Whitslack's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/306671/comments http://seekingalpha.com/article/171995-employment-neither-quality-nor-quantity?source=feed#comment-750539 750539
Consider a simplified economy where half of all workers are doctors or nurses and the other half are stockbrokers and financial planners. Could such an economy be self-sustaining? Assuming no one had to eat, maybe. But since people do have to eat, that economy would have to import food. In order to do so, we'd have to export something. (Currently our main export is inflation, but in a sustainable world it'd have to be a zero-sum game.) If the countries producing our food valued our health care and financial services, we could export those, but it's usually not too convenient for consumers to buy health care or financial services from the other hemisphere. Basically, we'd have to export goods to import goods. And that means we'd have to produce goods. Either we'd need farmers in addition to our doctors and bankers, or we'd need some other goods producers to produce goods that we could trade for food.

So in a way, health care is not a productive industry, but in a way it is. Service-producing industries are not necessarily bad, but we cannot survive on *only* producing services.]]> Sun, 08 Nov 2009 08:11:15 -0500
Consider a simplified economy where half of all workers are doctors or nurses and the other half are stockbrokers and financial planners. Could such an economy be self-sustaining? Assuming no one had to eat, maybe. But since people do have to eat, that economy would have to import food. In order to do so, we'd have to export something. (Currently our main export is inflation, but in a sustainable world it'd have to be a zero-sum game.) If the countries producing our food valued our health care and financial services, we could export those, but it's usually not too convenient for consumers to buy health care or financial services from the other hemisphere. Basically, we'd have to export goods to import goods. And that means we'd have to produce goods. Either we'd need farmers in addition to our doctors and bankers, or we'd need some other goods producers to produce goods that we could trade for food.

So in a way, health care is not a productive industry, but in a way it is. Service-producing industries are not necessarily bad, but we cannot survive on *only* producing services.]]> http://seekingalpha.com/article/170771-the-intrinsic-value-of-nothing-part-2?source=feed#comment-742172 742172 Tue, 03 Nov 2009 09:38:39 -0500 http://seekingalpha.com/article/168710-dollar-forced-to-abdicate-its-throne?source=feed#comment-730462 730462

On Oct 25 11:56 AM doubleguns wrote:

> What you propose requires Washington to change. They aren't going
> to change unless we change them. Vote them all out. goooh.com]]> Mon, 26 Oct 2009 09:17:37 -0400

On Oct 25 11:56 AM doubleguns wrote:

> What you propose requires Washington to change. They aren't going
> to change unless we change them. Vote them all out. goooh.com]]> http://seekingalpha.com/article/165542-bullish-sentiment-continues-for-gold-and-silver-stocks?source=feed#comment-713015 713015 > Did any analyst predicted the last year crash.....

Peter Schiff predicted it way back in 2007, and the other analysts laughed at him. Who's laughing now? Really, anyone who understands and believes in Austrian economic theory knew this was coming sooner or later. The Austrian economists now tell us this is not a recovery, it's a cover-up — a papering over with paper money. Buy gold and silver while your wages still have any purchasing power left in the world market.]]> Mon, 12 Oct 2009 10:41:13 -0400 > Did any analyst predicted the last year crash.....

Peter Schiff predicted it way back in 2007, and the other analysts laughed at him. Who's laughing now? Really, anyone who understands and believes in Austrian economic theory knew this was coming sooner or later. The Austrian economists now tell us this is not a recovery, it's a cover-up — a papering over with paper money. Buy gold and silver while your wages still have any purchasing power left in the world market.]]> http://seekingalpha.com/article/163155-inflation-premiums-at-multi-week-highs-suggest-breakout-for-commodities?source=feed#comment-693160 693160

On Sep 26 06:42 PM untrusting investor wrote:

> Ok, you probably will be OK over 5-10 years and make a little. But
> much better entry prices will be available over the next 1-24 months
> for those who are patient. The much safer and probably more profitable
> trades over the ST are to sell puts, collect the premiums, and wait
> for better put or entry prices.]]> Sun, 27 Sep 2009 12:57:25 -0400

On Sep 26 06:42 PM untrusting investor wrote:

> Ok, you probably will be OK over 5-10 years and make a little. But
> much better entry prices will be available over the next 1-24 months
> for those who are patient. The much safer and probably more profitable
> trades over the ST are to sell puts, collect the premiums, and wait
> for better put or entry prices.]]> http://seekingalpha.com/article/153102-cash-for-clunkers-a-cautionary-tale-for-healthcare-reform?source=feed#comment-612979 612979
Just wait. I'm sure this is on the horizon. They will spin it by saying there's too much supply and giving this destruction of property a sound-bite-friendly name like "thinning the herd." Then they'll tout how good it is, since it puts contractors and homebuilders back to work. Never mind that destruction of valuable property is always a net negative.]]> Mon, 03 Aug 2009 12:15:03 -0400
Just wait. I'm sure this is on the horizon. They will spin it by saying there's too much supply and giving this destruction of property a sound-bite-friendly name like "thinning the herd." Then they'll tout how good it is, since it puts contractors and homebuilders back to work. Never mind that destruction of valuable property is always a net negative.]]> http://seekingalpha.com/article/149502-short-the-u-s-a?source=feed#comment-593185 593185 Sat, 18 Jul 2009 15:21:49 -0400 http://seekingalpha.com/article/148209-employment-minimum-wage-maximum-stupidity?source=feed#comment-586300 586300
The minimum wage is just a political gimmick, and it's sadly a very effective gimmick because the people at the bottom of the ladder haven't yet learned enough about economics to understand why it's a gimmick. All the minimum wage does is make everything more expensive, increase unemployment, and increase the burden to society of all those receiving "assistance" from the taxpayers.]]> Mon, 13 Jul 2009 15:37:39 -0400
The minimum wage is just a political gimmick, and it's sadly a very effective gimmick because the people at the bottom of the ladder haven't yet learned enough about economics to understand why it's a gimmick. All the minimum wage does is make everything more expensive, increase unemployment, and increase the burden to society of all those receiving "assistance" from the taxpayers.]]> http://seekingalpha.com/article/147800-what-s-next-inflation-or-deflation?source=feed#comment-581581 581581
Doesn't core CPI *exclude* food and energy?]]> Thu, 09 Jul 2009 21:23:55 -0400
Doesn't core CPI *exclude* food and energy?]]> http://seekingalpha.com/article/145702-national-health-insurance-cap-and-trade-two-steps-in-the-wrong-direction?source=feed#comment-565514 565514
• Government-run "businesses" can operate at a loss indefinitely because their losses will always be subsidized by taxpayers held at gunpoint. What private business, which actually has to break even just to continue operating, stands a chance of competing with that? Extortion is illegal, unless the government is doing it.

• So-called health "insurance" is not really insurance at all but more of a prepaid health service plan. There is no incentive for one to curtail consumption or minimize waste when a given procedure will be covered whether one obtains it from an emergency room that charges $700 or from a walk-in clinic that charges $300.

• The correct solution to rising health care costs is to get *market forces* acting on them again. This means putting consumers back in the driver's seat so they will, in due course of serving their own self-interest, seek out the best quality service for the lowest price. The reason health care is broken is because the forces that make capitalism work have been artificially shunted and distorted by tax policy.]]> Sun, 28 Jun 2009 09:06:25 -0400
• Government-run "businesses" can operate at a loss indefinitely because their losses will always be subsidized by taxpayers held at gunpoint. What private business, which actually has to break even just to continue operating, stands a chance of competing with that? Extortion is illegal, unless the government is doing it.

• So-called health "insurance" is not really insurance at all but more of a prepaid health service plan. There is no incentive for one to curtail consumption or minimize waste when a given procedure will be covered whether one obtains it from an emergency room that charges $700 or from a walk-in clinic that charges $300.

• The correct solution to rising health care costs is to get *market forces* acting on them again. This means putting consumers back in the driver's seat so they will, in due course of serving their own self-interest, seek out the best quality service for the lowest price. The reason health care is broken is because the forces that make capitalism work have been artificially shunted and distorted by tax policy.]]> http://seekingalpha.com/article/145219-how-to-hedge-and-against-what?source=feed#comment-563145 563145
The correct thing for the Fed to do (if we concede that it should even exist at all) would be to remove all the excess liquidity that it injected into the system. However, it won't do this, for two reasons: 1) it's politically unpopular because it exposes the U.S. economy for the shame that it is, and 2) it actually will be unable to remove the liquidity, since its only mechanism for doing so is to sell all the toxic crap it bought back into the market, but no one wants to buy any of that for anywhere near the ludicrous prices the Fed paid for it in order to inject the liquidity in the first place. I'd hate to be Ben Bernanke; he's playing a lose-lose game.]]> Fri, 26 Jun 2009 02:32:18 -0400
The correct thing for the Fed to do (if we concede that it should even exist at all) would be to remove all the excess liquidity that it injected into the system. However, it won't do this, for two reasons: 1) it's politically unpopular because it exposes the U.S. economy for the shame that it is, and 2) it actually will be unable to remove the liquidity, since its only mechanism for doing so is to sell all the toxic crap it bought back into the market, but no one wants to buy any of that for anywhere near the ludicrous prices the Fed paid for it in order to inject the liquidity in the first place. I'd hate to be Ben Bernanke; he's playing a lose-lose game.]]> http://seekingalpha.com/article/139656-bond-market-to-bernanke-take-your-foot-off-the-accelerator?source=feed#comment-518336 518336
If interest rates were determined by supply and demand, rather than being fixed by a central bank (i.e., the Federal Reserve), we wouldn't have inflation, since the money/credit supply would be self correcting. Not enough savings means no capital readily available to lend, means higher interest rates, means more savings. Conversely, an excess of idle capital means more investment demand, lower interest rates, and increased economic growth. There is absolutely no need for some centralized body to be fixing interest rates. That only leads to inefficiencies in capital allocation, due to the time lag between market moves and the Fed's policy reactions.

