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  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Funny, you didn't have the courage to use the word "inflation""

    I figured it would be understood. Apparently I was right.

    "then you're advocating high inflation."

    It depends on what you mean by high. The doom and gloom hyperinflation you seem to be alluding to would only occur if fiscal policy clamped down on asset production at the same time note creation went up. That's what Zimbabwe did. You don't need to fall into a doom and gloom scenario in this case. Without the IRS, the compliance costs go way down, and thus production costs. Lower production costs lead to more asset production, and thus the ratio of assets to new notes would be more stabilized. Again, this is why it would be important for everyone to understand the inflation as a tax. Gov schools would likely fail them in this regard. The other factor is that China would have a larger consumer market for their mercantilist economy, thus they would have more capacity to buy our notes and keep inflation and interest rates down. The same would be true for Europe.

    "I can only presume you don't realize what economics has proven over and over again about the destructive effect of "

    Again, what hyper inflation in the US. You haven't been following the threads on SA. Anytime any mentions hyper inflation, they are called a nut.

    "(or the government) is acting as a central banker."

    Yeah, that was my point. It created inflationary policies that led the deflationary panic of 1907. QE does the same thing, though on a smaller scale in the current environment.

    "Your proof falls flat."

    Not at all. A CB note is just that. Its a note. Just like a stock cert if a note. A note represents an ownership right. An ownership right in an asset, and all assets are created by human labor. So, ultimately all notes are valuable based on the labor that can satisfy those ownership rights be creating assets. In the end, all notes are backed by assets that people create. People will value the notes (or gold - gold is just another type of note whose medium happens to be a precious metal that can't be counterfeited) when they feel the notes (money mediums) can be exchanges for assets that will make their lives better. In other words, people value money mediums because they are backed by consumable assets.

    "You're hamstrung by the false notion that backing guarantees money's value."

    Well, then, why don't people value gravel as money? Its because they know it can't be exchanged for anything. You could print Niel bucks all day, but good luck on convincing anyone of their value if people know those bucks are backed by assets they wish to consume.

    "Once this money is no longer scarce"

    No, its the same thing. That's what hyperinflation is. Its such a dilution of the notes as a ratio to assets, that people know that the claim to any real asset is so weak, that the money is basically worthless. Worthless because its not backed by a real asset. People want money when they feel the money has claims to real things. That's what a transaction is all about. Its about exchanging things.

    "And this *stuff* can not be resold to retrieve the money from circulation, so, by my definition, it is unbacked."

    That's why the real backing behind money is the labor that creates the assets. That's why a free market is so critical. A market that is free from tyranny is the most price sensitive and thus the most productive. New assets are constantly coming online to replace the other assets that have been consumed.

    "it is no longer money by definition. It's just a piece of paper."

    Well, that's destroying it. Think of it this way. A bank really doesn't have any real assets. The FF&E are immaterial, or should be for a good bank. So the remaining debits and credits are just a way of distributing ownership rights. The Fed is no different. When it debits and credits, it is doing the same thing. The debit is an accounts receivable from the American populace. The liability is the ownership right is that of the holder of that note. In other words the debit and credit represent a claim someone has on the ability of the US population to create an asset to be consumed. If the Fed debits and credits, but no asset came to fruition, then the balance sheet was just grossed up. To represent the asset was never created, the entry is reversed. Its just destroyed. Its just the accounting mechanics going on.

    "No sir, you have fallen for a "theory" that has been thoroughly debunked."

    When did I ever say I was advocating for MMT. I'm talking about the idea that recognizes that coercion is never a capital creator. As such, you want markets as free of coercion and tyranny as you can possible get them (aka free markets) to maximize price sensitivity and therefore asset creation.

    "No, please don't make any more guesses."

    I wish I could get you to stop with the guessing.

    Anyway, Fed notes don't fund the gov. The productivity of the populace does. When a gov confiscates and monopolizes the money medium, the gov then owns that medium. It does not need to collect it to spend it. It can just issue them in exchange for whatever asset it was allowed to purchase. This is why you don't want to go down this road, but unfortunately we have. That trip has invoked very real aspects of the physical world and pretendng like they don't exist will gastrate your ability to analyze what is going on in the markets (ie not being able to tell the direction of equities and interest rates).

