lets bore each other to death - Page 7 - Miata Turbo Forum - Boost cars, acquire cats.

Welcome to Miataturbo.net   Members
 


Current Events, News, Politics Keep the politics here.

Reply
 
 
 
LinkBack Thread Tools Search this Thread
Old 02-26-2012, 11:42 PM   #121
Elite Member
iTrader: (6)
 
blaen99's Avatar
 
Join Date: Sep 2010
Location: Seattle, WA
Posts: 4,112
Total Cats: 27
Default

I'm going to be nice to the noob.

Don't spam politics Nightsgt. Wrong forum to spam.

P.S. You'll be banned fast for spamming, so quit it please.
blaen99 is offline   Reply With Quote
Old 04-30-2012, 11:46 AM   #122
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Post

Related to the below comments:

The Evolution of Treasury Cash Management during the Financial Crisis. NY Federal Reserve paper with this quote:
The U.S. Treasury and the Federal Reserve System have long enjoyed a close relationship, each helping the other to carry out certain statutory responsibilities. This relationship proved benefi cial during the 2008-09 fi nancial crisis, when the Treasury altered its cash management practices to facilitate the Fed’s dramatic expansion of credit to banks, primary dealers, and foreign central banks.

…Understanding the relationship between Federal Reserve credit policy and Treasury cash management is important because the relationship illuminates an important but sometimes unappreciated interface between the Treasury and the Fed. It also underscores the symbiotic relationship between the two institutions, in which each assists the other in fulfilling its statutory responsibilities.”
-----

Quote:
Originally Posted by Scrappy Jack View Post
[...]
For a US Treasury auction to be successful, it needs a 1:1 coverage ratio. That's it. Because the Federal Reserve and US Treasury are in constant communication about reserve requirements and because of the nature of primary dealers, it would require some sort of -----up (to use a technical term) for an auction to fail.
Quote:
Originally Posted by Scrappy Jack View Post
[...]
The Fed and the Treasury are in constant communication regarding required reserves. Primary dealers must make a market in Treasuries. Go look at subscription ratios for US Treasury auctions. Barring a -----up between the Fed and Treasury, they will always be at least 1:1 because the Treasury knows ahead of time what level of required reserves they are targeting.
Quote:
Originally Posted by JasonC SBB View Post
My argument was never "when the Federal Reserve becomes insolvent", it is "When the FEDERAL GOV'T becomes insolvent".

The Federal Reserve will never want to inflate enough to risk hyper-inflation, regardless of how bad the Fed Gov deficits and debt become. The FED will tell Congress "we cannot inflate more. You Congressworms need to truly cut spending". (Helicopter Ben has already said this, weakly, a few times)

The only time hyperinflation may be a risk, is if Congress decides to nationalize the FED. Then the politicians may inflate to the moon.
Quote:
Originally Posted by Scrappy Jack View Post
Don't just take my word for it in terms of how the US Treasury bond market operates. Take it from the Federal Reserve.


In other words, the Federal Reserve knows the level of required reserves and the level of excess reserves in the banking system. The Fed, the US Treasury and the primary dealers are all in communication prior to the auction. Using this information, the auctions are designed to be oversubscribed (in other words, not fail).

After all, look at the obligations of a primary dealer:
Scrappy Jack is offline   Reply With Quote
Old 06-26-2012, 02:23 PM   #123
Crumple Zone Tester
iTrader: (7)
 
mgeoffriau's Avatar
 
Join Date: Jul 2009
Location: Jackson, MS
Posts: 7,656
Total Cats: 447
Default

Dammit. I used to read this kinds of articles in full agreement. How irritating that those with whom I'd otherwise be politically and ideologically aligned insist in constructing arguments couched in outdated and irrelevant terms.

