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The economy - oops - Page 54

post #2651 of 2963

Wait -- someone's actually advocating that we should go back to the gold standard? 

 

Good fucking god, people...
 

post #2652 of 2963
Quote:
Originally Posted by Devildoubt View Post

Wait -- someone's actually advocating that we should go back to the gold standard? 

 

Good fucking god, people...
 

 

The gold standard, along with Agenda 21, is pretty much the litmus test for political crazy right now.

post #2653 of 2963
Quote:
Originally Posted by Devildoubt View Post

Wait -- someone's actually advocating that we should go back to the gold standard? 

 

Good fucking god, people...
 


Explain.

post #2654 of 2963
I love the irony of you being upset at how bizarre my post was.

I should probably return my CFA and simply read more stuff on mises.org to get my head around this whole economics thing.
post #2655 of 2963
Quote:
Originally Posted by The Closer View Post

I love the irony of you being upset at how bizarre my post was.
I should probably return my CFA and simply read more stuff on mises.org to get my head around this whole economics thing.


You said something that was historically, demonstrably untrue. The irony's on you. You're welcome to back up your assertion. The theory of the business cycle theory, first systematically explained in The Theory of Money and Credit in 1912, discusses specifically the problems of fiat money. As did previous defenders of the idea of the business theory.  Sarcastically suggesting to me that you should find out more about the ideas you mischaracterize probably isn't the most strategic use of sarcarasm I can think of.

 

I'm not upset-it's bizarre by your own behavior. A few years ago (I looked back through the thread), you were posting several articles in which Austrians predicted the housing bubble and defended the notion. I didn't read the entire thread, so by all means, if you explained the idea that the business cycle theory doesn't apply to exactly those circumstances that it is today applied to, point them out to me.


Edited by stunt poop - 12/18/12 at 1:26pm
post #2656 of 2963
Sure thing buddy.
post #2657 of 2963
Fascinating dsiscussion, fellas. That's all I got to contribute!
post #2658 of 2963
And I misspelled discussion. That was depressing.
post #2659 of 2963

Color me a karaaaazy skeptic if I'm not persuaded by two lines of hearsay if you can't patiently lay out your case as I have mine.


Edited by stunt poop - 12/18/12 at 5:05pm
post #2660 of 2963
Quote:
Originally Posted by stunt poop View Post

Color me a karaaaazy skeptic if I'm not persuaded by two lines of hearsay if you can't patiently lay out your case as I have mind.

 

How do you make your case against someone who believes the sky is green with purple polka dots?

post #2661 of 2963
Quote:
Originally Posted by stunt poop View Post

Color me a karaaaazy skeptic if I'm not persuaded by two lines of hearsay if you can't patiently lay out your case as I have mind.

I made myself a promise a while back that I wouldn't engage in link spamming Ron Paul gold standard supporters for the following reason:

You guys are all way too much like Mike Tyson after he got his GED. He knew alllll these big words but had no clue what they actually meant and, more importantly, how they worked together.

You and all the 19 year Olds who are halfway through an economic 101 course will repeatedly shout "inflation! Fiat currency! Interest rates!" without ever being able to explain how something as asinine as the gold standard would be in any way viable for a global economic system like the one we live in.

But feel free to link to mises.org to your hearts content.
post #2662 of 2963
Quote:
Originally Posted by The Closer View Post


I made myself a promise a while back that I wouldn't engage in link spamming Ron Paul gold standard supporters for the following reason:
You guys are all way too much like Mike Tyson after he got his GED. He knew alllll these big words but had no clue what they actually meant and, more importantly, how they worked together.
You and all the 19 year Olds who are halfway through an economic 101 course will repeatedly shout "inflation! Fiat currency! Interest rates!" without ever being able to explain how something as asinine as the gold standard would be in any way viable for a global economic system like the one we live in.
But feel free to link to mises.org to your hearts content.


