his sweater, Oh, that not Mr Evans, that Mr. Rogers and he wants all the little boys and girls happy. Hotty Toddy, Just another spinner.
What makes you PM bugs think the USG won't make private ownership illegal again?
First, gold has been demonetized by the US. The motivation the last time was so that FDR could devalue the dollar 40% vs. gold. That would not work this time because dollars aren't linked to gold any more.
Second, there is not enough gold in private hands in the US to make it worthwhile.
Third, it would be very hard to enforce.
I worry more about seizure of 401k, 403b, and pension plans. That is a tastier target.
"As I said above, going to the gold standard helps us how, except by a fantasy in your head?"
By my definition, going to a hard currency includes no fractional reserve banking. May be my labeling is wrong.
There can still be creditors and debtors, of course, but only in proportion to what is available to lend.
So maybe we agree. I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
Otherwise, we are doomed to booms and busts, whatever that economic neophyte of a President may think.
some investor guy (profile) wrote on Wed, 7/8/2009 - 10:35 am
Is there any prececent for riots ending a depression? A lot of stuff will need to be replaced.
The after affects of a localized riot are stimulative to that area for the most part. After the Watts riots, there was considerable rebuilding which helped which helped local employment. Policy also changed to supply more services to the area.
I've heard some talk about the RRK riots concerning intentional vs. unconscious intent and urban renewal. The hypothesis is that the locals did the most damage to their neighborhoods because they wanted to bring that economic boost back to LA central. No offense but the people I saw where acting on pure emotion and rage. The greed came later but that was mostly in the form of people who lived outside the area coming in as opportunistic looters.
I don't have anything on large scale unrest but I'm sure it's been covered in academic circles.
I can pull some journal articles if you are really interested.
And KK if you are out there, I still owe you that wine list- i haven't forgotten.
Two that I agree with 100%! We need incentives for real investments.
Crispy,
I think we should just squeeze the privilege out of the existing system, namely by severely limiting or elminating inflation. That would force people towards real investments and innovation.
Targeted incentives always seem to backfire. We need to make hard work and ingenuity more worthwhile than inflation gathering or shams.
.
And I disagree vehemently. Food in and of itself does not increase productivity. In fact, I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food.
Food stamps are, in fact, anti-stimulative in that light, they foster dependence.
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
By hiding their gold?
Do you have this idea that gold holders can't be taxed and their wealth can't be confiscated?
Maybe I need to reread my old histories of medieval times?
or reread the tales of US gold confiscation after WW2.
I think the gold standard is fine. heck I wouldn't mind at all if we shifted to a gold standard. But many of the ideas of the gold standard that I'm hearing today seem founded based on some fantasy ideology, or based on some historical pretext that is long lost.
Don't think for one second that the gold standard would change the ability of the IRS to tax your wages and "confiscate your wealth".
Don't think for a second the gold standard would stop leverage
or that it would stop fractional reserve lending.
it didn't before, why should it now? especially now that things have gotten so "complex"
do you think that the Fed and Goldman sachs and Citibank will go back to 5th century practices just because Gold has been around for millenia?
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
I disagree - I think it does nothing but offer an illusion of security. If the state is going to screw you they will. Owning physical separate & independent of 'currency' is a better way and if so you can 'opt' out... or as I suggested above play it both ways.
I see a gold standard as an artificial construct as phony as fiat itself... X dollars an ounce as if chosen by God... why even do it. Have fiat & 'metal' separate and let them duke it out on the comex and in people's vaults.
And here's the worst part. The "welfare" of the state has increasingly gone to the to wealthy cronyists.
Happened in spades under a gold standard or fiat - won't be fixed by either.
I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
Almost agree. I think that arguments about the "limiting effect" of PMs can be circumvented by using a commodity mix which is empirically derived to mimic the long-term rate of growth in the economy. I'm not sure what it looks like but it would include a percentage of PMs. Something that incorporates housing stock or agricultural commodities, etc.
I'm doing a master's degree in Renewable Energy right now (remotely and online...special case the way I'm doing it). Apparently the CSP guys can't finance anything but have started to get some deals going again by tapping into stimulus money. The Arizona $2.1B deal is the big one...saw that in CSPtoday.
Check out the Club of Rome project in North Africa....this is a 20 year CSP deal where they are going to lay high voltage DC current under the Strait of Gibraltar and Mediterranean between Morocco, Spain, France, to Germany and Algeria, Sicily, Sardinia, through CH to Germany. The line loss with high voltage DC is 15% between Africa and Germany so the distance makes sense. Without HVDC forget it. It is a consortium of 20 or so large companies; big reinsurance guys (Munich Re, etc). As a note, if CSP covered 1% of the Middle East land area it would equal the energy produced by Middle Eastern oil in a year. Although with the dust here I keep thinking who would clean the mirrors....
A friend of mine just started a consulting job in San Francisco with a firm doing site acquisition for some CSP guys. Will find out more in the next couple of days, I hope. I'm in the Middle East but if I could get a job doing that I'd be on a plane back tomorrow.
personally, i think the best rebuttal to fiat fans is quite straightforward. walk down broadway in manhattan. look up. all of the great, classic memorable stuff was created before 1930, under a hard gold regime. now, compare that with what the nation has built since 1973.
Pre-senility greenie:
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. "
In fact, I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food.
Food stamps are, in fact, anti-stimulative in that light, they foster dependence.
Great. The ideal society is one with a pool of starving surplus labor that has no choice but to sell themselves to the wealthy for bread and water.
If I ever find out you people are more than a tiny minority of internet crackpots...if I ever start meeting people like this in the real world...I'm emigrating.
"Don't think for one second that the gold standard would change the ability of the IRS to tax your wages and "confiscate your wealth"."
I have absolutely no problem with visible taxes at a certain level. Taxpayers can clearly see what they are paying, and what they are, or are not, getting for that money.
I have a huge problem with the "hidden taxation" of inflation.
I'm well aware of FDR's gold CONfiscation. In fact, FDR's theft proves my point. He had to eliminate the gold standard to start the welfare state.
Also, I'm not against taxes. I'm against the unauthorized tax of inflation. We don't bother with balanced budgets because the fed provides the inflation tax. That is profoundly unfair and unCONstitutional in my view as the burden is generally put to those that can least afford the tax and don't understand the system.
So maybe we agree. I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
yes, now we are becoming closer to agreement.
As I've said above, I'm not against a gold standard at all. Heck, I think it's just fine.
However, our economic system has many problems that have nothing to do with "fiat" vs "hard metal". it is instead leverage and fractional reserve lending.
Thus, I target my ire at the problem: Fractional reserve lending and leverage.
The gold argument is completely different and has little to nothing to do with the problem, although too many people have been brainwashed to believe otherwise.
I would gladly take your metal backed monetary system with severely curtailed fractional reserve lending and leverage.
I would also gladly take a fiat based monetary system with severely curtailed fractional reserve lending and leverage.
but what I really want is severely curtailed fractional reserve lending and leverage.
unfortunately, looking over the millennia of monetary history that type of system tends to be a rarity, although it is still worth fighting for. (the Muslim world is an example of such a system though)
That makes me suspicious. The reason that I can't make PV work as a biz is that the ROI is terrible. The fact that no one will invest in CSP makes me immediately wonder if ROI is again an issue.
The underlying problem of course is that oil is too damn cheap. Or rather, that we don't roll in the societal costs (war, pollution) into the price-per-gallon.
I prefer to take a sunnier approach.
All Karma in the universe is finite (in my solipsistic world) so if there are that many ruthless free marketers out there; that's just more karma for me for simply being.
This is why charity is preferable to welfare:
With Charity I decide who does or doesn't get my donations; an individual choice and the basis of freedom
With Welfare it is the STATE who decides for me who gets my donations; the basis of enslavement.
Nobody here wants to admit that the investor side of the equation bears at least equal blame for our predicament, which is why it's not getting fixed. Nobody wants to give up their mythical money and illusion of superiority.
And where in my post did I say "The ideal society is one with a pool of starving surplus labor that has no choice but to sell themselves to the wealthy for bread and water."? Or anything like that?
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. "
Bzzz.... wrong answer.
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
so again, you bring up a nice little quote with lots of scary words like "welfare statists" but the essential premise is easy to debunk given history.
The gold standard DID NOT stop the state from borrowing more than its tangible assets would have allowed.
again: Mr. Credit Monster doesn't care about your gold standard. So sorry.
These Fed idiot savants are Broadway musical aficionados. We've run the gamut of "The Sun will come out tomorrow" to "Put on a Happy Face:"
Gray skies are gonna clear up,
Put on a happy face;
Brush off the clouds and cheer up,
Put on a happy face.
Take off the gloomy mask of tragedy,
It's not your style;
You'll look so good that you'll be glad
Ya' decide to smile!
Pick out a pleasant outlook,
Stick out that noble chin;
Wipe off that "full of doubt" look,
Slap on a happy grin!
And spread sunshine all over the place,
Just put on a happy face!
While i would prefer teach a man to fish, i also understand the importance of investment from those that have. That is why i subscibe to buy the man his own pole and bait and teach him. I would rather spend the money on the pole than constantly , for the same price, repurchasing the fish. The fish is caught and consumed either way...
the gold rush - a massive chunk of the world's gold found and mined in a few years. then, cold turkey and leveraged, overvalued midwestern farmland. duh.
Dawg,
this was some of the worst "food" I've ever had.
Nasty shit.
They even watered down the "Coke" more than usual.
Which is why I usually don't eat that fast food slop.
Yalt (profile) wrote (in reply to...) on Wed, 7/8/2009 - 2:37 pm You're a better man than I am, Broward. I expected exactly what I got.
I used to find it amusing to bring up the whole "maybe hard currency has some problems you aren't anticipating" issue only to be told I was a g-dd-mned communist but it got old.
"I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food."
I tend to share Yalt's view that while fear of hunger could be a motivator, that I would hope that the USA would be incentivised by something more noble and rewarding than subsistence living. It is many a sad nation where those who can feed themselves, are rich.
"Apparently the CSP guys can't finance anything" was a short-term problem that was credit crunch related. There was a pretty decent pipeline building up in 2007 and early 2008.
And don't worry, oil won't be cheap for long. But I don't think that's it....in the US solar electricity is competing against coal fired plants and other sources. Not a lot of electricity being produced from oil. Yes the total costs of coal aren't in the current market price but you're not going to see a lot of support for that, enough Obama doesn't support full carbon sequestration of coal at the moment with the other things on his plate.