    Of course, that is your choice, so good luck with that.
    Feb 13, 2015. 02:55 PM | 1 Like Like |Link to Comment
  • Downside For Stocks, But Also For Fed Expectations [View article]
    "As I always write: QEP is the worst possible monetary policy except for the alternatives. "

    No, that's not true. The alternative would be a transition to price senstive money creators. Of course, in that scenario, the protectionist forces that believe "working" means "keeping my asset prices up at the expense of the average person", won't be too happy. Which is why central banks are so vigorously defended by special interests. Its like a tariff. It makes domestic producers happy, while everyone esle is forced into having their lifestyles reduced to pay for it.

    The real solutions is rolling back the tons of protectionist fiscal and monetary policies that lead to the rich getting richer and the poor getting poorer. So, saying, "Since we can't have that, then what else can we do besides QE" is a false choice. The alternative is for grown ups to start acting like grown ups again.

    In the meantime, I need to caution everyone to be on the look out for the Fed to make another mistake.

    What's going on here is the Fed is creating the Fed notes that the IRS is sucking up with new and existing taxes. Since we can only use the Fed's monopolized bank notes to buy things, we can only use Fed notes to buy equities. As such, the Fed is providing the extra Fed notes needed to keep equities bid up. Now the Fed is talking about raising the DR, which means pulling some of that support away. The Fed did this big time from 2004 to 2007, and that led to the asset crashes in real estate and equities in 2008 and 2009.

    Now, 25 bps isn't the end of the world, but it is a step in the wrong direction with fiscal policy destroying Fed note effectiveness via taxes and regulations. This is typical gov disjointedness and bungling. Watch out for it. If the Fed does start making the attempt to raise rates, then rates will fall as people flee from equities and back into safety.

    The Fed would be better off by just freezing where they are and stop trying to help. I doubt their egos will let them do that. As such, they pose a threat and we need to be ready to protect ourselves.
    Feb 13, 2015. 02:26 PM | 1 Like Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    Hey, good fight everyone. Its way more fun this way.
    Feb 13, 2015. 02:16 PM | 1 Like Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "All I have asked for in this part of this discussion is that you acknowledge these plain, practical facts. Why is that hard? "

    Becasue they aren't plain, practical facts. They are your beliefs based on false assumptions. I doubt anything I would say to you would convince you and here's why...

    "The Fed is our instrument and it is doing our bidding."

    One of the few things Upton Sinclair said that I agree with is that when someone is paid not to believe something, they won't.

    The atrocities are the countless booms and busts that damage the wealth and livelihoods of millions and millions of people. The wars that govs are more apt to get in because they can pay for it via the stealth tax of central banks. The Panic of 1907, the great depression, the great recession, the dwindling opportunity for more and more people and what's more is the wealth we could have had if not for the rationalizers making excuses for gov regulators because its "serves them" by transferring the wealth from their fellow citizens to them.

    "you don't both acknowledge that and succeed in convincing us, your opinions in the matter will remain utterly without consequence."

    Actually, its just the opposite. I've learned to protect myself, and I have encountered others that have learned the same thing. The consequences of learning to push the cliches and platitudes are real indeed. I simply want others to share in these benefits. Not because I am altruistic, but because it interests me.


    "Maybe it could do it better - tell us how and why. Maybe we should reform it - tell us how and why. Then we will decide whether we agree with you."

    Again, my point is that its fundamental principle is flawed. Its best course of action would be to fade away, and let price sensitive money creators take over. However, people just arent' ready for this yet. Look at how entrenched your are in your position of defending it. Its like the defenders of slavery. They benefited from slavery, so they were immune to any of the reasons why they would be better off without its existence.

    There is progress. There are some people coming to the enlightenment that human relationships should be built on voluntary cooperation and not force. It takes time, and in the mean time, what such people need to do is learn to protect themselves from the wealth transfer that occurs when human relationships are based on force.

    This is why by studying the subsidy mix (the interplay between the bungling of fiscal and monetary policy from gov regulators who have neither the knowledge or the tools to do what they claim the can) you can learn to understand why these booms and busts occur. Like everything in nature, things happen for reasons. When you see inflationary policies being promolgated, you can take advantage of that by riding the asset wave up. Then when you see the gov making another mistake by suddenly panicking and reversing policy, you know its time to take your gains, and then buy back in at the bottom when the bunglers panic again and reinflate.