7 Reasons Americans Are So Complacent About Our Country’s Impending Bankruptcy

For a bonus, check out the comments in which I am accused of "willful obtuseness."
mgeoffriau is offline   Reply With Quote
Old 06-26-2012, 03:18 PM   #124
Elite Member
 
Join Date: Jul 2005
Posts: 6,454
Total Cats: 80
Default

Quote:
Originally Posted by Scrappy Jack View Post
...unappreciated interface between the Treasury and the Fed. It also underscores the symbiotic relationship between the two institutions,
And they are parasites on the productive!
JasonC SBB is offline   Reply With Quote
Old 06-26-2012, 04:23 PM   #125
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

Quote:
Originally Posted by mgeoffriau View Post
For a bonus, check out the comments in which I am accused of "willful obtuseness."
Sweet baby Jesus, I couldn't make it past page 1 of the comments so I couldn't see what you wrote. I just don't have enough time or psychic capacity in my life for that level of ignorance and angst. That is what I am talking about when I say that a better understanding of the operational realities of our monetary system can lead to better dialogue.


A lack of understanding is bad for your health and stress levels, your portfolio and our economy.
Scrappy Jack is offline   Reply With Quote
Old 06-26-2012, 04:25 PM   #126
Crumple Zone Tester
iTrader: (7)
 
mgeoffriau's Avatar
 
Join Date: Jul 2009
Location: Jackson, MS
Posts: 7,656
Total Cats: 447
Default

Quote:
Originally Posted by Scrappy Jack View Post
Sweet baby Jesus, I couldn't make it past page 1 of the comments so I couldn't see what you wrote. I just don't have enough time or psychic capacity in my life for that level of ignorance and angst. That is what I am talking about when I say that a better understanding of the operational realities of our monetary system can lead to better dialogue.


A lack of understanding is bad for your health and stress levels, your portfolio and our economy.
Actually, I'm commenting on the author's own page (where I linked), not the Townhall page.
mgeoffriau is offline   Reply With Quote
Old 06-26-2012, 05:11 PM   #127
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

Gotcha. Yes. There is the gap in cause and effect.

"First there is a massive expansion of the Fed's balance sheet, then the value of the dollar plummets, then you get high inflation and high interest rates and then currency collapse."

There is no understanding of the transmission mechanisms involved and that premise is largely based on the myth of the ever-present money multiplier and loanable funds theory.
Scrappy Jack is offline   Reply With Quote
Old 07-05-2012, 10:41 AM   #128
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Post

Cliffs: An expert on the operational aspects of modern monetary systems like the USA vents his frustration at the lack of understanding from all sorts of journalists, academics, economists and other-wise sophisticated individuals regarding things like banks do not lend reserves.

Link to full FTAlphaville story

Author: Peter Stella, formerly the head of the Central Banking and Monetary and Foreign Exchange Operations Divisions at the International Monetary Fund. He has co-authored a number of papers on the topics of money supply, collateral and risk-free assets.
Naturally, this stunningly incorrect conceptualization of the lending process and how it interacts with bank reserves leads people to think how to entice banks to “get this money out the door” including to thoughts of “negative” deposit rates as an incentive.

My frustration lies in my inability to explain to “sophisticated” people why in a modern monetary system–fiat money, floating exchange rate world–there is absolutely no correlation between bank reserves and lending. And, more fundamentally, that banks do not lend “reserves”.

Commercial bank reserves have risen because central banks have injected them into a closed system from which they cannot exit. Whether commercial banks let the reserves they have acquired through QE sit “idle” or lend them out in the interbank market 10,000 times in one day among themselves, the aggregate reserves at the central bank at the end of that day will be the same.

There is nowhere else they can go in a closed system. I cannot hold a deposit at the ECB, or at the Fed, or at the Bank of England. Not even the Fed’s primary dealers have accounts at the Fed, they operate through clearing banks who are depository institutions. So it simply not possible for the banking system as a whole to make its deposit balances at the central bank decline by trading with anyone other than the central bank itself.
Scrappy Jack is offline   Reply With Quote
Old 09-06-2012, 12:15 PM   #129
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Post

Cliffs: Michael Johns, a conservative and one of the founding forces of the Tea Party movement, wrote circa 1996 about the dangers of a balanced budget agenda.
The concept of balanced budgets has long existed as a weapon in mainstream political rhetoric, but only since the 1994 elections has this rhetoric run the significant possibility of becoming political reality.