The problem actually is the cost of PV and CSP technology itself, which is coming down in cost real quickly. CSP is viable depending on the market price of electricity (in Cali it is real high), site location, access to electrical grid. CSP is basically viable in terms of amounts of insolation in SE Cali (basically anything each of Palm Springs, roughly), SW Arizona, Spain, North Africa, and the Middle East. The best locations in the world are SW Egypt and the UAE-Saudi border it terms of solar intensity. In the US, there are insolation maps showing developable land (takes out public lands, etc.) on National Renewable Energy Laboratory (NREL) Home Page We have more than enough land to supply 100% of the US power needs with CSP, we just really need a HVDC power grid to run it across the country. If HVDC is used the distances aren't a problem. That is the real problem....getting around the regulatory headaches to upgrade the grid and getting the utility companies to get along with each other. I keep hoping Obama can smash the utility companies' skulls together but he clearly has other shit to do.
Blackhalo (homepage, profile) wrote on Wed, 7/8/2009 - 2:45 pm I tend to share Yalt's view that while fear of hunger could be a motivator, that I would hope that the USA would be incentivised by something more noble and rewarding than subsistence living.
The story talks about the person telling it as much as it talks about the subject of the tale.
US workers know how to fish and want to fish. Unfortunately, the "globalists financiers" hijacked the USA pond and shipped it overseas. Our primary job was to consume fish and worry about paying for the fish much later. The banksters and congress aren't the brightest crayolas in the box, sharpest knives in the drawers.......They didn't think pass the gordo gecko greed scam
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
so again, you bring up a nice little quote with lots of scary words like "welfare statists" but the essential premise is easy to debunk given history.
:: ::
Exactly.
There is nothing stopping Citizen A from levering up to the eyeballs to Citizen B as a PROMISE... no money changes hands at all. I Citizen A make castings for you Citizen B and YOU promise to pay me. You might ask where I get the metal from? I promise Citizen C who has the metal I will pay him as soon as Citizen B pays me. So on & so forth. A society can lever to the nine pins that way and has from time to time.
Gold standards constrain sovereign debt SOMEWHAT but does nothing to constrain debt or leverage overall.
YTL, the govnt bases theirs on not tangible but actually on their "good faith and effort" which i believe was used up over some 100 years ago...IMHO
Perhaps.
please remember, I don't argue against a gold backed currency. I argue only that it doesn't solve most of the problems people seem to be bringing up in this thread.
in order to do that we need to look at the real culprits, Fractional reserve lending and leverage. Both of which can and do occur in gold backed currencies.
If they don't, let me assure you I can easily "invent" them once we go back to a gold backed currency, and be rich beyond all imagination. It won't take much time for Goldman Sachs, SocGen, Barclays, and UBS to follow suit.
AngrySaver: I agree with you that going to a fixed metal backed currency would reduce the stealth inflationary "tax".
Sign me up, AFTER we deal with the leverage/fractional reserve system.
burnside (profile) wrote on Wed, 7/8/2009 - 2:49 pm
True enough, Byz. But aren't most issues soon crowded with strange, talkative people, whatever the actual merits?
It's true, but goldbuggery has more than its fair share. I'm sorta neutral about it, it's all money in the end, and only worth something to the other monkey-people, but I think many of the advocates have a very misplaced faith in it as a cure to economic ills.
I particularly wonder what the answer to a persistent forex crisis is. This is what drove Iceland into scrip and I think that's what any politcally independent nation would do in similar circumstances. I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
You are right that high fixed cost power generation doesn't pencil out if you have to pay interest on the investment. When everything is valued according to banker rules as if money was the only thing that mattered, then low fixed cost energy wins every time because you can fund energy consumption on cash flow and hope general price levels will stay in reasonable equilibrium.
But if we're in stimulus mode, with insanely low interest rates and forced spending on whatever rears its ugly head, we are very stupid not to be spending on investment in high fixed cost, low marginal cost power generation. Once those things are built, the energy looks very, very cheap.
I particularly wonder what the answer to a persistent forex crisis is. This is what drove Iceland into scrip and I think that's what any politcally independent nation would do in similar circumstances. I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
You know what is insane? People are still speculating on GM's bankrupt pink sheet stock (symbol is GMGMQ). I guess people figure they are playing musical chairs or something.
edit: maybe it is short covering. But why not just wait til it is $0.00? - then you don't have to cover anything, just keep the money you made selling it short.
There is nothing stopping Citizen A from levering up to the eyeballs to Citizen B as a PROMISE... no money changes hands at all. I Citizen A make castings for you Citizen B and YOU promise to pay me. You might ask where I get the metal from? I promise Citizen C who has the metal I will pay him as soon as Citizen B pays me. So on & so forth. A society can lever to the nine pins that way and has from time to time.
Gold standards constrain sovereign debt SOMEWHAT but does nothing to constrain debt or leverage overall.
And since the vast majority (about 92% of M3, IIRC) of what passes for money in this society consists of just such promises (you give me goods in exchange for the transfer of a promise to me from my bank to give me currency on demand at some future time into a promise to you from your bank to give you currency), a gold standard would constrain the volume of currency but not the volume of money.
We have a room mate. She is early 30s, has a young son. Father of child bailed when child was an infant.
She gets no gov funds, if she did they would go after the father to pay and she does not want the father in the son's life. Father has not seen child for 7 years, does not want to have anything to do wtih the kid - but would want to get back at her through the child if he had to pay out any money,
She works full time for $15.00 per hour. She found a job that will fit around the childs school hours.
So on that pay she provides for her son, car payment, food, small rent. Then she is broke. if she or the child become ill and it costs her one days pay, she is in trouble. That is subsistance.
My point is that there are many, many people in her situation. One day away from disaster. doing the best they can and hoping they can afford food next week.
This is why I think rather than moving away from the dollar we're headed into maybe 5 world currencies with the dollar as a major one. I see the dollar devaluing, but still a reserve currency. It is tough to have a reserve currency without a military behind it.
You know what is insane? People are still speculating on GM's bankrupt pink sheet stock (symbol is GMGMQ). I guess people figure they are playing musical chairs or something.
Reminds of the scenes from the movie 'Deer Hunter' where they are all playing Russian Roulette betting on who or who doesn't get the bullet. Money keeps moving right up to until the blood flows.
I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
Good point indeed.
I've been a bit surprised there isn't more of a push for a gold standard from those who might be best able to benefit from controlling the underlying market. Maybe there's a line even the most venal aren't willing to cross.
Interesting. I wonder if the NCUA is gearing up as well.
I bank with Golden One (big CA CU) and they set out this long message from the president on Monday about how they are perceived as a safe haven because of individual depositors and not because of their other financial assets. Is there a way to short my CU?
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
I disagree. From 1/1873 until 12/1879 (the so called long depression), real annualized returns on stocks were 10.8%. There was deflation at the time, but that was the norm under a gold standard. Also, unemployement reached a high of 14%, less than today's U-6 rate.
The railroad boom was a big cause of the panic 0f 1873. But all booms are followed by busts. At least the gold standard allowed people to opt out and kept the pain closest to where it emanated. Unlike today.
I lived in the Soviet Union in 1990. There's a real big difference between that and the US in 2009. The US still has food on the shelves and no power cuts. While not a market economy per se, the Soviets only had a crappy commodity economy in market economy terms.
edit: maybe it is short covering. But why not just wait til it is $0.00? - then you don't have to cover anything, just keep the money you made selling it short.
The broker is probably still requiring a $2.50/share margin reserve--you have to weigh the cost of losing the use of that capital against the additional money to be made by holding to final liquidation.
"My point is that there are many, many people in her situation. One day away from disaster. doing the best they can and hoping they can afford food next week."
I think the big news is that there still isn't much awareness of this -- and very little discussion in the MSM.
Wear half-decent clothing you got at Goodwill, drive a clean ten-year-old car and everybody assumes that it's all fine.
Or, wear really nice clothes and a nice car you bought a couple of years ago; and by looking at you, no one would ever know you can't make your rent. I ran into one of these people last fall, selling her possession. Blogged about it.
I lived in the Soviet Union in 1990. There's a real big difference between that and the US in 2009. The US still has food on the shelves and no power cuts. While not a market economy per se, the Soviets only had a crappy commodity economy in market economy terms.
That was kinda my point - the Soviets had one helluva a military but no economy prior to their final collapse. And no reserve currency status either. That was why I think a strong military is insufficient to guarantee reserve currency status... a nation would have to have a strong economy instead - w/ or w/out the military.
My concern is our reserve status is eroding our economy and severely. While it allows us to lever up to buy power and put food on the shelves it undermines our ability to produce power and grow food - purely due to exchange rate manipulation - manipulation as a result of reserve currency status. That is one of the 'real problems' G8 and others don't want to address because after the US consumer... who else is there?
That one has to get solved because even with all the talk about 'excess capacity' there are still something like 3-4 B people on this planet who could use a little more consumption thrown their way [food, potable water, reliable power, basic health care, education even before we get to 'big screens' - etc.]. The dollar as reserve currency scheme screws the pooch for all of us.
-albrt also gets major points for this: When everything is valued according to banker rules as if money was the only thing that mattered, then low fixed cost energy wins every time...
"..and the possibility that the economy is closer to a turning point is stronger now than just three months ago.."
Is that statement of the obvious supposed to mean something? I'd say that the possibility of the economy being 3 months closer to the turning point (than it was 3 months ago) is actually 100 % (The thing we would like to know is WHEN that will be. Will the turning point occur inside six months?, six quarters?? six years???) !!!
Which year?
Reposting; figure it's a pretty big development. That and this article's headline (Recession to end 2nd half)bugged me to no end.
"France joins China, India and Russia in calling for a new reserve standard"
globeandmail.com
That's a major power aligning with BRIC. If OPEC/Japan/Germany falls in line, dollar will die a sooner death.
LOL. Cool I hadn't heard from the Ministry of Truth in a couple of minutes.
why is 2% inflation acceptable?
how is that price stability?
over the medium term I see the risks to the inflation forecast as being more balanced
Potheads are everywhere, even in the Chicago Fed. Hope it is good stuff...
Scrooge-
Me thinks Sarko is just playing to the nationalistic base. Will believe it when I see it.
Cue TF rage posts on how Santelli must be part of the cabel to be giving the 10 yr auction an A+
The best time to kick a bully is when he's down.....
