The Financial Crisis: Bailouts, Failures and Death Panels [View article]
I rather enjoyed Bastiat's "That Which Is Seen And That Which Is Not Seen", as well as Hazlitt's "Economics In One Lesson". Isn't it interesting that we reached different conclusions with regard to their intent?
Halving Petroleum Price Subsidies Could Cut Greenhouse Gas Emissions by 15% [View article]
This is misleading.
Halving petroleum subsidies could reduce human CO2 emissions. Let's say you reduce human CO2 emissions by 15%. Humans account for less than 5% of all CO2 emissions. CO2 accounts for less than 15% of all GHG's.
Therefore, if one is able to reduce human CO2 emissions by 15%; then the total GHG emission reduction is more like 0.15 x 0.15 x 0.05 = 0.001125 or 0.1125% of GHG emissions.
China and U.S. Debt: Between a Rock and a Hard Place [View article]
This is the point I was going to bring up; but you beat me to it. It doesn't really matter if Mr. Krasting bought his "crap" from them-- they still do not HAVE to recycle those dollars back to us, right? Will we get some? Probably. Do we HAVE to get all? No.
A quick search for "China+Resource+[resource name OR country]" confirms his point.
The U.S. mint (a part of the Treasury) actually does the printing. The Fed usually just adds binary bits as a computer entry. When bills are actually printed, they have already been accounted for in the money supply, I believe. There are alot more zeros and ones in the ether than there are bills in circulation.
The video link I posted earlier is a pretty good watch for those interested in understanding the dynamics of money creation, treasuries and the Fed. I found the entire "Crash Course" set to be very informative...
The reason people worry about printing little pieces of paper is that it is not necessarily money. No one works for money. It is the conditioned reinforcer. Everybody wants "things". That's why we trade our little pieces of paper away almost as fast as we can get them. No one buys things with little pieces of paper-- they trade for other things. The paper is just a medium of exchange that is used to overcome the "double coincidence of wants" inherent in a direct barter system. If "money" is just printed and handed to you, would you go to work? If you take your new "money" to the store, would it be open? Heck no, they got their printed money and no longer need to work. Everyone has more pieces of paper; but no goods were produced to offset the increase in supply. Saudi Arabia doesn't trade us barrels of one of the most valuable commodities in existence because they like little pictures of George Washington. They trade with us because we produced things that those little pieces of paper can be used to obtain. If we produce no things, what is the currency supported by?
I think it is relevant to point out that the National Debt is comprised of two parts-- Publicly Held Debt (which is holders of Treasuries) and Intragovernmental Debt (which is usually the part people refer to when mentioning we only owe it to ourselves.)
www.youtube.com/watch?... Treasuries can be owned domestically or by foreign entities. All holders will want to be paid back. (Usually with FRN's backed by production-- not just green toner.) The Intragovernmental Debt, in my understanding, is where the excess holdings for the two trust funds were held. All of the money has been "borrowed" and now we owe it back to ourselves. The sweet little old ladies that paid into these two funds will want their benefits paid to them in retirement. They will want their money back. So, as the author points out, the arbitrary designations are meaningless.
It is also prudent to mention that the NPV shortfalls to the two biggies (Medicare and Social Security) are not calculated in the "National Debt" and, depending on whose numbers you use, indicate an additional $55 to 85 Trillion dollars that will need to be "created" or hopefully "produced".
Notice that in several instances, the Fed has taken a "backdoor approach" to monetizing the debt by not buying Treasuries directly; but by purchasing "assets" like MBS and then the seller of these MBS assets uses their newfound money to purchase Treasuries. The Fed gets to claim it's not monetizing the debt; but the money to buy the Treasuries did come from them.
Column A is Social Security and the Dept of Health and Human Services. Column B is the DOD and Homeland Security. Interest is interest. The percentages are of expenditures per total revenues (not expenditures).
Not very many pennies left (if any) out of every dollar to spend on such "Discretionary" things like the Dept of Energy, Education, Labor, Transportation, etc, etc, etc. This ain't rocket surgery...
U.S. Unemployment - Worse than It Looks? [View article]
I recently came across an article statistically extrapolating the U6 data for the Great Depression era. While the numbers look a little dubious, the author managed to draw the conclusion that U6 peaked at @36% in the 1930's. Curiously, I noted that the right axis (time) shows our U6 to be higher now than at the comparable timescale for the Great Depression (17+ vs 16+).
And MHFT knows exactly how GDP can increase while consumer spending is declining-- the "G" in I+C+G+(X-M).
