Dirk McCoy's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/308118/comments http://seekingalpha.com/article/180565/comments?source=feed#comment-833267 833267 Tue, 05 Jan 2010 00:12:24 -0500 http://seekingalpha.com/article/180557/comments?source=feed#comment-829591 829591
This would allow CRE debt repayment, low cost supply of domestic employees, and improved living standards. My guess that living on the 10th floor of a high-rise in Manhattan and cleaning apartments would be a substantially better life than dodging bullets in the Sudan.

On the other hand, a command-and-control economy that unionizes apartment cleaners and protects those jobs for Americans will assure CRE stays vacant and more Americans clean their own apartments (or they stay dirty)...]]> Sat, 02 Jan 2010 11:36:56 -0500
This would allow CRE debt repayment, low cost supply of domestic employees, and improved living standards. My guess that living on the 10th floor of a high-rise in Manhattan and cleaning apartments would be a substantially better life than dodging bullets in the Sudan.

On the other hand, a command-and-control economy that unionizes apartment cleaners and protects those jobs for Americans will assure CRE stays vacant and more Americans clean their own apartments (or they stay dirty)...]]> http://seekingalpha.com/article/178972/comments?source=feed#comment-814574 814574
Can you point me to a good web resource debunking Thomas Gold's theory that fossil fuels eminate from deep within the earth's crust- that the world is "full of oil", so to speak?

My little research so far says:

1. Gold was a genius;
2. The Russians have increased their oil output by drilling deeper;
3. The best places to find oil are near the seismic zones Gold predicted;
4. The kind of microbes Gold said could be responsible for fossil fuel synthesis have been found at the ultra-deep locations he theorized.

While I'm also not an expert here, the possibility that Gold is right is the most wishfullest of thinking- and just like hoping Y2K wouldn't be a disaster, sometimes wishful thinking combined with research can be a good thing...]]> Sun, 20 Dec 2009 12:18:33 -0500
Can you point me to a good web resource debunking Thomas Gold's theory that fossil fuels eminate from deep within the earth's crust- that the world is "full of oil", so to speak?

My little research so far says:

1. Gold was a genius;
2. The Russians have increased their oil output by drilling deeper;
3. The best places to find oil are near the seismic zones Gold predicted;
4. The kind of microbes Gold said could be responsible for fossil fuel synthesis have been found at the ultra-deep locations he theorized.

While I'm also not an expert here, the possibility that Gold is right is the most wishfullest of thinking- and just like hoping Y2K wouldn't be a disaster, sometimes wishful thinking combined with research can be a good thing...]]> http://seekingalpha.com/article/178654/comments?source=feed#comment-812540 812540
Kinda like our current administration, lol.]]> Fri, 18 Dec 2009 13:40:25 -0500
Kinda like our current administration, lol.]]> http://seekingalpha.com/article/178654/comments?source=feed#comment-812495 812495
Have you seen the latest Russian view on cherry-picking of their temperature data? I think they're going to become a lot more aggressive in selling the fossil fuels they're finding 40,000 feet deep. I'm no geologist, but my cursory review of Thomas Gold's theories (and the man himself) has me wondering if we may be further from $6/barrel oil than I thought, even if the dollar is weakened another 50% over the next few years...]]> Fri, 18 Dec 2009 13:09:54 -0500
Have you seen the latest Russian view on cherry-picking of their temperature data? I think they're going to become a lot more aggressive in selling the fossil fuels they're finding 40,000 feet deep. I'm no geologist, but my cursory review of Thomas Gold's theories (and the man himself) has me wondering if we may be further from $6/barrel oil than I thought, even if the dollar is weakened another 50% over the next few years...]]> http://seekingalpha.com/article/177391/comments?source=feed#comment-799800 799800
At the same time, there will be some very exciting new technologies that I hope government policy doesn't discourage. Central planning has never done a good job of moving resources into the right place- consider all the talk of creating more college graduates when there is a glut of them.]]> Thu, 10 Dec 2009 10:33:46 -0500
At the same time, there will be some very exciting new technologies that I hope government policy doesn't discourage. Central planning has never done a good job of moving resources into the right place- consider all the talk of creating more college graduates when there is a glut of them.]]> http://seekingalpha.com/article/175575/comments?source=feed#comment-784880 784880
The leading cause of air pollution deaths is burning of wood and dung indoors for heat in undeveloped countries. They should be developed with electricity and modern heating as soon as economically possible.