"why is 2% inflation acceptable?"
Because it is preferable to deflation?
Personally I think that 2% is wishful thinking from the Fed. I suspect their choices are -2% or >10%
If the credit markets are loosening, someone should notify small businesses I have as clients who still have their credit lines pulled.
Recession to Depression?
my point is that 2% inflation is not = to the mission of the central bank
unless their mission is to achieve theft. hmm, hold on.
Declines are less steep equals positive GDP equals recovery.
I doubt that.
--bh
Hat tip CCLT...just had to do it....
Better get some ice on that arm, CCLT.
The Baltic Dry Index has fallen over 8% in two days and dropped below key support in so doing. The chart looks ominous. Look out below.
Bloomberg.com:
Personal Finance
Was Evans referring to Abu Dhabi? Saudi Arabia?
k that makes sense.
However, firms are still reluctant to hire, and the unemployment rate reached 9-1/2 percent in June and will likely further increase through the remainder of the year before it flattens out in 2010.
Ya think, Evans?
Minnirenter:
sorry I was offline before.
I don't follow the Mpls rental market closely, although my brother just rented a place in the Como area of St. Paul.
There has been a huge amount of rentals coming into in the Minneapolis market the last 1-2 years, and also lots of condos going rental as well. The rental ask rates are all over the board depending on neighborhood and state of the property.
In general, you should be able to find relatively good deals no matter where you look, but I haven't seen many bargain basement units.
I have no specific advice except that you might want to steer clear of places that look "too good to be true" as it may be an underwater speculator/investor. That said, if you can find a great deal because it's a person who has held the property forever then that would be great.
OT noise:
July 8 (Bloomberg) -- The Federal Deposit Insurance Corp. may relax proposed rules for buying failed banks after some investors said they would block private-equity firms from participating, according to people briefed on the talks.
Regulators may ease a provision that would require private- equity investors to maintain Tier 1 capital ratios of at least 15 percent for lenders they purchase, said the people, who declined to be named because the talks are private. Tier 1 ratios, which measure a lender’s ability to withstand losses, currently must be at least 8 percent for new banks.
Wow, how did they pull of that 10 year? Given the dollars action it does not look like it was done with QE. I guess the sell off in equities did spark a flight to safety. And now, the DOW goes Kermit?
Yes, it is over! It is contained! It was all in our heads! Now, how do you get to shell beach and when is the last time you have seen the sun?
"DOW goes Kermit"
Do you mean....
...Why are there so many....songs about rainbows......
back on topic:
I don't think any of us would be overly surprised if the end of the recession was called in 2H2009 or even early 2010. there are two problems however
1) the risk of "double dip" recession is high
2) the risk of "jobless" recovery is sky high.
3) the risk of double dip recession plus jobless recovery is even high.
the end of recession tells us nothing about the duration of our pain. Didn't Japan's recession end decades ago?
ugh.
Still curious why no announcement of how much the fed bought at the auction.
Why no mention? What part of the 43.9% of indirect bidders is the fed?
MarketWatch has always made that info available moments after the auction ended ever since the fed started buying.
Why so hush hush?
"We expect modest increases in output in the second half of this year followed by somewhat stronger growth in 2010."
increases ? in what, wishful thinking?
stronger growth? in what sectors of the economy, financial services? retail?
Yearning to Learn-
No dude they will just have rising unemployment and declining asset prices and a crashing dollar and call it a recovery. Ya know, just talk up the market. It's all subjective anyways.
Stupid comments. Obviously she has not taken a look at tax receipts.
Income tax withholdings indicate the economy deteriorated rather than improved in the past three months. Adjusting for the “Making Work Pay” tax credit, withholdings plunged 4.8% y-o-y in May, 5.8% y-o-y in June, and 8.4% y-o-y so far in July.
increases ? in what, wishful thinking?
Spending.
Debt.
Crime.
Disillusionment.
yea.
The depression will not end in the second half. It is only starting. Credit bubbles take a long time to work themselves out, and that's once noncollectable debts start to get written off. We've only kicked the can a little. Filing this one under "another dumb fed shill".
The recession may be easing but the greater depression is just getting started.
shill (profile) wrote on Wed, 7/8/2009 - 1:27 pm
The Baltic Dry Index has fallen over 8% in two days and dropped below key support in so doing. The chart looks ominous. Look out below.
Do people actually trade index derivatives of that thing?
The crazy part is that it ever got up that high. They are going to be running routes from shipyard to scrapper for quite some time. Not even Chinese interventionism in the scrapping market is going to firm dry shipping, not for a good long while. Some people made some really over-optimistic deals for dry haulage lately.
Dryfly, anyone, what's the ship-surge period for US holiday imports? October? So, would this be nearing the end of the 90-day-out reservation period for holiday-period shipping? I'm not sure what dry shipping customary reservation windows are.
Is there any prececent for riots ending a depression? A lot of stuff will need to be replaced.
Which year?
or second half of what?
Interesting, Scrooge. I thought India was bigger, France has not traditionally been our fiscal friend.
The biggest dominoes are Japan, Saudi Arabia, and Germany. I think even if they all announced tomorrow, it would take a few years to pull it off technically. Maybe it could happen much faster, I don't know.
"why is 2% inflation acceptable?"
That was going to be my question. Why is any inflation acceptable? To rob savers and reward debtors?
I think I answered my own question.
Just some more fertilizer for the green shoots. Oh wait they died already. some thing is not right here.
withholdings plunged 4.8% y-o-y in May, 5.8% y-o-y in June, and 8.4% y-o-y so far in July.
Wow, thanks for hard numbers.
Confirms my intuition.
The job market mirrors this, I think.
I do targeted searches on several sites for my own skill set but I also do a couple of manual look-overs to see what I might be missing.
These are general job ads, not IT-specific, and they seem to have declined significantly in the past 60 days.
Byzantine Ruins-
Oh yeah right....the Christmas shopping season. You don't think they are seriously going to have one of those this year, do you? Maybe we can double up in 2018.
What's going on with oil?
RE: the 10 year auction, the Fed has conveniently changed the definition of indirect bidder.
Consumer spending, which had dropped sharply since the second half of last year, has been roughly flat so far in 2009.
I've seen this point beaten mercilessly the last few months in the MSM without ever questionning the why?
I imagine my spending would hold up as well if I neglected to pay my mortgage, credit cards, and taxes.
I've looked around the table and finally figured out the sucker
What's going on with oil?
Supply and demand.
Some investor guy-
They had like a really big riot in the late 30s and early 1940s, mostly in Europe, Japan and the western Pacific. That's my barometer.
"Wow, how did they pull of that 10 year? Given the dollars action it does not look like it was done with QE. I guess the sell off in equities did spark a flight to safety. And now, the DOW goes Kermit? "
Right on target.
It has worked out pretty well, actually. The S&P has only given up 70pts from the high, but we have gained 70bps in the 10 year, and have even crashed oil a bit.
You have to give BB credit, he is a great manipulator.
Dennis Kneal was right!
It's over baby!!!
All over but the cryin'.
You don't want to give green shoots any fertilizer until they reach seedling stage...
It'll burn them right up...
Currently, core inflation is near 2 percent, a level I generally find acceptable
When did we have a vote authorizing perpetual inflation? As far as I can tell, the fed and the banksters have unilaterally decided that inflation is the default setting. The notion that inflation is a benefit to our country should be publicly debated. And if it is decided that inflation is beneficial, we should discuss the distribution of inflation.
Personally, I'd like to see some "inflation gathering" taxes instituted.
Looks like we need another public statement...get Timmy on the phone, first release didn't quite do the trick.
"You to give BB credit, he is a great manipulator".
Yeah, we keep talking about markets on this board like they still actually exist.
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:37 pm replyIgnore userByzantine Ruins-
Oh yeah right....the Christmas shopping season. You don't think they are seriously going to have one of those this year, do you?
I'm just looking at the baltic dry trying to see, what levitated it up above the rocky bottom. It's volatile and tied to fixes on shipping contracts, so I'm just trying to see what might be causing a moderate bounce (to 1/3 of the previous high -- so, it's the "bounce that bankrupts" if you own any new hulls) . I don't think there's going to be much of a Christmas this year but 300 million+ people living under reduced means is still something. Not everyone is poor. Maybe that's why. Maybe people who should have known better were just very self-deceiving during the "green shoots" mania. Hard to know.
We're definitely heading for the downward-grinding part. As Gavshire said, this has only just begun. It won't be a real party til the sovereigns start cracking.
I did the Google news test on Mr. Evan's predictive powers. hmmmm....
Chicago Fed's Evans sees housing risks receding, growth recovering in 2008
Forbes - Oct 22, 2007
Chicago Fed's Evans sees housing risks receding, growth recovering in 2008 - Forbes.com
So when do we get 4% mortgages?...I'll jump in if the rate is worth my wild.
@Comrade Coinz
I think France has a bigger GDP than India. And France is in G8 as well. As to when they're pulling the reserve currency off...who knows. That's the mystery, isn't it
I'm just glad I'm out of dollar so I don't have to wake up one day and see dollar drop 40% and have a heartattack.
The "downward grinding part" you mention has now been going on in Japan for about 15 years, yes?
"RE: the 10 year auction, the Fed has conveniently changed the definition of indirect bidder. "
Yeah, I like this quote:
The matter was technical enough to confuse even industry veterans.
"We are not precisely sure what this all means," said Ward McCarthy, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey.
"We spoke with some very seasoned market players with decades of experience on dealer trading floors who were similarly unsure what to make of the contents of the Federal Register."
US Treasury auction changes may overstate indirect bid
| Reuters
Basically this is at the crux of it:
"The Treasury's changes, contained in a June 1 entry to the Federal Register, relate to what it considers a "guaranteed bid." Under the previous arrangement, once a primary dealer offered securities at a pre-specified level to its customer, that bid was considered to be the dealer's own."
Looks like they are re-classifying some primary dealer bids as indirect bids.
More smoke and mirrors.
montas ankle (profile) wrote on Wed, 7/8/2009 - 10:22 am
why is 2% inflation acceptable?
how is that price stability?
Think of deflation/inflation as a big nasty bulldog. You have to keep tension on the leash or it can turn on you or get a running start and get away. That's why the Fed is so very afraid of even a little slack (deflation) in the leash.
