Here's What Happened The Last Time The Fed Owned All Outstanding Treasuries [View article]
What would happen if the Fed never sells the securities and holds them to maturity? They will not incur any real losses, just paper. I am curious how this will affect the projections stated above over the next 5-20 years.
The cost of caring for people with dementia is $157-215B a year and could double by 2040, a study from RAND Corp. estimates. The cost of dementia treatment is $109B - above the $102B spent on heart disease and the $77B on cancer - with the other dementia expenses used for long-term day-to-day care. Companies that develop drugs for Alzheimer's disease and other conditions include Pfizer (PFE), Eli Lilly (LLY), J&J (JNJ) and Merck (MRK). [View news story]
We saved money all our lives on cheap processed foods and are now paying for it on the back end...
"If capitalism is America’s biggest problem, why save it?" asks MarketWatch's Paul Farrell. "Wall Street, Corporate America, Big Oil and the entire economy been transformed into a bizarre circus Adam Smith would never recognize. Capitalism is now an out-of-control Frankenstein monster that changed everything." Not that Farrell provides any alternatives. [View news story]
Welcome to our corporatist system of governance where there are four or five major industries with overwhelming influence on the economic decisions in this country. Congress thinks they're in control but are just pawns in the game.
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
The cash on the sidelines is always changing (currently increasing) and has nothing to do with stock (or for that matter any other asset) transactions other than affecting the price. The real question the main stream media should be asking is not how much cash there is, but why. It is there because the "big boys" (banks) are hoarding cash (impending liquidity crunch) or is it there because the Fed is trying to inject liquidity to inflate (all assets) and needs to be put to work by the owners of said cash (banks). Answer this question and you can predict with greater certainty where the market will be in 3-6 months.
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
The money in the sidelines is nothing more than an accounting log. It is not true M0 or M1. It is created by margin and fractional reserves. It is destroyed by margin calls and debt/deflation cycles. When the big money (usually highly leveraged) decides to pull out we have a drop in the velocity of money and a drop in the prices leaving less for those holding the bag (stocks).
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
I think the problem here is a "chicken and egg" argument. The exchange of securities does not change the money supply, but the money supply does affect the PRICE of securities. When there is more "cash on the sidelines", or in other words, M3, it forces inflation on everything, including stock prices.
This inflation is what changes stock prices and if you are a stock holder it is a good thing, and if you are a stock purchaser, it is not so good.
James, I've been following your posts for a while and thought they were insightful. However, where you ran into trouble in 2012 can be explained by the Fed inflating the money supply causing the markets to act in irrational ways.
How Congress Could Fix Its Budget Woes, Permanently [View article]
He does so because he was put into power by said banks. What this author is suggesting is the equivalent of a biblical debt jubilee. A rebalancing of wealth where the creditors would suffer and the debtors would be relieved of their burden. Of course, this hasn't happened in ages and unlikely to do so in our current financialized corporatist society.
How Congress Could Fix Its Budget Woes, Permanently [View article]
I'm not sure there was much of a middle class created in the time period you're talking about. The class that was created was the Gilded class of the Morgans, Carnagie's and Rockefellers. The wealth was concentrated about as much if not more than today in the top few. The majority of the population worked in squalid conditions on subsistence wages. That was the alternative to subsistence farming, subsistence factory work.
How Congress Could Fix Its Budget Woes, Permanently [View article]
The faith in US credit is waivering. It can be seen by the attempts (unsuccessful) to date for the OPEC nations and China to price oil in something other than USD. This would free the OPEC nations and China to be paid in something other than USD denominated treasuries (our debt). However, unfortunately for them, there are no good substitutes at this time with a global market liquid enough to substitute. Euro was a candidate until Europe started in their deflationary spiral and are now starting the printing presses, and the Renminbi is essentially fixed to the USD.
That being said, it's only a matter of time when we lose dollar hegemony, and it's hyperinflation from there.
How Congress Could Fix Its Budget Woes, Permanently [View article]
Because they have to. US bonds are the most liquid of illiquid assets when we are talking about purchases on a national scale. If not for dollar hegemony, US bonds would be much less in demand and our interest rates would be that much higher.
How Congress Could Fix Its Budget Woes, Permanently [View article]
The fed is repairing the damaged balance sheets of the banks. I think many people are confusing money printing with monetary base, and money velocity. In our fractional reserve banking system, the monetary base (what the fed is printing) was no where near what the money supply (multiples of the base due to the magic of fractional reserve banking) is. In fact, with all the deflationary forces ongoing due to debt restructuring or reduction, the fed could probably print twice as much money without inflation.