    What you don't do is believe the lies that its all the free market's fault and that only holy and righteous gov regulators can save you. Its just the opposite, the gov regulators are causing the booms and busts around the natural growth rate of what's left of the underlying free market. That's why as long as the gov doesn't totally kill the growth via regulations, that the central bank can always reinflate the asset prices. That's why you want to get back in at the bottom, and let the Fed transfer everyone elses' wealth your way. Until everyone else comes to enlightenment, its the only way to protect yourself.
    Feb 13, 2015. 02:14 PM | 2 Likes Like |Link to Comment
  • QuickChat #277, January 7, 2015 [View instapost]
    And now I see 2093 on the S&P.
    Feb 13, 2015. 12:26 PM | 1 Like Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    JasonC's comments also reflect the common tactic of conflating the role of legitimate gov with the abuses of gov. Thus, whenever someone attacks the abuses of gov, they are labeled as "anarchists", or "kooks", because an attack on gov, means you want no gov, as opposed to just wanting legitimate gov vs the abuses of gov.

    To try and say that gov has never been a source of abuse and corruption because the abusers and corrupters got away with it by not being arrested is the height of ignoring reality. The United States owes its existence to people revolting against the abuses of gov, hence illegitimate gov.

    The role of gov is to protect person and property. From that people become free to pursue their own industry for their own improvement. This is what Jefferson said. Jefferson was the 3rd President of the United States, so if the people who claim we can never question gov really believe what they claim to believe, then they shouldn't question a President of the US. Of course, they will, which just goes to show, what they really want is not total obiedence to gov, but cover for when gov subsidizes them.

    In order for gov to fullfill its legitimate purpose of protecting property and person, it needs to be granted force, so it can oppose illegitimate force. The danger is that force will be captured by the very people its supposed to oppose. When that happens, the gov then becomes a tool of theft. Passing a law that requires people to buy the products of the people that paid for the legislation, is no different than just telling one group to give antoher group their money. The cover or fruad that they use to justify the theft is the exchange of the product. This is an attempt to legitimize the theft in the minds of the thieves. The thieves justify it by saying, "well we had a vote and you lost". Here's another law that was passed by the majority.

    http://bit.ly/1wezcw4

    "The Fugitive Slave Law or Fugitive Slave Act was passed by the United States Congress"

    I didn't see anyone arresting members of Congress for that, so I guess its OK.

    Here's the bottom line. Gov needs to be subjected to the same market discipline that smart phones are subjected to. There has to be a check to make sure the gov functions as the product in the market its supposed to function as. Calling people "kooks" and "idiots" because they attempt to apply this discipline to the gov product, is a prescription for disaster, and that's reality.
    Feb 13, 2015. 12:16 PM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "No. We are talking about institutions that exist under positive laws, not about mere opinions all equal to each other. "

    But your assumption is that the "positive" is "positive". You haven't reasoned out what that would be true, and then if the empirical evidence supports your opinion. You have just made a bunch of assumptions, and then built a paradigm on those assumptions.

    "If a man has the opinion that everything a US federal court decides is irrational and ideological, it won't make the police force defer to his opinion instead of to the rulings of those courts."

    I never said it would. What I was pointing out, is that the established courts have and do send people to jail that shouldn't go to jail. Just because they are established does not mean they are legitimate. China uses their established court system to throw political prisoners in jail.

    "Legimate does not mean you like something or I like something. It means legally established, deferred to by all other state institutions, enforced, effective, operating, real, in broad daylight."

    Yeah, see, that's your problem. Under that definition, any atrocity a gov commits can't be challenged. What you are really describing is how a statist, authoritarian looks at things, and is always whining about law and order not being followed, as such, some minority groups needs to be rounded up and shot.

    "Nobody is arresting Fed governors for theft."

    And nobody arrested JB Colbert or John Law either, but that still doesn't mean that what they did wasn't stealing. To act like no gov can ever be an agent of theft, is to ignore Auschwtiz.

    http://bit.ly/1vIs8eb

    Of course they claimed "work makes you free".

    http://bit.ly/17zrJN8

    "Your ideology can't tell the two apart "

    Actually, that's your hang up. Acting like everything a gov does is beyond reproach is the real head in the sand.

    "As a matter of public law in the United States, if you try to arrest a Fed official for theft you will be detained yourself for making an unlawful arrest. "

    The same thing would happen to someone trying to arrest a Roman Centurion that was occupying their country.