Ghost,
I still see a deflationary environment. The recent 4% yield on the 10 yr was a deal. The fed is making extraordinary efforts to prevent a system meltdown. That's not the same as creating high or hyper inflation.
@Bob_in_MA
Lol. Great find!
"I did the Google news test on Mr. Evan's predictive powers. hmmmm...."
LMAO!!! Awesome.
No dude they will just have rising unemployment and declining asset prices and a crashing dollar and call it a recovery. Ya know, just talk up the market. It's all subjective anyways.
Perhaps. but I don't necessarily agree with your point.
It is not uncommon for unemployment to continue to rise after the official recession has ceased. This is because typically businesses ramp up production without hiring early in the recovery. Only later when the recovery is more assured to they rehire employees again.
It is also not uncommon for asset prices to fall during the early part of recovery.
A crashing dollar causes semantic issues, since our GDP is calculated in dollars. I would argue that part of the purpose of all of this is to devalue our dollar leading to a rise in nominal GDP. as we all know, a rise in nominal GDP is considered "expansion" and thus the end of recession.
So unfortunately, it would not necessarily be inappropriate to call the end of a recession during a time of rising unemployment, declining asset prices, and dollar devaluation.
Clearly, some of this can be "gamed" by lying governmental agencies. but some of it is just the way we measure recessions.
However, in the end it doesn't really matter much anyway. As I said above, one of the major problems here is that the official end of the recession may not mean that we have recovery. we may have a double dip or a prolonged jobless recovery as example.
404 - Not Found - sacbee.com
Legalizing marijuana as California budget fix.
Oh baby.....this is getting go. Can't wait to see Obama actually fighting Cali over this one.
this guy is an established polyanna shithead - are his latest second-derivative green-shoots blatherings really worth an article?
TBTFail- AIG
TBTJail- Lewis
TBTBail- California
TBTMail- McMansion Keys
TBTNail- Starr Jones?
TTTTail- MJ's Hearse?
TBTVail- Latoya
TBTWail- Bunny Marley
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:45 pm
The "downward grinding part" you mention has now been going on in Japan for about 15 years, yes?
That's right, although I don't think we will get 15 years, but the Japanese inability to formulate policy to end their predicatment certainly informs my opinions.
Japan was very lucky in that they are not trying to play the Great Game and had plentiful sources of foreign exchange due to their mercantilist economic policies. The US is a net debtor and up to its ears in machinations.
To me, the question is not necessarily when people can afford to cut us loose in a carefully stage-managed fashion, but if we'll be kicked over the side in a moment of desperation when people have to impose capital controls rather than feeding our endless appetite for debt we can't pay back.
Yearning-
Understand your points, I'm just pointing out that the central bankers are manipulating the economy so much you can call it whatever you want to and it is at this point pretty much meaningless. Seriously, explain $70/barrel oil in the period of the lowest demand in 30 years.
H-Hack
Yeah that guy is a f**ktard.
OT:
WASHINGTON (Reuters) - Enrollment in the major U.S. antihunger program, food stamps, grew by 1.2 million people in two months and stands at a record 33.8 million people, the government said on Wednesday.
Food stamps helped one in nine Americans buy groceries during April, according to Agriculture Department figures. The average benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
Byzantine-
What do you think the likelihood of capital controls is? I have about half of my money overseas and can't decide whether to move it back. The FDIC does not really exist in Dubai, you know.
Another idiot makes a forecast.
gosh, an awful lot of gold bugs on here again of late.
"at a record 33.8 million people"
more than one for every four non-farm payroll jobs. when that ratio hits one to two (and it will, though it may take a decade or more), i'll be more interested in 'second derivative' theories.
I wish he would stake his job on it... 2nd half i agree with i just dont know what year....
I'm a LeadBug.
The average [food stamp] benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative.
Dude I want his job if all you have to do is surf the net and make stuff up.
That's about $1.50 a meal...
Former Detroit CFO James Harris: City could go broke by December
Former Detroit CFO James Harris: City could go broke by December | Detroit News - - MLive.com
"gosh, an awful lot of gold bugs on here again of late."
Are you a dollar bug?
"What's going on with oil?
Supply and demand. "
Yes...levered speculation has run its course again...
What about silver? I remember some silver permabulls here saying $20+...
Evans reads like official NASA releases on Apollo 13, day four.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative
Really?
I agree that maybe free bus passes aren't stimulative, but it would seem to me that food stamps are.
People take food stamps and IMMEDIATELY spend them on food.
this also gives them more disposable income (since food stamps/dollars are somewhat interchangeable) which allows them to buy more stuff elsewhere.
that increases spending.
consumer spending is 70% of GDP.
thus it would be stimulative, no?
where is the flaw in my logic.
I think someone needs to tell the FED, the gag is up, people know this has all been about blowing hope up our behinds. Now don't patronize us, and give us these optimistic views on 2nd half recovery when we are dangling by a thread above the abyss.
Dryfly, anyone, what's the ship-surge period for US holiday imports? October? So, would this be nearing the end of the 90-day-out reservation period for holiday-period shipping? I'm not sure what dry shipping customary reservation windows are.
I don't know for sure because I'm on the other end of the pipeline from 'finished goods go to stores' but my guess & belief is that October is pretty close to the peak Asian offload for Xmas season delivery. If the stuff isn't in the warehouses by early Nov they won't be on the shelves on Black Friday - that would be considered a killer.
JMHO.
Updated:
Wacker AG (Germany) -800
City of Olathe, KS -18
Former Detroit CFO: City likely bankrupt by December
Cardinal Glass -30
Major job cuts possible for Ikea
WQED Pittsburgh -9
City of Boston, MA -24
Job openings remain at a record low
Honeywell -148
Colonial Bank -136
Zachary Holdings -10
Montgomery County, NC area schools -6
Harland Clarke layoffs in progress
Brooklin Boat Yard -10
Untitled Document
"Think of deflation/inflation as a big nasty bulldog. You have to keep tension on the leash or it can turn on you or get a running start and get away. That's why the Fed is so very afraid of even a little slack (deflation) in the leash."
The problem with leaning so hard to one side to counter the bulldog's current momentum is that he's got 4-wheel drive and he turns on a dime. When the rabbit behind you catches his attention, you're going to fall on your ass and then get your face dragged across the pavement at high speed.
the only sure fire way to have marijuana legalization help with the financial crisis
is to require everybody in congress to smoke it
on a daily basis
"I'm not saying these things are "bad" but they are not stimulative"
the sad thing is that our wars of choice, continuing IVs into the veins of AIG/FRE/FNM/C/BAC and outright gifts to GS mean that we may run out of crumbs to throw at things like food stamps, FDIC and PBGC sooner rather than later.
the idea that any policy from the fed or treasury can be genuinely stimulative for anything except the back pocket of GS (or the beneficiaries of asset and/or commodity inflation) is utter crap, however, those basic elements of the safety net are real.
This is the 2nd 2nd half recovery call in 2 years. Can I get a third ?
ok wait a minute
maybe im wrong about that
could be marijuana is the problem...congress has been tokin up all along
sorry
I'm feeling all nostalgic about the 2nd half recovery calls in 2008 now......getting a warm feeling inside.
Oh wait that's puke.
Which is worse - bankers or terrorists (profile) wrote on Wed, 7/8/2009 - 1:51 pm
Byzantine-
What do you think the likelihood of capital controls is?
I am not an investment advisor or anything like that. I have virtually no money. So you are asking someone with no skin in the game who can't really give you "advice" or anything that could be construed as such.
My feeling as a private person is that it isn't a party til the sovereign fiscal crises start, and these big international crises always lead to capital controls. I also, just sharing my ignoprant opinion, think the people most likely to keep paying their debts in something recognizable as an exchangeable currency for the forseeable future are the Germans.
I have about half of my money overseas and can't decide whether to move it back. The FDIC does not really exist in Dubai, you know.
Good luck gaming it. Tell me how it works out for you.
I spent all my money so I couldn't get robbed. Seemed easier to have a retirement when I was young enough to enjoy it and pick up more money when I was more sure what "money" would mean than to cry tears of blood watching it get debased or stolen.
Lets get busy people. Need you all to be productive so when we here in Cali get that fat Fed paycheck it will actually contain some cash.
Btw is lighting a cigar with a bear chit mean the same thing as a fed?
Bob_in_MA, nice find. Evans keeps worrying about inflation too - and that isn't the problem right now.
best wishes
MSN blog?....but that's where the sheeples read!
"True unemployment rate already at 20%"
Top Stocks- MSN Money
"gosh, an awful lot of gold bugs on here again of late."
Are you a dollar bug?
No. I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around.
we had major economic dislocations WORSE than we do now pre-Fed and pre-fiat currency. The panic of 1873 for instance.
A lof of Austrian economic theory is well done, and I have read and studied much of it and agree with much (but not all) of it. (De Soto's Money, Bank credit, and economic Cycles is on my desk).
but the problems in our current society go much further than the Federal Reserve, or the removal of the Gold Standard.
If I were to obliterate something, I would obliterate or at least severely curtail fractional reserve lending and leverage.
the Federal reserve is an agent of fractional reserve lending, and thus I would cripple it for that reason.
FWIW: there was massive fractional reserve lending done by the first Italian banks hundreds of years ago while on the gold standard which led to bank runs. This is what led to the first reserve banking system.
"I spent all my money so I couldn't get robbed."
i'm sure you still have a few buckets of ducats lying around, byz...
Byzantine-
Got your point about spending it while you're young but I'm in real estate development and when this job ends I could be out of work for a really, really, really long time. Besides, what is the fun of shorting my former US commercial real estate employers without some cash on me?
Someone with a lot of money needs to take front page ads out in a paper people still read and just print the various statements from 2007, 2008, and 2009 from government officials that are the exact same thing over and over again. No need for comment or editorial, would speak for itself.
"A crashing dollar causes semantic issues, since our GDP is calculated in dollars. "
The wealth of 99% of Americans is measured in dollars.
That is the problem. Americans think they have been getting wealthier for years, when in fact their wealth is being confiscated by central bankers and friends.
Forget about GDP, it is meaningless in the lives of most people. Forget about deflation/inflation. It is all about wealth:
Are jobs being created or destroyed?
Are you more or less likely to pay higher taxes in the future?
Are you more or less likely to collect Social Security under its current terms by the time you retire?
Do you have more or less leisure time?
Etc.
There is only one road to wealth (as a nation): produce more than you consume. There is only one road to increasing wealth: improve productivity.