At the very least, a proper audit of the Fed is called for, to verify to Congress and to the public that everything they're doing is legit. Call your congressperson and instruct him or her to sponsor H.R. 1207, the Federal Reserve Transparency Act of 2009. It's up to 179 cosponsors at last count. (Only 218 votes are needed for a majority of the House.)]]> Tue, 26 May 2009 15:01:44 -0400
If interest rates were determined by supply and demand, rather than being fixed by a central bank (i.e., the Federal Reserve), we wouldn't have inflation, since the money/credit supply would be self correcting. Not enough savings means no capital readily available to lend, means higher interest rates, means more savings. Conversely, an excess of idle capital means more investment demand, lower interest rates, and increased economic growth. There is absolutely no need for some centralized body to be fixing interest rates. That only leads to inefficiencies in capital allocation, due to the time lag between market moves and the Fed's policy reactions.

At the very least, a proper audit of the Fed is called for, to verify to Congress and to the public that everything they're doing is legit. Call your congressperson and instruct him or her to sponsor H.R. 1207, the Federal Reserve Transparency Act of 2009. It's up to 179 cosponsors at last count. (Only 218 votes are needed for a majority of the House.)]]> http://seekingalpha.com/article/139431-not-your-grandpa-s-deflation?source=feed#comment-517725 517725
To the author: thanks for an unusually entertaining read. I actually chucked aloud at some of your witticisms.]]> Tue, 26 May 2009 08:58:03 -0400
To the author: thanks for an unusually entertaining read. I actually chucked aloud at some of your witticisms.]]> http://seekingalpha.com/article/138651-treasuries-mother-of-all-bubbles-is-primed-to-pop?source=feed#comment-510939 510939 Wed, 20 May 2009 08:12:18 -0400 http://seekingalpha.com/article/136682-don-t-be-fooled-by-inflation?source=feed#comment-497837 497837
"Although [inflation] can often look like growth, it is no more capable of creating wealth than a hall of mirrors is capable of creating people."]]> Sun, 10 May 2009 13:25:58 -0400
"Although [inflation] can often look like growth, it is no more capable of creating wealth than a hall of mirrors is capable of creating people."]]> http://seekingalpha.com/article/134532-will-quantitative-easing-work?source=feed#comment-485287 485287
A weak currency is only good for net debtors. Those of us who have been fiscally responsible and have positive net worths would prefer that our nest eggs not be chiseled away by inflation.]]> Fri, 01 May 2009 09:00:57 -0400
A weak currency is only good for net debtors. Those of us who have been fiscally responsible and have positive net worths would prefer that our nest eggs not be chiseled away by inflation.]]> http://seekingalpha.com/article/134219-plunge-protection-team-attacks-bofa-this-ends-now?source=feed#comment-483660 483660
Instruct your congressperson to cosponsor H.R. 1207, the Federal Reserve Board Transparency Act. The non-partisan bill has huge momentum right now, having recently surpassed 100 cosponsors.]]> Thu, 30 Apr 2009 07:42:02 -0400
Instruct your congressperson to cosponsor H.R. 1207, the Federal Reserve Board Transparency Act. The non-partisan bill has huge momentum right now, having recently surpassed 100 cosponsors.]]> http://seekingalpha.com/article/132848-three-possible-causes-of-yet-another-downturn?source=feed#comment-476318 476318
H.R. 1207, the bill to audit the Fed, now has 91 cosponsors and counting. Urge your representative to cosponsor it.]]> Fri, 24 Apr 2009 15:44:38 -0400
H.R. 1207, the bill to audit the Fed, now has 91 cosponsors and counting. Urge your representative to cosponsor it.]]> http://seekingalpha.com/article/132027-is-inflation-in-our-future?source=feed#comment-471505 471505 Tue, 21 Apr 2009 14:17:38 -0400 http://seekingalpha.com/article/131585-monetary-policy-response-to-inflation-is-a-fool-s-journey?source=feed#comment-469608 469608 Mon, 20 Apr 2009 10:29:20 -0400 http://seekingalpha.com/article/131585-monetary-policy-response-to-inflation-is-a-fool-s-journey?source=feed#comment-469606 469606 Mon, 20 Apr 2009 10:28:57 -0400 http://seekingalpha.com/article/130016-is-fiat-money-the-real-culprit?source=feed#comment-456244 456244 > reason) can not appropriately appreciate the need for changing
> money supply at different stages of economic cycles.