Yet before such a goal is uniformly embraced and enacted as policy, Congress and Clinton should pause to reflect on whether such an objective deserves its place at the pinnacle of our economic objectives. Upon such reflection, there is good reason to believe that it does not.

There is, for instance, no historical data that would demonstrate that a balanced budget enhances gross domestic product (GDP) or any other indicator of economic productivity. Balanced budget advocates have long contended that the absence of a balanced budget opens the door to a “crowding-out effect? on interest rates, whereby government borrowing actually closes out private borrowing, thus raising interest rates on private credit and slowing the economy. Contrary to this, however, some of the most profound drops in interest rates and expansions in economic growth have occurred at moments when the deficit has been on the rise (witness, for instance, the interest-rate drop and economic growth that largely characterized the eight-year Reagan administration period).

Nor is there any particular evidence demonstrating that our current budget deficit is necessarily at the root of any particular economic problem that a balanced budget would correct. True, the balanced budget is a convenient political means for cutting the substantial waste and even fraud that exists in federal expenditures, but there is no reason to believe that this could not be accomplished short of wedding our nation’s policy leaders to a squarely balanced budget in every fiscal year.

BALANCED BUDGETS BEHIND DEPRESSIONS

Perhaps most convincingly, America does have some previous experience with balanced-budget efforts, and it is cause not for celebration but considerable alarm. Without exception, on six consecutive occasions from 1817 until 1930 when government cut spending considerably without simultaneously seeking to stimulate the economy with equally deep tax cuts or other fiscal stimuli, depressions arose. The correlation is a shocking 100 percent. Balanced-budget efforts in America have always preceded national depressions.
Emphasis mine. I have alluded to that last part before and posted the dates and data previously.

Link to full article
Scrappy Jack is offline   Reply With Quote
Old 09-07-2012, 10:56 AM   #130
Elite Member
iTrader: (2)
 
fooger03's Avatar
 
Join Date: Jan 2009
Location: Columbus, OH
Posts: 4,132
Total Cats: 187
Default

If I decided to stop racking up credit card bills in my household, I wouldn't be able to buy as much either...I would have to buy wal-mart brand shoes instead of Mizunos, I would have to do my grocery shopping at Aldi, and I wouldn't be able to afford the lease on my BMW 7-Seiries, so I'd probably have to go out and buy a used car...A USED CAR, CAN YOU IMAGINE THE HORROR!?!?...but if the minions of my household would ever let me pay my credit card bills off completely, they would be surprised at how much more money I have to spend than I did when my debt was 6 times my annual household income and I was still buying 90" 3-D TVs by increasing my credit card limits....
fooger03 is offline   Reply With Quote
Old 09-07-2012, 03:05 PM   #131
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

fooger - What you said makes virtually no sense in the context of this thread and I do not understand your point at all unless you think the US Federal Government somehow operates on an overextended level of leverage via lines of credit that can be terminated by outside forces.


Please note that virtually any financial analogy comparing a household/corporation/state to the US Federal Government is going to be majorly flawed. I'm not talking about "every analogy has some flaw(s)" or "apples to oranges" comparison. I'm talking, "does not apply" type of flawed.
Scrappy Jack is offline   Reply With Quote
Old 09-07-2012, 04:11 PM   #132
Elite Member
iTrader: (2)
 
fooger03's Avatar
 
Join Date: Jan 2009
Location: Columbus, OH
Posts: 4,132
Total Cats: 187
Default

So the US government doesn't use a significant portion of its income to pay interest???

Wow, I never would have guessed!!