Anything measured in USD can be manipulated by altering the value of those dollars.
Shipping News:
Evergreen to Cut Fleet by a Sixth
Evergreen Marine said today it plans to reduce the size of its global container fleet by a sixth over the next four years as it sees no clear signs of an economic recovery.
Evergreen to Cut Fleet by a Sixth | Journal of Commerce
What about silver? I remember some silver permabulls here saying $20+...
Try to buy the physical stuff in orders of less than 250 oz. You are paying $20+/oz then you are paying for s/h/insurance on top of it many times.
Don't look at the Comex and use it as some argument against PMs.
Other than stimulus, this is total rear view projection. It's idiotic. This guy seriously must have trouble sleeping at night. I'd quit before I had to get up there and regurgitate this rubbish.
Not a mention of CRE going into the crapper and what that will do for construction and employment. No clue about the next wave of foreclosures, the effects on lending and the banking sector, the impact of still lower home prices on consumer balance sheets. Nothing about spending cuts, higher taxes and layoffs from state and local govt. Add those to still coming job losses elsewhere and all you are looking at is continued deleveraging.How does one delever? A higher saving rate. And that only breeds more asset price declines.
These guys truly do not get it. It's sad. This is deflation short term, and they keep talking about what's going to happen when inflation returns...uh, newsflash...that is NOT the problem to be worrying about right now.
by the way, the link on the CR page to the speech is broken.
"Have you ever heard of Plato, Aristotle, Socrates...? Morons.
"I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around."
no one does. but fractional games based on something imaginary are a bit easier to engineer than ones based on something exceedingly rare and desirable which is a royal pain in the ass to pull out of the ground, no?
do you really think that the imaginary nyfed balance sheet would be able to keep on ballooning to ten TRILLION if there was any kind of commodity-related brake on the ability to print? and, more interestingly, do you think they would be so arrogant if they weren't literally sitting on well over a half-trillion in gold in the basement?
now go reread "gold and economic freedom" and give me five 'our fathers'.
"The panic of 1873 for instance."
The panic of 1873 is a prime example of messing with the money supply.
The point of a "hard" currency is you don't contract and expand the money supply. The panic of 1873 would never have happened with a stable money supply.
@Yearning - I believe that they aren't exactly "stimulative" for a couple reasons. First, food is an entirely essential item. Either you get it, or you die. So, the baseline consumption of ANYONE is going to involve food thus providing the ability for a person to not die and nothing more is not going to add "growth" to consumption numbers. Second, it's just a transferrence of tax dollars from the future to now or, if you prefer, a redistribution from a wealthier person to one less fortunate.
@Yearning to Learn
I think gold is a way better vehicle to retain your wealth, as opposed to dollar (or other fiats), in these troubled time. As for gold as a fractional lending vehicle....that I agree with you to a degree.
I'm with H-Hack. Without fiat currency central bankers would be irrelevant. And let's face it they run the world. That's like Soviet Union without its nuclear arsenal. Seriously, why would they give up their big gun. This little charade will go until no one has the slightest clue of what things are worth anymore.
Oh wait.........
Evans sees housing risks receding, growth recovering in 2008
Yeah, thanks for the good news here.
Rob Dawg (homepage, profile) wrote on Wed, 7/8/2009 - 1:52 pm
* reply
* Ignore user
The average [food stamp] benefit of $133.28 per person was up $40 due to a short-term increase under the economic stimulus package.
Great, now subsistence food assistance is now an economic stimulus. What next? Free transit passes? Look, I'm not saying these things are "bad" but they are not stimulative.
curious- what spending do you consider to be stimulative?
I think of all the government spending this is the most stimulative of all- the recipients spend it they don't use it to repay debt or increase savings. I think most economists agree that this kind of spending has the greatest multiplier effect which is what "deficit spending" is all about.
Mr. Sparkle-
"Food.....either you get it or you die". Not so sure. I truly believe bankers can live on coke, S & M parties, and unadulterated greed.
HollywoodHack (homepage, profile) wrote (in reply to...) on Wed, 7/8/2009 - 10:58 am
...the idea that any policy from the fed or treasury can be genuinely stimulative for anything except the back pocket of GS (or the beneficiaries of asset and/or commodity inflation) is utter crap, however, those basic elements of the safety net are real.
There's lots of stimulative policies. We just choose to not implement them. Accelerated depreciation on asset classes is a good one. Tax credits for small renewable energy projects would work. We could jumpstart a domestic PV industry and if my calculations are correct replace 1/3rd of our fossil fuel electrical generation for less than 1/2 a TARP.
this co called 'recovery' is artificial
We are borrowing the stimulus money. More stimulus is equivalent to throwing gasoline on the fire. We can't possible pay the debt back... legitimately. The government will use inflation to cheapen the debt. Unfortunately, this will hurt the poor, the working class, and the elderly on fixed income. Reckless government spending is not an American value. Interesting Finance & Economic articles
Stimulus is a joke of a concept; it doesn't end up with real economic growth in the long term. Even the New Deal failed to increase private investment. It wasn't until 1941 that domestic private investment reached 1929 levels. The fact that the first stimulus has failed to stop the bleeding yet isn't surprising. Our government deficit for the year which is over 20% of GDP (when the omnibus bill, first stimulus, bailouts, and on-budget deficit are summed) is unsustainable and something's gotta give, whether it be the lenders or the interest rates.
hat tip to Interesting Finance & Economic articles
"and, more interestingly, do you think they would be so arrogant if they weren't literally sitting on well over a half-trillion in gold in the basement?"
Well, now, that is a good point, isn't it? If gold were so "useless", why does our government hold so much of it still? Shouldn't we sell some of it to fund the debt?
They have it, because they might need it. Shouldn't we all have some, then?
No. I simply don't subscribe to the idea that all our problems would be gone if we were on the gold standard and if we didn't have that pesky fed around.
I'll even go one step farther... fiat makes gold even better. The real power of holding physical gold in a fiat system is it lets you play both games simultaneously. If I were a gold bug I would never ever want to see a gold standard ever again.
BTW real gold bugs could care less what happens to gold vs USD, sterling, yuan etc. The only metrics that matter are ounces per barrel, ounces per bushel, ounces per square foot - etc. - OR ounces per hour and ounces returned per ounces invested. If somebody says they are a 'gold bug' and convert all their gold gains to fiat for 'calculation' then they aren't really that tied to gold.
Personally I love fiat - if it weren't invented I'd try to patent the concept. I am also real glad it is lawful & acceptable to own physical gold even if I currently don't. That might change and soon.
I truly believe bankers can live on coke, S & M parties, and unadulterated greed.
Hmm? are they hiring?
OT: Arizona GOP state senator: Earth is 6,000 years old!
Daily Kos: Arizona GOP state senator: Earth is 6,000 years old!
Holy cripes, Arizona State Sen. Sylvia Allen is a complete loon!
Best comment ( really a hilarious picture ) Daily Kos :: Comments Arizona GOP state senator: Earth is 6,000 years old!
Blackrock vs. FDIC
guess who my money is on?
FDIC May Ease Rules on Buyout Firms Purchasing Banks (Update1) - Bloomberg.com
@Which is Worse - You sound like Slim Pickens in Dr. Strangelove. "Shoot, a fella could have a pretty good weekend..."
We could jumpstart a domestic PV industry and if my calculations are correct replace 1/3rd of our fossil fuel electrical generation for less than 1/2 a TARP.
Dawg, I would love to see that calculation. Every time I sit down and work out PV numbers, I can't see how it's an honest-to-god business. (And I'm doing this as an entrepreneur with an eye to making a buck.)
PVs with realistic assumptions about sunshine just ain't cheap compared to oil, and I keep getting reminded of that fact.
Those bonds ($134.5 bn worth) likely authentic:
“AsiaNews had also received similar reports: one of the two Japanese arrested in Chiasso and then released is Tuneo Yamauchi, is the brother of Toshiro Muto, until recently vice governor of the Bank of Japan….
“These photos reveal that the securities under discussion are not bonds but Treasury Notes, because they are securities that can be immediately exchanged for their worth in goods or services and because they are devoid of interest coupons.”
ASIA-ITALY Everything suggests that the American bonds seized at Chiasso are real - Asia News
KM4,
That was posted yesterday.
Blind faith can be terrifying.
Dryfly-
Central bankers aren't giving up their power short of a world war. They are a one-world government that would make Roman emperors envious. I don't think the topic is worth discussing on this board.
Shill-
Hells yeah.
Food stamps are not "stimulative" in that they do nothing to create wealth. i.e., they do nothing to create production, they are pure consumption.
What is that saying about teaching a man to fish?
Followup: Unless you are considering the TARP money to be lit up in flames (probably not a bad assumption), so you are arguing for spending the cash by buying PVs rather than in banker's love nests. That would certainly be an interesting case to consider.
BTW real gold bugs could care less what happens to gold vs USD, sterling, yuan etc. The only metrics that matter are ounces per barrel, ounces per bushel, ounces per square foot - etc. - OR ounces per hour and ounces returned per ounces invested. If somebody says they are a 'gold bug' and convert all their gold gains to fiat for 'calculation' then they aren't really that tied to gold.
Thank The Maker that someone has made this point.
The arguments Pro/Con PM are complete noise unless you compare it against other commodities, items, and services. Arguing that Silver should go higher than 20 USD or gold should hit 2,000 USD is a complete waste of time and typing without the context of what that USD can buy in regards to other things.
Plant the seed, You'll never be in need.
@Edward Teach Esq.
Wow thanks for the find! amazing.....so that means that Japan was trying to get rid of its bonds. (shocking, I know) Me thinks they'll be the next to sponsor the new reserve currency
There is only one road to wealth (as a nation): produce more than you consume. There is only one road to increasing wealth: improve productivity.
Anything measured in USD can be manipulated by altering the value of those dollars.
not true. You can take the wealth from others as well. (wars).
otherwise I agree.
However, part of the problem is that everybody wants to produce more than they consume right now. that is just as unhealthy as consuming more than you produce.
A better path would be for all to produce as much as they consume.
======
The panic of 1873 is a prime example of messing with the money supply.
The point of a "hard" currency is you don't contract and expand the money supply. The panic of 1873 would never have happened with a stable money supply.
