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  • Debt Is No Salvation [View article]
    The Dutch had a period of low rates while they were becoming a world economic power house. They had sound money, low rates, and lots of savings. Before they got their independence from Spain, they had rates in double digits. The high rates were necessary to attract savings. However, once they gained independence from Spain and adopted many free market ideas (though not completely) they attracted capital, which lowered rates.
    Sep 7 08:29 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]

    The former CEO of BBT has a great phrase, "The problem with gov regulations is not that they cause malinvestment, but that they cause everyone to make the exact same malinvestment at the exact same time".
    Sep 7 08:22 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    Hey Tack, I thought you said earlier that the free market was a fantasy Utopia. So if the free market has never existed, how can you say something that has never existed has caused booms and busts.

    Actually you are right. The free market has never existed, and that's why booms and busts have been such a ubiquitous part of our history. The goal of forward thinkers like Fisher is to bring one about and do away with these gov created disasters that serve to make the rich richer and the poor poorer.
    Sep 7 08:11 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    With the markets controlled 10 ways from Sunday by gov at all levels, you can hardly call it a free market.
    Sep 7 08:03 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    I think you have a dogma about how you think the world works, so I will tell you how it really works, not so much for your benefit for the others reading here.

    Coercion is wealth transfer. It makes one person inflate and another person deflate. It explains why gov can engage in a bunch of subsidies, and cause the stock markets to run up. It also explains why the collapse when the subsidies end or when some other asset inflation in the market causes it to collapse.

    If you learn to watch for these signals, you can learn to predict the direction of markets and interest rates and find ways to protect yourself from having your wealth transferred from you.

    So you can keep to your pedestrian understanding of economics, but my goal is to clue in everyone else so they can learn not to panic when gov pops some asset bubble they created and realize that when the gov boobwazie blames the free markets and then rants and foams at the mouth about how we will never have a free markets, that everyone else will pick-up on the contradiction.
    Sep 7 07:57 PM | 2 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "bank to extend credit"

    You are trying to misdirect. As I said before, try to open a bank without without the FDIC's permission. You said there was no coercion, when I point it out, you want to avoid it.

    Here's another example. If there is no coercion, try not paying your taxes and see what happens to you, or if you don't like your local school district, don't pay your property taxes and see what happens to you.

    Of course, I am sure you will want to talk about bitcoins.
    Sep 7 07:42 PM | 1 Like Like |Link to Comment
  • Debt Is No Salvation [View article]
    "Now, if you want to suggest that we eliminate the transfer payments altogether and people either adapt or starve -- real, old-fashioned, hardball capitalism -- "

    It didn't take long for your doom and gloom arguments to surface. The idea that there is going to mass starvation is pure nonsense. After all, if you are suggesting you care so much, I am sure you and those that care like you will make sure these people don't starve. However, I'm sure you will come up with some excuse real fast as to why it shouldn't be your responsibility.

    In fact, Capitalism is just a system of property rights. It means you get to keep what you produce. That means you can't use coercion on anyone. The only way for people to interact is voluntary cooperation. In Capitalism, since many hands make light work, people are soon viewed as valuable resources instead of liabilities like they are in gov regulated rationing systems like you seem to favor. Kim Jong Il said the problem with socialism is too many people.

    Your attempt at irrational false choices doesn't refute the empirical data. The freer an economy, the more that is produced and the less poverty there is
    Sep 6 09:13 PM | 2 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "but you're free to compete by extending credit. "

    Again, try opening a bank without the FDIC's permission, or creating a holding company without the Fed Res's.
    Sep 6 09:07 PM | 4 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "By definition government exists via theft and coercion"

    Well, it looks like we have someone here who is a couple hundred years ahead of many of the other commenters in this thread.

    The next stage of human advancement will be when people realize that gov is just like any other product in the economy, which means it should be price sensitive. That means it can't coerce people to use its product. It must entice them to do so.

    Gov is just a security product. Its come to be more, because gov is the only product that is granted the use of force. The danger of that is just what has happened, that force is captured by the very people it was supposed to protect us from. The guns that were supposed to protect us, are now are pointed at us. Coercion is now polluting all sorts of industries from education (teachers make you pay for their school via taxes and if you don't they will hurt you and your family - how noble), to roads, to medicine, to food, and the list goes on.

