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  • Why Not Just Print More Money? [View article]
    "the first time in the history of mankind that the poor had a chance to even survive. "

    Excellent point. Capitalism is the idea of property rights. What you create with your body is yours. To protect that productivity, then you must protect a person's property. Protecting property and person, means protecting people from violence. Gov's only grant is force, thus, the logical role for gov is protecting people from force instead of the prior tradition of gov force being turned on people to make them do the things the gov thought they should do.

    This was a massive leap forward in human philosophical development (though some would argue it was the original method that had been usurped by the later). We can see the tremendous leap forward in human living standards since this development. We even have websites now that track these advances. So, even while it seems there is destruction all around us, there is still progress. Not because of gov intervention, but in spite of it. It would be even greater if we could get gov relegated to its logical role.
    Nov 19, 2015. 08:11 PM | Likes Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "I never said govt violence should compel note creation."

    See, I predicted you would deny it. The Fed was created by gov law. Try opening a bank without the gov's permission and see what happens to you. Its a gov cartel that forbids entry so the gov can CONTROL note creation, and they use force to back it up. Try creating an alternate banking system and see what happens to you. The gov can use force to stop people from competing with it. That's why the Fed needed gov to create it, so it could create notes without fear of people running to another US bank when they thought it got out of control.

    "It has been thoroughly debunked."

    Yeah, only in your world. What has really been debunked is gov intervention into prices. A central bank is just central planning for money and banking. So, how can you say private production is the most important aspect of the economy, and then ignore that for one of the most important products in society, money?

    This is why you are so unconvincing, you are so contradictory. Contradiction is the hallmark of fraud. That's why your analysis provides no predictive value for investing. It doesn't accept the world for what it is. You are basing your beliefs on pure specious reasoning rather than deductive reasoning, that's why you have to use words like "nonsense". Simply dismissing something is not a reason why you are correct, nor is saying, "A exists and B exists, therefore A caused B".
    Nov 19, 2015. 05:22 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    True, and it could certainly happen for the US. We could so pollute our notes that we lose reserve status, and then when others have another place to put their money, that's when interest rates and inflation would really take off.

    Credit risk is really an expression of choice, that is, the lender has other options besides me that they prefer. Right now, the US is the one that everyone prefers. What would change that is China, Europe, or South America going totally free market. Then they would become the haven of capital and labor for the world, and the US would see how the rest of the world valued our risk based on the spiraling inflation and interest rates we would see.

    Of course, the likelihood that the oligarchs in these places would give up their power any time soon is remote, so I see a period of malaise in the US for a very long time. Rates will probably be a lot lower for a very long time. Equities will creep higher, but not take off.

    What to look out for will be the Fed doing a series of DR rate hikes that would deflate equities and cause a run to safety. If that happens, I would bet they would cut the rate again, do more QE, or both. That would reinflate equities and cause interest rates to go back up. In theory, if you could time that, the Fed could transfer quite a bit of wealth your way. This is what I mean by protecting yourself.

    Sweden has done this raised then cut again. The reason they have to is because they are blind to the costs that their regulatory and tax levels create. What is going on is the market is trying to show them where their lack of competitiveness is (like the US) but they won't listen (like Cullen). The sign of an inefficient labor market (due to price controls) is surplus. Sweden has to pay its labor to leave.

    What we have to do is accept this system for what it is, instead of what Cullen tries to tell us it is, and learn to time the boom and bust cycles that central banks and other gov interventions cause, all the while hoping we can convince enough people to return to sanity.
    Nov 19, 2015. 05:13 PM | 2 Likes Like |Link to Comment
  • Median Inflation Vs. Mediocre Growth [View article]
    Hey, thanks for the feedback. I really value your insights. That's why I post these things here sometimes. I often wonder what your take might be.
    Nov 19, 2015. 04:17 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "P.S. I never said that the U.S. is "on the verge of collapse"-- "

    And that's not even the issue. What you can have is decades and decades of lower living standards that what you might have had, and that's what people typically experience. No body is talking Mad Max here (unless you are a Malthusian environmentalist). What we may have had is people typically retiring at 40 instead of 70 had not the gov forcibly directed consumption into activities that were not as productive as others. That's the real crime here. Its the lost time. Once time is expended, you can never get it back. Like the poor guy that planned to retire, but now has to work another 10 years or maybe even until he dies. That's how the reduction in the standard of living is manifested.
    Nov 19, 2015. 04:11 PM | 3 Likes Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "You guys read too many fear mongering websites. "

    Oh no. We are just the uninformed and irrational. The monarch of Europe used this excuse to enslave people in Africa. They called them irrational.