Obama and the Stock Market: From Buy the Bottom to Sell the Top? [View article]
There is a difference between intelligence and wisdom.
The "right things intellectually" usually require the support of government. "It is error alone which needs the support of government. Truth can stand by itself." Jefferson
The "smart advisors and appointees" the President "has surrounded himself with" are the same old same old, tired, corrupt, proven failures that have been making mistake after mistake for at least five Presidential terms now. But we were expecting something different? "Beware of politicians with nifty logos..."
"We have tried spending money. We are spending more than we have ever spent before and it does not work. We have never made good on our promises... I say after eight years of this administration we have just as much unemployment as when we started... And an enormous debt to boot." Morgenthau
"The statesman who should attempt to direct private people in what manner they ought to deploy their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." Smith
The anti-capitalists have had their run-- nearly a century. They have failed here in that time. They have failed every government on every continent in every period of human civilization. Let's try something different.
"A program whose basic thesis is, not that the system of free enterprise for profit has failed in this generation, but that it has not yet been tried." FDR
The Federal govt plans on spending every penny of revenues it receives. Tax receipts are generally down; so revenues are down. No one has raised taxes enough to generate more revenues-- so they are what they are. We will spend every penny of them.
Then, the Federal govt will auction off a record amount of Treasuries to borrow and refinance more debt on top of a record level of debt (Total Credit Market/GDP). They will spend every penny the entire world gives them. Any of us are free to loan them money. www.treasurydirect.gov...
On top of this, the Fed has invoked QE, to spend even more money. (Inflation? What inflation? Just ignore the price of food, energy, healthcare that you pay ever-increasing spot prices for on a daily basis; or compare that that to all the equity you are losing in your homes and assets-- things you already own-- and hey! there's no inflation!)
And the problem must be interpreted as we are not spending enough? No mention of the preceding credit expansion? To levels per income far exceeding historical norms? The Great Depression just "started"in 1929? Oh yeah-- "Animal Spirits..."
Grading Obama's Economic Policy Thus Far [View article]
Good article Mr. Harrison.
I concur with the theme that this is no ordinary inventory-driven recession and am reminded of one of Mises' quotes. While it would certainly be nice to click the heels of our ruby red slippers together while chanting "There's no place like the status quo", it would appear we are rapidly reducing our choices to two: Voluntary austerity or Involuntary austerity.
A society where grown women fight in the floors of department stores over a shortage of cabbage patch kids; where disillusionment is caused by the discovery of a professional athlete cheating on his wife; where hardship is defined by lack of 3G coverage for an iPhone-- is not ready for true adversity. But, for now, let's enjoy the "recovery".
Former Fed Vice Chairman vs. Mish: Is the Fed Out of Ammo? [View article]
The Financial Crisis: Bailouts, Failures and Death Panels [View article]
U.S. Dollar Takes a Hit Thanks to Personnel Changes at the Fed [View article]
Halving Petroleum Price Subsidies Could Cut Greenhouse Gas Emissions by 15% [View article]
Halving petroleum subsidies could reduce human CO2 emissions. Let's say you reduce human CO2 emissions by 15%. Humans account for less than 5% of all CO2 emissions. CO2 accounts for less than 15% of all GHG's.
Therefore, if one is able to reduce human CO2 emissions by 15%; then the total GHG emission reduction is more like
0.15 x 0.15 x 0.05 = 0.001125 or 0.1125% of GHG emissions.
More Greek Debt Won't Smooth Over the Crisis [View article]
China and U.S. Debt: Between a Rock and a Hard Place [View article]
A quick search for "China+Resource+[resource name OR country]" confirms his point.
Correcting National Debt Myths [View article]
The video link I posted earlier is a pretty good watch for those interested in understanding the dynamics of money creation, treasuries and the Fed. I found the entire "Crash Course" set to be very informative...
The reason people worry about printing little pieces of paper is that it is not necessarily money. No one works for money. It is the conditioned reinforcer. Everybody wants "things". That's why we trade our little pieces of paper away almost as fast as we can get them. No one buys things with little pieces of paper-- they trade for other things. The paper is just a medium of exchange that is used to overcome the "double coincidence of wants" inherent in a direct barter system. If "money" is just printed and handed to you, would you go to work? If you take your new "money" to the store, would it be open? Heck no, they got their printed money and no longer need to work. Everyone has more pieces of paper; but no goods were produced to offset the increase in supply. Saudi Arabia doesn't trade us barrels of one of the most valuable commodities in existence because they like little pictures of George Washington. They trade with us because we produced things that those little pieces of paper can be used to obtain. If we produce no things, what is the currency supported by?