    There are some prototypes of what is possible. Disney World for example, where the police say, "Welcome home" and Disney's Celebration (a private city). Its been a long time since the first secessio plebis in 494 BC, but the idea has been refined over time. Perhaps in the next few hundred years we might see people willing to stop ignoring the detriments of coercion.
    Sep 6 09:06 PM | 2 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "Benjamin Strong a Fed man at the time "

    What's really interest is that Strong died in 1928 and Young took over in 1929. Young's Fed got worried about the stock market and decided they needed to do something (to be fair Young wasn't quite on board with this, but he did go along with it).

    So, in the fall of 1929 they took the discount rate all the way up to 6%. Does anyone remember what happened in October of 1929?

    What's even more interesting is that LM Shaw attempted to use the Treas as a central bank. He basically engaged in QE buy buying bonds from banks, got rid of reserve requirements, and increased the number of banks. By doing so, he basically mimicked accommodative policy from a CB. Now we get the parallel between Strong and Young. Shaw left in March of 1907, and in October of 1907 we saw the Panic of 1907.

    We can also point to the creation of the 2nd US central bank being created in 1816. However, it didn't start operations until 1817, and then in 1819 we got the Panic of 1819.

    The idea that monetary policy can never lead to a boom and a bust is only for suckers.
    Sep 6 08:53 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "they are earned as a share of or claim against GDP. "

    More accurately, notes are a claim on labor. At the end of the day, the only thing that matters is labor. Labor is human action that turns resources into assets. People were surrounded by all sorts of resources for thousands of years that did them no good, until they had the understanding necessary to engage in the human action that would allow them to turn those resources into something that made their lives better. That's the case now. We are surrounded by resources that we don't even know exist yet that would make our lives even better.

    That's why the religion of gov monopolies for money or anything is fanaticism. Faith without reason is fanaticism, and the unreasoned belief that coercive gov will somehow defy the laws of physics and bring about new production that only price sensitive learning can is pure fanaticism. All the empirical evidence shows it never has, and there is no reason to expect it ever will.
    Sep 6 08:46 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    I've always liked the images of googling "Zimbabwe Inflation".
    Sep 6 08:39 PM | Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    For all those worshipping at the shrine of gov monopolized money, and claiming the Fed can never make mistakes, remember the housing collapse and subsequent equity collapse in 2009 leading to the recession was all caused by the Fed screwing up monetary policy from 2004 to 2007.
    Sep 5 04:19 PM | 2 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "The problem isn't monetary, at all, not one iota."

    For someone who claims to be a capitalist, you sure don't sound like one.

    Monetary problem is not the sole problem but it is part of the problem. Monetary policy contributed to the rise in housing that was being spurred by all sorts of fiscal subsidies, then monetary pulled the carpet out from underneath those prices, they collapsed, and we got a recession. The recession gave the gov bugs ammunition to rush in with more regulations, which caused even more competition barriers and drove the cost of production up even further which insured that uenmployment would take a long time to correct.

    "There are probably numerous ways this idle labor could be redeployed, e.g., public works projects"

    Oh great, another consumption binge for projects that will be politicized causing them to cost way too much take way to long and all be built in the wrong places assuming the EPA lets them be built at all. All that would do is the same thing the housing consumption binge did. It would create a risk-on bubble that would eventually be popped by some panicky gov regulator, which would then bring on another recession, which would then induce the gov to impose even more regulations, leading to unemployment taking even longer to correct.

    I guess all this explains why you have been wrong on the direction of interest rates for such a long time.
    Sep 5 04:14 PM | 3 Likes Like |Link to Comment
  • Debt Is No Salvation [View article]
    "The costs of production have never been lower and never needed less labor, and that's precisely the problem, societally."

    No its not. That's total nonsense. What we have are lots of barriers to entry that would drive costs even lower. Just because they are lower to what they have been in the past, does not mean they are as low as the could be given people's income now.

    Really, you are getting sucked in to a bunch of talking points by people with sham economic theories who are trying to justify their protectionism.
    Sep 5 04:06 PM | 2 Likes Like |Link to Comment