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brachiosaurus

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  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    netbluesky, i think you misread my post. I was saying that Keynes describes it perfectly (a triumph for keynes). I'm pretty sure we agree.
    Feb 7 02:01 PM | Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    not really. Note that the portion of *growth* (rate of change) in world GDP due to china is much larger than that due to the US, which makes it the most important factor in trends.

    but, i don't think asia's gains are america's loss.
    Feb 7 01:59 PM | Likes Like |Link to Comment
  • Inflation, Easy Money And The Austrian School Of Economics [View article]
    MIT's billion prices project corroborates the BLS, and helps refute shadow stats.
    Feb 7 05:37 AM | Likes Like |Link to Comment
  • Inflation, Easy Money And The Austrian School Of Economics [View article]
    Believe me, I hate the government's role in Fannie and Freddie as much as anybody, but they took on high risk mortgages because their non-government shareholders told them to. They wanted to copy all of their private sector friends like Bear Sterns and AIG, because they were jealous of their "profits". If there were proper government regulations in place, then Freddie and Fannie (and AIG and Bear Sterns and Countrywide) would not have been sitting on top of that trillions of rubbish.
    Feb 7 05:25 AM | 2 Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    imes, I don't think you understood the argument. Look at points 1, 2, 3 that I made above. Which are incorrect? Keynesianism completely triumphed in this crisis, and gave prescriptions for how to avoid the situation we are in, but people like you ignored the prescription. The only country that really used anything remotely from the Keynesian playbook was China, and they came out the best. Granted, China has also done many misguided things with the stimulus, for which they'll most likely face a large blow-up, but that isn't the fault of Keynesianism.
    Feb 6 11:08 PM | Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    Nice comment WMARKW. I think I mostly agree with you. These are easy "predictions," but Austrian and some monetarist economists predicted the exact opposite of these. Obviously interest rates are enforced by the Fed, which wants them low, so I agree the interest rate predictions are rather empty. However there were people (many "Austrians") predicting that the Fed wouldn't be able to keep them low, and even many Chicago-style economists were idiotically warning about "crowding out."

    [[BTW, there were actually two days in 2008 when the Fed wasn't able to get the effective Fed Funds Rate within the ballpark (I think like 50 bp or more off) of their target, so let's not forget that the Fed isn't omnipotent. Under certain circumstances, the Fed could really lose control of the Fed Funds rate in a practically permanent way. But those circumstances don't exist in the US right now, so I think its hardly even worth bringing up. ]]
    Feb 6 10:49 PM | Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    The Great Depression was a great piece of evidence for Keynesianism as well as the current economic debacle. I suggest reading Krugman with an open mind and you'll learn quite a bit, even if you don't agree with everything!

    1) Krugman predicted that inflation and interest rates would stay low, despite a massive surge in the monetary base. Check
    2)He predicted that interest rates would stay low despite large budget deficits. Check
    3)He predicted that where there was austerity the recession would hit hardest (e.g., Ireland, Spain, Latvia) , and where there was stimulus (e.g., China) the recovery would proceed quickest. Check

    The stimulus in the US was too small, by at least a trillion dollars, and we are suffering to this day because of it. But even the paltry stimulus that the US got, prevented our economy from suffering as badly as say the UK.

    Keynesianism has more evidence in its favor than ever before.
    Feb 6 04:57 PM | Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    no :) best of luck with your clients
    Feb 6 06:17 AM | 2 Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    easy on the spray-on tan
    Feb 6 04:20 AM | 2 Likes Like |Link to Comment
  • Chinese Premier Wen Jiabao softens his countrymen up for aid to the eurozone by saying it's in their own interests. Since the EU is China's biggest export market and its largest source of technology, "helping to stabilize European markets...amounts to helping ourselves. We must make all quarters of society understand this." (previous)  [View news story]
    good for chinese exporters, but kinda silly to me when china has a gdp/capita 1/4 that of Europe. I'm sure the dirt poor peasants feel a little miffed that they bail out Europe when they themselves don't have the means to own a PC or a car.

    The only country that can and should fix the imbalances is Germany. China's funds will only create new imbalances.
    Feb 6 02:17 AM | Likes Like |Link to Comment
  • Has The Eurozone Credit Crunch Been Averted? [View article]
    Thanks for the comment! Didn't the Fed embark on some similar direct liquidity injection in 2008 (in contrast to simply buying treasuries)? I don't know the ramifications of all this, but it is interesting to sit back and learn!
    Feb 5 11:06 PM | Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    I agree that emotions are very important if not the only important thing with gold. If i was trying to save money in china but getting negative real interest rates on my savings deposits (this is also modestly the case in the US), I'd understand the emotion of wanting to get out of cash and into gold.

    Nevertheless, we need to get used to the fact that US policy is not *the* dominant factor in economic trends these days. China is almost already now and will certainly be more important.
    Feb 5 10:58 PM | 3 Likes Like |Link to Comment
  • Did The Liquidity Trap Cause The Hike In Gold? [View article]
    why the focus on the US? The major consumer of gold is China and India. They both suffer from out of control inflation, which is why they have such demand for it.

    China is the country with the most severely negative real interest rates, and that is why we have rising gold prices. When China appeared to be tightening monetarily, gold fell. Now that China is pressing the gas pedal again monetarily, gold rises. Very simple.

    People worried about hyperinflation in the US are misinformed. And clearly have been wrong over the past 5 years.
    Feb 5 08:38 PM | 4 Likes Like |Link to Comment
  • Has The Eurozone Credit Crunch Been Averted? [View article]
    Dear shareholders unite,
    I've found myself confused by a lot of the commentary on the LTRO-- maybe you can help me out here. My understanding is that new euros created through this program will by necessity be accompanied by 1-1 increase in cash deposits held at the ECB. Even if the new euros are facilitating new lending, they get shuffled within the banking system, and end up at the ECB, unless the ECB burns the euros through some other mechanism. Because the terms of financing are so attractive, especially given that they are 3-yr loans, there is really no way for the private interbank market to compete. The result is the amount of cash deposited at the ECB balloons, regardless of whether banks are "hoarding cash."
    Feb 3 06:18 AM | Likes Like |Link to Comment
  • Why Rising Inequality Is A Concern For Shareholders [View article]
    Inequality has a crushing effect on entrepreneurialism. How can someone who can't afford health insurance, much less start-up capital, realistically embark on a risky business idea.
    Jan 31 11:33 AM | 2 Likes Like |Link to Comment
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