Correcting National Debt Myths [View article]
www.youtube.com/watch?...
Treasuries can be owned domestically or by foreign entities. All holders will want to be paid back. (Usually with FRN's backed by production-- not just green toner.) The Intragovernmental Debt, in my understanding, is where the excess holdings for the two trust funds were held. All of the money has been "borrowed" and now we owe it back to ourselves. The sweet little old ladies that paid into these two funds will want their benefits paid to them in retirement. They will want their money back. So, as the author points out, the arbitrary designations are meaningless.
It is also prudent to mention that the NPV shortfalls to the two biggies (Medicare and Social Security) are not calculated in the "National Debt" and, depending on whose numbers you use, indicate an additional $55 to 85 Trillion dollars that will need to be "created" or hopefully "produced".
Notice that in several instances, the Fed has taken a "backdoor approach" to monetizing the debt by not buying Treasuries directly; but by purchasing "assets" like MBS and then the seller of these MBS assets uses their newfound money to purchase Treasuries. The Fed gets to claim it's not monetizing the debt; but the money to buy the Treasuries did come from them.
The Real Truth About the Deficit [View article]
A B Interest A+B+I
FY2002 52% 18% 18% 88%
FY2003 57% 24% 18% 99%
FY2004 57% 25% 17% 99%
FY2005 53% 24% 16% 93%
FY2006 50% 24% 17% 91%
FY2007 50% 22% 17% 89%
FY2008 54% 25% 18% 97%
FY2009 72% 33% 19% 124%
Not very many pennies left (if any) out of every dollar to spend on such "Discretionary" things like the Dept of Energy, Education, Labor, Transportation, etc, etc, etc. This ain't rocket surgery...
Oops-- sorry about the formatting, I tried.
U.S. Unemployment - Worse than It Looks? [View article]
And MHFT knows exactly how GDP can increase while consumer spending is declining-- the "G" in I+C+G+(X-M).
U.S. Unemployment - Worse than It Looks? [View article]
Obama and the Stock Market: From Buy the Bottom to Sell the Top? [View article]
The "right things intellectually" usually require the support of government. "It is error alone which needs the support of government. Truth can stand by itself." Jefferson
The "smart advisors and appointees" the President "has surrounded himself with" are the same old same old, tired, corrupt, proven failures that have been making mistake after mistake for at least five Presidential terms now. But we were expecting something different? "Beware of politicians with nifty logos..."
"We have tried spending money. We are spending more than we have ever spent before and it does not work. We have never made good on our promises... I say after eight years of this administration we have just as much unemployment as when we started... And an enormous debt to boot." Morgenthau
"The statesman who should attempt to direct private people in what manner they ought to deploy their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted to no council and senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it." Smith
The anti-capitalists have had their run-- nearly a century. They have failed here in that time. They have failed every government on every continent in every period of human civilization. Let's try something different.
"A program whose basic thesis is, not that the system of free enterprise for profit has failed in this generation, but that it has not yet been tried." FDR
I'm just sayin'...
Barack 'Herbert Hoover' Obama? [View article]
The Federal govt plans on spending every penny of revenues it receives. Tax receipts are generally down; so revenues are down. No one has raised taxes enough to generate more revenues-- so they are what they are. We will spend every penny of them.
Then, the Federal govt will auction off a record amount of Treasuries to borrow and refinance more debt on top of a record level of debt (Total Credit Market/GDP). They will spend every penny the entire world gives them. Any of us are free to loan them money. www.treasurydirect.gov...
On top of this, the Fed has invoked QE, to spend even more money. (Inflation? What inflation? Just ignore the price of food, energy, healthcare that you pay ever-increasing spot prices for on a daily basis; or compare that that to all the equity you are losing in your homes and assets-- things you already own-- and hey! there's no inflation!)
And the problem must be interpreted as we are not spending enough? No mention of the preceding credit expansion? To levels per income far exceeding historical norms? The Great Depression just "started"in 1929? Oh yeah-- "Animal Spirits..."
I just don't buy it.
Grading Obama's Economic Policy Thus Far [View article]
I concur with the theme that this is no ordinary inventory-driven recession and am reminded of one of Mises' quotes. While it would certainly be nice to click the heels of our ruby red slippers together while chanting "There's no place like the status quo", it would appear we are rapidly reducing our choices to two: Voluntary austerity or Involuntary austerity.
Is the U.S. 'Turning Japanese'? [View article]