Debt Rattle Jul 17 2014: The Rise Of The Super Dollar

 

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  • #14077

    Fritz Henle “Air raid rules”, West Danville, Vermont July 1942 My, what a lovely day. Summer’s here. Then again, not so great perhaps if yours is one
    [See the full post at: Debt Rattle Jul 17 2014: The Rise Of The Super Dollar]

    #14078
    Odysseus
    Participant

    1. Make sure the money is backed by gold (otherwise it loses its buying power).
    2. Don’t let the government spend too much money it doesn’t have (otherwise it will cause havoc).

    Sadly, Ilargi, neither of these is necessarily true as stated.

    How much sovereigns can spend is directly related to the amount of available productive work.

    That can be a vastly different quantity than the amount of pretty yellow rocks near at hand. Money can be exchanged for goods and services. Pretty yellow rocks are no better of a good than any other.

    #14079
    Professorlocknload
    Participant

    The cheapest, most effective tool the Fed possesses is the “Jawbone.”

    And it is not afraid to use it,,,like now.

    “Hawkish,” indeed. When the day comes the Central Planners raise interest rates, it will be in defense of the dollar, it’s fall having been caused by an overshoot in the devaluation of it. The Fed is bluffing at this point. The last thing it needs is to tank bonds and stocks here.

    And bond vigilantes can only exist in private credit markets, not government controlled ones. Prolly the main reason interest rates remain stuck on stupid, and will for a while longer. Besides, what better way to discourage (hide?) price discovery of their currency?

    My take on all this BS is, the Fed was shocked by the first quarter GDP print, and dumped massive liquidity into the system in some ,as yet, unknown way, combined with intensified data manipulation. Encouraging things like subprime auto loans is more of an indicator of intent, than pushing Bullard in front of a podium, brandishing hawk-talk.

    The worm doesn’t turn here until quite a few more folks recognize it for what it is. That inept bureaucracy has commandeered the life’s blood of the means of production, Capital itself.

    #14081
    ₿oogaloo
    Participant

    Has Odysseus been drinking the MMT koolaid?

    “How much sovereigns can spend is directly related to the amount of available productive work.”

    Yet even if there is a “direct relation” the amount of available productive work is not the only factor (and besides, how do we define what is “productive” and what is “wasteful”?) the other limits are the price and availability of natural resources, the acceptance of the currency in international trade, and the trust currency holders have that the currency is a reliable store of value.

    The function of the shiny yellow rocks is to keep the system honest, a virtue sadly lacking in the modern monetary system.

    #14082
    Ken Barrows
    Participant

    Housing starts, meh. What about the super Philly Fed survey? Only point here is that statistics aren’t going to change things much. When Microsoft-type layoffs proliferate, then we know something’s going down.

    #14083
    Raleigh
    Participant

    Was watching a documentary about Daniel Ellsberg, the Pentagon Papers. When the public did not come to his assistance, he said, “The American public see, hear and understand, but then they choose to look the other way.” (Not an exact quote). Whenever we dismiss reality, pain is right around the corner. It is as if, by denying, we are making room for pain to enter.

    #14084
    Gravity
    Participant

    Gravity is the first (supervenient) algorithm.

    One thinks, therefore one is an additive algorithm.
    One thinks that one thinks, therefore the mind is an adequate algorithm.
    One knows that one thinks that one thinks
    ((that one knows) that one is an amplified algorithm),
    therefore the body is an identical algorithm.

    (the field also feels)
    Gravity is the only adequate morphogenetic algorithm.
    The identity of affirmation involves no negation,
    the identity of absolute affirmation involves zero negation
    (verily that [0 ≠ 0]),
    eternal equity and infinite novelty must follow (at fair value).

    Spinoza’s The Ethics – Part II
    Prop.[XXXII] All ideas, in so far as they are
    referred to Gravity, are true.
    Prop.[XXXIII] There is nothing positive in ideas,
    which causes them to be called false.
    Prop.[XXXIV] Every idea, which in us is absolute
    or adequate and perfect, is true.
    Prop.[XXXV] Falsity consists in the privation of knowledge,
    which inadequate, fragmentary, or confused ideas involve.