I took the time to patiently explain to several posters, including yourself, why my ideas and some of my problems with Krugman. You've gone through no effort to explain what is problematic about the gold standard, yet you cry foul and are unwilling or unable to explain why I'm mistaken. I have to wonder if you even looked at any of my posts, since in several of them I patiently explained my answers to objections, and you pretend that I just post linkbait and are parading something I learn in an economics basics textbook. Instead of resorting to insults, just explain how I'm wrong. I've waited for someone to do that. I even answered your post without a link, and you ignored it. I explained some of my ideas to JuddL, after which I merely reposted previous links saying that they go into fuller detail. I looked back through my posts in this thread, and most of them don't have links. I even responded to VTRan's objections to Austrian economics point by point, which proved to be somewhat of a waste since he didn't respond to any of it. Somehow, I don't respond in kind with snark and barbs, but I actually lay out a case. Saying that I spam links is just dishonest.

 

Edit: I went back and found six posts in which I laid out my beliefs for people who objected/asked, and no one responded in kind with the half-hearted exception of your original question you posed at me. That's some kind of link spamming. Don't like what someone has to say? Just accuse them of link baiting and ignore their substantive posts.


Edited by stunt poop - 12/18/12 at 2:37pm
post #2663 of 2963

Im not ignoring it - Im refusing to engage it because youre basing your argument on something that is inaccurate, ie the notion that by adhering to a gold standard we would somehow reduce the dramatic fluctuations associated with the traditional business cycle.  Inhibiting the ability of a central bank to take action depending on market conditions doesnt help anybody.

 

Break away from Mises for a moment and check out something like the following: http://www.amazon.com/Golden-Fetters-Depression-1919-1939-Development/dp/0195101138

post #2664 of 2963
Quote:
Originally Posted by Spook View Post

 

How do you make your case against someone who believes the sky is green with purple polka dots?

Austrian business cycle theory makes you so uncomfortable that you believe it can't be be countered, in any fashion. That's stupid. At least Krugman takes a crack at it from time to time.

post #2665 of 2963

My problem with your arguments, Stunt Poop, and with a lot of the Gold Standard supporters, is that they frame their arguments in stark, moralistic (Ayn Rand's morals that is) terms. You posit a Utopia where only "rational" economic decisions are made, free of the eeeevil depredations of deranged/stupid/greedy politicians.

 

Some things to consider:

 

Those Boom/Bust cycles often coincide with incredible advances in technology. The Railroads are a perfect example. Lots of greed, Government interference, and people who lost their life savings if not their lives, but the result was a revolution in transportation and the settling of the North American and European continents.

 

Another example is the Tech Boom/Bust of the late 90's. Having participated in that one to a small extent, I can assure you that there was plenty of irrational behavior without any help from the Government. Fact is, when exciting new paradigms emerge (whether it's technology as in my examples, or a financial product, or something like the Tulip mania), "animal spirits" take over, on the private and public sides.

 

More frustratingly, the Austrians views Government as some kind if Alien entity that continually interferes with some kind of Randian/Roussian vision of "Natural Economic Man" that does not and has not ever existed.

 

There is plenty of research showing that human beings rarely if ever operate as the rational Optimizers depicted in classic economics.

post #2666 of 2963
Quote:
Originally Posted by The Closer View Post

Im not ignoring it - Im refusing to engage it because youre basing your argument on something that is inaccurate, ie the notion that by adhering to a gold standard we would somehow reduce the dramatic fluctuations associated with the traditional business cycle.  Inhibiting the ability of a central bank to take action depending on market conditions doesnt help anybody.

 

Break away from Mises for a moment and check out something like the following: http://www.amazon.com/Golden-Fetters-Depression-1919-1939-Development/dp/0195101138Cut

Ahuh. You're not merely refusing to engage. All that requires is for you to not post (with anyone you suppose has inaccurate views). You posted a few things that don't reflect much understanding of the subject (why don't projects after a bust become profitable, as you asked-apparently you didn't read the part where assets have to be liquidated, lines of production stopped, and workers laid off in the contractionary purge, all while inflation means a decrease in purchasing power of money and a tendency for higher prices), with the last one being factually untrue. And you're committed to not defending your ideas.