    "Didn't mean to give you the impression that I am in favor of unfettered govt spending."

    No, just that you have a disconnect from the basic principles that spell out why unfettered spending is somehow different from just a little bit of unfettered spending. Even when gov is performing its legitimate functions its can overspend. We are the customers. We should be able to secede from a bad gov producer the same we secede from a bad suit store. However, since we can't, the proclivity for gov to over spend is massive. The result is not collapse, but decades and decades of malaise or even a decline. Since I want to enjoy life, I want to avoid that.

    So, I want the people that are most efficient at providing goods and services to do that. Those are people that I can break away from if the do a bad job. That's why I want gov limited to what it can do. I can grant it force, but I can't grant it price knowledge that no human has. We use our brains to figure out what tools are best suited for what jobs.

    All we are trying to do is to get you to see logic and reason. In short we are trying to get you to be pragmatic.
    Nov 19, 2015. 04:07 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "I can see that I am wasting my time. "

    Me too. You have a fundamentalist fanaticism that keeps you wanting to split hairs instead of understanding the broad concepts that really matter in this. The fact that you have to use the phrase "claptrap" shows how open minded you are.

    I realize you are beyond listening, like a Bossuet arguing for absolutism, buy my goal is to offer the opposing side that will allow other people not to get dragged down into the weeds and see that what you are really proposing is nothing more than price blind gov central planning that you justify on specious reasoning and then try to quell dissent via bullying tactics. Its a shame what readers on SA have to be subjected to by the authors (I know you guys hate that because you think you are the ones being picked on, but hey you chose t publish, if you can't take it the heat and so forth).

    The bottom line is you want to use the threat of gov violence to compel note creation (regardless of the channel) that allows those doing the compelling to transfer wealth from the general populace to those controlling the levers of the coercion. My aim is to alert people to this, and help them find ways to protect themselves. That's because, as a capitalist I realize people are the most important resource on the planet. They are fellow producers, and I want them producing so we can trade so both of our lives can get better. Its sad you don't feel the same.
    Nov 19, 2015. 03:58 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    You're accusing me of being "uninformed" when you write comments on this website like:

    "My understanding is that all the cash from QE is still sitting at the PDs. Apparently this cash isn't being converted to loans."


    If you think all this money is being handed out to people on the street, then you really have been wasting your time writing. Whether electronic or paper, its irrelevant. Its all notes. The banks debit their overnight and credit their securities when the Fed "buys" from them. That makes them liquid. They could debit loans and credit cash, and that would make them less liquid. Its just sitting there, which shows they are afraid to convert that liquid debit to a less liquid debit.

    Again, though, the mechanics don't really matter. The banks are all one big cartel, which is something the supposed robber barons couldn't achieve. They had to turn to the gov to get it done, and now everyone is complaining about how the evil banks just keep messing up and getting bailed out. Well of course. That was the point of the gov cartel. TO PROTECT THEM. Its known as protectionism. Protectionism is not capitalism, and its not pragmatic. Its dogmatic.
    Nov 19, 2015. 03:36 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "When credit is used for unproductive purposes (like speculating on a housing bubble) it can be harmful. "

    Education is a speculation. Starting a business is a speculation. Life is a speculation. Hiding indoors is a speculation.

    What you are describing is the power of gov intervention to drive up an asset price, and then reversing policy that results in the asset price collapsing. The fact that you can't see this is why I caution people against the information you provide.