Proponents of the gold standard would argue that pegging a currency to gold (or silver) would preclude (or dramatically dampen) these "economic cycles" from occurring in the first place. Fiat money is what allows the boom/bust cycle.]]> Wed, 08 Apr 2009 11:13:27 -0400 > reason) can not appropriately appreciate the need for changing
> money supply at different stages of economic cycles.

Proponents of the gold standard would argue that pegging a currency to gold (or silver) would preclude (or dramatically dampen) these "economic cycles" from occurring in the first place. Fiat money is what allows the boom/bust cycle.]]> http://seekingalpha.com/article/129496-obama-helps-china-in-preparation-for-a-dollar-collapse?source=feed#comment-454801 454801

On Apr 05 10:17 AM Asbytec wrote:

> When inflation hits, the Fed and the Treasury will deal with the
> very real problem by tightening the money supply, calling in the
> massive loans, etc. Folks who say the dollar is dead seem to leave
> this part out.
]]> Tue, 07 Apr 2009 10:38:38 -0400

On Apr 05 10:17 AM Asbytec wrote:

> When inflation hits, the Fed and the Treasury will deal with the
> very real problem by tightening the money supply, calling in the
> massive loans, etc. Folks who say the dollar is dead seem to leave
> this part out.
]]> http://seekingalpha.com/article/129040-decoupling-set-to-increase?source=feed#comment-449530 449530
The problem is not a lack of money but a lack of wealth. The politicians seem to think that money and wealth are synonymous, but that is not so. Wealth is the pie; the slices of that pie are the money. More money just means smaller slices, not a bigger pie. You get a bigger pie by producing what is valued by others, but all of this so-called "stimulus" is soaking up capital (including labor) and squandering it, rather than allowing the aggregate self-interest in the free market to reallocate it to productive ends.

If production is the answer, then why is unemployment so high right now? Shouldn't some daring entrepreneurs be snapping up all the newly available workers and putting them to productive use? The answer is that labor is too expensive — for a couple of reasons. Firstly, wages were/are just as overinflated as everything else, which established an expectation among workers of certain wage rates, rates that are now unsustainable in this deleveraging environment. And secondly, the government engages in price fixing of labor via the minimum wage, which doesn't actually guarantee a decent living for everyone but rather only guarantees an irrationally high standard of living for some and unemployment for others.]]> Thu, 02 Apr 2009 13:08:57 -0400
The problem is not a lack of money but a lack of wealth. The politicians seem to think that money and wealth are synonymous, but that is not so. Wealth is the pie; the slices of that pie are the money. More money just means smaller slices, not a bigger pie. You get a bigger pie by producing what is valued by others, but all of this so-called "stimulus" is soaking up capital (including labor) and squandering it, rather than allowing the aggregate self-interest in the free market to reallocate it to productive ends.

If production is the answer, then why is unemployment so high right now? Shouldn't some daring entrepreneurs be snapping up all the newly available workers and putting them to productive use? The answer is that labor is too expensive — for a couple of reasons. Firstly, wages were/are just as overinflated as everything else, which established an expectation among workers of certain wage rates, rates that are now unsustainable in this deleveraging environment. And secondly, the government engages in price fixing of labor via the minimum wage, which doesn't actually guarantee a decent living for everyone but rather only guarantees an irrationally high standard of living for some and unemployment for others.]]> http://seekingalpha.com/article/126791-and-there-goes-the-dollar?source=feed#comment-432763 432763
> 2) Where was all this consternation about imminent currency collapse
> and Weimer hyperinflation when we started the $3 trillion Iraq and
> Afghanistan social engineering projects? Political bias?

