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  • Summary Of My Post-CPI Thoughts [View article]
    "Shrink to grow "

    The problem with this analysis is that it comes from an uninformed position. The "shrink to grow" is the assumption that gov shrinks.

    What's really going on, is that when gov grows, real productivity shrinks. So yes, when you to try grow by shrinking productivity, such a course will most certainly be counterproductive.

    The only thing gov can do when it expands is to great an inflationary bubble brought on by the gov's access to force which can be used to induce a consumption binge. A consumption binge is essentially the consumption of capital. In accounting terms what is happening is that capital is debited and assets are credited. The result will be a receding balance sheet, and we see this manifested in what we call recessions (they used to be called panics and then depressions and now recessions).

    "The interpretation that this is a Fed failure and not the failure of the fiscal authorities is perverse and unhistorical."

    Such a statement represents additional misunderstandings. Humphrey Hawkins was supposed to deal with this very issue. The idea being that if there was not enough employment, then it was the Fed's fault. Now they want to act as if the Fed is impotent. Notice how we have moved from the Fed can stop all economic downturns to the Fed is now totally impotent yet at the same time the Fed has the power to avoid all harm. Contradiction is the hallmark of fraud.

    In reality the Fed and the Executive and Congress are just two sides of the same coin. Its all really the same thing. Both are tools that induce consumption binges. Consumption binges run up GDP and equity prices, but when the binge can't be sustained, a crash follows. Only in gov regulated economies do you get booms and busts. However, in a totally gov regulated its just one long bust or massive period of austerity.

    Here's an early example of what gov does to create these boom and bust cycles.

    The empirical data shows this over and over, and yet the interventionists (read - slavers) refuse to learn from the failure.
    Aug 12, 2015. 08:07 AM | 1 Like Like |Link to Comment
  • Little Trouble In Big China [View article]
    "A two-percent move in a currency is barely worth recording - it is almost within the daily standard deviation band of some currencies."

    But you can't make big headlines with such facts. Such as:

    Trump on CNBC: The devaluation will “devastate” the U.S. “They’re just destroying us.”

    Barron’s blog: “Just when markets were getting acclimated to the idea that the Federal Reserve would start raising short-term interest rates in September, China has to go and devalue its currency by a shockingly large amount.” (Shockingly large? Really?)

    And what’s with Bloomberg News calling it a record devaluation (since fixed)?
    Aug 12, 2015. 07:51 AM | 2 Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "With production of assets"

    Whoops, "without production of assets". There really is no such thing as printing money. Money only value to the extent assets exist or can be created. To print money, would mean to print assets. In other words, an end to scarcity. If people could do that, it would have been done long ago. What they really mean is increased printing of the "money medium". That is really just a coerced division of ownership rights. In other words it is theft. Theft is a disincentive to produce, and thus production falls, and thus the standard of living falls. Which is exactly what you see in Greece, Europe, Cuba, N Korea, and now the US.
    Jul 27, 2015. 06:03 PM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "with no liabilities on the government side to provide the financial assets that created the economy we have."

    Which really isn't much to brag about, but again, for you guys to try and take credit for what progress has been made is laughable. Progress has incurred in spite of you guys, not because of you.

    Think about, you guys monopolize the money medium, but then you still go about collecting taxes, as if taxes still funded the gov. Talk about biting your head off. You guys have been behind all the financial collapses since John Law, but your convenient ploy of just dismissing all the empirical data allows your confirmation bias to overrun the facts.

    Well, if you are happy letting your wealth be transferred from you because you prefer to hold to your outdated dogma, well that's your business. For the economically informed and pragmatic, its far better to face the world for what it is rather than what the ideology you have spouted wants to try and claim that it is. Such a position is more suited to the Youtube and Yahoo news threads.
    Jul 27, 2015. 06:00 PM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    There is no reason for them to hike, but its hard to tell if Yellen will follow her "data dependent" language or the "rate hikes this year" language. Either way, I'm ready for both, but I would prefer these dunderheads to stop believing their own press and just sit on their hands.
    Jul 27, 2015. 05:55 PM | 1 Like Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "It's not theory, it's the dismal practice of people who largely agree with you and not at all with me."