 

Here's an idea: Don't post if your idea is not to have a discussion, here on this thing that people post on to have discussion.

post #2667 of 2963
Quote:
Originally Posted by Cylon Baby View Post

My problem with your arguments, Stunt Poop, and with a lot of the Gold Standard supporters, is that they frame their arguments in stark, moralistic (Ayn Rand's morals that is) terms. You posit a Utopia where only "rational" economic decisions are made, free of the eeeevil depredations of deranged/stupid/greedy politicians.

 

Some things to consider:

 

Those Boom/Bust cycles often coincide with incredible advances in technology. The Railroads are a perfect example. Lots of greed, Government interference, and people who lost their life savings if not their lives, but the result was a revolution in transportation and the settling of the North American and European continents.

 

Another example is the Tech Boom/Bust of the late 90's. Having participated in that one to a small extent, I can assure you that there was plenty of irrational behavior without any help from the Government. Fact is, when exciting new paradigms emerge (whether it's technology as in my examples, or a financial product, or something like the Tulip mania), "animal spirits" take over, on the private and public sides.

 

More frustratingly, the Austrians views Government as some kind if Alien entity that continually interferes with some kind of Randian/Roussian vision of "Natural Economic Man" that does not and has not ever existed.

 

There is plenty of research showing that human beings rarely if ever operate as the rational Optimizers depicted in classic economics.

How do I break up quotes so I can respond paragraph by paragraph?

 

Anyways, don't ascribe to me things I don't believe. I don't believe in Ayn Rand's morality, and am not a Randian. And I don't believe that people act rationally, or that this is why markets are good. In fact, quite the opposite-because people are subject to weakness and prone to evil, they need constant checks of their power and corrective mechanisms. Bad people must be allowed to do the least harm. I suspect I have a very different idea of how to do that than you. I don't believe in expanding the power to do ill and magnify the consequences of people's bad decisions. My solution is not to give them huge amounts of unchecked power to destroy and cause harm. If a bank inflates its money, it should go out of business and pay back its customers. On a market it eventually will, both because checks deposited at other banks will call upon the fraudulent bank to redeem the money, because of the threat of a loss of confidence and a bank run, and they would be limited by how many people deposited money into them in the first place. If the Federal Reserve does it in collusion with all banks, it's protected by law, and untold trillions are created, stealing away money from everyone who suffers from higher prices and who don't receive these infusions of money.

 

Your point about advances in technology isn't substantive. You're going to have to offer me something to actually disagree with. I've studied the creation of the railroads, but I'm not going to go into a big exposition about their production unless you start pointing out some idea that you believe has explanatory power over mine or that works as a causal force in the development of new technology that explains business cycles. I can point out that captains of industry, along with bankers, often colluded with government to inflate the money supply and thus protect their profits in the 19th century, to which my ideas lend explanatory power, since these caused recessions.

 

As for the dotcom boom of the 90s, your point is off target. Nowhere is the business cycle theory supplanted or discredited because people make bad business decisions. It's a non-sequitur. Nothing and nowhere in Austrian theory suggests that people won't make bad decisions or that businesses won't fail.

 

Interestingly enough, the dotcom boom of the 90s was a result of inflationary policies. And, surely enough, it resulted in a bust. Individual businesses fail all the time. That's neither here nor there for Austrian theory. I've had my own business and seen other businesses implode because of really bad decisions. I don't know why you're offering this data as a counter point. I'm not offering psychological profiles of business people. What gives the Austrian theory explanatory power is its ability to identify the causal forces at work when there are a cluster of errors; why so many businessmen and investors create lines of production that must be liquidated across many industries and around the same time. Businesses fail all the time, which may not be the result of bad monetary policy resulting in a recession. But this whole discussion is about why many errors are made across many lines of production and around the same time, which is what Austrian theory explains. The psychology of business people, some of whom may even understand business cycle theory, is irrelevant. If you've got a counter point to my explanation for this cluster of errors across many industries, I'm happy to hear it, and I'm not being sarcastic. I actually think it's a great step that you want to counter the idea and engage in the topic.