Go back 100 years and ask yourself- if (and it's still very much an if) you knew that cars and planes and electricity would cause temperatures to rise 1.4 degrees over the next 100 years- would you have passed a law to make cars and planes and electricity illegal? Why should we do that to the developing world now?

One last thing- the cloud experiment at CERN could shed some light on what's been happening, it just started up last week.]]> Tue, 01 Dec 2009 15:02:44 -0500
The leading cause of air pollution deaths is burning of wood and dung indoors for heat in undeveloped countries. They should be developed with electricity and modern heating as soon as economically possible.

Go back 100 years and ask yourself- if (and it's still very much an if) you knew that cars and planes and electricity would cause temperatures to rise 1.4 degrees over the next 100 years- would you have passed a law to make cars and planes and electricity illegal? Why should we do that to the developing world now?

One last thing- the cloud experiment at CERN could shed some light on what's been happening, it just started up last week.]]> http://seekingalpha.com/article/175607/comments?source=feed#comment-782640 782640
John, it seems you may not be as agnostic on AGW as you were- good decision given the recent and ongoing revelations of data destruction and collusion amongst the leading "warmer" scientists. While none of us know future climate for sure, empirical observations are now aligning with theoretical calculations to show that CO2 is not the primary driver of temperature, and hopefully this realization will allow us to go back to using money and price signals to make technology decisions instead of government/media wonks picking what seems coolest (and thus most pregnant with PR and donations).

Where do you see EEstore on your technology curve? I'm hoping they're just trying to sneak through the trough of disillusionment and will release something amazing, but experience tempts me to think this is just below cold fusion in hype. ]]> Mon, 30 Nov 2009 10:33:50 -0500
John, it seems you may not be as agnostic on AGW as you were- good decision given the recent and ongoing revelations of data destruction and collusion amongst the leading "warmer" scientists. While none of us know future climate for sure, empirical observations are now aligning with theoretical calculations to show that CO2 is not the primary driver of temperature, and hopefully this realization will allow us to go back to using money and price signals to make technology decisions instead of government/media wonks picking what seems coolest (and thus most pregnant with PR and donations).

Where do you see EEstore on your technology curve? I'm hoping they're just trying to sneak through the trough of disillusionment and will release something amazing, but experience tempts me to think this is just below cold fusion in hype. ]]> http://seekingalpha.com/article/175060/comments?source=feed#comment-777042 777042
Truth is, taxes will go up. But government spending will moderate, and entitlements will be restructured (first, mammograms, we'll see what's next). And interest rates will stay low. The Fed can print a lot of money, inflation in US labor and services is a long, long way away. Gold and oil will continue to rise, but those are not the majority of expenses for the majority of Americans.]]> Wed, 25 Nov 2009 09:59:51 -0500
Truth is, taxes will go up. But government spending will moderate, and entitlements will be restructured (first, mammograms, we'll see what's next). And interest rates will stay low. The Fed can print a lot of money, inflation in US labor and services is a long, long way away. Gold and oil will continue to rise, but those are not the majority of expenses for the majority of Americans.]]> http://seekingalpha.com/article/171204/comments?source=feed#comment-746031 746031
1. It wouldn't do much to raise actual bank lending rates since most of them are pegged much higher;
2. It would slow bank profits, which, given banks aren't making use of reserves to lend isn't so bad;
3. It would show the Fed isn't totally abdicating an anti-inflation stance;
4. It would be a reversal of the 2002-2006 debacle, where the Fed waited too long, and then started an inexorable march upward that eventually spooked anyone with an adjustable rate mortgage or line of credit (a big part of the economy);
5. It could creat a short term swirl of activity that would blow over, creating more long term confidence.

The worst thing the Fed could do is nothing for a year, and then jack rates back up to above 5% (assuming long term rates stay under 6).

And the worst thing our government could do is take advantage of low rates and debt monetization (to the extent there is any) by spending more of it on more "stimulus". Print more money, but use it to lower debt.]]> Thu, 05 Nov 2009 08:42:13 -0500
1. It wouldn't do much to raise actual bank lending rates since most of them are pegged much higher;
2. It would slow bank profits, which, given banks aren't making use of reserves to lend isn't so bad;
3. It would show the Fed isn't totally abdicating an anti-inflation stance;
4. It would be a reversal of the 2002-2006 debacle, where the Fed waited too long, and then started an inexorable march upward that eventually spooked anyone with an adjustable rate mortgage or line of credit (a big part of the economy);
5. It could creat a short term swirl of activity that would blow over, creating more long term confidence.