Ah, so you agree with me and you help prove MY point.. Going to a gold standard does not prevent a government from "messing" with the money supply. I'm sorry to have to be the one to tell you this, but the CREDIT monster is out of the bag. You can't put it back in. we had the CREDIT monster back in 1873 while we were on the gold/silver standard. Being on a "hard" currency DID NOT STOP the government from changing the money supply. it DID NOT STOP speculators from messing with the value "of money". it DID NOT STOP farmers from going into too much debt. it DID NOT STOP us from going into what is likely the worst depression we've ever had.
so you are proving my point. As I said above, going to the gold standard helps us how, except by a fantasy in your head?
additionally, there was no Federal Reserve in 1873. and there you have it.
You search for easy answers to complicated problems.
the issue is leverage and fractional reserve lending, not "hard" currency which is a figment of your imagination.
hundreds of years ago we saw bank runs in early Italy since the goldsmiths were lending out more "notes" than they had gold to cover in their vaults.
gold standard is a fine idea. but it isn't going to help us much.
I'll leave you with 2 quotes. the second is an original from me that I've said before
"All Fiat eventually goes to zero."
and YTL's corrolary
"All gold/metal backed currencies eventually go to fiat"
What makes you PM bugs think the USG won't make private ownership illegal again?
Rob said "Accelerated depreciation on asset classes is a good one. Tax credits for small renewable energy projects would work"
Two that I agree with 100%! We need incentives for real investments.
JP-
Forget about PV. Check out CSP. Look at http://www.csptoday.com Lots of CSP underway today but it is only getting equity from stimulus money. There's a $2.1B deal in Arizona....world's largest.
@ HomeGnome (profile) wrote on Wed, 7/8/2009 - 11:12 am
That was posted yesterday.
Missed it but this picture comment Daily Kos :: Comments Arizona GOP state senator: Earth is 6,000 years old! was spot on !
Wehn does the guns and gold crowd turn on their spokespeople (rush, hannity, back, etc..)?
Yagig that would be me, I am a real Gold/Silver Bug....the price is of no matter to me...but preservation and insurance is.
Hilarious.
I truly believe bankers can live on coke, S & M parties, and unadulterated greed.
Damn it.
I chose the wrong profession.
I say forget everything that's being said by anyone and just put a chart of the yen-dollar exchange rate on your screen. Huge move today. Biggest gain for the yen since early October 2008, and we all know what was happening to the market at that time. If this flashing-yellow risk appetite indicator still means anything, strange things may be afoot at the Circle K again.
HollywoodHack (homepage, profile) wrote (in reply to...) on Wed, 7/8/2009 - 2:01 pm
i'm sure you still have a few buckets of ducats lying around, byz...
I wish I had some buckets of ducats. I would buy a bucket of beer and a bucket of chicken with it and then I'd be just about set. I only started my ass moving on making more geld once the great deleveraging started, and it'll be a few more months at minimum til that starts to pay off.
Broward-
Of course if you're really into Xanax you could probably work for the Fed.
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
And here's the worst part. The "welfare" of the state has increasingly gone to the wealthy cronyists.
And their only source is Hal Turner. Oh, and "confidential, well-informed sources" that told them about US paper money imprinted with spaceships.
Did the 10yr auction really go that well? Anyone??
Food stamps are not "stimulative" in that they do nothing to create wealth. i.e., they do nothing to create production, they are pure consumption.
What is that saying about teaching a man to fish?
I disagree. Food can increase productivity.
How much work can a starving man do?
How much work can a man do with a full belly?
I find it interesting that people only see "investment" in terms of technologies or equipment. But they ignore the "investment" into human capital.
====
I personally see 2 "stimulation" arguments here, and thus definitions are in order.
definition 1: stimulation as in to stimulate our economy, as in to increase GDP:
as already discussed, GDP is a construct that uses nominal dollars. consumption is roughly 70% of GDP
Food Stamps are immediately spent into the economy which raises consumption which then raises GDP.
definition 2: stimulation as in to stimulate growth and/or wealth.
even here, I would argue that food stamps are an investment into our labor resources. and thus also count as stimulus.
Lots of CSP underway today but it is only getting equity from stimulus money.
Many thanks for the link, and I'll do more digging there. I've done the bigass equity raising before (which I assume is required for CSP), and I was hoping that PV was going to be more scalable.
What exactly did you mean: " it is only getting equity from stimulus money" ??
Was Mr Evans singing Good Day in the NeighborHood while pulling his big coat off and putting on his sweater, Oh, that not Mr Evans, that Mr. Rogers and he wants all the little boys and girls happy. Hotty Toddy, Just another spinner.
What makes you PM bugs think the USG won't make private ownership illegal again?
First, gold has been demonetized by the US. The motivation the last time was so that FDR could devalue the dollar 40% vs. gold. That would not work this time because dollars aren't linked to gold any more.
Second, there is not enough gold in private hands in the US to make it worthwhile.
Third, it would be very hard to enforce.
I worry more about seizure of 401k, 403b, and pension plans. That is a tastier target.
"As I said above, going to the gold standard helps us how, except by a fantasy in your head?"
By my definition, going to a hard currency includes no fractional reserve banking. May be my labeling is wrong.
There can still be creditors and debtors, of course, but only in proportion to what is available to lend.
So maybe we agree. I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
Otherwise, we are doomed to booms and busts, whatever that economic neophyte of a President may think.
So is Rick Santelli going to say he was wrong? He called todays 10 auction an A+...
Welfare- forced wealth redistribution
Charity- voluntary wealth redistribution
Which is more in line with the idea of economic freedom?
@ Coinz--I worry more about seizure of 401k, 403b, and pension plans. That is a tastier target.
Agreed.
some investor guy (profile) wrote on Wed, 7/8/2009 - 10:35 am
Is there any prececent for riots ending a depression? A lot of stuff will need to be replaced.
The after affects of a localized riot are stimulative to that area for the most part. After the Watts riots, there was considerable rebuilding which helped which helped local employment. Policy also changed to supply more services to the area.
I've heard some talk about the RRK riots concerning intentional vs. unconscious intent and urban renewal. The hypothesis is that the locals did the most damage to their neighborhoods because they wanted to bring that economic boost back to LA central. No offense but the people I saw where acting on pure emotion and rage. The greed came later but that was mostly in the form of people who lived outside the area coming in as opportunistic looters.
I don't have anything on large scale unrest but I'm sure it's been covered in academic circles.
I can pull some journal articles if you are really interested.
And KK if you are out there, I still owe you that wine list- i haven't forgotten.
Two that I agree with 100%! We need incentives for real investments.
Crispy,
I think we should just squeeze the privilege out of the existing system, namely by severely limiting or elminating inflation. That would force people towards real investments and innovation.
Targeted incentives always seem to backfire. We need to make hard work and ingenuity more worthwhile than inflation gathering or shams.
.
By my definition, going to a hard currency includes no fractional reserve banking. May be my labeling is wrong.
Absolutely. Fractional lending has been around since the dawn of money.
"I disagree. Food can increase productivity."
And I disagree vehemently. Food in and of itself does not increase productivity. In fact, I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food.
Food stamps are, in fact, anti-stimulative in that light, they foster dependence.
Which is what the govt wants, of course.
What makes you PM bugs think the USG won't make private ownership illegal again?
If they do it, then the price should go up due to scarcity. And I think I lost my gold the day before they make it illegal.
Did the 10yr auction really go that well?
How would anyone know? Looking at the government stats?
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
By hiding their gold?
Do you have this idea that gold holders can't be taxed and their wealth can't be confiscated?
Maybe I need to reread my old histories of medieval times?
or reread the tales of US gold confiscation after WW2.
I think the gold standard is fine. heck I wouldn't mind at all if we shifted to a gold standard. But many of the ideas of the gold standard that I'm hearing today seem founded based on some fantasy ideology, or based on some historical pretext that is long lost.
Don't think for one second that the gold standard would change the ability of the IRS to tax your wages and "confiscate your wealth".
Don't think for a second the gold standard would stop leverage
or that it would stop fractional reserve lending.
it didn't before, why should it now? especially now that things have gotten so "complex"
do you think that the Fed and Goldman sachs and Citibank will go back to 5th century practices just because Gold has been around for millenia?
The thing I like best about a gold standard is that it gives citizens a shelter from political and financial theft. The "welfare state" requires that people can't opt out. A gold standard provided a safe store of value.
I disagree - I think it does nothing but offer an illusion of security. If the state is going to screw you they will. Owning physical separate & independent of 'currency' is a better way and if so you can 'opt' out... or as I suggested above play it both ways.
I see a gold standard as an artificial construct as phony as fiat itself... X dollars an ounce as if chosen by God... why even do it. Have fiat & 'metal' separate and let them duke it out on the comex and in people's vaults.
And here's the worst part. The "welfare" of the state has increasingly gone to the to wealthy cronyists.
Happened in spades under a gold standard or fiat - won't be fixed by either.
I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
Almost agree. I think that arguments about the "limiting effect" of PMs can be circumvented by using a commodity mix which is empirically derived to mimic the long-term rate of growth in the economy. I'm not sure what it looks like but it would include a percentage of PMs. Something that incorporates housing stock or agricultural commodities, etc.
JP-
I'm doing a master's degree in Renewable Energy right now (remotely and online...special case the way I'm doing it). Apparently the CSP guys can't finance anything but have started to get some deals going again by tapping into stimulus money. The Arizona $2.1B deal is the big one...saw that in CSPtoday.
Check out the Club of Rome project in North Africa....this is a 20 year CSP deal where they are going to lay high voltage DC current under the Strait of Gibraltar and Mediterranean between Morocco, Spain, France, to Germany and Algeria, Sicily, Sardinia, through CH to Germany. The line loss with high voltage DC is 15% between Africa and Germany so the distance makes sense. Without HVDC forget it. It is a consortium of 20 or so large companies; big reinsurance guys (Munich Re, etc). As a note, if CSP covered 1% of the Middle East land area it would equal the energy produced by Middle Eastern oil in a year. Although with the dust here I keep thinking who would clean the mirrors....
A friend of mine just started a consulting job in San Francisco with a firm doing site acquisition for some CSP guys. Will find out more in the next couple of days, I hope. I'm in the Middle East but if I could get a job doing that I'd be on a plane back tomorrow.
personally, i think the best rebuttal to fiat fans is quite straightforward. walk down broadway in manhattan. look up. all of the great, classic memorable stuff was created before 1930, under a hard gold regime. now, compare that with what the nation has built since 1973.