    "When credit is used for productive purposes (like building a new factory for output) it can be helpful. "

    Which only happens when gov force is not involved. Sure, gov can build a factory, the same way a slave master can make a slave harvest a crop, but what we didn't see is what else may have been built that would have been even better or what the slave might have produced on their own absence the force applied to them to extract a 100% income tax (or do you want to say that sometimes slavery is good if it creates a crop that can be sold?).

    "The US govt spends huge amounts on scientific and medical research and while these endeavors often end up being wasteful they also end up being huge advancements in innovation at times."

    Again, more specious reasoning. Of course gov guns can compel research, but again, what we don't see is what else would have been researched. Its the slave example again. Force coerced a slave to grow a crop, but what we don't see is what else the slave would have produced on their own. Sure gov can spend a billion developing Tang, but what we didn't see is the private effort that would have spent 100k developing Tang, assuming anyone would have wanted it in the first place.

    Again, just making specious claim after specious claim to support a mythical reality doesn't bring you anymore credibility.

    By the way have you ever been a CFO or controller in a bank or someone that would make all the journal entries?
    Nov 19, 2015. 03:29 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    Nice try, but your attempt to misdirect is an old tactic for those that are losing the argument. What you have is a belief system of how you think the banking system works. Its similar to the Catholic Church telling people they can't comment on the policy that combines church and state because they can't speak Latin.

    The reality is the arguments you are making for interjecting gov force into the system is because you see improving living standards along side of increasing gov debt. That's no different than the autocrat argument I pointed out above. Its a specious claim, and simply reiterating a hundred times won't change the logic, or lack thereof, of what you are trying to do. Using gov force to intervene in pricing decisions is a theft transaction pure and simple. It inflates one person while deflating another, and that is the root of the boom bust cycle that you are whining about. The policies you favor are causing the very things you are complaining about.

    Perhaps if you want to be credible, and not just another conventional wisdom pusher is actually learn some history and economics so you can understand that gov intervention is based on force, and violence is not a way to grow an economy. A better understanding such as this will prevent you from saying such outlandish things as this.

    "A world where 5 men basically own all of US industry?"

    If they owned all industry, then that means they would own all wealth. If they owned all wealth, who would be their customers? If one of the pipes burst in their mansions, it means they would have to fix it themselves. If you want to see what a single person economy looks like, where one person owns all the resources, watch the movie Castaway. So this Marxian nonsense that all the wealth will concentrate in the just a few hands via capitalism is just crazy talk.

    See, its nonsense talk this that shows that you have not thought this through. You are the one that needs to open up your mind, instead of just saying, "whatever MSNBC tells me about robber barons is true, and whatever the facts have to say is false."
    Nov 19, 2015. 03:17 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "Why not just make everyone an instant Millionaire?"

    John Law tried this.

    "Not only would Law advance the use of paper money, the French word millionaire would come into use as a result of his most famous scheme"

    "Law believed that paper notes would increase the money in circulation, which, in turn, would increase commerce."
    Nov 19, 2015. 02:28 PM | 1 Like Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "In the late 1800's and early 1900's the USA was about as close to raw capitalism as we have ever seen."

    Oh my gosh, you really don't know much about history. You really need to learn some facts instead of just repeating the myths about history you get from gov schools, MSNBC, or CNN.

    The late 1800s and early 1900s we were seeing the rise of the Progressives, the Republican Protectionism, and creeping socialism. There were indeed aspects of the American economy that were freer than they were in Europe, with Europe's mercantilism and central banks (which is why the poor were fleeing Europe in droves for the US) but it was no bastion of complete capitalism. So the only myth here is the history that you are painting.

    Here are a few examples.

    The reason for the panics

    To push prices up on consumers, rather than lower. That's no part of capitalism. Also, the reason we have OPEC. Their cartel was in response to our cartel.

    So, Rockefeller was a rock ribbed capitalist eh? Funny how his son marries the daughter of the senator that sponsored the original Fed Res act and how his brother and son were bankers.

    Also notice how many Presidents came out of Ohio in the late 1800s, which is where Rockefeller was. Give me a break, it was the most capitalism we have ever seen. It was an interventionist world, where people might get rich via capitalist principles, but then they would buy gov to create regulations to protect them from competition.