    "Reality. It is not optional. "

    Agreed, but the only one ignoring it here, is you.
    Feb 13, 2015. 11:52 AM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "What you've stated above sounds like you deny the Fed has any legitimate role or function, at all, and ought to be illegal. "

    As a price control for money, what you stated is correct. However, I could see a legitimate role as a taxing mechanism, which is what it really is. The trick is that eveyone would have to understand it as a taxing mechanism and then understand, it would be the only one we need. As such, better controls and incentives could be designed for it. Now, it is viewed as something it is not. Thus, it winds up functioning as a taxing mechanism that transfers wealth from the general populace to the special interests which it really serves. Given that, it interests me to inform people how to take advantage of that, in order to mute the damage its mishandling can cause them.

    "If you do not have a central bank, then you cannot issue money into circulation by buying assets with newly printed cash"

    This is not true.

    "To this end, Shaw bought back the government bonds from commercial banks "

    http://bit.ly/U6UrQf

    Its just that trying to use a central bank to replace price sensitive mechanisms for producing money mechanisms lead to asset price distortion. It causes booms and busts.

    "The government intervention in the money market reached its height with Shaw. He resigned on March 3, 1907"

    ...and a few months later...

    "that took place over a three week period starting in mid-October"

    October of 1907, that is.

    http://bit.ly/sfYnjy

    This is the problem, they can't be consistent with their policies. So whether its the Treas or a full fledged central bank, they both have the same problem of not knowing what is TOO much or what is TOO little. Money should be created the same way smartphones are created, via price senstive markets. It's never really been tried before. Each time it gets going, the gov takes it over, and starts to create booms and busts. I'm just saying, admit this, and then learn to take advantage of it.

    "If you do not have a central bank, then the only way to issue money into circulation is by buying goods & services with newly printed cash."

    That's not true either. First we have to make a distinction between money and money mediums. Money is a contract for exchange. The money medium is the product that becomes universally accepted as a representation of that contract. The mediums have been lots of things. Rice, salt, tobacco, gold, silver, bank notes, ration tickets, etc. Each has pros and cons. Now we are seeing digitial innovations for money mediums. Bitcoins are one, and trophies in video games are another. The digitial is getting close to overcoming lots of cons of the old mediums. Gold is limited thus limiting transactions, but digital is not. Bank notes can be counterfeited thus subsidizing transactions, but digital can be encrypted. So, the idea that money mediums would not exist except for gov is just propoganda. It represents archaic thinking that lacks vision and innovation, which is typical for gov influence on prices and production.

    "This is called "unbacked" money."

    There is no such thing. Here's why...

    "buying goods & services "

    People didn't want gold because they could eat it or live in it or wear it, they wanted it because it could buy those things. The reason gold rose as a money medium is because it didn't wear away like rice or salt. Also, it couldn't be counterfeited like bank notes. However, it was limited, so it was not always around when you needed it. But, bank notes that were backed by gold, were only valuable, not because of the gold, but because of the goods and services gold could buy.

    Think of gold as a proxy for a stock certificate. People want stock certificates because they represent claims on assets. The more valuable the assets, the more valuable the stock certificates. In other words, the real backing for any money medium, gold or bank notes, is the stuff you can buy with them. As such, there really is no such thing as fiat in the sense there is nothing backing it up. If there were nothing backing it up, then there would be nothing you could buy with it. In other words, you can't print money, because money is a contract for exchange of assets, thus you would need to print assets (which is post scarcity, something we clearly do not have), but you can print bank notes (the medium).

    "Retrieving unbacked money from circulation is always more disruptive to the economy than retrieving backed money"

    As I noted above, there is no such thing as unbacked money. What happens is when gov destroys its monopolized bank notes, say, via an increase in the DR or a tax increase, is, it takes notes out of the system thus distorting the ratio of notes to assets. A better way for you to understand this, is to think of the Fed or IRS destroying Fed notes as akin to buying back treasury stock. Nothing has happened to the productive capacity of the company, all that has occured is the ratio of notes (stock) to assets has changed. It would actually be far preferable for the company to come up with some new asset production capability to make the additional stock so valuable that there would be no reason to buy it back.

    This is the basic functioning of a balance sheet. If you don't know how that works, send me an email to my inbox, and I will respond with the answer on this thread.

    A similar thing happens when monopolized banks notes are destroyed. Since we use these notes to buy stock, the less of them there are, the less of them are available to bid up stock prices. This is why you see equities markets drop following increases in the DR. Not always, because tax policy affects how many notes there are to bid up equities, and regulatory policy affects what asset classes will be chased, but if there is a dramatic enough move in the DR, then the subsequent note destruction will offset the other factors and lead to a drop in equity prices, which can be large enough to bring on a recession.

