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The Coming Economic Insolvency
#41
muni bonds

Meredith Whitney explaining and defending her most recent prediction which will be very interesting when it comes to be.

"And down through the centuries the robes have never failed to keep the public at a respectful distance, inspire a decent awe for the professions, and impart an air of solemnity and mystery that has been as good as money in the bank. The four faculties of theology, philosophy, medicine, and law have been the perennial seedbeds, not only of professional wisdom, but of the quackery and venality so generously exposed to public view by Plato, Rabelais, Molière, Swift, Gibbon, A. E. Housman, H. L. Mencken, and others. What took place in the Greco-Roman as in the Christian world was that fatal shift from leadership to management that marks the decline and fall of civilizations." - taken from a speech by Hugh Nibley
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#42
And speaking of Ron Paul, here he is again, telling it like it really is. If anyone sees anything wrong with what he is telling the reporter, please let the rest of us know, ok?

The problem with Paul, is that he is not afraid to be the harbinger of bad news. That is why he will not be elected president. Nobody likes to have bad news thrust in their faces.
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#43
I dumped my tax free munis quite some time ago. Clearly some, especially left wing, municipalities are going to have trouble. Quite possibly, the federal government as well. Obviously, I own no gummint bonds. I did when they yielded 12%, however.

Bernanke et al do appear addicted to "more stimulus" i.e. printing money. It is probably due to his political affiliation or some primal fear he dares not speak or some kind of group think that has taken over his mind. Even Greenspan fell into the trap.

It has always puzzled me why financiers and elitist economists think a "little bit of inflation" is good, and a scintilla of deflation is bad. Would they be kicked out of their favorite club if they said otherwise?
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#44
The Fed/Bernanke is done with printing money. They feel it's enough.
Nick Bennenbroek, head of Group of 20 forex strategy at Wells Fargo
Wrote:
There are no hints of further easing from the Fed
By the time its latest "quantitative easing" program wraps up next week, the Fed will have pumped some $2.3 trillion into the economy.

Not 14B as the Ron Paul article said

Ooops, sorry, I forgot it's the economic forum...
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#45
Greenspan pours cold water on massive stimulus programs: Fed's Massive Stimulus Had Little Impact.

Quote:The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.

In a blunt critique of his successor, Fed Chairman Ben Bernanke, Greenspan said the $2 trillion in quantative easing over the past two years had done little to loosen credit and boost the economy.

"There is no evidence that huge inflow of money into the system basically worked," Greenspan said in a live interview.

Of course, his input prior to Bernanke wasn't all that sterling either.
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#46
(06-20-2011, 05:24 PM)jt Wrote: It has always puzzled me why financiers and elitist economists think a "little bit of inflation" is good, and a scintilla of deflation is bad. Would they be kicked out of their favorite club if they said otherwise?
The fed loses control of real interest rates (and even potentially the ability to maintain a steady money supply) if inflation goes negative. That would definitely be a social faux-pas.

(06-30-2011, 06:37 PM)John L Wrote: Greenspan pours cold water on massive stimulus programs: Fed's Massive Stimulus Had Little Impact.

Quote:The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
The trade imbalance was one of the main causes of the financial crisis, so I don't see why he's discounting those effects.
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#47
(07-06-2011, 08:50 PM)b5d Wrote:
(06-30-2011, 06:37 PM)John L Wrote: Greenspan pours cold water on massive stimulus programs: Fed's Massive Stimulus Had Little Impact.

Quote:The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
The trade imbalance was one of the main causes of the financial crisis, so I don't see why he's discounting those effects.

Ok, you are going to have to explain how a 'trade imbalance' is one of the main causes.

I'll give you a plus for calling it correctly, rather than a 'trade deficit'. But just how can that be a main culprit?

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#48
(07-06-2011, 09:06 PM)John L Wrote: Ok, you are going to have to explain how a 'trade imbalance' is one of the main causes.
If goods from China (as an example) disproportionately come here, then China is going to want IOUs to make sure they're going to get paid at some point. Those IOUs come in the form of investments, which they can liquidate at any time. It is therefore an economic accounting identity that trade imbalances are equal and opposite to capital imbalances (actually, there are some other factors in the equation, but those are the most important.) One of the driving factors of the financial crisis was that investment money was coming in, and nobody could find anyplace legit to put it. So they had to make up some less viable investment strategies.

Quote: I'll give you a plus for calling it correctly, rather than a 'trade deficit'.
I'm not sure what you're getting at. You mean just that there are two sides at fault, not just the US? I'd agree with that.
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#49
(07-06-2011, 09:20 PM)b5d Wrote:
(07-06-2011, 09:06 PM)John L Wrote: Ok, you are going to have to explain how a 'trade imbalance' is one of the main causes.
If goods from China (as an example) disproportionately come here, then China is going to want IOUs to make sure they're going to get paid at some point. Those IOUs come in the form of investments, which they can liquidate at any time. It is therefore an economic accounting identity that trade imbalances are equal and opposite to capital imbalances (actually, there are some other factors in the equation, but those are the most important.) One of the driving factors of the financial crisis was that investment money was coming in, and nobody could find anyplace legit to put it. So they had to make up some less viable investment strategies.

Quote: I'll give you a plus for calling it correctly, rather than a 'trade deficit'.
I'm not sure what you're getting at. You mean just that there are two sides at fault, not just the US? I'd agree with that.