    Here's another one, of the famed Sherman Antitrust.

    Notice his love of tariffs, which is the mother of all trusts. So he supposedly wants to protect the consumer from higher prices of monopolies, but then turns around and imposes higher prices on consumers via tariffs. Again, hardly capitalism. John also had a famous brother.

    Oh, and here is another supposed free market collapse in OCTOBER of 1907.

    But look what happened just a few months before.

    " He resigned on March 3, 1907" and look what he was doing.

    "Shaw bought back the government bonds from commercial banks that owned them, increased the number of government depository banks, and in 1902, he told the banks that they no longer needed to keep cash reserves against their holdings of public funds. The intended effect of these actions was to provide a more elastic currency which would then respond to the needs of the market. The government intervention in the money market reached its height with Shaw."

    Elastic currency? Buying bonds from banks? Why that's QE. So we have a gov intervention that creates an inflationary boom that is followed a few months later buy a bust, and you want to call that capitalism.

    "A world where 5 men basically own all of US industry? "

    But they didn't. They couldn't control new entrants. That's why they had to keep buying them out at inflated prices, and why trusts like US Steel where flops from a performance standard. That's why these guys turned to gov. So gov could get them the true cartel a freer market would not allow. Its why prices kept falling and supply kept increasing. The exact opposite of monopoly. There were poor people, but they were getting richer. That's why so many left Europe, because all they had to look forward to was poverty. At least the freer markets of the US offered them a chance. Why do you want to go back to that mercantile system that only makes the rich, richer, and the poor, poorer?

    Oh, and how is it that we had bank runs after the creation of the Fed Res? We were told by the people that created the Fed Res that it would end all financial downturns.

    This could go on all day, but the only fanciful straw man here is your contrived notion of history. The only myth is the world of gov intervention that eliminates poverty. You are the one that lives in a fantasy world that has to engage in perpetual cognitive dissonance in order to avoid the failures of your theories and practices.

    "But we shouldn't just go out and assume that the world is worse off because govt debt as a % of GDP is high."

    And my point is that you shouldn't assume that the world is better off either, especially when logic and the empirical evidence demonstrates the opposite is true.

    "The truth is somewhere in the middle "

    No, its about as far from your narrative as it can get. The job of gov is to make people free. That's all. By turning gov guns towards the people to compel pricing decisions (and don't even try to suggest that that's not what you want, try not paying your taxes and see what happens) that voluntary exchange would not create is wealth transfer via theft. It makes one person richer and one person poorer.

    "but the world is a lot more complex than that.... "

    I know clinging to your fundamentalist dogma makes you feel better, and you love the kudos that you get from the advocates of tyranny, but your analysis is only useful from the perspective of what not to do, and I caution people about listening to it with regards to investing or gov policy.

    SA is a site about building and protecting wealth, and if people are uninformed about what you have to offer, then they run a higher risk of losing their wealth. That's why I am here to point out the threat that your ideas pose to personal wealth. I want to help them learn to protect themselves.
    Nov 19, 2015. 02:22 PM | 3 Likes Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    What Cullen doesn't understand is that he is really just expressing the accounting equation.

    Assets = Liabilities + Owner's Equity

    If you think about it, all the stuff on the left is the real stuff we care about. The "care about" is an expression of ownership rights. Thus the right side of the equation is just ideas. They are ideas of ownership rights. So we can rewrite the equation this way.

    Assets = Ownership Rights

    We typically represent ownership rights with pieces of paper, which we call notes. Stocks are notes, Fed Res notes are notes, and actually gold (to the extent it is simply used as money) is a note.

    What makes notes valuable (and gold) is that it represents claims to assets, which we live in, eat, drive, clothe ourselves with, etc. This is why its so dangerous to just print notes. Just printing without regards to asset production, simply dilutes ownership rights. Thus, when a person is born, they are saddled with debt, if the notes represent weaker claims on assets than they should. That means a person has to work harder (which is a reduction in the standard of living) to re-establish the value of the notes that have been printed.

    This is why you want to leave note creation to price sensitive players and not price blind gov. Gov has incentives to lower your standard of living by diluting the notes, because in the short term it increases their standard of living and those most directly connected to the gov.