The worst thing the Fed could do is nothing for a year, and then jack rates back up to above 5% (assuming long term rates stay under 6).

And the worst thing our government could do is take advantage of low rates and debt monetization (to the extent there is any) by spending more of it on more "stimulus". Print more money, but use it to lower debt.]]> http://seekingalpha.com/article/170526/comments?source=feed#comment-742384 742384
One factor being overlooked- the tax law changes of 1997 significantly increased the capital gains exemption for houses, creating a short term boost in after-tax earning potential that supercharged the trend.

My guess is that in areas where supply and demand are reasonably balanced, the bottom is in now. In areas where job creation/destruction and taxes force ongoing exodus, another 20% fall is quite possible. The key will be for homebuyers to figure out which areas are which- and for homeowners to take some action vis a vis their taxes...]]> Tue, 03 Nov 2009 11:20:15 -0500
One factor being overlooked- the tax law changes of 1997 significantly increased the capital gains exemption for houses, creating a short term boost in after-tax earning potential that supercharged the trend.

My guess is that in areas where supply and demand are reasonably balanced, the bottom is in now. In areas where job creation/destruction and taxes force ongoing exodus, another 20% fall is quite possible. The key will be for homebuyers to figure out which areas are which- and for homeowners to take some action vis a vis their taxes...]]> http://seekingalpha.com/article/170295/comments?source=feed#comment-741163 741163
On the other hand, technology and regulatory structure could make it so we all just work and vacation in cyberspace, and no one has to travel anywhere.

The question- which is the future? And should it be decided by a marketplace, or elected officials? If the marketplace, then pilot salaries will continue to drop as technology and labor availability conspire to make qualified pilots less scarce relative to demand. If elected officials- then get ready for thousands of more articles like this touting pilots, planes, travel, cyberspace, CO2, and every possible factor regarding air transport...]]> Mon, 02 Nov 2009 16:52:15 -0500
On the other hand, technology and regulatory structure could make it so we all just work and vacation in cyberspace, and no one has to travel anywhere.

The question- which is the future? And should it be decided by a marketplace, or elected officials? If the marketplace, then pilot salaries will continue to drop as technology and labor availability conspire to make qualified pilots less scarce relative to demand. If elected officials- then get ready for thousands of more articles like this touting pilots, planes, travel, cyberspace, CO2, and every possible factor regarding air transport...]]> http://seekingalpha.com/article/170519/comments?source=feed#comment-740679 740679
But, please, don't discount future costs of programs without discounting future benefits- it's like telling someone they've just lost a million dollars because they just had a child and have to pay for food, housing, clothing, tuition, cars, vacations.... The prescription drug program net present cost may be $8.7 Trillion, but the net benefit may be considerably more if those drugs prevent heart transplants and lost work hours- and the cost may come down as economies of scale allow lower cost development and manufacture of drugs.

As for inflation and fiat dollars, the focus should be on the infinitely larger fiat CREDIT expansion- and contraction. Reigning in leverage- while monetizing some of the debt to make repayment easier while punishing those in the money who allowed credit to grow as it did- is more important than trying to affix money creation to a single precious metal (or some other standard that would take the "fiat" out of fiat currency).]]> Mon, 02 Nov 2009 13:16:21 -0500
But, please, don't discount future costs of programs without discounting future benefits- it's like telling someone they've just lost a million dollars because they just had a child and have to pay for food, housing, clothing, tuition, cars, vacations.... The prescription drug program net present cost may be $8.7 Trillion, but the net benefit may be considerably more if those drugs prevent heart transplants and lost work hours- and the cost may come down as economies of scale allow lower cost development and manufacture of drugs.