You also make a good point about how there are no limits on how much debt the U.S. can rack up. We can just keep going farther and farther into debt, owing other countries more and more trillions of dollars, and no country will ever have an issue with that. Hell, why do we even pay taxes? If our government can just "rent" an unlimited amount of money from everyone else without any strings attached or any need to pay it back, why don't I have a free Bentley?

Everyone likes saving, but many people like the spending part of finances much more than they like the saving part, so the saving part never gets accomplished. When we go from having a household economic "boom" by high income AND racking up debt on our credit cards, followed by a household economic "bust" when we find out that, instead of the promotion we were expecting, our salary is being cut in half and we can barely afford to pay for household expenses plus the interest on those lines of credit, we enter a household "economic depression", which is similar to a corporation/state/federal depression. And I'm not talking "similar" as in a horse is similar to a dog because they both have 4 legs, I'm talking the geometric definition of "similar", as in they are EXACTLY the same thing with the only exception being the proportion.
fooger03 is offline   Reply With Quote
Old 09-07-2012, 04:31 PM   #133
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Arrow

Quote:
Originally Posted by fooger03 View Post
So the US government doesn't use a significant portion of its income to pay interest???

Wow, I never would have guessed!!

You also make a good point about how there are no limits on how much debt the U.S. can rack up. We can just keep going farther and farther into debt, owing other countries more and more trillions of dollars, and no country will ever have an issue with that. Hell, why do we even pay taxes? If our government can just "rent" an unlimited amount of money from everyone else without any strings attached or any need to pay it back, why don't I have a free Bentley?

Everyone likes saving, but many people like the spending part of finances much more than they like the saving part, so the saving part never gets accomplished.

Fooger - It sounds like you have a lot of common misunderstandings and misconceptions about the US monetary system. I would recommend you go back to the start of this thread and read from there.

For one thing, the US Federal debt is the single most misunderstood topic in all of economics. That's perfectly understandable as the reality of today is not very intuitive due to the vestigial/anachronistic language and structure.


Most of the US "debt" is actually someone's savings. Much of the rest of it is accumulated as a means of foreign exchange rate manipulation.


As for your Bentley - Unlike any household or corporation or state, the US Federal government is operationally capable of ordering up and paying for a dozen or a million Bentleys for every single individual in the world. The problem is never insolvency, it is inflation (and that example above would be wildly inflationary and/or hyperinflationary). If you don't understand all of that, go back to the beginning of this thread.

[Edit: And taxation has multiple purposes, mainly causing a legal demand for use of US dollars among its citizens (try paying your Federal income tax with gold coins or Miata parts).]

A poor understanding of the US monetary system is bad for your blood pressure and your portfolio.
Scrappy Jack is offline   Reply With Quote
Old 09-27-2012, 11:01 AM   #134
Crumple Zone Tester
iTrader: (7)
 
mgeoffriau's Avatar
 
Join Date: Jul 2009
Location: Jackson, MS
Posts: 7,656
Total Cats: 447
Default

Sigh.

Fed Virtually Funding the Entire US Deficit: Lindsey

Quote:
The latest round of extraordinary Federal Reserve stimulus is risky and leaves little room to maneuver should another crisis hit, economist Lawrence Lindsey told CNBC’s “Squawk Box” on Wednesday.

Lindsey said that with the Fed purchasing at least $40 billion a month in mortgage debt through QE3, “they are buying the entire deficit.” (Read more: Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates.)

“I have no problem doing extraordinary things in extraordinary times,” said Lindsey, a former White House economic advisor under former president George W. Bush who now runs his own consulting firm.

Lindsay said he agreed with the Fed’s first two rounds of quantitative easing. Now, with the economy now growing closer to its trend rate, “doing something that’s really out of the ordinary is risking things.”

He added, “If this becomes the new ordinary, it’s hard to imagine the Fed’s maneuvering room” should another crisis hit. (Read More: Why Fed Policy Just Like the NFL Refs: El-Erian.)

The central bank's recently announced bid to stimulate the economy has also taken the pressure off politicians to deal with the U.S. fiscal cliff, Lindsay argued, which could result in destabilizing tax hikes and spending cuts automatically taking effect early next year.