    On a related note, I’m especially bereaved about the downing of MH17, having many compatriots aboard, and feeling naturally responsible by elemental affiliation.
    Of all suspects, the separatists are least likely to be responsible, having no clear means. If they are responsible, its surely an accident that a commercial flight was targeted.
    More likely it was a false-flag event perpetrated by the CIA, Kiev or Washington directly, all having greater motive or means than the separatists to deliberately down the flight.

    #14086
    Raleigh
    Participant

    Gravity – agree with you re MH17. The separatists had nothing – nothing – to gain by downing that plane, but it might have been an accident on their part. But a false flag event? Now you’re talking. Putin is showing incredible restraint, even though the Nobel Peace Prize winner keeps baiting him.

    #14087
    Raleigh
    Participant

    Four ways rich Chinese elude Forex laws to move money abroad: by using friends’ bank accounts in China and abroad; underground money changers; private banks (example, Bank of China); and setting up offshore companies and then using fake trade contracts.

    https://www.tremeritus.com/2014/07/17/how-rich-chinese-elude-forex-laws-to-move-money-abroad/

    #14088

    Regarding MH17, I also agree with Gravity, the Russian separatists have nothing to gain and all to lose by shooting down an airliner. If it was an accident by the separatists then it isn’t terrorism, if it were a FF by Kiev or the USA, it would be terrorism. As far as I am concerned, terrorism is about intent to cause terror. I wish news outlets would make this distinction.
    I think Ukraine is a proxy war and I feel sorry for all the people who are dragged in on the ground, or in this case, in the air. The instigators of this war are likely far away and comfortable. They are probably psycopaths and will not identify with the victims. It would be nice if people with dangerous personality disorders were excluded from roles of responsibility, it would be a totally different world!

    Carbon

    #14125
    alan2102
    Participant

    Boogaloo:
    “Has Odysseus been drinking the MMT koolaid? – ‘How much sovereigns can spend is directly related to the amount of available productive work.’”

    You don’t have to be a koolaid drinker to recognize that all this endless handwringing about debt lacks fundamental (and radically modifying) context. Yes, of course debt can get out of hand, and it probably IS out of hand, but it still cannot be viewed as a thing apart from the milieu in which it lives. There is an enormous difference between debts incurred in building productive infrastructure, for example, and those incurred as a result of consumption and waste. ENORMOUS. To just compare bald debt numbers (number of dollars, or yuan, or whatever) is terribly misleading — and yet it happens all the time.

    “Yet even if there is a “direct relation” the amount of available productive work is not the only factor (and besides, how do we define what is “productive” and what is “wasteful”?) the other limits are the price and availability of natural resources, the acceptance of the currency….” etc.

    Yes, of course. Many factors. But in answer to your question: “how do we define what is productive and what is wasteful” — I would say it is not too hard to arrive at APPROXIMATE definitions that are good enough.

    #14131
    alan2102
    Participant

    On another note: Walayat is enjoying some well-deserved “I told you so’s” as the market hits new record highs:

    https://www.marketoracle.co.uk/Article46521.html
    Stock Market in DANGER of Strangling the Bears to Death
    Jul 20, 2014 – By: Nadeem_Walayat
    “The 5+ year stocks bull market continues to tighten its noose around the bears throats, though despite reddening faces and bulging eyes this has not halted the increasingly exasperated calls for the stocks bull markets always imminent end to definitely end this time.” end quote

    Ha. “Reddening faces and bulging eyes.”

    Yes, Nadeem, you were RIGHT, and all of us nervous nellies were WRONG.

    Eventually the bears will be right, of course; i.e. nothing ever goes straight up and never comes down. Walayat thinks the bull has a couple good years left, unless a blow-off top develops, in which case the bull could end sooner, according to him. See link for details.

    You would think that all this talk of tapering and tightening would have given him pause, but no. He probably views things as does Ackerman:

    https://news.goldseek.com/RickAckerman/1404741600.php
    When Will the Fed Tighten? Never.
    Rick Ackerman
    7 July 2014
    “I worked some numbers over the weekend in order to refine my forecast for Fed policy. One prediction that has stood the test of time is that any real tightening by the central bank is as likely as a Martian invasion. Turns out that when you crunch the latest data available, a Martian invasion winds up being 1.835 times as likely as any Fed tightening now or in the future. The formula I used to handicap this bet is proprietary and somewhat esoteric, so I won’t go into it here. But the bottom line is this: Anyone who believes that deliberate tightening is even remotely possible, let alone likely, is delusional.”

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