As for inflation and fiat dollars, the focus should be on the infinitely larger fiat CREDIT expansion- and contraction. Reigning in leverage- while monetizing some of the debt to make repayment easier while punishing those in the money who allowed credit to grow as it did- is more important than trying to affix money creation to a single precious metal (or some other standard that would take the "fiat" out of fiat currency).]]> http://seekingalpha.com/article/170514/comments?source=feed#comment-740657 740657
Most of your ideas would work well after that. I don't see how people don't understand a public option will do to private healthcare what public schools did to education- force the vast majority into a system with higher costs, less choice, and uneven quality. ]]> Mon, 02 Nov 2009 13:04:56 -0500
Most of your ideas would work well after that. I don't see how people don't understand a public option will do to private healthcare what public schools did to education- force the vast majority into a system with higher costs, less choice, and uneven quality. ]]> http://seekingalpha.com/article/170419/comments?source=feed#comment-740430 740430
As for the bank foreclosure numbers forcing this number higher, don't overlook the significant sales in the low end of the market this year. Many first time homebuyers (and others) took advantage of the tax credit.

And it's been obvious for over two years that the housing market could precipitate a collapse of the entire economy (based not only on asset bubble collapse but a total loss in confidence in trade and money). The question- "what to do about it?"- was the subject of a few of my articles, and while the Fed has not monetized as much debt as I would have liked, they have at least created the impression that they were going to. Now that the dollar is falling, labor rates stagnating, commodity prices rising- the US has a better chance to work to pay off its debt- as long as we don't create a non-productive nanny state.]]> Mon, 02 Nov 2009 11:29:43 -0500
As for the bank foreclosure numbers forcing this number higher, don't overlook the significant sales in the low end of the market this year. Many first time homebuyers (and others) took advantage of the tax credit.

And it's been obvious for over two years that the housing market could precipitate a collapse of the entire economy (based not only on asset bubble collapse but a total loss in confidence in trade and money). The question- "what to do about it?"- was the subject of a few of my articles, and while the Fed has not monetized as much debt as I would have liked, they have at least created the impression that they were going to. Now that the dollar is falling, labor rates stagnating, commodity prices rising- the US has a better chance to work to pay off its debt- as long as we don't create a non-productive nanny state.]]> http://seekingalpha.com/article/168697/comments?source=feed#comment-734014 734014
On the other hand, should their brand falter (I never understood why Macs are less susceptible to viruses...), AAPL would falter as well. Given none of us here know if AAPL will be a Coke- or a GM- means that at some point, you'll want to exit the stock based on your risk profile. As long as AAPL is on a winning streak, their shares will do well, but a serious stumble could set the stock back by 100 points, sure. ]]> Wed, 28 Oct 2009 11:50:01 -0400
On the other hand, should their brand falter (I never understood why Macs are less susceptible to viruses...), AAPL would falter as well. Given none of us here know if AAPL will be a Coke- or a GM- means that at some point, you'll want to exit the stock based on your risk profile. As long as AAPL is on a winning streak, their shares will do well, but a serious stumble could set the stock back by 100 points, sure. ]]> http://seekingalpha.com/article/169238/comments?source=feed#comment-733988 733988
What is the optimal solution? Monetization. This makes it easier to pay back debt, while punishing those who gave out too much credit. The risk is inflation, which will reduce living standards- especially if social security, welfare, and minimum wage entitlements aren't indexed.

But shouldn't this be the fate of those who borrow more than they can repay? And technology, increased global production capacity, and recognition of the fairness of living within one's means (no matter how meager) can mitigate the worst effects of this shift upon the national psyche.]]> Wed, 28 Oct 2009 11:30:57 -0400
What is the optimal solution? Monetization. This makes it easier to pay back debt, while punishing those who gave out too much credit. The risk is inflation, which will reduce living standards- especially if social security, welfare, and minimum wage entitlements aren't indexed.

But shouldn't this be the fate of those who borrow more than they can repay? And technology, increased global production capacity, and recognition of the fairness of living within one's means (no matter how meager) can mitigate the worst effects of this shift upon the national psyche.]]> http://seekingalpha.com/article/168423/comments?source=feed#comment-726848 726848
1. What happens if global temperatures continue to cool?
2. What happens if Briffa fails to adequately address the Yamal controversy (perhaps on Capital Hill, a la Mann)?
3. What happens if the Senate refuses to ratify a climate change treaty or cap and trade?
4. What happens if conservation efforts and technology meet up to push Peak Fossil event out another 100 years?
5. What happens if there is a serious grid event triggered by wind power variability?

I'm a solar believer- but timing is everything, and just like investing in 8% efficient solar would have been a mistake when Jimmy Carter proposed it, I don't believe investing huge sums in current renewables technology in the US today is the best use of global capital- especially if events turn from the perfect storm of government and big business conspiring around the flag of CO2 reduction before consumers understand the economic impact. There is a need for energy expansion around the world- are our actions helping or hurting US companies' ability to participate in that growth?

