Endless QE

[madanthonywayne]

Egan-Jones has responded to QE3 by once again downgrading our credit rating:

In its downgrade, the firm said that issuing more currency and depressing interest rates through purchasing mortgage-backed securities does little to raise the U.S.'s real gross domestic product, but reduces the value of the dollar.

In turn, this increases the cost of commodities, which will pressure the profitability of businesses and increase the costs of consumers thereby reducing consumer purchasing power, the firm said.

In April, Egan-Jones cuts the U.S. credit rating to "AA" from "AA+" with a negative watch, citing a lack of progress in cutting the mounting federal debt.

http://www.cnbc.com/id/49037337

The Federal Reserve’s “money printing,” Hassiepen said, has not
“really contributed to the improvement in the general economy” so far.
Instead, all it has done is increase inflation and the cost
structure in the general economy, as will the new round of QE just
announced Thursday.
“We actually think this is going to cause unemployment, not
employment,” he said. the Fed’s policy will reduce household’s
disposable income and raising costs will also “lead companies to lay off
people,” he said.
“Let’s say six months from now, you might see job actions” in some
of the more commodity-sensitive industries that are particularly
vulnerable to an increase in commodity prices and a weak dollar, he
predicted.
“This is going to cause the economy to completely stagnate,” he
said, expecting the effect to start within three or four months.
He first expects a “rapid uptick in gasoline and food prices,”
which will affect households’ disposable income. This in turn will take
several months to work its way through into the general economy.
“People are going to feel nostalgic for the 1.7% for the last
quarter,” he said, referring to the second quarter GDP growth.
“Unfortunately we have a Federal Reserve that simply does not
recognize the inflationary impact of food and energy prices any longer,”
he said.

http://www.forexlive.com/blog/2012/09/13/egan-jones-analyst-hints-at-us-rating-downgrade-post-qe3/

The current fed policy reminds me of a story from a hitchhiker's guide to the galaxy[/I]

MANAGEMENT CONSULTANT:
Um listen, if we could, er, for a moment move on to the subject of fiscal policy -

FORD:
”Fiscal Policy”?!

MANAGEMENT CONSULTANT:
Yes.

FORD:
How can you have money if none of you actually produce anything? It doesn’t grow on trees you know!

MANAGEMENT CONSULTANT:
You know If you would allow me to continue!

CAPTAIN:
Yes let him to continue.

MANAGEMENT CONSULTANT:
Since we decided a few weeks ago to adopt leaves as legal tender, we have, of course all become immensely rich.

FORD:
No really? Really?

CROWD MEMBERS:
Yes, very good move…

MANAGEMENT CONSULTANT:
But, we have also run into a small inflation problem on account of the high level of leaf availability. Which means that I gather the current going rate has something like three major deciduous forests buying one ship’s peanut. So, um, in order to obviate this problem and effectively revalue the leaf, we are about to embark on an extensive defoliation campaign, and um, burn down all the forests. I think that’s a sensible move don’t you?

MARKETING GIRL:
That makes economic sense.

[Murmurs of agreement from crowd]​

 

[joepistole]

Egan-Jones has responded to QE3 by once again downgrading our credit rating:

LOL, Don't get too excited Mad. If this is so credible, why did the stock markets react to it with a 200+ point rally? Stock markets don't rally on bad economic news.

Additionally, the firm you cited for the downgrade was charged just a few months ago by the SEC (Security Exchange Commission) for serious misrepresentations, omissions and conflicts of interests – reminds me of Republican Party officials and their devotees. Your firm's lack of credibility is probably one reason why the market failed to react to it's down grade.

“BY JEANNETTE NEUMANN
U.S. securities regulators alleged that Egan-Jones Ratings Co. and its president, Sean Egan, filed inaccurate documents that exaggerated the small credit-rating firm's expertise.

The Securities and Exchange Commission said Tuesday that Egan-Jones misrepresented how many securities the firm rated as well as the number of years it had been rating those deals. Such information gives investors and regulators insight into the experience of a credit rater.

The SEC said Egan-Jones made the "material misrepresentations and omissions" in July 2008 when it applied to the agency to issue officially recognized ratings on bonds issued by countries, U.S. states and local governments ...”

http://online.wsj.com/article/SB10001424052702303592404577364132973207216.html



FOR IMMEDIATE RELEASE
2012-75

Washington, D.C., April 24, 2012 — The Securities and Exchange Commission today announced charges against Egan-Jones Ratings Company (EJR) and its owner and president Sean Egan for material misrepresentations and omissions in the company’s July 2008 application to register as a Nationally Recognized Statistical Rating Organization (NRSRO) for issuers of asset-backed securities (ABS) and government securities. EJR and Egan also are charged with material misrepresentations in other submissions furnished to the SEC and violations of record-keeping and conflict-of-interest provisions governing NRSROs.

http://www.sec.gov/news/press/2012/2012-75.htm


Just what you Republicans want in a securities rating agency, one that has been charged with fraud/misrepresentation! It fits in perfectly with the Republican misinformation agenda.