www.mises.org/
www.lewrockwell.com/]]> Thu, 19 Mar 2009 16:33:53 -0400
> 2) Where was all this consternation about imminent currency collapse
> and Weimer hyperinflation when we started the $3 trillion Iraq and
> Afghanistan social engineering projects? Political bias?

www.mises.org/
www.lewrockwell.com/]]> http://seekingalpha.com/article/125487-where-is-the-_flation?source=feed#comment-423963 423963
With $1000 that I have today, I buy 50 shares of XYZ for $20 per share. In order to buy those shares, someone else, let's say you, have to sell them to me. So now you have my $1000, and I have your 50 shares of XYZ. A few months and a few scandals later, XYZ is trading at $5 per share. I've had enough, so I sell my 50 shares back to you for $5 per share. Your claim is that $750 was destroyed, since I had $1000 to start and only have $250 now. But you're overlooking the fact that YOU still have $750 of the $1000 that I originally paid you. So I have $250, and you have $750. That equals $1000. No money was destroyed at all!

So the stock market's plunging is not destroying any money at all. Money is merely changing hands, which is all that ever happens in the market. In order for money to be destroyed, the Federal Reserve has to sell assets and then actually eradicate the money it receives for them.

Even a borrower defaulting on a loan does not constitute destruction of money. If I borrow $1000 from you, spend it on a nice suit, and then default on my loan, the $1000 wasn't destroyed: the tailor has it now. It's a zero-sum game.

Where it becomes non-zero-sum is when the government manipulates the money supply by conjuring new dollars out of thin air or by annihilating existing dollars. Given that the only thing the Federal Reserve (which is neither federal, nor do they have any reserves) knows how to do is conjure new money, I'd say we're looking at severe inflation down the road.]]> Fri, 13 Mar 2009 00:00:01 -0400
With $1000 that I have today, I buy 50 shares of XYZ for $20 per share. In order to buy those shares, someone else, let's say you, have to sell them to me. So now you have my $1000, and I have your 50 shares of XYZ. A few months and a few scandals later, XYZ is trading at $5 per share. I've had enough, so I sell my 50 shares back to you for $5 per share. Your claim is that $750 was destroyed, since I had $1000 to start and only have $250 now. But you're overlooking the fact that YOU still have $750 of the $1000 that I originally paid you. So I have $250, and you have $750. That equals $1000. No money was destroyed at all!

So the stock market's plunging is not destroying any money at all. Money is merely changing hands, which is all that ever happens in the market. In order for money to be destroyed, the Federal Reserve has to sell assets and then actually eradicate the money it receives for them.

Even a borrower defaulting on a loan does not constitute destruction of money. If I borrow $1000 from you, spend it on a nice suit, and then default on my loan, the $1000 wasn't destroyed: the tailor has it now. It's a zero-sum game.

Where it becomes non-zero-sum is when the government manipulates the money supply by conjuring new dollars out of thin air or by annihilating existing dollars. Given that the only thing the Federal Reserve (which is neither federal, nor do they have any reserves) knows how to do is conjure new money, I'd say we're looking at severe inflation down the road.]]> http://seekingalpha.com/article/121903-u-s-economy-spending-and-phantom-financing-will-only-lead-to-ruin?source=feed#comment-399918 399918 Mon, 23 Feb 2009 10:41:14 -0500 http://seekingalpha.com/article/120796-will-silver-now-outperform-gold?source=feed#comment-391022 391022 Mon, 16 Feb 2009 16:57:58 -0500 http://seekingalpha.com/article/120757-three-potholes-on-the-road-to-economic-recovery?source=feed#comment-390998 390998 Mon, 16 Feb 2009 16:42:26 -0500 http://seekingalpha.com/article/119932-the-end-of-gold-part-three?source=feed#comment-383907 383907

On Feb 11 10:27 AM market ace wrote:

> Gold is not the answer to everything as some indicate, but anyone
> not holding some position in it is missing the boat big time. People
> also should not get too excited about gold at $5,000/oz as then a
> cup of coffee will probably be $500. Every thing in economics always
> over reacts so with all of this gov't wasteful spending inflation
> will be back big time.]]> Wed, 11 Feb 2009 10:43:12 -0500

On Feb 11 10:27 AM market ace wrote:

> Gold is not the answer to everything as some indicate, but anyone
> not holding some position in it is missing the boat big time. People
> also should not get too excited about gold at $5,000/oz as then a
> cup of coffee will probably be $500. Every thing in economics always
> over reacts so with all of this gov't wasteful spending inflation
> will be back big time.]]>