Pre-senility greenie:
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. "
In fact, I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food.
Food stamps are, in fact, anti-stimulative in that light, they foster dependence.
Great. The ideal society is one with a pool of starving surplus labor that has no choice but to sell themselves to the wealthy for bread and water.
If I ever find out you people are more than a tiny minority of internet crackpots...if I ever start meeting people like this in the real world...I'm emigrating.
"Don't think for one second that the gold standard would change the ability of the IRS to tax your wages and "confiscate your wealth"."
I have absolutely no problem with visible taxes at a certain level. Taxpayers can clearly see what they are paying, and what they are, or are not, getting for that money.
I have a huge problem with the "hidden taxation" of inflation.
YTL,
I'm well aware of FDR's gold CONfiscation. In fact, FDR's theft proves my point. He had to eliminate the gold standard to start the welfare state.
Also, I'm not against taxes. I'm against the unauthorized tax of inflation. We don't bother with balanced budgets because the fed provides the inflation tax. That is profoundly unfair and unCONstitutional in my view as the burden is generally put to those that can least afford the tax and don't understand the system.
" Yalt (profile) wrote (in reply to...) on Wed, 7/8/2009 - 11:32 am
Great. The ideal society is one with a pool of starving surplus labor that has no choice but to sell themselves to the wealthy for bread and water."
So Yalt, in your world, the government would provide everything to everyone?
I got some bad news for you - that system has been tried, and it failed.
"if I ever start meeting people like this in the real world..."
well, if you were a member at augusta, you'd meet them all the time. but i doubt that this is the case.
Are you actually using "jobless recovery" as if it is a meaningful semantic construct?
So maybe we agree. I would like to see a currency that is backed by either gold or silver (silver is actually preferable), but NOT both, and no fractional reserve banking.
yes, now we are becoming closer to agreement.
As I've said above, I'm not against a gold standard at all. Heck, I think it's just fine.
However, our economic system has many problems that have nothing to do with "fiat" vs "hard metal". it is instead leverage and fractional reserve lending.
Thus, I target my ire at the problem: Fractional reserve lending and leverage.
The gold argument is completely different and has little to nothing to do with the problem, although too many people have been brainwashed to believe otherwise.
I would gladly take your metal backed monetary system with severely curtailed fractional reserve lending and leverage.
I would also gladly take a fiat based monetary system with severely curtailed fractional reserve lending and leverage.
but what I really want is severely curtailed fractional reserve lending and leverage.
unfortunately, looking over the millennia of monetary history that type of system tends to be a rarity, although it is still worth fighting for. (the Muslim world is an example of such a system though)
provide everything to everyone?
Straw man, bad argument.
I expect better from you, Ghost.
You're a better man than I am, Broward. I expected exactly what I got.
Apparently the CSP guys can't finance anything
That makes me suspicious. The reason that I can't make PV work as a biz is that the ROI is terrible. The fact that no one will invest in CSP makes me immediately wonder if ROI is again an issue.
The underlying problem of course is that oil is too damn cheap. Or rather, that we don't roll in the societal costs (war, pollution) into the price-per-gallon.
"That's about $1.50 a meal... "
Supersize?
Yalt,
I prefer to take a sunnier approach.
All Karma in the universe is finite (in my solipsistic world) so if there are that many ruthless free marketers out there; that's just more karma for me for simply being.
This is why charity is preferable to welfare:
With Charity I decide who does or doesn't get my donations; an individual choice and the basis of freedom
With Welfare it is the STATE who decides for me who gets my donations; the basis of enslavement.
I expected exactly what I got.
Nobody here wants to admit that the investor side of the equation bears at least equal blame for our predicament, which is why it's not getting fixed. Nobody wants to give up their mythical money and illusion of superiority.
"Straw man, bad argument."
And where in my post did I say "The ideal society is one with a pool of starving surplus labor that has no choice but to sell themselves to the wealthy for bread and water."? Or anything like that?
One logical leap deserves another.
"Under a gold standard, the amount of credit that an economy can support is determined by the economy's tangible assets, since every credit instrument is ultimately a claim on some tangible asset. But government bonds are not backed by tangible wealth, only by the government's promise to pay out of future tax revenues, and cannot easily be absorbed by the financial markets. A large volume of new government bonds can be sold to the public only at progressively higher interest rates. Thus, government deficit spending under a gold standard is severely limited. The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. "
Bzzz.... wrong answer.
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
so again, you bring up a nice little quote with lots of scary words like "welfare statists" but the essential premise is easy to debunk given history.
The gold standard DID NOT stop the state from borrowing more than its tangible assets would have allowed.
again: Mr. Credit Monster doesn't care about your gold standard. So sorry.
And people wonder why goldbugs aren't taken seriously.
Went to Wendy's while traveling this last weekend.
Seemed like all the combo meals were around $7.
These Fed idiot savants are Broadway musical aficionados. We've run the gamut of "The Sun will come out tomorrow" to "Put on a Happy Face:"
Gray skies are gonna clear up,
Put on a happy face;
Brush off the clouds and cheer up,
Put on a happy face.
Take off the gloomy mask of tragedy,
It's not your style;
You'll look so good that you'll be glad
Ya' decide to smile!
Pick out a pleasant outlook,
Stick out that noble chin;
Wipe off that "full of doubt" look,
Slap on a happy grin!
And spread sunshine all over the place,
Just put on a happy face!
HomeGnome (profile) wrote (in reply to...) on Wed, 7/8/2009 - 11:40 am
Went to Wendy's while traveling this last weekend.
Seemed like all the combo meals were around $7.
That's what happens when you put food in your products.
Teach a man to fish vs give a man a fish..
While i would prefer teach a man to fish, i also understand the importance of investment from those that have. That is why i subscibe to buy the man his own pole and bait and teach him. I would rather spend the money on the pole than constantly , for the same price, repurchasing the fish. The fish is caught and consumed either way...
You know what happens when multiple support barriers break on a major structure?
TIIIIIIIIIIIIMMBERRRR!!! CRASH!
the gold rush - a massive chunk of the world's gold found and mined in a few years. then, cold turkey and leveraged, overvalued midwestern farmland. duh.
YTL, the govnt bases theirs on not tangible but actually on their "good faith and effort" which i believe was used up over some 100 years ago...IMHO
Dawg,
this was some of the worst "food" I've ever had.
Nasty shit.
They even watered down the "Coke" more than usual.
Which is why I usually don't eat that fast food slop.
Yalt (profile) wrote (in reply to...) on Wed, 7/8/2009 - 2:37 pm
You're a better man than I am, Broward. I expected exactly what I got.
I used to find it amusing to bring up the whole "maybe hard currency has some problems you aren't anticipating" issue only to be told I was a g-dd-mned communist but it got old.
"I would argue the opposite: a person fed for free is much less likely to work than someone who needs to work for food."
I tend to share Yalt's view that while fear of hunger could be a motivator, that I would hope that the USA would be incentivised by something more noble and rewarding than subsistence living. It is many a sad nation where those who can feed themselves, are rich.
Teach a Man to garden.
He can save the seeds and leave me outta the loop...
we'll never go back to the gold standard, so why waste breath on it?
Fractional reserve systems wouldn't be bad if the central banks were ethical and did their monetary tweaking in moderation.
And didn't britain try to go back to the gold standard - and it resulted in a recession?
Fitch Expects Further Downgrades of US CMBS
Research Recap » Blog Archive » Fitch Expects Further Downgrades of US CMBS
"Apparently the CSP guys can't finance anything" was a short-term problem that was credit crunch related. There was a pretty decent pipeline building up in 2007 and early 2008.
And don't worry, oil won't be cheap for long. But I don't think that's it....in the US solar electricity is competing against coal fired plants and other sources. Not a lot of electricity being produced from oil. Yes the total costs of coal aren't in the current market price but you're not going to see a lot of support for that, enough Obama doesn't support full carbon sequestration of coal at the moment with the other things on his plate.
The problem actually is the cost of PV and CSP technology itself, which is coming down in cost real quickly. CSP is viable depending on the market price of electricity (in Cali it is real high), site location, access to electrical grid. CSP is basically viable in terms of amounts of insolation in SE Cali (basically anything each of Palm Springs, roughly), SW Arizona, Spain, North Africa, and the Middle East. The best locations in the world are SW Egypt and the UAE-Saudi border it terms of solar intensity. In the US, there are insolation maps showing developable land (takes out public lands, etc.) on National Renewable Energy Laboratory (NREL) Home Page We have more than enough land to supply 100% of the US power needs with CSP, we just really need a HVDC power grid to run it across the country. If HVDC is used the distances aren't a problem. That is the real problem....getting around the regulatory headaches to upgrade the grid and getting the utility companies to get along with each other. I keep hoping Obama can smash the utility companies' skulls together but he clearly has other shit to do.
Blackhalo (homepage, profile) wrote on Wed, 7/8/2009 - 2:45 pm
I tend to share Yalt's view that while fear of hunger could be a motivator, that I would hope that the USA would be incentivised by something more noble and rewarding than subsistence living.
The story talks about the person telling it as much as it talks about the subject of the tale.
Had to laugh when I saw this sign in West Virginia:
Coal
The Carbon Neutral Fuel.
I guess it's technically correct...
And people wonder why goldbugs aren't taken seriously.
True enough, Byz. But aren't most issues soon crowded with strange, talkative people, whatever the actual merits?
US workers know how to fish and want to fish. Unfortunately, the "globalists financiers" hijacked the USA pond and shipped it overseas. Our primary job was to consume fish and worry about paying for the fish much later. The banksters and congress aren't the brightest crayolas in the box, sharpest knives in the drawers.......They didn't think pass the gordo gecko greed scam
Bzzz.... wrong answer.
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
so again, you bring up a nice little quote with lots of scary words like "welfare statists" but the essential premise is easy to debunk given history.
:: ::
Exactly.
There is nothing stopping Citizen A from levering up to the eyeballs to Citizen B as a PROMISE... no money changes hands at all. I Citizen A make castings for you Citizen B and YOU promise to pay me. You might ask where I get the metal from? I promise Citizen C who has the metal I will pay him as soon as Citizen B pays me. So on & so forth. A society can lever to the nine pins that way and has from time to time.
Gold standards constrain sovereign debt SOMEWHAT but does nothing to constrain debt or leverage overall.