 

[Michael]

Joe Joe Joe.... we've been doing this for about 5 years now.

I know it's nice to live in the illusion that our betters, the wealthy Oligarchs, actually know what they're doing and have our best interest at heart - particularly when they buy politicians like Obama or Mittens and pass regulations and laws 'for the good of the little people'. Yes, when a cute TSA agent shoves a couple digits in your anus, ignorance probably does feel like bliss

But, really now, it's time to get over it - these sociopaths high on dopamine are going to destroy more than just our economy and when they finally realize printing money and 'putting Americans to work' is NOT creating prosperity, they will happily send American children to die in needless war, AGAIN.


It's not possible to print one's way to prosperity.
It's not possible to WAY overpay for shoddy half ass government built bridges and roads on one's way to prosperity.

Oh, and overvalued stocks ALSO do not pave the way to prosperity.

 

[Michael]

European Commission president Jose Manuel Barroso called for an EU Superstate, a reduction in individual and National liberty in his fight to "to win the battle against nationalists, or extreme populists"

Extreme populists! Haaa! Godfrey Bloom (a Member of the European Parliament for Yorkshire) makes note that we in England and America often refer to that as "Democracy" - a foreign concept to these dopamine addled politician Technocratic ninny sociopaths.

 

[Michael]

From time to time you hear a reference to Japan.... as if their 25 year spending on infrastructure 'worked'. And if it worked there, it can work in the US too!

Um, no.

A few things to note about Japan from my experience and you tell me if this fits with how we are in America. Extreme social unity. The nail that stands up, MUST be hammered down. And by hammer, I mean hammered DOWN. Up at 6AM, home at 12midnight. School, up at 6AM, home at 5PM, off to cramschool, home at 11PM. Very small safety net. Very small Unionization. When you do get a job, if you're lucky, plan to spend a lot of time pre-work praising the company.
WE LIVE for The Company!
WE SERVE THE COMPANY!
WE BREATH AND LIVE FOR COMPANY!!!!
HAI!!!!!!!!!!!!

Followed by stretch, breathing and company approved calisthenics.

I recall a Chinese once commented: If we ever wanted to know about Communism, Japan is the place to learn.

If you saw the schools in Japan you'd be scared for the kids (at least some of them). There is NO WAY ON EARTH you could build a school like that in the USA. Imagine a slide that stops at brick ledge and a fence with some sharp rocks. Kids hurt themselves all the time. Not too seriously, but it's not uncommon to see blood. Now recall the we don't even keep score any longer - everyone wins! I only use this as an example to illustrate that Japanese don't sue, challenge, or in any way attempt to disrupt social harmony as seen through the eyes of Japanese.

They have really REALLY nice State owned roads in Japan. It costs a LOT to drive on them. Say, 4 hour trip, about $40-$80 in tolls. God damn nice roads though. Real nice. But, all around those roads, all that private industry, is slowly dying, rusting little by little.

For the first time I've started to see second hand CLOTHING shops in Japan. I remember when Japanese wouldn't even buy a used CAR let alone used clothing.

Social harmony is an all encompassing aspect to Japanese life. It's a mono-culture. Which has it's advantaged - it's extremely safe. I think if you are charged with a crime the conviction rate is 98%. Prison is run differently - theirs is to remold. Brainwashing is therefor acceptable. Ours OTOH is about punishing.

Yet, for all of this - it didn't work in Japan.

It isn't even going to come close to working in the USA. We're not Japanese. No where near anything like Japanese.



Also, speak to a grandparent about how things were during the great building of the federal highways. Kids were shipped to off to live in barracks and their pay was sent home to mom for safekeeping. There is NO WAY Americans would accept that in this day and age. It'd be like living in an Army Barracks.

AND WE HAD MONEY THEN!


Fast forward to the 1960s, we're STILL paying off LBJ's "Great Society" social welfare programs that destroyed our culture and left us shackled to the Nanny State - and back then there was no expectation to get something for nothing. We hadn't yet raised a few generations on the Welfare system where getting money from the State is the norm.

Not to mention, where IS this money going to come from?!? Oh, yeah, selling bonds on the great great great grandchildren's labor. Or inflating grandma's retirement away.

It didn't work for the Japanese - and they had their own money (which is just about gone now).



We watch as our society is being flushed right into the toilet (it's been swirling the bowl for 3 generations) and these sociopaths Ninny's haven't got a clue. Mark my words, they will frog march us off to war.


So, it's either Rape, Murder, Death and War against 'Commies' or 'Terrorists' or 'whatever' .........OR, .............




.......get this, we simply let the crooked Banks that made Liar Loans fail ......we liquidate the debt. Oligarchs lose a few houses - so what? And we send the Criminal Bankers off to prison. Maybe we even have a real trial and we hang a few of them - criminals like those a MF Global are put to justice.


Which way is it going to go America?
We stop selling our children's labor as debt?
We stop selling grandmother's retirement as inflation?
We retool our monetary system away from State ruled Oligarch's, decentralize and rediscover the happiness that comes with respect and individual Liberty?

Or we hand it all over to these sociopath Ninny Technocrats and the Oligarchs who buy?