The Fed, maybe because it can't do otherwise, has told the Congress: 'We're going to buy your bonds no matter what,'” Lindsey said. “I think that's keeping the pressure off the president, off the Congress.”

The effective of QE3 on interest rates may also keep Congress from reining in borrowing.

“If the (Fed) chairman’s estimates of the effectiveness of QE3 on interest rates come true, we’re going to be down to an average cost of borrowing for the government of 0.6 of a percentage point,” Lindsey said. “Why would any Congress not borrow and spend if they could borrow at 60 basis points?”
mgeoffriau is offline   Reply With Quote
Old 10-17-2012, 09:33 PM   #135
Crumple Zone Tester
iTrader: (7)
 
mgeoffriau's Avatar
 
Join Date: Jul 2009
Location: Jackson, MS
Posts: 7,656
Total Cats: 447
Default

Scrappy, did you catch Romney warning us that if Obama is reelected, that it "puts us on a road to Greece."?
mgeoffriau is offline   Reply With Quote
Old 10-18-2012, 08:25 AM   #136
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

No. I am not watching the debates. I have heard him and Ryan make similar comments in the past and Obama talk about the US being "out of money."

I am confident that none of them believe that, that all of them really do know that's bullshit, but that they will say anything they think necessary to try and make the other team lose.
Scrappy Jack is offline   Reply With Quote
Old 10-18-2012, 10:27 AM   #137
Crumple Zone Tester
iTrader: (7)
 
mgeoffriau's Avatar
 
Join Date: Jul 2009
Location: Jackson, MS
Posts: 7,656
Total Cats: 447
Default

Mosler's site has a transcript of a semi-public appearance of Romney from a few years ago in which he describes the money creation process fairly accurately. His conclusion to the audience is that excessive money creation will lead to a failed bond auction, but again, that could be pandering to the audience.
mgeoffriau is offline   Reply With Quote
Old 10-18-2012, 11:18 AM   #138
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

Fair enough; I'm probably giving them too much credit. There are a ton of people in my industry (financial services/investments) that don't really understand monetary systems or are clinging to outmoded concepts that have been proven inaccurate.


Mitt's choice of Federal Reserve chairman could be the single most important nomination of his Presidency (if he gets elected). That will have way more impact on every American than who he nominates to the Supreme Court.
Scrappy Jack is offline   Reply With Quote
Old 10-29-2012, 11:24 AM   #139
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

Wheee! Huge infographic on the Federal Reserve:

Link to full image

Attached Thumbnails
lets bore each other to death-visual-guide-federal-reserve-infographic.jpg  
Scrappy Jack is offline   Reply With Quote
Old 11-06-2012, 11:08 AM   #140
Elite Member
iTrader: (2)
 
Join Date: Sep 2008
Location: Central Florida
Posts: 3,284
Total Cats: 178
Default

Mark and anyone else in learning more about the actual operations of the modern free-float fiat monetary system:
Mosler's <u>Soft Currency Economcis II</u> Mosler's Soft Currency Economcis II
is available on Amazon.
Scrappy Jack is offline   Reply With Quote
 
 
Reply

Related Topics
Thread Thread Starter Forum Replies Last Post
Transmission Heat Shield Thread patsmx5 General Miata Chat 46 06-06-2016 11:27 AM
elesjuan's mediocre 95 Miata adventure (google fiber edition) elesjuan Build Threads 8 02-16-2016 09:36 PM
Mazdaspeed 2.0L C-Spec ITB motor w/ accessories graexodus Miata parts for sale/trade 9 10-25-2015 04:34 PM
New supertech pistons /wiesco xx rings HHammerly Miata parts for sale/trade 5 10-17-2015 07:53 AM
What happened to my Dynalite? midpack Suspension, Brakes, Drivetrain 18 09-22-2015 08:52 PM


Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off



All times are GMT -4. The time now is 07:48 PM.