BTW, there were a couple folks on that TV show whose livlihoods depend on the impression that a climate disaster is imminent- could it be they are they in denial? Have you googled "Yamal trees" and understand the significance of that recent development yet?]]> Fri, 23 Oct 2009 09:54:26 -0400
1. What happens if global temperatures continue to cool?
2. What happens if Briffa fails to adequately address the Yamal controversy (perhaps on Capital Hill, a la Mann)?
3. What happens if the Senate refuses to ratify a climate change treaty or cap and trade?
4. What happens if conservation efforts and technology meet up to push Peak Fossil event out another 100 years?
5. What happens if there is a serious grid event triggered by wind power variability?

I'm a solar believer- but timing is everything, and just like investing in 8% efficient solar would have been a mistake when Jimmy Carter proposed it, I don't believe investing huge sums in current renewables technology in the US today is the best use of global capital- especially if events turn from the perfect storm of government and big business conspiring around the flag of CO2 reduction before consumers understand the economic impact. There is a need for energy expansion around the world- are our actions helping or hurting US companies' ability to participate in that growth?

BTW, there were a couple folks on that TV show whose livlihoods depend on the impression that a climate disaster is imminent- could it be they are they in denial? Have you googled "Yamal trees" and understand the significance of that recent development yet?]]> http://seekingalpha.com/article/164957/comments?source=feed#comment-704840 704840
And at $150/barrel, the rest of the world will not develop transportation infrastructure like we have. They weren't at $30/barrel oil. So coal (lots of it, because it's increasingly clearer that the wheels are falling off the AGW wagon) and natural gas will do the heavy lifting for the emerging electric car industry over the next 30 years while solar technology is further developed and can come in at $.05/kwh (in current dollars) to power the world for centuries to come using silicon made from sand.

And we're not running out of sand, or people to convert and install it, anytime soon. Meanwhile, shale and lots of other sources of oil become quite viable at $100/barrel. So while there may be short term shocks (even Britney Spears still sells some albums at higher than I think rational prices), I don't see $200 oil and massive push cost inflation, especially given the excess labor floating around the world.]]> Tue, 06 Oct 2009 09:09:49 -0400
And at $150/barrel, the rest of the world will not develop transportation infrastructure like we have. They weren't at $30/barrel oil. So coal (lots of it, because it's increasingly clearer that the wheels are falling off the AGW wagon) and natural gas will do the heavy lifting for the emerging electric car industry over the next 30 years while solar technology is further developed and can come in at $.05/kwh (in current dollars) to power the world for centuries to come using silicon made from sand.

And we're not running out of sand, or people to convert and install it, anytime soon. Meanwhile, shale and lots of other sources of oil become quite viable at $100/barrel. So while there may be short term shocks (even Britney Spears still sells some albums at higher than I think rational prices), I don't see $200 oil and massive push cost inflation, especially given the excess labor floating around the world.]]> http://seekingalpha.com/article/163934/comments?source=feed#comment-696705 696705
We will never run out of oil because, at some point, we'll have converted so much sand (which we won't run out of any time soon) into solar panels that it will be cheaper than $200 oil- and the oil that's left will rot in the ground.]]> Wed, 30 Sep 2009 09:43:22 -0400
We will never run out of oil because, at some point, we'll have converted so much sand (which we won't run out of any time soon) into solar panels that it will be cheaper than $200 oil- and the oil that's left will rot in the ground.]]> http://seekingalpha.com/article/163919/comments?source=feed#comment-696666 696666
But what he's wrong about is that this will mean a collapse of capitalism. These things will happen because market forces will make it so. A US engineer earning 6X what one in India earns is not sustainable. But just because living standards go up in India does not mean they have to go down in the US- unless Obama and his union pals try to remove us from the global economy, in which case the rest of the world will boom while we stagnate.

While I appreciate tedstr's comment about most of our money being spent on US purchases, let me remind that a typical 1980's Soviet spent most of their money on domestic purchases. But a socialist economy ends up not having as much to buy. Capitalism will fail only if we let it.]]> Wed, 30 Sep 2009 09:15:24 -0400
But what he's wrong about is that this will mean a collapse of capitalism. These things will happen because market forces will make it so. A US engineer earning 6X what one in India earns is not sustainable. But just because living standards go up in India does not mean they have to go down in the US- unless Obama and his union pals try to remove us from the global economy, in which case the rest of the world will boom while we stagnate.