David, those trade goods, which are already bought, are sent here, within the private sector. Cash has already changed hands up and down the process, all the way to the store shelves. China, or other countries, have provided goods, and we have provided cash for them. That is how trade works.

This is not a stock, bond, or treasury, investment sort of thing. Only two things are slowing down this flow: the recession, and the threat of inflation from too much liquidity. I think you are trying to mix apples and oranges here.

As for the "trade imbalance" thing, I was complimenting you on your not using the erroneous term "trade deficit". There is no trade deficit, as most people claim. Only when goods are accepted with a promise to pay later, does the 'deficit' exist. But in world of trade, payment is either immediate, or within something like a "fifteen or thirty day pay" rule.
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#50
John,

I was deliberately leaving cash out of the mix. The reason is that cash behaves differently when we're talking about an individual firm versus an entire economy (and nobody wants cash as an end in itself, so it's only an intermediate step anyway.) For an individual firm, you're right, you pay in cash and that's all you need to worry about. If an entire economy tries to buy Chinese goods, without giving anything real in return, then the value of cash itself goes down. Then we spend the same amount of money, but it's worth less, so the imbalance goes away. The only way to keep the imbalance persisting is to let them invest here, bringing the dollar back up.

I know you like to compare macroeconomics to household or firm-level decisions. That works as long as your comparing real inputs to real outputs. If you're looking at the entire economy, then you have to remember you're in a weird world where the value of cash itself can change.
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#51
That is why the nuts and bolts business of trade has nothing to do with this 'financial crisis'. The cause of the crisis is a government induced one: not one of trade.
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#52
(07-06-2011, 10:53 PM)John L Wrote: That is why the nuts and bolts business of trade has nothing to do with this 'financial crisis'. The cause of the crisis is a government induced one: not one of trade.

Don't follow. Do you mean it was caused by currency manipulation by the US Fed? (I mean, practically every one of the variables we've been discussing is controlled in some way by some government. This discussion got started in the first place with Greenspan's observation that the Fed affects trade.)
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#53
(07-06-2011, 11:54 PM)b5d Wrote:
(07-06-2011, 10:53 PM)John L Wrote: That is why the nuts and bolts business of trade has nothing to do with this 'financial crisis'. The cause of the crisis is a government induced one: not one of trade.

Don't follow. Do you mean it was caused by currency manipulation by the US Fed? (I mean, practically every one of the variables we've been discussing is controlled in some way by some government. This discussion got started in the first place with Greenspan's observation that the Fed affects trade.)

The reference to Greenspan was his remarks that his successor had not fixed the problem as of yet.

Currency manipulation is monetary in nature. The execution of trade has nothing to do with monetary policy. It's just trade. David, you are mixing government policy with private action.

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#54
(07-07-2011, 11:00 AM)John L Wrote: The execution of trade has nothing to do with monetary policy.

OK, I'm going to try one last time to make my point. Part of the quote about Greenspan's was as follows:

Quote:The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
So in other words, the part about monetary policy affecting exports was so obvious that it barely deserved mention. Monetary policy doesn't affect the exports directly, but it does affect investment, which is closely tied with trade balance.

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#55
(07-07-2011, 02:01 PM)b5d Wrote:
Quote:The Federal Reserve's massive stimulus program had little impact on the U.S. economy besides weakening the dollar and helping U.S. exports, Federal Reserve Governor Alan Greenspan told CNBC Thursday.
So in other words, the part about monetary policy affecting exports was so obvious that it barely deserved mention. Monetary policy doesn't affect the exports directly, but it does affect investment, which is closely tied with trade balance.

I'm not arguing that point. Hey, we are talking on different levels here.

Are you Jewish?

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#56
(07-07-2011, 07:20 PM)John L Wrote: I'm not arguing that point. Hey, we are talking on different levels here.
The point you were arguing, I take it, was that trade balance wasn't the cause of the economic recession. (Or at least that was it, phrased as a question.) If monetary policy can affect trade, then the relation works the other way around. Trade can make interest rates act like they're lower than the actual rate, pumping up the bubble.

Quote:Are you Jewish?
Could be...is this going to turn into one of Q's rants here?
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#57
(07-08-2011, 08:26 PM)b5d Wrote:
Quote:Are you Jewish?
Could be...is this going to turn into one of Q's rants here?

Jews argue about anything and everything. As the saying goes "What do you have when two Jews get together? Answer #1 - an argument. Answer #2 - three different opinions.

That is why I asked that question.

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#58
http://msmagazine.com/blog/blog/2011/07/...st-friend/

A feminist perspective on deficit's and other serious economic matters. S2

It's a wonder she exists in her position.
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#59
And here it an example of the damage these 'so called' economists can cause, especially when the 'dupable' take the time to actually read the garbage they put out there.

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#60
He probably hasn't had been in a vagina since he came out. What a beta. He probably makes the women whose asses he kisses revolt inside. Look at him for Christ's sakes. I wish the internet wasn't available to just anyone.

John, are you sure this isn't a parody?

This wouldn't exist if not for empowerment schemes or other bullshit, but here we are and there she is, getting paid somehow to tell everyone spending into deb is good. It does make sense since women are invariably pro-larger gov't and more handouts. Power of the voter.

Illustrates the larger concept that the average American is an idiot when it comes to economics, but they vote.
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