"And didn't britain try to go back to the gold standard - and it resulted in a recession? "
lol, yeah, right after the aliens landed...
the bankers never give up the power to create money.
Teach a banker the power of central bank mischief and he'll create shams from now until eternity.
Home Gnome-
True if you pump the emissions down into the center of the earth. If scientists knew how to do it that would be even better.
lol, yeah, right after the aliens landed..
Cool you seen them also!
YTL, the govnt bases theirs on not tangible but actually on their "good faith and effort" which i believe was used up over some 100 years ago...IMHO
Perhaps.
please remember, I don't argue against a gold backed currency. I argue only that it doesn't solve most of the problems people seem to be bringing up in this thread.
in order to do that we need to look at the real culprits, Fractional reserve lending and leverage. Both of which can and do occur in gold backed currencies.
If they don't, let me assure you I can easily "invent" them once we go back to a gold backed currency, and be rich beyond all imagination. It won't take much time for Goldman Sachs, SocGen, Barclays, and UBS to follow suit.
AngrySaver: I agree with you that going to a fixed metal backed currency would reduce the stealth inflationary "tax".
Sign me up, AFTER we deal with the leverage/fractional reserve system.
One logical leap deserves another.
Intellectually dishonest.
not much else to say.
"Bread + water" != "everything to everyone"
Off to pool since the board has turned into my previous work environments.
sorry to post and run, but I gotta go. I'll check back later.
burnside (profile) wrote on Wed, 7/8/2009 - 2:49 pm
True enough, Byz. But aren't most issues soon crowded with strange, talkative people, whatever the actual merits?
It's true, but goldbuggery has more than its fair share. I'm sorta neutral about it, it's all money in the end, and only worth something to the other monkey-people, but I think many of the advocates have a very misplaced faith in it as a cure to economic ills.
I particularly wonder what the answer to a persistent forex crisis is. This is what drove Iceland into scrip and I think that's what any politcally independent nation would do in similar circumstances. I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
FDIC gearing up for bank closures
Economist: FDIC gearing up for bank closures - Washington Business Journal:
Good Luck, Broward
rps,
We're all Koi now?
JP -
You are right that high fixed cost power generation doesn't pencil out if you have to pay interest on the investment. When everything is valued according to banker rules as if money was the only thing that mattered, then low fixed cost energy wins every time because you can fund energy consumption on cash flow and hope general price levels will stay in reasonable equilibrium.
But if we're in stimulus mode, with insanely low interest rates and forced spending on whatever rears its ugly head, we are very stupid not to be spending on investment in high fixed cost, low marginal cost power generation. Once those things are built, the energy looks very, very cheap.
I particularly wonder what the answer to a persistent forex crisis is. This is what drove Iceland into scrip and I think that's what any politcally independent nation would do in similar circumstances. I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
Best comment of the day Byz.
You know what is insane? People are still speculating on GM's bankrupt pink sheet stock (symbol is GMGMQ). I guess people figure they are playing musical chairs or something.
edit: maybe it is short covering. But why not just wait til it is $0.00? - then you don't have to cover anything, just keep the money you made selling it short.
There is nothing stopping Citizen A from levering up to the eyeballs to Citizen B as a PROMISE... no money changes hands at all. I Citizen A make castings for you Citizen B and YOU promise to pay me. You might ask where I get the metal from? I promise Citizen C who has the metal I will pay him as soon as Citizen B pays me. So on & so forth. A society can lever to the nine pins that way and has from time to time.
Gold standards constrain sovereign debt SOMEWHAT but does nothing to constrain debt or leverage overall.
And since the vast majority (about 92% of M3, IIRC) of what passes for money in this society consists of just such promises (you give me goods in exchange for the transfer of a promise to me from my bank to give me currency on demand at some future time into a promise to you from your bank to give you currency), a gold standard would constrain the volume of currency but not the volume of money.
I don't understand this obsession with M0 at all.
BREAKING
U.S. May consumer credit down $3.23 billion
Real world subsistance.
We have a room mate. She is early 30s, has a young son. Father of child bailed when child was an infant.
She gets no gov funds, if she did they would go after the father to pay and she does not want the father in the son's life. Father has not seen child for 7 years, does not want to have anything to do wtih the kid - but would want to get back at her through the child if he had to pay out any money,
She works full time for $15.00 per hour. She found a job that will fit around the childs school hours.
So on that pay she provides for her son, car payment, food, small rent. Then she is broke. if she or the child become ill and it costs her one days pay, she is in trouble. That is subsistance.
My point is that there are many, many people in her situation. One day away from disaster. doing the best they can and hoping they can afford food next week.
Dryfly-
This is why I think rather than moving away from the dollar we're headed into maybe 5 world currencies with the dollar as a major one. I see the dollar devaluing, but still a reserve currency. It is tough to have a reserve currency without a military behind it.
Looks like the Dow cracked 8100 about the same time the S&P breached 870 and the program buy jam was on...man look at that TNX...
You know what is insane? People are still speculating on GM's bankrupt pink sheet stock (symbol is GMGMQ). I guess people figure they are playing musical chairs or something.
Reminds of the scenes from the movie 'Deer Hunter' where they are all playing Russian Roulette betting on who or who doesn't get the bullet. Money keeps moving right up to until the blood flows.
Byz, precisely.
I realized just now, though it has been unconscious, that I'm with Dryfly on PMs in a fiat universe - I'm sure I couldn't have described it so well.
I wonder if people really want to have a currency that's vulnerable to global-scale capital structures cornering -- or crashing -- the market on the underlying commodities.
Good point indeed.
I've been a bit surprised there isn't more of a push for a gold standard from those who might be best able to benefit from controlling the underlying market. Maybe there's a line even the most venal aren't willing to cross.
Shill
Interesting. I wonder if the NCUA is gearing up as well.
I bank with Golden One (big CA CU) and they set out this long message from the president on Monday about how they are perceived as a safe haven because of individual depositors and not because of their other financial assets. Is there a way to short my CU?
I see the dollar devaluing, but still a reserve currency. It is tough to have a reserve currency without a military behind it.
Even tougher without an 'economy' behind it - Soviet Union had a military yet no reserve currency.
What a bunch of bull shit.....the Fed bought that 10 year auction, if one believes otherwise we are in trouble.
please explain to me again the panic of 1873.
facts:
the US was ON a gold (and silver) standard
there was no Federal Reserve bank.
yet:
there was more credit in the economy compared to the amount of tangible assets. The resultant credit deflation decimated our economy and led to arguably the worst depression ever, worse than the Great Depression.
I disagree. From 1/1873 until 12/1879 (the so called long depression), real annualized returns on stocks were 10.8%. There was deflation at the time, but that was the norm under a gold standard. Also, unemployement reached a high of 14%, less than today's U-6 rate.
The railroad boom was a big cause of the panic 0f 1873. But all booms are followed by busts. At least the gold standard allowed people to opt out and kept the pain closest to where it emanated. Unlike today.
"man look at that TNX... "
Parabolic. Something is up. Big time move from equites to T-Bills, which seems odd as I would expect that lower rates would be a boon to growth.
How much did the Fed buy of the 10 year because I am guessing it was alot.
Dryfly-
I lived in the Soviet Union in 1990. There's a real big difference between that and the US in 2009. The US still has food on the shelves and no power cuts. While not a market economy per se, the Soviets only had a crappy commodity economy in market economy terms.
Sounds like Russia now.......
WOAH! 10-year at 3.29. Somebody is losing credibility...
edit: maybe it is short covering. But why not just wait til it is $0.00? - then you don't have to cover anything, just keep the money you made selling it short.
The broker is probably still requiring a $2.50/share margin reserve--you have to weigh the cost of losing the use of that capital against the additional money to be made by holding to final liquidation.
"How much did the Fed buy of the 10 year because I am guessing it was alot."
Given the Dollar's performance today, I would say not a lot.
Dollar Rises Versus Euro on Signs Economic Rebound Is Faltering - Bloomberg.com
Dollar Rises Versus Euro on Signs Economic Rebound Is Faltering
Ah yes, my little euros to dollars move a few weeks ago is starting to blossom....
"My point is that there are many, many people in her situation. One day away from disaster. doing the best they can and hoping they can afford food next week."
I think the big news is that there still isn't much awareness of this -- and very little discussion in the MSM.
Wear half-decent clothing you got at Goodwill, drive a clean ten-year-old car and everybody assumes that it's all fine.
Or, wear really nice clothes and a nice car you bought a couple of years ago; and by looking at you, no one would ever know you can't make your rent. I ran into one of these people last fall, selling her possession. Blogged about it.
Tales from the Coast: In a Lonely Place
Off to pool since the board has turned into my previous work environments.
You worked in an insane asylum?
I lived in the Soviet Union in 1990. There's a real big difference between that and the US in 2009. The US still has food on the shelves and no power cuts. While not a market economy per se, the Soviets only had a crappy commodity economy in market economy terms.
That was kinda my point - the Soviets had one helluva a military but no economy prior to their final collapse. And no reserve currency status either. That was why I think a strong military is insufficient to guarantee reserve currency status... a nation would have to have a strong economy instead - w/ or w/out the military.
My concern is our reserve status is eroding our economy and severely. While it allows us to lever up to buy power and put food on the shelves it undermines our ability to produce power and grow food - purely due to exchange rate manipulation - manipulation as a result of reserve currency status. That is one of the 'real problems' G8 and others don't want to address because after the US consumer... who else is there?
That one has to get solved because even with all the talk about 'excess capacity' there are still something like 3-4 B people on this planet who could use a little more consumption thrown their way [food, potable water, reliable power, basic health care, education even before we get to 'big screens' - etc.]. The dollar as reserve currency scheme screws the pooch for all of us.
Bob Dobbs,
That was outstanding bit of writing. Can I repost it elsewhere? With credit and all that..
Do we have a track record for his past predictions?
Nova;
Please feel free to repost, with credit; wouldn't mind a link to my blog with the text.
Thanks
Dryfly and YTL - my two new heros.
-albrt also gets major points for this: When everything is valued according to banker rules as if money was the only thing that mattered, then low fixed cost energy wins every time...
"..and the possibility that the economy is closer to a turning point is stronger now than just three months ago.."
Is that statement of the obvious supposed to mean something? I'd say that the possibility of the economy being 3 months closer to the turning point (than it was 3 months ago) is actually 100 % (The thing we would like to know is WHEN that will be. Will the turning point occur inside six months?, six quarters?? six years???) !!!