    Here's a chart that overlays the DR with recessions. If you don't know what the DR is, send me an inquiry to my inbox and I will respond here on this thread. Notice the 60s, 80s, and 90s. There was tax/regulatory relief in those periods, that offset increases in the DR by leaving Fed notes in the economy by not taxing them away.

    http://bit.ly/1sZE5UT

    One of the biggest blunders by the current crop of CBers and their advocates is the notion that the money mediums need to be retrieved back in. We would probably all be better off, if they just left out there what they created, and live with a little higher inflation, rather than constantly causing all these recessions. A better way to deal with inflation is remove gov regulations on productivity that restricts asset creation. Inflation is just a ratio of notes to assets, as such, rather than "retrieve" the notes, focus on creating more assets. The improved ratio would quite the inflation.

    I do realize my thinking is about 500 yrs more advanced that most conventional wisdom, so I realize the policies we have will continue. So one of my goals (because it interests me) is to inform other poeple of what is going on, so they to can include all the variables in their analysis, and thus be able to predict the risk-on and risk-off scenarios. By doing so, they will be less apt to panic, and not wind up buying at the top and selling at the bottom.

    Also, let me guess, you think taxes "fund" the gov?
    Feb 13, 2015. 11:28 AM | 1 Like Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "None of them are infallible, all of them are perfectly legitimate."

    Then its perfectly legitimate to criticize their existence. To CLAIM otherwise, is the type of fundamentalist dogma claim that illustrates those who are clinging to irrational ideologies. Its no different than those that defended the union of church and state. The attempt to categorize everyone that challenges the existence of such entities as kooks, is just the old "ridicule" argument aimed at quelling dissent rather than a reasoned discussion about the virtures of one course of action vs another.

    Again, you can hold to your fanatical beliefs, but trying to get me to change my mind by simply declaring that my disagreement makes me a whacko is not an effective strategy.

    All the empirical evidence and logical reasoning shows that price controls, including money mediums, must be based on force. And, force for prices is just another term for theft, and theft is just a consumption subsidy. It causes asset price distortion via inflation and deflation, and by recognizing that, you provide a way to protect yourself and even improve yourself.

    But asking me to give into propoganda is not even something Goebbels could have accomplished.
    Feb 13, 2015. 10:36 AM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Both Republicans and Democrats in Congress back new legislation that introduces binding currency rules for trade deals and imposes punitive import taxes on countries deemed to be “currency manipulators”. "

    http://bit.ly/1DMsHou

    Smoot Hawley anyone?

    http://1.usa.gov/V176pA
    Feb 13, 2015. 09:34 AM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "Your world sounds more like Putin's world than mine"

    And its sounds like you world is more Goebbels' than Putin's.

    http://bit.ly/1A3QxcD

    "Yes, sir: got it!"

    Apparently not.

    "is not unexplained, it's easy to understand and it's called the invisible hand of the market."

    It is for the things it can explain, but the point that free markets just cause these unexplained sudden collapses, it does not. Here is an example of where the conventional wisdom on the need for gov to regulate things such as interest rates leads people.

    http://seekingalpha.co...

    Such stories where all over the place in 2013, because people think central banks can do what they CLAIM they can do, just like the people that erroneously claim central banks are a legitimate part of the free market (typically by those that benefit from the wealth transfer).

    When you are willing to have a correct ideology instead of an ideology that requires you to ignore real variables in the equation, then the ups and downs of the market become more predictable.

    Hence, a comment of mine from June 2013.

    "If the Fed ends, tapers QE, I think the bond markets are wrong if they think rates will go up. Rates will fall. "

    http://seekingalpha.co...

    "The blundering hand of Uncle Sam is the opposite."

    Uncle Sam's hand is blundering because it is price blind. In Uncle Sam's hand is a gun. Force is used for theft or as a defence against theft. A central bank is an example of force being used for theft. Theft is a consumption subsidy. It transfers wealth which inflates the recipient and deflates the victim. This is why you see the rich get richer under gov regulations, instead of everyone getting richer under free markets and capitalism. A free market is a market that's free from tyranny. As such, an opposition to free markets is an advocacy for tyranny and wealth transfer via theft.

    "THe invisble hand of the market allocates valuable resources automatically to their "highest-value use" because the use of the resource that creates highest value can (by definition) out-bid all lower-value uses. "

    This is true in a free market, but you can have a market that's not free. You can have a market that includes the pollution of coercion. Coercion leads to price distortions, which then prevents the "highest-value use", and allows the subsidization of activities that the market would purge but get protected because of political concerns. Hence, bank bailouts, auto bailouts, union bailouts, stock market bailouts, etc.