    Its also why, in general, it makes sense to get rid of your CB notes as quickly as possible by exchanging them for price sensitive notes, such as stock certificates in private companies. Private companies must use price sensitive mechanisms to determine how many notes they create, and don't have an express policy of depreciating their stock certificate by 2% every year, like the Fed.
    Nov 19, 2015. 01:44 PM | 3 Likes Like |Link to Comment
  • Why Not Just Print More Money? [View article]
    "but global aggregate debt has exploded in the last 75 years. Yet global poverty is lower than it has ever been, global inequality is declining,"

    Again, though, you still have the same logical problem. What you are doing is simply assuming that correlation is causation, and that gov debt is just as good as private debt or that gov money is just as good as private money or that it was the gov debt that reduced the poverty. What we don't see is how MUCH MORE poverty would have been reduced had gov debt had been lower, thus allowing private, price sensitive consumption to supplant the gov debt.

    What we can also show, is that economies that have lower gov intervention also have better economies.

    We can also see this in how AGI moves from more gov interventionist states to lower gov interventionist states.

    "You have tried to portray the world as being worse off than it was 75 years ago. That's a preposterously misleading argument!"

    No, you need to pay attention. If you just want to create straw men arguments, then you should just have a blog where you argue with yourself all day. What I said is that the world would have been better off during the last 75 years relative to what it did experience had the price blind gov consumption not supplanted private, price sensitive consumption, not that we are worse off now relative to then. You just made that up, thus it is you that are being misleading.

    "I've also never argued that autocratic regimes grow more than democratic regimes. Where did you even get that? "

    I never said you did. I simply brought that up as another example of specious reasoning that we see in discourse today. Its common. You often see it with regards to China. It goes like this. China has high growth. China has a communist, autocratic regime. Ergo, to have high growth, you must have a communist, autocratic regime.

    Here's an example.

    "You'd be hard pressed to find someone who is more capitalist than I am! "

    It would only take about 5 seconds. There are plenty of real capitalists (I for one) that realize that gov intervention (which in this context what we mean is with regards to what should be a voluntary price setting process) has no part of capitalism. As such, if you think it does, then that makes you less of a capitalist than I am.

    The role of gov is to regulate with regards to force. When it does so, its force becomes legitimate, thus it uses legitimate force to oppose illegitimate force. If it did its job perfectly, then no human could use force on any other human. The result, is that all people would be free of force, thus making them free. When the market is full of people that are free from force, then the market is free of force, and thus you have a free market.

    That means that the only way people can deal with each other is on a voluntary basis. That makes the market as price sensitive as it can be, which means that the market must be as productive as it can be. Now granted, this isn't just something you declare and its done, its a process. The gov product must evolve to get better just like smart phones evolve and get better. The better the gov does as eliminating force, or rather, the better the gov does at creating free markets, then the more prosperity you have, and that explains the reduction in poverty you are claiming is the result of gov intervention. Socialism, communism, and other forms of gov intervention have been waning over the decades, and the result has been exactly what you would expect from markets that become freer and freer - more prosperity and less poverty.

    China isn't growing because of communism. China is growing because since the death of Mao and mass starvation and murder under the communists, China has been engaging in reforms that have allowed for more free markets. Thus, the more they engage in free(er) markets, the more growth they will get, and the less starvation and poverty they will have. In other words, the less they have gov interfering in things gov shouldn't interfere in (which is pricing decisions), the better off they will be.

    So, again, your problem is your specious reasoning. Just because A exists, and B exists, that does not mean A caused B. C can also exist, and if it does, then it may have been that C that caused B, but if you just ignore it, then you really haven't added any meaningful analysis.
    Nov 19, 2015. 01:25 PM | 2 Likes Like |Link to Comment
  • Tragedy In Paris: The People And Markets Will Overcome [View article]
    "Hitler? He believed in the Superior Race, as do the Jews, the Muslims and the Christians."

    Don't forget Keynes and Margret Sanger.
    Nov 19, 2015. 12:40 PM | 1 Like Like |Link to Comment