    You've got that completely backwards. The people like you have been running the show for decade after decade, and all they can do is lie about what they promised, then ignore what they promised when it is pointed out to them, and then declare they need even more power after they have royally screwed everything up.

    Greece could get a trillion euro loan, and all that would happen is an inflationist bubble that ran up stock prices and interest rates. Gov price blind projects would expand, and for a few years the Greeks would live well again. However, over that same time the rest of Europe would have to lower their standard of living. Then in a few years, we would be right back here with more claims of Europe victimizing the Greeks and how another trillion would be necessary. If they got their next trillion, the rest of Europe would see their standard of living lowered even more, the Greeks would go on another consumption binge, and then in a few years the crisis would resurface again.

    With each cycle, the consumption binge of the Greeks would be paid for by the rest of Europe not investing in technology that made life better and what you would get is an entire continent slowly eating its seed corn until it was all gone and then they would all be reduced to a Cuba or N Korean standard of living.

    These crazy theories about gov money and expansion have all been thoroughly debunked. The so called experts have all been exposed as the charlatans they are, and only the dogmatically faithful still give them any credence.
    Jul 27, 2015. 05:53 PM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "No, austerity taxes more, not less"

    The gov worshippers believe this, but my point is that REAL austerity, means austerity for the looters in charge of gov. In other words, you give less reign to the price blind and more reign to the price sensitive. As such, the price blind have a more austere existence, as they should.

    The austerity that is bandied about, is not the austerity that is really needed. Gov looters bleed the productive more and more, and thus chase away the productive. With production of assets, notes have no value, as there is no asset for the note to lay claim to.
    Jul 27, 2015. 05:45 PM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "This week’s FOMC statement will be the major release of the week, with the statement released at 2pm EDT on Wednesday. It will not be followed by a press conference, and while no one expects a rate hike this week, analysts will be reading the statement extremely closely for indications if a move is up-coming at the next meeting. Most expect the Fed to hike for the first time at the September meeting. The members’ forecasts are indicating that there will likely be only 1 rate hike this year. Interestingly, the Fed disclosed recently that on June 29th, they had accidentally posted confidential data from the board’s staff, specifically showing a forecast where it implied there would be 2 rate hikes before year-end. The FOMC was quick to note that this forecast was from the staff and not the board members, but it has given market participants some extra noise to siphon to determine how the Fed will indeed proceed."

    Well, isn't this interesting.

    "they had accidentally posted confidential data from the board’s staff, specifically showing a forecast where it implied there would be 2 rate hikes before year-end."

    Again, though, remember, while the timing is an interesting bit to speculate and argue about, the important thing is what happens with a DR increase. Remember, the Fed is inherently a dishonest body. Not necessarily intentional, but more so driven by the self delusion they create for themselves. They and their worshippers actually think the Fed controls interest rates. It does not. It prints Fed Res notes or it doesn't. That's all it does. Printing biases towards risk-on, and not printing biases towards risk-off.

    So two rate hikes of 25 bps each, will take some support away from asset prices and that will tend to lower equities and interest rates. Remember its the gov meddling that causes the booms and busts, so you have to protect yourself accordingly.

    Jul 27, 2015. 03:20 PM | 1 Like Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    Speaking of biting your own head off, here is how the "experts do this".

    "The Revenue Act of 1918, 40 Stat. 1057, raised income tax rates once again. "

    "Even in 1918, only 5% of the population paid federal income taxes (up from 1% in 1913), and yet the income tax funded one-third of the cost of World War I."

    In other words, this approach is expected to win the game by punishing your best players.

    Now, here is another example of the "experts" in charge.

    "For instance, the New York Fed increased its discount rate from 4 percent in October 1919 to 7 percent in June 1920. "

    And look what happened in 1920-1921. Remember these are the people that "will do no harm". As I noted above, taxes up and DR up. That's a perfect storm for risk-off.