My guess is the Ninny's. I can tell simply by this board and conversations I've had with other, relatively highly educated Citizens. So, it's War. Americans are too ignorant to do anything other than what we're told. The few that actually do have a clue, are WAY in the minority. And with greater than 50% dependent on the government in one way or another - they'd not dare to rock the boat. So, then it's settled. The Oligarchs and their cheerleading bitches (like Ben and his supplicants) win.

We loose.
My guess is, it will be the ME again only much much much worse.

 

[joepistole]

From time to time you hear a reference to Japan.... as if their 25 year sending on infrastructure 'worked'. And if it worked there, it can work in the US too!
Um, no.
A few things to note about Japan from my experience and you tell me if this fits with how we are in America. Extreme social unity. The nail that stands up, MUST be hammered down. And by hammer, I mean hammered DOWN. Up at 6AM, home at 12midnight. School, up at 6AM, home at 5PM, off to cramschool, home at 11PM. Very small safety net. Very small Unionization. When you do get a job, if you're lucky, plan to spend a lot of time pre-work praising the company.
WE LIVE for The Company!
WE SERVE THE COMPANY!
WE BREATH AND LIVE FOR COMPANY!!!!
HAI!!!!!!!!!!!!
Followed by stretch, breathing and company approved calisthenics.
I recall a Chinese once commented: If we ever wanted to know about Communism, Japan is the place to learn.
If you saw the schools in Japan you'd be scared for the kids (at least some of them). There is NO WAY ON EARTH you could build a school like that in the USA. Imagine a slide that stops at brick ledge and a fence with some sharp rocks. Kids hurt themselves all the time. Not too seriously, but it's not uncommon to see blood. Now recall the we don't even keep score any longer - everyone wins! I only use this as an example to illustrate that Japanese don't sue, challenge, or in any way attempt to disrupt social harmony as seen through the eyes of Japanese.
They have really REALLY nice State owned roads in Japan. It costs a LOT to drive on them. Say, 4 hour trip, about $40-$80 in tolls. God damn nice roads though. Real nice. But, all around those roads, all that private industry, is slowly dying, rusting little by little.
For the first time I've started to see second hand CLOTHING shops in Japan. I remember when Japanese wouldn't even buy a used CAR let alone used clothing.
Social harmony is an all encompassing aspect to Japanese life. It's a mono-culture. Which has it's advantaged - it's extremely safe. I think if you are charged with a crime the conviction rate is 98%. Prison is run differently - theirs is to remold. Brainwashing is therefor acceptable. Ours OTOH is about punishing.
Yet, for all of this - it didn't work in Japan.
It isn't even going to come close to working in the USA. We're not Japanese. No where near anything like Japanese.Also, speak to a grandparent about how things were during the great building of the federal highways. Kids were shipped to off to live in barracks and their pay was sent home to mom for safekeeping. There is NO WAY Americans would accept that in this day and age. It'd be like living in an Army Barracks.AND WE HAD MONEY THEN!Fast forward to the 1960s, we're STILL paying off LBJ's "Great Society" social welfare programs that destroyed our culture and left us shackled to the Nanny State - and back then there was no expectation to get something for nothing. We hadn't yet raised a few generations on the Welfare system where getting money from the State is the norm.Not to mention, where IS this money going to come from?!? Oh, yeah, selling bonds on the great great great grandchildren's labor. Or inflating grandma's retirement away. It didn't work for the Japanese - and they had their own money (which is just about gone now).We watch as our society is being flushed right into the toilet (it's been swirling the bowl for 3 generations) and these sociopaths Ninny's haven't got a clue. Mark my words, they will frog march us off to war.So, it's either Rape, Murder, Death and War against 'Commies' or 'Terrorists' or 'whatever' .........OR, ....................get this, we simply let the crooked Banks that made Liar Loans fail ......we liquidate the debt. Oligarchs lose a few houses - so what? And we send the Criminal Bankers off to prison. Maybe we even have a real trial and we hang a few of them - criminals like those a MF Global are put to justice.Which way is it going to go America?We stop selling our children's labor as debt?We stop selling grandmother's retirement as inflation?We retool our monetary system away from State ruled Oligarch's, decentralize and rediscover the happiness that comes with respect and individual Liberty? Or we hand it all over to these sociopath Ninny Technocrats and the Oligarchs who buy? My guess is the Ninny's. I can tell simply by this board and conversations I've had with other, relatively highly educated Citizens. So, it's War. Americans are too ignorant to do anything other than what we're told. The few that actually do have a clue, are WAY in the minority. And with greater than 50% dependent on the government in one way or another - they'd not dare to rock the boat. So, then it's settled. The Oligarchs and their cheerleading bitches (like Ben and his supplicants) win. We loose. My guess is, it will be the ME again only much much much worse.

Per your own admission, you cannot compare Japan to The United States and draw the conclusions you have repeatedly made – something that has been repeatedly pointed out to you by numerous posters. You are a stuck record Michael, endlessly repeating yourself.

