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EK1949

EK1949
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  • Why Is The U.S. Economy Still Depressed? [View article]
    "You should never look to the Gov. to spend more"

    The federal government has an obligation as sole issuer of new money to spend up to the level the private sector needs whether anybody likes it or not. That's its function, however badly it performs it due to widespread incomprehension on this very point.

    "they are really spending our money"

    That's right, government spending is where we get our money, which argues they're not spending enough and are taxing too much. If they don't spend enough it doesn't matter if they are spending more. That's "largest tax increase in history" reasoning. An expanding economy generates all kinds of "largests", but largest relative to what? In the case of spending the author actually answers this but as is usually the case the meaning escapes most people.

    "Business and consumer spending along with Residential construction are the 3 pillars of a good economy."

    Government provisions these pillars by deficit spending, or they won't have enough money. That's how you judge if spending is not enough, enough or too much, not the zero point on a budget spreadsheet. The real economy is what must be balanced by taxing and spending, not the budget.
    May 30, 2015. 06:01 PM | 2 Likes Like |Link to Comment
  • Federal Reserve? [View article]
    Since we want to "heat" the economy we have to put it on the path to overheating it or we won't go anywhere we want to be. There's no magical other way to do it. We have to cure the illness we suffer from now to put us in a position to cure the illness we'd rather have. Me, I think the ills of prosperity are preferable to the ills of not having it. One would think that a consensus would form around this idea after years of policy driven weakness and passivity.

    Question time:

    Is it really true that our growth path is just something happening to us rather than the predictable outcome of our decision making? Shouldn't we at least try to grow more first before we resort to passive explanations? Why not use tools that worked in the past before giving up? Why give up in advance?
    May 26, 2015. 09:59 AM | 2 Likes Like |Link to Comment
  • Federal Reserve? [View article]
    Here is what the Fed should say if it follows the author's reasoning:

    1) Rates should not be raised until the economy is strong enough, so we don't have to hurry back to zero after the damage is done. IOW don't plan a mistake planning is supposed to avoid.

    2) Improving the economy is almost entirely a fiscal operation and has been ever since the crash. Presently we have the fiscal brake on, leaving monetary policy as supportive with nothing to support. The heavy lifting must be fiscal, as we have recommended and still recommend.

    For five years this policy incoherence has produced exactly the painfully slow expansion that one would expect to see from a realistic perspective. It was foreseen, and now it's seen. The correct path is fiscal expansion for the acceleration it will produce, followed by gradual tightening governed by the growth path, not an irrational desire to normalize unconnected to real conditions.
    May 26, 2015. 08:42 AM | 2 Likes Like |Link to Comment
  • Williams deal means higher taxes, lower income for some investors [View news story]
    I got dinged on the KMI/KMP acquisition, but I'm glad to own more KMI. This time I only have GP shares. Lookin' good I say.

    But if you want LP divs without the tax headache buy a half position in MLPL.
    May 13, 2015. 08:17 PM | 5 Likes Like |Link to Comment
  • Is A Fiscal Deficit Really 'Austerity'? [View article]


    "The only people calling this "austerity" are those that want to see a bigger and bigger government that they have a hand in controlling."

    People who want to control the size of government regardless of its level of function tend to be anti-Keynesian. Keynesians, post Keynesians and the like see the economy as signalling the level of effort the government sector must provide. A budget balance can't provide that information, employment, wage growth and other real factors of production and consumption can, and do. It's these factors that say what's austere or not. It could hardly be any other way, unless you think an arbitrary Big Number has some kind of magical property on its own.
    May 11, 2015. 05:38 PM | 1 Like Like |Link to Comment
  • Preparing For The Market's Collapse [View article]
    People who have a good chance of surviving in a crisis form bonds of trust with those around them, by prior inclination and sound thinking. The last group I'd trust would be survivalists, the last group that would trust me.
    May 9, 2015. 11:13 PM | Likes Like |Link to Comment
  • The Midnight Sun - Part 1 - Are You Ready? [View article]
    "You're traveling through another dimension, a dimension not only of sight and sound but of mind."

    There's not much of the latter. Your friend has noticed that markets go up and down without any help from him. Owning stocks is better than being "in the market" for them, unless you're a trader, both skilled and disciplined, which most traders aren't.

    A skilled and disciplined investor is a very different animal who "no longer participates in investors' forums nor pays attention to market news. Just goes about his daily routine, walking, playing golf and tennis."

    Why doesn't he listen to you and panic on cue? Why don't I? It could be because he's no longer willing to be manipulated to his disadvantage by sound and fury signifying nothing, even with a loooonnng list of stock symbols trailing meaninglessly behind. :-)
    May 3, 2015. 02:24 PM | 2 Likes Like |Link to Comment
  • The 'War On Cash' Migrates To Switzerland [View article]
    "Might Warren Buffett whose wealth is inextricably tied to the fiat kings of Wall Street have an axe to grind?"

    Axe-grinding better explains failure than success. If gold is a good investment, constant haranguing plays no part in that, any more than a harangue for or against value stocks, growth stocks, dividend stocks, stock or bond funds, real estate trusts, financials, whatever. I won't say I'm not influenced, but I certainly understand that I shouldn't be.

    Commodities, especially "loved" ones, are for traders, not investors IMO.
    Apr 26, 2015. 02:34 PM | 2 Likes Like |Link to Comment
  • There Is Little 'Fact' In The Austerity Vs. Deficit Spending Debate [View article]
    "I actually think this approach works to a degree based on the U.S. experience and some of the success of Abenomics in Japan, but there may be consequences at some point like hyperinflation."