While I appreciate tedstr's comment about most of our money being spent on US purchases, let me remind that a typical 1980's Soviet spent most of their money on domestic purchases. But a socialist economy ends up not having as much to buy. Capitalism will fail only if we let it.]]> http://seekingalpha.com/article/161845/comments?source=feed#comment-680628 680628
Funny that China's central planners accomplished the same thing with their coastal cities.

But rather than looking at it as "taking our jobs", look at it as expansion. Chinese, Indians, Eastern Europeans have joined us in the capitalist model- why shouldn't they be rewarded with jobs?

I think monetary policy, lack of vision, and a scarcity mentality have kept us from realizing that expansion is good, that a better living standard for other states/countries is good, and that a rising tide can lift all boats.

As for the idea that we have too many people for the jobs we have, ask yourself this- if money was no object, would you buy anything? The answer would tell you that a lot of construction workers would be building swimming pools and extra garages, that a lot of car workers would be selling some sweet convertables, that a lot of scrap dealers would be coming up with the metals for that, that a lot of solar installers and utility workers would be figuring out how to come up with more energy, and that there would need to be more quality steakhouses, restaurants, and live theater. And then perhaps more planes and boats to carry people to do missionary work when they've realized all the stuff in the world doesn't mean that much anyway.

Don't fall into the trap of the modern central planners who tell you we'll run out of energy, we'll run out of food, we'll run out of - what, land? if we let our economy keep growing.]]> Thu, 17 Sep 2009 10:46:29 -0400
Funny that China's central planners accomplished the same thing with their coastal cities.

But rather than looking at it as "taking our jobs", look at it as expansion. Chinese, Indians, Eastern Europeans have joined us in the capitalist model- why shouldn't they be rewarded with jobs?

I think monetary policy, lack of vision, and a scarcity mentality have kept us from realizing that expansion is good, that a better living standard for other states/countries is good, and that a rising tide can lift all boats.

As for the idea that we have too many people for the jobs we have, ask yourself this- if money was no object, would you buy anything? The answer would tell you that a lot of construction workers would be building swimming pools and extra garages, that a lot of car workers would be selling some sweet convertables, that a lot of scrap dealers would be coming up with the metals for that, that a lot of solar installers and utility workers would be figuring out how to come up with more energy, and that there would need to be more quality steakhouses, restaurants, and live theater. And then perhaps more planes and boats to carry people to do missionary work when they've realized all the stuff in the world doesn't mean that much anyway.

Don't fall into the trap of the modern central planners who tell you we'll run out of energy, we'll run out of food, we'll run out of - what, land? if we let our economy keep growing.]]> http://seekingalpha.com/article/161845/comments?source=feed#comment-679516 679516 Wed, 16 Sep 2009 14:33:28 -0400 http://seekingalpha.com/article/161824/comments?source=feed#comment-679510 679510
By focusing law enforcement on those who defraud (Madoffs) or are willfully negligent (rating agencies), we can create an environment where honest businesspeople who want to make money via creative interests- including properly guaging fat tail risk and mitigating it because it can cause them to lose their money and their reputations.

But regulation that just creates more barrier to entry, higher operating costs, and fear that elected (or appointed) officials will be in position to "pick winners" will only serve to damage our economy. Take a look at Africa and their top down "regulation" of their economies to see just how damaging this can be.]]> Wed, 16 Sep 2009 14:28:53 -0400
By focusing law enforcement on those who defraud (Madoffs) or are willfully negligent (rating agencies), we can create an environment where honest businesspeople who want to make money via creative interests- including properly guaging fat tail risk and mitigating it because it can cause them to lose their money and their reputations.

But regulation that just creates more barrier to entry, higher operating costs, and fear that elected (or appointed) officials will be in position to "pick winners" will only serve to damage our economy. Take a look at Africa and their top down "regulation" of their economies to see just how damaging this can be.]]> http://seekingalpha.com/article/161184/comments?source=feed#comment-676274 676274
The effect of price stickiness and controls (minimum wage, managers unwilling to lower prices) will translate to decreased utilization and lower economic activity.