 

[joepistole]

Joe Joe Joe.... we've been doing this for about 5 years now. I know it's nice to live in the illusion that our betters, the wealthy Oligarchs, actually know what they're doing and have our best interest at heart - particularly when they buy politicians like Obama or Mittens and pass regulations and laws 'for the good of the little people'. Yes, when a cute TSA agent shoves a couple digits in your anus, ignorance probably does feel like bliss

That sounds more like your fantasy. After all it is those oligarchs that are funding your Libertarian Party (e.g. Koch brothers).

But, really now, it's time to get over it - these sociopaths high on dopamine are going to destroy more than just our economy and when they finally realize printing money and 'putting Americans to work' is NOT creating prosperity, they will happily send American children to die in needless war, AGAIN.

An interesting notion, putting people to work is not creating prosperity, really?

It's not possible to print one's way to prosperity.

A nice Republican talking point, but where is your evidence? Oh that is right you don’t have any – one of them small details again. As has been repeatedly proven, the US has had fewer recessions, shorter recessions, and longer periods of prosperity since the creation of The Federal Reserve and use of Keynesian economics methods. You have nearly 100 years of empirical evidence going against your notions Michael.

It's not possible to WAY overpay for shoddy half ass government built bridges and roads on one's way to prosperity.
Oh, and overvalued stocks ALSO do not pave the way to prosperity.

Again Michael, where is your proof?

 

[Michael]

It's not possible to print one's way to prosperity.

An interesting notion, putting people to work is not creating prosperity, really?

Yes Joe, "Putting people to work" does not magically create prosperity. China and the USSR had 100% employment. Digging holes and filling in said dug holes is NOT the same as creating prosperity. While you little Keynesian's can't seem to tell fantasy from reality, do you think you might let the rest of us live free FROM your sociopathic social experiments???

Do you think you could do us that little favor? Just butt the hell out of our lives? You do your thing and let us do ours?

This is why we need currency competition and to rid ourselves of income tax and 30 year bonds. So you people can go off and ruin your own lives by destroying your own currencies while leaving us well enough alone. See, that's the thing. You can't do it by yourselves - which is why you'll never leave us alone. You talk about how 'if we don't like it we can leave'. I'm beginning to think yes, this is going to happen. And we're going to probably end up taking 3/4th of the States with us. Maybe we'll leave you a New Jersey and parts of Utah. As they say: Be careful what you wish for.

It's not possible to print one's way to prosperity.

A nice Republican talking point, but where is your evidence?

A nice "Republican talking point"???
You have got to be kidding me?!?

Oh, and overvalued stocks ALSO do not pave the way to prosperity.

Again Michael, where is your proof?

Um, you did see the Japanese stock price take a 30,000 point dump as Japan's economy tanked and has remained shitty over the last 25 years?





Take a good look, these are the Ninny's who are happily selling off your children's future through 30 year Bonded-Labor to maintain the Banking Cartel and the political Sociopaths they buy off in Washington (ie: the Obomney's and Mittens). The Ninny's have no problem inflating a lifetimes worth of savings if it means handing out more bonuses at the Banks or saving their political donors like Corzine from going to prison. Inflation is a stated goal even! Let grandmother eat cat food is their motto. A hundred years ago these Ninny's would have been HUNG for trying to inflate away The Citizens' life savings. Back then people understood inflation as a tax and that it was stealing. Not now, take a real good look, we've had 5 years and this it only just the beginning. They're so entrenched in their Keynesian Ideology they'd just as soon sacrifice children to the God's of War if it gives them the needed inflation to keep their Banks afloat. Better to see innocent woman and children raped and murdered in Asia 30 years ago and now Afghanistan, Iraq and Libya and soon it'll be Iran, and evenetually they'll unleash their Dogs right here in the USA.... we see it with the TSA, it's just the beginning..... all rather than let one Banking Oligarch lose a single penny on their crooked immoral investments.

Everything the Founding Father's warned us against, we ignored.
Everything we hated in the English we have become.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson,
3rd president of US (1743 - 1826)​

 

[Carcano]

Digging holes and filling in said dug holes is NOT the same as creating prosperity. While you little Keynesians can't seem to tell fantasy from reality, do you think you might let the rest of us live free FROM your sociopathic social experiments???

LOL!

Let grandmother eat cat food is their motto. A hundred years ago these Ninny's would have been HUNG for trying to inflate away The Citizens' life savings. Back then people understood inflation as a tax and that it was stealing.

This is interesting...during the gold standard the US experienced the greatest increase in wealth the world had ever seen, with a slight deflationary trend.

Suddenly in the 1960s, some prominent younger economists decided that a 'little' inflation could create wealth, and this was strongly resisted by the old guard of central bankers who regarded the idea as "rank heresy".

Economic historian James Grant explains...
http://www.youtube.com/watch?v=dexHf5LdFgA

 

[joepistole]

LOL!


This is interesting...during the gold standard the US experienced the greatest increase in wealth the world had ever seen, with a slight deflationary trend.