The sad part of the story, which some people allude to but the author is suggesting is that the balance reparations are that of the creditors (banks) and not to the debtors (commoners). Is it fair that only the bankers get made whole when both creditors and debtors "over indulged" during the good times? It would be just as effective for the fed to print the money and send every american a proportional check but this would bypass our banks who are used to getting a cut (interest on government bonds).
So, you see, the fed is of the banks, by the banks, for the banks. What the author is arguing only happened on rare occasions, early in our colonial history where money was created as needed and resorbed back in due time so as not to stoke the flames of inflation.
How Congress Could Fix Its Budget Woes, Permanently [View article]
Let's no confuse correlation with causation. The US post WWII was in an ideal position to grow no matter what monetary standard they were on. Europe was in ruins and our factories were humming. That being said, Bretton Woods was instrumental in solidifying the US dominance in the new world order thanks to dollar hegemony (oil priced in USD) so that all international energy transactions had to be done in USD. This created an artificially high demand for US bonds and thus our borrowing rates were artificially low. Nothing to do with austerity/monetary base or any other superficial (and politically charged) variables...
The NYT's John Broder takes Tesla's (TSLA) Model S up and down the East Coast from Washington on Interstate 95, where the company has installed Supercharger stations 200 miles apart. Things start dandily enough, but then the weather cools, and Broder has to endure freezing feet and white knuckles because he has to turn the heating off to preserve power. Eventually, he needs a tow truck to pick him up because the car runs out of juice. [View news story]
I wonder how many "horseless buggies" ran out of fuel in the early days of the automobile before the appropriate infrastructure was built up.
Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]
Another way to look at it is, the poor will be the least affected because they already live a life with a smaller "carbon footprint". The middle class have the most to lose!
Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]
Were you listening?... ...as in not what the media spouts about but what the scientists were discussing? If not, you can't say it didn't happen because you weren't informed.
Here's What Happened The Last Time The Fed Owned All Outstanding Treasuries [View article]
The cost of caring for people with dementia is $157-215B a year and could double by 2040, a study from RAND Corp. estimates. The cost of dementia treatment is $109B - above the $102B spent on heart disease and the $77B on cancer - with the other dementia expenses used for long-term day-to-day care. Companies that develop drugs for Alzheimer's disease and other conditions include Pfizer (PFE), Eli Lilly (LLY), J&J (JNJ) and Merck (MRK). [View news story]
"If capitalism is America’s biggest problem, why save it?" asks MarketWatch's Paul Farrell. "Wall Street, Corporate America, Big Oil and the entire economy been transformed into a bizarre circus Adam Smith would never recognize. Capitalism is now an out-of-control Frankenstein monster that changed everything." Not that Farrell provides any alternatives. [View news story]
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
This inflation is what changes stock prices and if you are a stock holder it is a good thing, and if you are a stock purchaser, it is not so good.
James, I've been following your posts for a while and thought they were insightful. However, where you ran into trouble in 2012 can be explained by the Fed inflating the money supply causing the markets to act in irrational ways.
How Congress Could Fix Its Budget Woes, Permanently [View article]
How Congress Could Fix Its Budget Woes, Permanently [View article]
How Congress Could Fix Its Budget Woes, Permanently [View article]
That being said, it's only a matter of time when we lose dollar hegemony, and it's hyperinflation from there.
How Congress Could Fix Its Budget Woes, Permanently [View article]
How Congress Could Fix Its Budget Woes, Permanently [View article]
The sad part of the story, which some people allude to but the author is suggesting is that the balance reparations are that of the creditors (banks) and not to the debtors (commoners). Is it fair that only the bankers get made whole when both creditors and debtors "over indulged" during the good times? It would be just as effective for the fed to print the money and send every american a proportional check but this would bypass our banks who are used to getting a cut (interest on government bonds).
So, you see, the fed is of the banks, by the banks, for the banks. What the author is arguing only happened on rare occasions, early in our colonial history where money was created as needed and resorbed back in due time so as not to stoke the flames of inflation.
How Congress Could Fix Its Budget Woes, Permanently [View article]
The NYT's John Broder takes Tesla's (TSLA) Model S up and down the East Coast from Washington on Interstate 95, where the company has installed Supercharger stations 200 miles apart. Things start dandily enough, but then the weather cools, and Broder has to endure freezing feet and white knuckles because he has to turn the heating off to preserve power. Eventually, he needs a tow truck to pick him up because the car runs out of juice. [View news story]
Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]
Sense And Nonsense About Climate Change. What Do Investors Need To Know? [View article]