I think the wildcard is energy- if natural gas and oil prices go up, that will force some inflation in many things. If US labor is not allowed to depreciate, that will cause both inflation and reduced utilization. ]]> Mon, 14 Sep 2009 14:51:59 -0400
The effect of price stickiness and controls (minimum wage, managers unwilling to lower prices) will translate to decreased utilization and lower economic activity.

I think the wildcard is energy- if natural gas and oil prices go up, that will force some inflation in many things. If US labor is not allowed to depreciate, that will cause both inflation and reduced utilization. ]]> http://seekingalpha.com/article/160898/comments?source=feed#comment-671399 671399
As living standards continue to go up worldwide (as free trade and technology enable the continued march towards greater productivity) why wouldn't we spend more money on feeling better and living longer?

But there are better ways to assure people get healthcare than create a healthcare version of public schools where thousands of dollars are confiscated and then the "free" option becomes the (nearly) only game in town. If Congress would enable school vouchers, perhaps I'd have more confidence that a public option won't eventually create a subsidized, inefficient bureacracy that doesn't offer choice as some central planning authority determines we're spending "too much" on healthcare...]]> Thu, 10 Sep 2009 21:37:40 -0400
As living standards continue to go up worldwide (as free trade and technology enable the continued march towards greater productivity) why wouldn't we spend more money on feeling better and living longer?

But there are better ways to assure people get healthcare than create a healthcare version of public schools where thousands of dollars are confiscated and then the "free" option becomes the (nearly) only game in town. If Congress would enable school vouchers, perhaps I'd have more confidence that a public option won't eventually create a subsidized, inefficient bureacracy that doesn't offer choice as some central planning authority determines we're spending "too much" on healthcare...]]> http://seekingalpha.com/article/160408/comments?source=feed#comment-667855 667855
1. The results of the capitalism vs. communism experiments said capitalism was superior;
2. The results of the price controls and central planning experiments said they would, over time, create serious problems;
3. Controlling the money supply and targeting minor inflation yielded moderate growth;

What the geniuses haven't processed yet:

1. After communism was discredited, the addition of a couple billion Chinese, Indians, and Eastern Europeans to global labor markets created a massive labor shock;
2. Automation and this labor shock meant a lot of jobs were created in tech, but after the tech bust of 2001, housing was the main area of opportunity and growth in the US- requiring massive leverage;
3. The Fed rate increases (from 2% to 6%) caused the price of this leverage to go above what consumers and business people thought they could afford, and as rational actors, they stopped buying and started selling;
4. This started a negative credit cycle that is still proceeding globablly, creating massive deflation in housing and wealth that have supressed spending and created a depression.

A free market Austrian looks at 2 billion people still to be added to the global labor and consumer pools and technology and says a new business cycle will soon create strong growth. A monetarist looks at this growth and says money needs to be created to assure price stability so as to avoid money hording and foster investment.

But a political Keynesian like Krugemen figures there is a significant voting block that wants wealth redistribution now, and the levers of government must be applied via taxes and spending to accomplish these goals- markets be damned.

This is the same kind of politics-first thinking Leonid Brezhnev used to keep Soviets living in sub-par conditions, and the rest of the Communist world in abject poverty, long after the results of the central planning experiments were in. ]]> Wed, 09 Sep 2009 09:07:55 -0400
1. The results of the capitalism vs. communism experiments said capitalism was superior;
2. The results of the price controls and central planning experiments said they would, over time, create serious problems;
3. Controlling the money supply and targeting minor inflation yielded moderate growth;

What the geniuses haven't processed yet:

1. After communism was discredited, the addition of a couple billion Chinese, Indians, and Eastern Europeans to global labor markets created a massive labor shock;
2. Automation and this labor shock meant a lot of jobs were created in tech, but after the tech bust of 2001, housing was the main area of opportunity and growth in the US- requiring massive leverage;
3. The Fed rate increases (from 2% to 6%) caused the price of this leverage to go above what consumers and business people thought they could afford, and as rational actors, they stopped buying and started selling;
4. This started a negative credit cycle that is still proceeding globablly, creating massive deflation in housing and wealth that have supressed spending and created a depression.

A free market Austrian looks at 2 billion people still to be added to the global labor and consumer pools and technology and says a new business cycle will soon create strong growth. A monetarist looks at this growth and says money needs to be created to assure price stability so as to avoid money hording and foster investment.