That is simply untrue; it is more Libertarian historical and factual revisionism. This has been repeatedly proven false in this forum but that doesn’t stop your guys from ignoring reality. God forbid that reality should stop you guys from pitching your nonsense and falsehoods.

http://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

The reality is, this history is that since the Federal Reserve and Keynesian economic policies, depressions/recessions have been fewer in number, less severe and shorter in duration. While periods of prosperity (economic growth) have been longer and more sustained.

Suddenly in the 1960s, some prominent younger economists decided that a 'little' inflation could create wealth, and this was strongly resisted by the old guard of central bankers who regarded the idea as "rank heresy".

That is simply untrue as well. But please do attempt to prove it.

Economic historian James Grant explains...

http://en.wikipedia.org/wiki/James_Grant_(finance)

That is a laugh; James Grant is not an economic historian by training or by profession.
James Grant it’s a writer who makes a living pandering to Libertarian conspiracy advocates.

http://en.wikipedia.org/wiki/James_Grant_(finance)

 

[Carcano]

That is simply untrue as well. But please do attempt to prove it.

You have already proved it with your chart posted above. Notice how there are no more deflationary periods after the 1950s to counterbalance the periods of inflation.

The whole notion of fulfilling the Fed's mandate of price stability somehow became...passe.

As Grant explains in the first five minutes of the interview.

 

[Carcano]

That is simply untrue; it is more Libertarian historical and factual revisionism.

It has nothing to do with liberty (which is the word that 'libertarian' is derived from)...it has to do with economic reality.

Are you seriously denying that the period from 1848 to 1950s was the greatest leap foreword in US wealth and living standards the world has yet seen?

 

[joepistole]

Yes Joe, "Putting people to work" does not magically create prosperity. China and the USSR had 100% employment. Digging holes and filling in said dug holes is NOT the same as creating prosperity. While you little Keynesian's can't seem to tell fantasy from reality, do you think you might let the rest of us live free FROM your sociopathic social experiments???

As Quad and I have pointed out to you, your analogy is wrong. China and the USSR did not have full employment. And has been pointed out to you numerous times no one is advocating people dig holes and then fill them up.

And your notion that giving people jobs, allowing them to fend for themselves, buy homes and save is not prosperity is more than just a bit bizarre. I am sure employed people everywhere might disagree with you on that point. Additionally no one is engaging in sociopathic experimentation – that is more Libertarian and right wing nut case baseless conspiracy nonsense.

Do you think you could do us that little favor? Just butt the hell out of our lives? You do your thing and let us do ours?

How do you suggest we do that? We live in a democracy. Are you suggesting that everyone who disagrees with you, who is rational, who uses evidence in decision making should roll over and let you do whatever you want to do?

This is why we need currency competition and to rid ourselves of income tax and 30 year bonds. So you people can go off and ruin your own lives by destroying your own currencies while leaving us well enough alone. See, that's the thing. You can't do it by yourselves - which is why you'll never leave us alone. You talk about how 'if we don't like it we can leave'. I'm beginning to think yes, this is going to happen. And we're going to probably end up taking 3/4th of the States with us. Maybe we'll leave you a New Jersey and parts of Utah. As they say: Be careful what you wish for.

As has been repeatedly pointed out to you Michael, our currency competes daily in the world currency markets. We have currency competition already.

A nice "Republican talking point"???
You have got to be kidding me?!?

Yes it is an often repeated Republican talking point and totally without merit.

Um, you did see the Japanese stock price take a 30,000 point dump as Japan's economy tanked and has remained shitty over the last 25 years?
Take a good look, these are the Ninny's who are happily selling off your children's future through 30 year Bonded-Labor to maintain the Banking Cartel and the political Sociopaths they buy off in Washington (ie: the Obomney's and Mittens). The Ninny's have no problem inflating a lifetimes worth of savings if it means handing out more bonuses at the Banks or saving their political donors like Corzine from going to prison. Inflation is a stated goal even! Let grandmother eat cat food is their motto. A hundred years ago these Ninny's would have been HUNG for trying to inflate away The Citizens' life savings. Back then people understood inflation as a tax and that it was stealing. Not now, take a real good look, we've had 5 years and this it only just the beginning. They're so entrenched in their Keynesian Ideology they'd just as soon sacrifice children to the God's of War if it gives them the needed inflation to keep their Banks afloat. Better to see innocent woman and children raped and murdered in Asia 30 years ago and now Afghanistan, Iraq and Libya and soon it'll be Iran, and evenetually they'll unleash their Dogs right here in the USA.... we see it with the TSA, it's just the beginning..... all rather than let one Banking Oligarch lose a single penny on their crooked immoral investments.

Again as has been proven to you many times before, you cannot draw the conclusions you have drawn from Japan. Two, inflation does not destroy life time savings. You apparently don’t understand the components of interest rates. So let me run through it for you;

Interest rate = Risk free Rate + Risk Premium (default rate, liquidity, term) + Inflationary/deflationary expectations.

The Risk Free Rate is normally considered to be the US Treasury Rate.

So inflationary expectations are key components of any interest rate, and since granny gets cost of living adjustments in her Social Security, there is no adverse impact on retirees save one and that is the fixed income pensioner who is now more and more a relic of a previous generation. Pensions have been replaced with individual saving plans like 401k’s.