    The trick in all of this is not to have an ideology that excludes these realities, but to have an ideology that allows you to make and preserve wealth. If you don't, those with the ideology of transferring your wealth away from, will certainly do so. You have to learn to protect yourself and not follow the propoganda they would have you believe.

    Now, if you want to cling to such ideologies and keep losing money, that's your choice, but I choose to have an ideology that includes all the variables.
    Feb 13, 2015. 09:06 AM | 1 Like Like |Link to Comment
  • Where the 10-Year Is Headed Now [View article]
    The 10 yr has hit the 1.60s in 2015.
    Feb 13, 2015. 08:50 AM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    "They are entirely legitimate institutions that exist for well understood public functions following well established long standing laws"

    No that myth has been thoroughly debunked. There are still plenty of gov schooled people that believe it, well, because they went to a gov school.

    Anybody that is willing to just ignore variables in the market, like a central bank, simply because of the CLAIM that a central bank can do no harm, deserves to have their savings wiped out.

    Just because somebody claims something to be true, doesn't make it so, and think about their claim for a moment. The claim is a central bank and central bankers can do no harm. In other words, they are perfect, in other words, they are gods. Isn't it interesting that all throughout history, from pharoahs to ceasars, you have people in gov claiming to be gods.

    And they want to say I am the one holding to ideological fantacism. Yeah, right.
    Feb 13, 2015. 08:32 AM | 3 Likes Like |Link to Comment
  • Weekly Unemployment Claims: Initial And Continued February 12, 2015 [View article]
    "I'm gonna guess you are not from Florida? "

    It must be Illinois.

    http://bit.ly/1AhaiAO
    Feb 12, 2015. 09:06 PM | Likes Like |Link to Comment
  • Negative Interest Rates: Capital's Reproduction Problem [View article]
    Neil

    The real lesson is the damage that is done to ordinary people by the overall ideological fanaticism that leads to central banks and gov regulation of prices. The idea is that a supposed group of super humans have market knowledge that ordinary mortals do not. As such, they will be able to manage the economy with their superior price knowledge, aka Also Sprach Zarathustra.

    Instead, look at damage these people have caused. The massive wealth destruction, wealth transfer via theft, wars, death, and despair. Bernanke fell for this false vision of himself and these institutions, and the result was he engaged in destructive policies by drying of Fed notes with additional DR increases thus leading to the asset collapse that brought on the housing and stock market crashes followed by the recession.

    Its time to stop making excuses for this nonsense (ie "I'm critical of the Fed as well") , realize the emperor has no clothes, and move on to some grown-up policies. Barring that, the best advice for people is learn to protect themselves by realizing its not some unexplained free market force that causes everyone to make the exact same mistake at the exact same time, but rather the coordinated effort that only the coercive hand of a gov that can cause such orchestrated movements.

    As such, realize that its institutions like the Fed, or tax policy, or regulatory policy that causes these booms and busts, and the boom and bust can be relatively predictable if you understand what to look for. By doing so, you won't get caught off guard and allow these wealth transferring (theft) mechanisms to transfer your wealth away from you.

    This is an investing website. Its about improving and protecting your wealth, and if you want to have credibility, you have to stop saying outrageous and specious things, and start looking towards reality and what is necessary to build and protect wealth. So, the idea that out of control free markets cause these unpredictable crashes via some unexplained, mysterious herd mentality, will leave people vulnerable to wealth destruction instead of prepared as to how to defend their savings.

    The lesson is that a central bank, progressive income tax, price regulation, subsidies, etc, are all protectionist measures designed to make the rich, richer and the poor, poorer. So if you don't want to be in the later class, its best to wake up to reality, and learn to watch for the signals that the Fed (or some other gov policy) is about to collapse asset prices, get yourself positioned accordingly, and the move back in at the bottom when the Fed (or any central bank) is about to reinflate those same asset prices.

    Its a pattern as old as the Bank of Amsterdam (and its free coinage laws) and the tulip bubble it created, or John Law and his monopoly of bank notes in France and the Mississippi bubble. What you want to do is become Richard Cantillon to his John Law, ride the asset bubble up, and get out before it bursts.

    Such an approach is the only valid and constructive thing to be said here.
    Feb 12, 2015. 07:47 PM | 2 Likes Like |Link to Comment
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