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Old 03-27-2012, 01:02 PM   #21
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Quote:
Originally Posted by Shearhead_3:16 View Post
If you want people to take your websight or magazine seriously then you have to get sponsors who at least look legit and don't post their banners on websites frequented by those who tevo "Ancient Aliens".
That's stupid, that's like concluding some gearhead is considering turboing miatas, comes here, and sees all the cat threads, and confirms his suspicions that miatas are owned by gay weirdos.

Google must have seen a correlation between "US government collapsing!" websites and interest in "grow your own vegetables!" as well as "free electricity!" crap. Before my knee surgery I looked up how long it takes to get hooked on pain meds and for weeks google thought I was trying to shake an addiction.

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Originally Posted by Joe Perez View Post
Given this, I simply cannot take seriously any economic advice proffered by a man who clearly lacks even the most fundamental understanding of economics.
?? Based on what?
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Old 03-27-2012, 01:37 PM   #22
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P.S. The author does NOT advocate:
- violence
- joining a "militia"
- tax resistance
- living "off the grid"

The above are like cutting off your nose to spite your face.

He advocates finding and marketing a niche business that won't suffer if/when the gov't meaningfully cuts its budget. He says if you want to be active politically, do it in local politics.
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Old 03-27-2012, 03:01 PM   #23
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Question

Quote:
Originally Posted by JasonC SBB
You missed the step where he said that the Fed will have to buy debt (causing inflation).
Quote:
Originally Posted by Scrappy Jack
Clarify for me your definition of "inflate." In what way does the Federal Reserve buying US Treasury securities cause this inflation? What is the mechanism that gets you from A (Federal Reserve actions) to B (inflation)?
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Originally Posted by JasonC SBB View Post
Fed Res increases supply of "high powered money", which ends up as extra reserves at the banks, which gets lent out, increasing the money supply, decreasing its value.
I am not trying to be obtuse here. I want to answer your question from my perspective but you and I are operating with fundamentally different models and the language can be muddy.

"High powered money" = reserves at the Fed + cash held by the public?

Are you using "inflation" as short hand for "price inflation" as most people do or are you considering an increase in the broader money supply measures alone as inflation?
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Old 03-27-2012, 03:10 PM   #24
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Originally Posted by JasonC SBB View Post
That's stupid, that's like concluding some gearhead is considering turboing miatas, comes here, and sees all the cat threads, and confirms his suspicions that miatas are owned by gay weirdos.

Google must have seen a correlation between "US government collapsing!" websites and interest in "grow your own vegetables!" as well as "free electricity!" crap. Before my knee surgery I looked up how long it takes to get hooked on pain meds and for weeks google thought I was trying to shake an addiction.



?? Based on what?
Would you buy a turbo kit from a websight that your unfamiliar with that advertises & sells electric superchargers?
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Old 03-27-2012, 03:57 PM   #25
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At first, I was going to get annoyed that the tangent about internet-generated web ads was actually still going on.


Then I realized where I was.
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Old 03-27-2012, 03:58 PM   #26
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omfg. ever heard of cookies?
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Old 03-28-2012, 02:42 PM   #27
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Quote:
Originally Posted by Shearhead_3:16 View Post
Would you buy a turbo kit from a websight that your unfamiliar with that advertises & sells electric superchargers?
I would buy a clutch.

Your argument is stupid, you are comparing having automatic google ads, vs. an outfit selling turbo kits and a tornado.
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Old 03-28-2012, 02:44 PM   #28
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Originally Posted by Scrappy Jack View Post
I am not trying to be obtuse here. I want to answer your question from my perspective but you and I are operating with fundamentally different models and the language can be muddy.

"High powered money" = reserves at the Fed + cash held by the public?

Are you using "inflation" as short hand for "price inflation" as most people do or are you considering an increase in the broader money supply measures alone as inflation?
Inflation = increase in money supply due to HPM multiplied by money multiplier, usually followed by price increases. Yes I know the recent increase in HPM was not followed by an overall increase in money supply (M2?) because banks aren't lending (which means a reduction in the money multiplier)
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Old 03-28-2012, 07:24 PM   #29
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Quote:
Originally Posted by JasonC SBB View Post
Inflation = increase in money supply due to HPM multiplied by money multiplier, usually followed by price increases. Yes I know the recent increase in HPM was not followed by an overall increase in money supply (M2?) because banks aren't lending (which means a reduction in the money multiplier)
Gotcha. This assumes that the neo-classical textbook concept of the money multiplier and loanable funds is an accurate model and that banks are reserve constrained.

Banks do not lend reserves or deposits. Loans create reserves deposits.

If you reject that premise, do not bother reading any further.

For those seeing the massive wall of text below and about to TL;DNR:

Cliffs: The foundation of the arguments presented by the original author are based on out-dated textbook concepts that are not reflective of the operational reality of the way the monetary and banking systems in the USA currently operate.

It's like being concerned your wife's Optima (with a factory 10.5:1 compression ratio and a turbocharger) is going to spit a rod out the block because she ran 87 AKI fuel with boost and that high a compression ratio.



On the money multiplier in the current operational landscape of the US monetary system:

Quote:
Originally Posted by Carpenter and Demiralp, by way of the Federal Reserve Board (emphasis and selective quotation mine)

Casual empirical evidence points away from a standard money multiplier and away from a story in which monetary policy has a direct effect on broader monetary aggregates. The explanation lies in the institutional structure in the United States, especially after 1990. First, there is no direct link between reserves and money—as defined as M2.

Following a change in required reserves ratios in early 1990s, reserve requirements are assessed on only about one-tenth of M2. Second, there is no direct link between money—defined as M2—and bank lending.

[...]

We argue that changes in the sensitivity of bank loans may stem from the demand side, and that a better test for the lending channel is to check whether bank loans are financed by reservable deposits. Our findings suggest that this is not the case.

All of these points are a reflection of the institutional structure of the U.S. banking system and suggest that the textbook role of money is not operative. While the institutional facts alone provide compelling support for our view, we also demonstrate empirically that the relationships implied by the money multiplier do not exist in the stem from the demand side, and that a better test for the lending channel is to check whether bank loans are financed by reservable deposits. Our findings suggest that this is not the case.
Link to Federal Reserve paper

Last edited by Scrappy Jack; 03-28-2012 at 07:37 PM. Reason: Caught a typo and corrected (with a strikeout), cleaned up some phrasing and formatting
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