And for the balance of your commentary it is all nonsense.

Everything the Founding Father's warned us against, we ignored.
Everything we hated in the English we have become.

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
Thomas Jefferson,
3rd president of US (1743 - 1826)​

For starters, Jefferson was one founding father. He was not plural. And he had no vision of the modern banking system. So to say as you have done that he somehow favors you or is somehow correct, is bizarre. Additionally, private banks do not control or issue our currency as you have alleged. The issues Jefferson faced are not the issues we face today.

 

[joepistole]

It has nothing to do with liberty (which is the word that libertarianism is derived from)...it has to do with economic reality.

You are right in that Libertarian economic notions have nothing to do with economic reality.

Are you seriously denying that the period from 1848 to 1950s was the greatest leap foreword in US wealth and living standards the world has yet seen?

No, what I am denying is that prosperity had anything to do with the gold standard as you had inferred. The United States was effectively off the Gold Standard with the Gold Reserve Act of 1934 which nationalized all gold (exceptions for jewelry). And the nation at that time was effectively using deficit spending and operating under Keynesian economic policies.

Since leaving the gold standard, inflation has moderated with no depressions contrast that with the period in which we were on the gold standard and was characterized with frequent periods of extreme inflation and depression.

 

[joepistole]

You have already proved it with your chart posted above. Notice how there are no more deflationary periods after the 1950s to counterbalance the periods of inflation.

The chart I referenced doesn’t prove your claim. Let me repeat your claim, “Suddenly in the 1960s, some prominent younger economists decided that a 'little' inflation could create wealth, and this was strongly resisted by the old guard of central bankers who regarded the idea as "rank heresy".

The chart I referenced showed that since implementation of Keynesian economic policies, depressions have been virtually eliminated whereas they were common in the pre-Keynesian era. Why do you think we need depressions to “counter balance” inflation? There is no benefit to depressions.

The whole notion of fulfilling the Fed's mandate of price stability somehow became...passe.

The Fed has two missions, price stability and full employment. The Fed’s primary mission is not zero inflation.

 

[Michael]

And your notion that giving people jobs, allowing them to fend for themselves, buy homes and save is not prosperity is more than just a bit bizarre.

Let's make this point one more time: NO JOE, "Giving" people jobs does NOT create prosperity. What is it you do not understand about this simple concept? Paying people to dig holes does not create prosperity. Paying people to fill in holes does NOT create prosperity.

And you have the gall to say "buy" homes. Take a look around you Joe, look at all the people who can't afford to buy homes thanks to the government's 'Home Affordability Act'.
You have the gall to say "save". Take a look at the interest rate Joe, it's less than inflation - it's nearing zero percent and soon to be negative interest!

Where is all the money coming from to enact all of your social engineering experiments Joe? From the poor. Which is why they're getting poorer while the rich are getting richer. It doesn't matter if it's Bush Jr or Obama Jr.... the poor continue to be made poorer by the sociopathic Ninny's and the Bankers who lead them around by the nose.

Additionally no one is engaging in sociopathic experimentation

Oh really? So QE1, QE2 and QE3 were all planned? 5 years of unemployment was planned? Baked in the cake huh? Is that what you're saying?

These imbeciles have NO IDEA what's going to happen. They're a bunch of pathetic Ninny's who want to trot out tired old arguments like: "We're just here trying to 'help' the poor fend for themselves". Meanwhile the poor get poorer and rich get richer. Fat pigs like Corzine gamble away the life savings of poor farmers and all you can do is cheerlead with a big 'O' on your pom-pons.

How do you suggest we do that? We live in a democracy. Are you suggesting that everyone who disagrees with you, who is rational, who uses evidence in decision making should roll over and let you do whatever you want to do?

We live in a Republic. What do I suggest? How about we follow the Law and stop stealing?

As has been repeatedly pointed out to you Michael, our currency competes daily in the world currency markets. We have currency competition already.

You don't seem to get it. We are FORCED to use the USD.

Interest rate = Risk free Rate + Risk Premium (default rate, liquidity, term) + Inflationary/deflationary expectations.

The Risk Free Rate is normally considered to be the US Treasury Rate.

So inflationary expectations are key components of any interest rate, and since granny gets cost of living adjustments in her Social Security, there is no adverse impact on retirees save one and that is the fixed income pensioner who is now more and more a relic of a previous generation. Pensions have been replaced with individual saving plans like 401k’s.

Basically Joe's argument is the monetary system is very complex, yet at the same time he suggests one person at the Federal Reserve should set interest rates of money.
Well Joe, why don't you follow your own logic to it's conclusion. IF the system is so complex, then it should be up to the market to set the price of money.
OH, but we couldn't have that now could we? I mean, what's a Banking Cartel to do if it can't manipulate the savings out of grandmother's pension and give it to their buddies on Wall Street?



Jefferson knew full well what would happen, and it's happening now as we speak.