    The idea that we need to leave our lives up to the determination of the "experts" is ludicrous. Remember when they say "austerity", it means the rate at which they can steal has been reduced. When they say "expansionary", they mean the rate at which they can steal has been increased.

    True austerity, means austerity for gov. It means less taxation and less gov spending. Austerity policies for the gov (limitations on the plunder of the ruling elite) are expansionary policies for the rest us. Now, expansion of gov consumption subsidies, will run up asset prices, but they do so at the cost of productivity. The result is a bubble that will be popped by something. Typically it is the gov itself, when it panics, and ends the consumption subsidies. The other way to pop the bubble is commodity prices, or some other such price increase. So, the trick is to realize what is realling going on, and learn to ride the asset prices, based on the forces that are driving them. The last thing you want to do is listen to the nonsense spewed by people claiming there are people on the planet who can do no harm to price sensitive decisions even though they are price blind. Only dogmatic ideologues hold such positions.
    Jul 27, 2015. 10:23 AM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "Contractionary policy is not expansion failing"

    Well how can that be? Wilson's uninterested expert was supposedly going to fix all that. As was noted many times above, the gov intervention was supposed to end all contractionary periods. Now you are admitting that they are causing the contractionary periods, and want to act like the promises were never made or should be ignored? Claiming that certain people in the environment can do no harm is basically claiming that certain people in the environment are omniscient. Then you want to claim you are not a gov worshipper?

    "to create the exchange media for the greatest economic power in world history."

    Here's where a certain sort of uninformed person shows they have not read Bastiat. The growth of any economy exists to the extent they have Capitalism. There are no pure socialist or communist economies anywhere on the face of the planet. If such an economy could be achieved, they would all be dead in a matter of months. Even the highly coerced economies like Cuba, N Korea, and Venezuela have underground free economies that provide for people to an extent that keeps them alive.

    The comment above is another version of, "well the gov built the road and there are cars on it, ergo, nothing better or more valuable would have been done." Another example is, "well gov intervened and the economy still grew, ergo, the gov intervention caused the economy to grow." These are known as specious claims. Uninformed and poorly educated people do this all the time. Its the only way they can feel smart. Its the same as someone doing a rain dance every day, and then one day it rains. The person doing the rain dance then claims, it was the dancing that caused the rain.

    The point of Bastiat's "seen and unseen" is that what would have happened instead of dancing would have been to cultivate, and then when the rain came (without the dancing) productivity would have been even greater.

    The way to prove such specious claims are not specious claims, is to demonstrate that every where it is tried, is that it works. As such, then why does Greece not leave the Euro, print their own currency, create living wages, mandatory incomes, massive public works projects, increased gov employment, and then the drachma would become the world's new reserve currency. But they don't, do they? The reason is they don't, is they don't have enough Capitalism to create things people would want at a price people could afford. Thus, if its capitalism that pays for the gov's mistakes, then people become even happier when you just have Capitalism and not the gov mistakes. However, the unenlightened and greedy among us, would rather large numbers of people live like slaves rather than admit they were wrong.

    "They want this gigantic experiment in mass prosperity to be run a different way"

    Right, the enlightened want it run according to nature's rules that create even more prosperity, instead of the slowly degrading standard of living that has been observed since the 1990s.

    "with more shrinkage in the growth to "pay back" by tax extinguishment the assets/liabilities we used"

    Well, what is really happening is that these so called experts believe they have to tinker with the Fed's DR or tax policy to "manage" the economy. Its is this fatal conceit that leads to the following.

    "Now, I don't know about the rest of you but I'm persuaded by the fact that every one of our depressions was preceded by bouts of exactly this kind of shrink "

    In other words, the poorly educated and dogmatic among us put faith in their gods to run everything, and the result is not the stability that was promised, but booms and bust cycles that are really wave's of wealth transfer from the general populace to the special interest groups. Its the old saying that gov is a system of legal plunder for those that run it against those that do not. It is JB Colbert reborn (again for the poorly educated, I suggest you look up who that is). Its a system where fraud and deceit are used to make the rich richer and the poor poorer, all the while promising the poor that if they are just patient, these, kind, compassionate people in charge will one day deliver utopia.