But a political Keynesian like Krugemen figures there is a significant voting block that wants wealth redistribution now, and the levers of government must be applied via taxes and spending to accomplish these goals- markets be damned.

This is the same kind of politics-first thinking Leonid Brezhnev used to keep Soviets living in sub-par conditions, and the rest of the Communist world in abject poverty, long after the results of the central planning experiments were in. ]]> http://seekingalpha.com/article/160279/comments?source=feed#comment-666451 666451
But if we're too stupid to learn, then I guess the suffering will be fair in itself...]]> Tue, 08 Sep 2009 11:16:24 -0400
But if we're too stupid to learn, then I guess the suffering will be fair in itself...]]> http://seekingalpha.com/article/160310/comments?source=feed#comment-666091 666091
To make real this point, consider the number of hours a minimum wage worker had to work in 1950 to buy 10 gallons of milk, an outfit, a plane ticket to Florida, a television, and a course of antibiotics. You'll see it's significantly fewer hours now. ]]> Tue, 08 Sep 2009 09:01:11 -0400
To make real this point, consider the number of hours a minimum wage worker had to work in 1950 to buy 10 gallons of milk, an outfit, a plane ticket to Florida, a television, and a course of antibiotics. You'll see it's significantly fewer hours now. ]]> http://seekingalpha.com/article/159833/comments?source=feed#comment-661584 661584
Eventually, something gives. As it does, there will be price inflation in raw materials, especially those that aren't substituted, further price deflation in labor and assets, and further economic angst. Each side (inflationistas and deflationists) will look at specific cases and squeel about Fed policy.

The question you really need to ask yourself- outside of if one or two trillion of Fed stimulus is going to offset $20 Trillion of lost credit (hmm, that would be a no, especially if the Fed increases short term rates) is how substitutable are gold, oil, iron, copper, lumber, and grain?

Gold is not the only source of money or beauty (though it is for the gold bugs, so it should rise), oil is not the only source of energy (especially at $100/barrel, but that will take time, so it should rise), iron is not the only source of steel (we will recycle more steel from cars than use it this year), copper is not the only source of connection (copper-coated aluminum or wireless, anyone?), lumber is not the only source of housing (lots and lots of commerical real estate will be converted to housing), and grain is not the only source of food (if technology, Africa, and former Soviet states step up, this is one area where we could see deflation). Meanwhile, labor-intense services (healthcare, entertainment, beauty, legal, reporting, education) should see relative price decreases. How much does it cost to download a song or read a news article today?

So, there will be some inflation- which will be a good thing, because it will mean there is demand on a global scale and the three billion people living on less than $2.50 a day may have a chance at a better lifestyle. And there will be deflation as well, because there are a couple billion more low cost workers looking to get in on the action. Increasing the global money supply to account for all this new economic activity is a reasonable approach.]]> Fri, 04 Sep 2009 09:23:43 -0400
Eventually, something gives. As it does, there will be price inflation in raw materials, especially those that aren't substituted, further price deflation in labor and assets, and further economic angst. Each side (inflationistas and deflationists) will look at specific cases and squeel about Fed policy.

The question you really need to ask yourself- outside of if one or two trillion of Fed stimulus is going to offset $20 Trillion of lost credit (hmm, that would be a no, especially if the Fed increases short term rates) is how substitutable are gold, oil, iron, copper, lumber, and grain?

Gold is not the only source of money or beauty (though it is for the gold bugs, so it should rise), oil is not the only source of energy (especially at $100/barrel, but that will take time, so it should rise), iron is not the only source of steel (we will recycle more steel from cars than use it this year), copper is not the only source of connection (copper-coated aluminum or wireless, anyone?), lumber is not the only source of housing (lots and lots of commerical real estate will be converted to housing), and grain is not the only source of food (if technology, Africa, and former Soviet states step up, this is one area where we could see deflation). Meanwhile, labor-intense services (healthcare, entertainment, beauty, legal, reporting, education) should see relative price decreases. How much does it cost to download a song or read a news article today?

So, there will be some inflation- which will be a good thing, because it will mean there is demand on a global scale and the three billion people living on less than $2.50 a day may have a chance at a better lifestyle. And there will be deflation as well, because there are a couple billion more low cost workers looking to get in on the action. Increasing the global money supply to account for all this new economic activity is a reasonable approach.]]>