But don't worry Joe, QE3 is going to result in HIGHER unemployment. LESS students will be able to afford University. And soon, retirees will be eating food only fit for dogs and cats. You'll still be there cheerleading Obama or some other pig the State trots out for you to worship and the rest of society will go into the toilet. I'm of the opinion you'll have to be the one eating cat food before you wake up and realize you've been had. AND even then, I'm not so sure. I'm thinking you'll be eating through a tin of cat food blaming the GOP and cheerleading the Democrats. I can see you now with your big "C" pom-pons "Corzine for President" munching on Kibbles and Bits.

I wouldn't be shocked one bit if the USA doesn't break apart. I know I'm more than happy for MI to legally and peacefully leave the Union.

 

[joepistole]

Let's make this point one more time: NO JOE, "Giving" people jobs does NOT create prosperity. What is it you do not understand about this simple concept? Paying people to dig holes does not create prosperity. Paying people to fill in holes does NOT create prosperity.

You decreeing something doesn’t make it so Michael. Please do explain how employment does not create prosperity for the employee and the employer and the consumer. Simply saying something bizarre does not make it so Michael.

And you have the gall to say "buy" homes. Take a look around you Joe, look at all the people who can't afford to buy homes thanks to the government's 'Home Affordability Act'.
You have the gall to say "save". Take a look at the interest rate Joe, it's less than inflation - it's nearing zero percent and soon to be negative interest!

The discussion was jobs Michael. When people have jobs, they can afford to take care of themselves. They can buy homes. They can consume goods. Without jobs they can do none of the above. Contrary to your bizarre claims Michael, employment does create wealth.

Where is all the money coming from to enact all of your social engineering experiments Joe? From the poor. Which is why they're getting poorer while the rich are getting richer. It doesn't matter if it's Bush Jr or Obama Jr.... the poor continue to be made poorer by the sociopathic Ninny's and the Bankers who lead them around by the nose.

No one is, least of all moi, social engineering experiments. That is you creating yet another straw man Michael. What I am advocating are solutions that have been tried and proven with nearly 100 years of direct experience. You are advocating returning to a time in which periods of rapid inflation and deflation were the norm.

Oh really? So QE1, QE2 and QE3 were all planned? 5 years of unemployment was planned? Baked in the cake huh? Is that what you're saying?

I have no idea as to what you are trying to say here. It’s jibberish.

These imbeciles have NO IDEA what's going to happen. They're a bunch of pathetic Ninny's who want to trot out tired old arguments like: "We're just here trying to 'help' the poor fend for themselves". Meanwhile the poor get poorer and rich get richer. Fat pigs like Corzine gamble away the life savings of poor farmers and all you can do is cheerlead with a big 'O' on your pom-pons.

More gibberish Michael.

We live in a Republic. What do I suggest? How about we follow the Law and stop stealing?

Now we get into your nonstandard definition of stealing. Using words as they are defined in Webster’s and other dictionaries, we are following the laws and no one is stealing. But that small detail has not stopped you from repeatedly making this unsupported allegation.

You don't seem to get it. We are FORCED to use the USD.

We have been through this many times before, and your statement here is false. You can use whatever currency you choose to use in your many financial transactions as long as all parties agree to use that currency. Your problem is now one is mandating that they use other currencies. Most companies don’t want to use currencies other than the domestic currency as using the domestic currency in most cases is more efficient and less risky.

Basically Joe's argument is the monetary system is very complex, yet at the same time he suggests one person at the Federal Reserve should set interest rates of money.

You have created yet another straw man Michael. I don’t suggest nor do I advocate that one man at the Federal Reserve should set interest rates. And in reality, one man at The Federal Reserve does not set interest rates. Target interest and inflation rates are set by the Federal Reserve Open Market Committee which is much bigger than just one man.

Well Joe, why don't you follow your own logic to it's conclusion. IF the system is so complex, then it should be up to the market to set the price of money.
OH, but we couldn't have that now could we? I mean, what's a Banking Cartel to do if it can't manipulate the savings out of grandmother's pension and give it to their buddies on Wall Street?

The price of money is determined by a free market Michael. It happens every day across the globe in the currency markets. And as previously pointed out to you, granny is getting compensated for inflation. It is part of the interest rate. I have to give you credit, you don’t let little things like reality get in your way.

Jefferson knew full well what would happen, and it's happening now as we speak.

OH yes, Jefferson was a prophet as seer in addition to a president. If you believe that, I have some bridges I want to sell you.

But don't worry Joe, QE3 is going to result in HIGHER unemployment. LESS students will be able to afford University. And soon, retirees will be eating food only fit for dogs and cats. You'll still be there cheerleading Obama or some other pig the State trots out for you to worship and the rest of society will go into the toilet. I'm of the opinion you'll have to be the one eating cat food before you wake up and realize you've been had. AND even then, I'm not so sure. I'm thinking you'll be eating through a tin of cat food blaming the GOP and cheerleading the Democrats. I can see you now with your big "C" pom-pons "Corzine for President" munching on Kibbles and Bits.

I wouldn't be shocked one bit if the USA doesn't break apart. I know I'm more than happy for MI to legally and peacefully leave the Union.

