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Cullen Roche

 
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  • Deal Agreement Avoids Default [View article]
    Louie,

    We should have forced more defaults. No doubt about it. I was in favor of crushing the banks when we had the chance. But the Fed wouldn't let it happen and they convinced the US govt that it was in the best interest of everyone not to force cramdowns. I think that was a big mistake as it left the US economy with an excessive level of debt that still needs to be worked off. We never should have rewarded those who should have defaulted.

    But that doesn't mean the entire economy should be left to get dragged into a depression just because of a few bad actors. I was in favor of stimulus geared towards Main Street and not Wall Street. We can stabilize the pvt sector via tax cuts and other policies while also allowing the de-leveraging to occur. But the policy implementation over the last few years has been a complete debacle.

    It's very important not to think that I believe deficits don't matter. They most certainly due. They just don't impose a solvency constraint on the US govt in the same manner that they do in Greece.

    If you haven't read my treatise on the monetary system you might be interested.

    Best,

    CR

    pragcap.com/resources/...
    Aug 1, 2011. 02:04 PM | 1 Like Like |Link to Comment
  • Paul Ryan: Not Qualified to Chair the House Budget Committee [View article]
    Argentina and Russia were very different. Russia had foreign denominated debts and a currency peg. I believe Argentina also ran a currency peg. Both also suffered bouts of very high inflation leading up to their insolvencies. They essentially suffered hyperinflation before deciding to just scrap the whole thing. See my discussion here on hyperinflation and why it's highly unlikely in the USA;

    papers.ssrn.com/sol3/p...
    Jul 7, 2011. 09:00 PM | 1 Like Like |Link to Comment
  • Paul Ryan: Not Qualified to Chair the House Budget Committee [View article]
    The inflation comments are dead right! But that's not what Ryan is saying. He is saying we can really face a default. That's complete and utter nonsense. If he were arguing about inflation or hyperinflation he'd have a good point.

    And on that note, I still don't see the big issue. Where is the high inflation that all of these people have been calling for? 3.5% is the historical average. And the hyperinflation calls have been so wrong that it's not even worthy of mention.

    If you want to argue that the country is being destroyed via high inflation then the onus is on you to prove that we have high inflation. And no, Shadow Stats doesn't count.

    But more importantly, let's have discussions about our reality and stop using the debt ceiling to try to scare Americans into a default that isn't happening....Paul Ryan is playing a nasty game of political fearmongering. He should be ashamed and called out for it.
    Jul 7, 2011. 12:06 PM | 4 Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Let's be realistic. I am not saying that these future obligations cannot cause inflation, but they cannot cause the USA to "run out money". There is simply no such thing. If we wanted to print $50T tomorrow we could do it. There's no such thing as implying that we can't do that. Would it be disastrous? Yes. But we need to be more specific in what that ultimate problem is. There's a difference between high inflation and not having the means by which to meet your liabilities.
    Jul 6, 2011. 01:59 AM | Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    You're not understanding the fact that there is no such thing as the USA having or not having money. It's entirely wrong to refer to future spending as "unfunded". There is simply no such thing.

    Again, if you think we're becoming bankrupt via inflation then the onus is on you to prove to me that we have a major inflation problem. I don't see it and the data corroborates this argument....
    Jul 5, 2011. 07:51 PM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Dave,

    The two monetary systems are not remotely comparable. There is no such thing as the USA having to face its insolvency reality. We could have to face our inflation reality at some point, but we've been hearing the fearmongerers scream about hyperinflation for years now. Where is all this horrid inflation? I have shown to you that there is no solvency crisis in the USA. If you're arguing that there is a hyperinflation or high inflation problem in the USA then the onus is on YOU to prove that....
    Jul 5, 2011. 07:50 PM | Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Reserve currency status has NOTHING to do with this. Japan isn't bankrupt despite far worse debt levels and they don't enjoy this reserve status.

    As I've written about in great detail, there is nothing consistent with the USA and past hyperinflations.

    papers.ssrn.com/sol3/p...
    Jul 5, 2011. 02:06 PM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    There is no such thing as these liabilities being "unfunded" We can always fund these liabilities in the future. Whether it will result in high inflation is a very different question. And it's not the same debate they are having in Greece. Greece quite literally cannot obtain enough Euros to meet their payments.

    You might say it is a semantic point, but I would vigorously disagree.
    Jul 5, 2011. 02:04 PM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    America's been printing money for 200+ years. We've been in fiscal deficit for nearly our entire existence.....So, if you want to be very technical, then America has been "printing" its way to prosperity for is entire existence.

    But this misses the whole point. Printing is only destructive when done in excess of productive capacity. Obviously, America has been printing money for centuries. But its output over that time has far offset the money "printing". In other words, we have not printed in excess of productive capacity....
    Jul 5, 2011. 02:00 AM | 3 Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    BIG difference between operational constrained and political constraint.
    Jul 5, 2011. 01:56 AM | 2 Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Removing Greece from the EU and having them issue drachma does not change the cause of their disease....
    Jul 5, 2011. 01:54 AM | Likes Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Your argument is the classic inflation leading to hyperinflation argument. Where is this highly destructive inflation or hyperinflation? I am the last person on the planet to argue that the US economy is booming, but the inflationists have been so wrong in their analysis in recent years that it's amazing that so many of the readers here are still drooling over their inaccurate calls...
    Jul 5, 2011. 01:53 AM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    You're using all the standard fear mongering tactics.

    You prove that you don't even understand the MMT position when you use the term "unfunded liabilities".

    And for the record, I am a registered Republican and the founder of MMT, Warren Mosler, is a libertarian, so your attempts to turn this into a political debate fall flat on its face before it gets started.

    Again, for those who are interested in turning this into a political debate i suggest you not read me. For those who are interested in the absolute truth I suggest you read the following with an open mind.

    pragcap.com/resources/...
    Jul 5, 2011. 01:50 AM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Doesn't matter. You can't compare the Federal govt of the USA to a US state or a Euro nation. The analogy doesn't fit.
    Jul 5, 2011. 01:45 AM | 1 Like Like |Link to Comment
  • America Cannot Go the Way of Greece [View article]
    Ian,

    I would suggest you start here:

    pragcap.com/resources/...

    Feel free to email me with questions.

    Best. CR
    Jul 5, 2011. 01:44 AM | 1 Like Like |Link to Comment
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