    Now, I don't know about the people whose greed and selfishness lead them to such self delusion as to peddle such fraud, but I for one choose to be pragmatic and not fall for the pie in the sky promises followed by threats of doom and gloom. I choose to see reality for what it is and realize that is the self proclaimed gods among us that are really the devils.

    The way you protect yourself is to recognize that they are not the creators of wealth, but rather the transferors of wealth via coercion. What I do is position myself to keep my wealth from being transferred away from me, or figure out where the wealth is going to be transferred to, and be there when it gets there. To do that, you have to realize that the boom and bust cycle is caused by these dunderheads trying to "manage" the economy. That will lead to asset inflation and deflation, otherwise known as wealth transfer. Cutting taxes and regulation is the same as cutting the DR or increasing QE. It means risk-on. Increasing taxes and regulations is the same as increasing the DR or decreasing QE. It means risk-off. In other words, its the increase of consumption subsidies or the decrease in consumption subsidies.

    All of these cycles have been created by the people who want to claim the victories for wealth creation they had nothing to do with in order to distract people from their failures. Only the weak minded fall for such fraud. The fact is, you have to protect yourself from such destructive policies, by seeing them for what they are. Not what the poorly educated, and specious claim they are.
    Jul 27, 2015. 09:57 AM | 1 Like Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "Last night, China’s benchmark CSI 300 index tumbled 8.5%, the second straight drop and the biggest one-day fall since February 2007. It is up just 8.08% YTD. The WSJ blames the drop on rumors the government is backing away from emergency measures to support blue chip shares. "

    A tax increase does the same thing to asset prices. A tax increase is basically the same thing as a DR rate increase. Expect asset prices to react the same way.
    Jul 27, 2015. 08:18 AM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "The deficit that badly needs to rise is still falling."

    And look who the supposed geniuses are that call for tax increases after they claim the deficit needs to rise.

    "On Friday, Hilary Clinton proposed a massive increase in the short-term capital gains tax rate as well as an increase in the required holding period for long-term gains from one to two years. The tax is intended to be punitive. Clinton argued it would curtain what she calls “quarterly capitalism,” the tendency to manage toward quarterly results. "

    Also notice how these guys constantly have to apply modifiers to the term "capitalism". Of course they do. Capitalism is a system of property rights that requires people to respect one another in order to engage in associations. Capitalism is a system of voluntary cooperation. Everything else is a system of conquest, hence terms like "punitive". In other words, in order to steal from people, you need to rationalize it. The rationalization is embodied in the monikers we see applied to the system of property rights that prohibits violence and plunder of our neighbors, aka Capitalism.
    Jul 27, 2015. 08:17 AM | 1 Like Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    Here is what stimulus gets you in pictures. Its a graphic example of how gov intervention creates a boom followed by a bust, which of course then provides the perfect opportunity to demand more stimulus while ignoring how the first one failed.
    Jul 23, 2015. 09:02 AM | 1 Like Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    "a flight of human capital from the troubled economy"

    How could it be a "troubled economy"? It has had decades of intervention and stimulus.
    Jul 23, 2015. 08:56 AM | Likes Like |Link to Comment
  • Summary Of My Post-CPI Thoughts [View article]
    I was at a movie theater the other day, and when I went to the line to purchase the tickets, a manager directed me away from the line (staffed by an employee) and to a kiosk where I made my selections, got my tickets, and then went to see the movie.

    The idea occurred to me that I might want to find out who makes those terminals because you could certainly see an application for them, not only in movie theaters, but in fast food.

    The employees of theaters and fast food may want to thank the "no harm" interventionists.
    Jul 23, 2015. 08:53 AM | Likes Like |Link to Comment