LOL, well we will have to see if QE3 leads to higher unemployment. But QE1 and QE2 to have not led to increased unemployment but rather lower unemployment. As for the rest of your doom and gloom predictions, they have been part and parcel of right wing fear mongering for years now. What we need to fear is right wing extremism and the irrational behaviors the right wing extremists advocate.

 

[Michael]

This graph gives the rational for many of the large spikes in inflation - WAR and FIAT currency.

While Joe probably thinks War is wonderful because it "Creates Jobs" (so a few million woman and children are raped, how's little Jimmy going to fend for him wittle self... AND don't you want little Jimmy to have a Job, a hot lQQking wife and a Happy Home?!?!). In reality WAR destroys prosperity. See, this is what the government does when it wants to create inflation (and use the inflation as a way to get out of paying it's obligations) - it starts War.

Unfunded obligations in the USA work out to anywhere between $80 and $144 TRILLION. This is impossible to pay. Mark my words, Obama's little War will soon be killing more than woman and children in Libya - but also woman and children in other countries of the middle east, like Iran. You can thank your neo-Keynesian sociopaths when the War does start and if the draft is initiated and you're asked to "Defend the Country from the Terrorists!"

I can hear it now: "We Good Americans all have to sacrifice for the 'benefit' of the Bankers *cough cough* errrr...... Nation. We need more Patriot Acts! Less Civil Liberties! Now be good little Cattle and DIE for your Farmers!!!"

 

[Michael]

Joe,

It was nearly 4 years ago when you started cheerleading Obama and Helicopter Ben. How many more decades will it take before you admit social engineering does NOT produce a prosperous society. Can it keep people employed? Sure. So what? Digging holes and filling them is does NOTHING to create a prosperous society.

You seem to think the government, the same government who can't even meet their objectives in Afghanistan, after spending TRILLIONS, the same government who's public schools are turning out illiterates who don't even know what the Bill of Rights is, the same government who can't find it's own arse with both hands, is going to turn on the magic 'job's faucet' and out flows all these meaningful and productive jobs.

Put down the crack pipe.
NO, it's not going to happen.

Obama's an idiot.
Bernanke's an even bigger idiot.

QE1 did not work, QE2 did not work, Operation Twist did not work, QE3 isn't going to work. Either is QE4 or QE5 or QE6.... of course, now that they have an Endless QE they'll come up with other idiotic names like "Operation Screw" .......over the Citizens of the USA.

So, we'll just wait and watch as next year life in the USA is MUCH worse than this year, more unemployed, less education, more retiree's eating cat food.
And the year after that, they'll be even worse.
And that's when they'll trot out the "The Terrorists are Coming!!! The Terrorist are Coming!!!".... and poor ignorant hungry desperate Americans will be lining up to enlist in the War Effort like Cattle in line for the slaughter.

 

[joepistole]

Joe,It was nearly 4 years ago when you started cheerleading Obama and Helicopter Ben. How many more decades will it take before you admit social engineering does NOT produce a prosperous society. Can it keep people employed? Sure. So what? Digging holes and filling them is does NOTHING to create a prosperous society.

And you have been cheerleading Paul and his incoherent policies. And instead of offering coherent evidence backed argument to support your allegations, you have responded with a plethora of misinformation, name calling, and discredited theory.

What I am advocating is using proven solutions that have produced nearly a century of economic growth and stability to solve our existing problems. That used to be called conservatism. What you are advocating is going back to an era in which deep depressions and extreme inflation were the norms as proven by your graph.

You seem to think the government, the same government who can't even meet their objectives in Afghanistan, after spending TRILLIONS, the same government who's public schools are turning out illiterates who don't even know what the Bill of Rights is, the same government who can't find it's own arse with both hands, is going to turn on the magic 'job's faucet' and out flows all these meaningful and productive jobs.
Put down the crack pipe.
NO, it's not going to happen.
Obama's an idiot.
Bernanke's an even bigger idiot.

You are back to spouting incoherent gibberish Michael.

QE1 did not work, QE2 did not work, Operation Twist did not work, QE3 isn't going to work. Either is QE4 or QE5 or QE6.... of course, now that they have an Endless QE they'll come up with other idiotic names like "Operation Screw" .......over the Citizens of the USA.

So, we'll just wait and watch as next year life in the USA is MUCH worse than this year, more unemployed, less education, more retiree's eating cat food.
And the year after that, they'll be even worse.
And that's when they'll trot out the "The Terrorists are Coming!!! The Terrorist are Coming!!!".... and poor ignorant hungry desperate Americans will be lining up to enlist in the War Effort like Cattle in line for the slaughter.

Well unfortunately for you Michael the facts speak for themselves. The facts are the QE has worked. Stimulus has worked. Instead of losing nearly a million jobs a month we have been creating 100k – 200k private sector jobs every month for the last 3 years. Instead of an economy contracting at an annualized rate of 9% we now have an economy that has been growing at an annual rate of about 2%-3% per year for the last 3 years. And inflation has remained tame, rising only moderately in 2 of the last 4 years. That is a success Michael.