    Only "to a degree" matters. The long run is an infinite series of short runs. All paths to a better future pass through a better present. Shrink to grow isn't about to start working "some day". We'll always need public finance to support the real economy if we want it to grow for the future the way our debt ridden ancestors made it grow for us. Just as we inherited their debt and the assets
    built from them, we'll pass everything we built to our descendents. They won't be materially impoverished by this arrangement any more than we are today. We should go and do likewise.

    "For all the hoopla about free enterprise, self reliance, entrepreneurship etc 40% of the USA GDP is federal, state and municipal spending. Anyone who tells you can can cut that without consequences is wrong and every politician in American knows it no matter what they might say publicly."

    What I'm saying is our leaders believe that and the opposite of that, depending on which stick pokes them harder.
    Apr 25, 2015. 12:49 PM | 1 Like Like |Link to Comment
  • There Is Little 'Fact' In The Austerity Vs. Deficit Spending Debate [View article]
    Every attempt to shrink to grow fails. So why do we still try to make the impossible work? I'm not a psychiatrist, but I'm familiar with how emotion twists reason around its little finger.

    Suppose that increasing debt reduces future resources? If it's true, there can be no expansion of money and no growth in real throughput. What about population growth? That's a real, not financial factor, and since we've knocked out the means of financing growth in real throughput......it's as much a part of our plan to cut off real growth as financial growth. You can't favor shrinkage without its consequences unless you don't know what they are, BUT YOU DO KNOW.

    See, you actually do know that debt now increases future growth, and that this increases, not decreases future resources and wealth. How do I know that you know? Easy, because whenever we face a truly frightening financial catastrophe, most of the wrongsters switch sides! When they absolutely must be right instead of "virtuous", they suddenly, temporarily are, then when the worst danger is past they retreat to being wrong again. That's how it played out five years ago when we shifted from spend to grow to shrink to (un)grow in order to "save dollars".

    I must ask how do people know how to be right when it counts most without knowing all along? How do wrongsters judge when it's safe to be wrong again? See what I'm getting at? :-)
    Apr 25, 2015. 10:40 AM | 6 Likes Like |Link to Comment
  • Secular Stagnation Or Golden Era Of Low And Stable Growth? [View article]
    If we're in a slow growth era, and that growth is not adequate for producing plentiful jobs at rising wages, I wonder how that is supposed to negate spending for jobs, for infrastructure, for education, for science and new technology. But then, perhaps the obvious crisis of public finance IS the "low growth era".

    You can't just go into "pitiful helpless giant' mode because you're depressed, can you? Isn't it more likely that we're economically depressed because we only implement crappy ideas and treat good ideas like they have cooties. Spend to build things? No, nobody ever grew THAT way!
    Apr 24, 2015. 01:01 AM | Likes Like |Link to Comment
  • If The Global Economy Is Cliff Diving, Why Is Oil Breaking Out? [View article]
    Yup, there's too much savings when spending is low, so yields are low. Funny though, that looks like spending too low for the price of loans and goods to buy with them. That should tell you the major players are running small deficits to "save money", shrinking their economies thereby. Not a worthwhile savings by any sane measure, but hey, people believe.....different. :-(
    Apr 21, 2015. 04:30 PM | Likes Like |Link to Comment
  • If The Global Economy Is Cliff Diving, Why Is Oil Breaking Out? [View article]
    Some programs may generate more than others while both may be necessary in other ways, too. Aircraft carriers and safety net programs add to GDP while also performing other necessary functions. Generally income support and other necessities are seen as taking from each other but it's usually not the case. There are different ways to conceive of immediate support of income and other more investment-y expenditures. In reality they support each other, since the goal of optimal throughput (buying what's produced up to the level facilitating expansion) requires both to be sufficiently funded. The aircraft carrier, bridge, airport, new electrical grid, retirement and health spending, Starbucks, all play their role.
    Apr 21, 2015. 04:20 PM | Likes Like |Link to Comment
  • If The Global Economy Is Cliff Diving, Why Is Oil Breaking Out? [View article]
    "While debt isn't always bad, when debt rises faster than gdp it seems like we simply exited a recession by buying gdp with debt as opposed to creating gdp from actual domestic production."

    No, it means we stopped buying GDP (never mind what "with"), so it fell against the debt. Deficit rises, recovery begins, deficit falls, recovery slows so were back to "too much debt" without seeing anywhere near the benefit we should have.

    So you think there's not enough production in spite of the fact that there's also not enough money to buy it? Look, the relationship between growth, debt, deficit and GDP ought to provide you with sound information about how much net spending is needed to optimize the debt/GDP ratio.

    That means we need to cut taxes and spend more in some combination to buy what we produce. That's also "buying GDP", and real production. Deficit dollars buy the same real groceries as the rest of them. There are no "deficit groceries", "deficit highways", they're all real. Only the dollars are unreal, all of them.
    Apr 21, 2015. 02:21 PM | Likes Like |Link to Comment
  • They Lie! Pros Make Successful Stock Price Forecasts, Every Day, With Double-Digit Simple-Percentage Payoffs [View article]
    So if I don't have enough time to spend saving and investing for the long term, what am I doing with my time? If I'm working, I can save, if I can save I can invest, if I invest I can hold stocks, not pay the finance tax (the best way to bolster returns), and profit from compounding.

    Why isn't a young investor well advised to start creating a fund after college, say, put a little away at first, start buying shares a few at a time, learn the ropes, make mistakes early, recover from them, increase contributions with income, and take the plan all the way into retirement?

    Your appropriate time discipline means buying and selling to generate income for someone else. What time discipline is better than the patience to let the stocks you bought earn the returns they'll give you if you will just let them run and stop monkeying around with get rich quick schemes?
    Apr 20, 2015. 08:24 PM | Likes Like |Link to Comment
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