 

I don't know what you're talking about regarding people acting as rational optimizers (well, sort of-classical economists like William Stanley Jevons and Leon Walras were economists who had models of general equilibrium that didn't correspond to reality and weren't useful), nor of people as some kind of natural economic men that has never existed. What the hell are you talking about? Austrian economics is a descriptive science. It does not make assumptions about people's psychology, nor about their preferences, nor their abilities. It seems as if Austrian economics describes people as a great deal worse than what you believe it does. What are you reading to get this, Forbes magazine?

 

If you're going to talk about business cycle theory, try to stay on topic. I'm not saying this to boss you, but you're getting into huge issues when you toss out ideas like you're throwing darts about how you don't like Austrian views on government or what Austrians say about rational human behavior. I'm not going to approach such a massive issue by saying I disagree, since I'm not going to make the time to make a protracted discussion of them when you've already glossed over business cycle theory, a topic to itself. They're interesting and I think it's great that you have objections to them if you have, indeed, looked into these ideas or wanted to argue them. But I'd rather approach issues as piecemeal of my broader views since it's not feasible or sensible to type up a veritable treatise of Austrian economics to defend such broad objections as how you object to Austrian views on government.

post #2668 of 2963

You know what, I see no point in engaging any further with you. You ascribe (vaguely stated) beliefs to me while complaining that I'm doing the same to you, you question my (and anyone else in this thread that engages with you) intelligence, you pretend to not understand the concept of "economic man" when it's been a centerpiece of Economist's thought for more than a hundred years, you dismiss my examples without explanation, and you are a self righteous sanctimonious prick. And you write 6 paragraphs to say you won't "bother" to engage any of my points, and do the same to Closer. You are trolling this thread and aren't worth my or anyone's else's time.

post #2669 of 2963
Quote:
Originally Posted by Cylon Baby View Post

You know what, I see no point in engaging any further with you. You ascribe (vaguely stated) beliefs to me while complaining that I'm doing the same to you, you question my (and anyone else in this thread that engages with you) intelligence, you pretend to not understand the concept of "economic man" when it's been a centerpiece of Economist's thought for more than a hundred years, you dismiss my examples without explanation, and you are a self righteous sanctimonious prick. And you write 6 paragraphs to say you won't "bother" to engage any of my points, and do the same to Closer. You are trolling this thread and aren't worth my or anyone's else's time.

I engaged several of your points and explained them, and you're bitching that my answer didn't make you happy. That's not my problem, now, is it? Saying I'm merely pretending not to understand a concept you've made up is stupid. You made it up. What do you expect from me? Your anger is your own problem. Maybe you should do that thing people do when they don't know a subject and they research it instead of crying about me being sanctimonious.

post #2670 of 2963
Quote:
Originally Posted by stunt poop View Post

You posted a few things that don't reflect much understanding of the subject

Ok.

post #2671 of 2963
Quote:
Originally Posted by Cylon Baby View Post

More frustratingly, the Austrians views Government as some kind if Alien entity that continually interferes with some kind of Randian/Roussian vision of "Natural Economic Man" that does not and has not ever existed.

 

 

I assume you mean "Rousseauian" there? If so, that's a pretty gross (but common) misinterpretation of the man's work. I think a lot of people get it after reading the two Discourses and The Social Contract in college, but nothing else. To really get a handle on his thoughts, one must read Emile and The Confessions. For one, "Natural Man" is, by his own admission, a thought experiment. But when he invokes that idea he's also intentionally flipping the work of both Hobbes and Locke on their heads. The Second Discourse is a response to what Rousseau sees as a wrongheaded interpretation of base human nature. Basically, Hobbes thinks the acquisition of power is the driving force behind human activity, while Locke see it as the acquisition of property. The key insight (among many others) that Rousseau brings in the Discourse on Inequality is that those human drives that were posited by Locke and Hobbes (and Rand, in fact) are socially constructed, are responses to particular social contexts.

 

As far as economics goes, he's actually pretty silent and hard to pin down, but it's readily apparent that in general he is skeptical of aggregations of power of any kind, governmental or corporate. The kind of government he tends to advocate is pretty socially democratic, and the people of history that he admires are the Solons and the Bruti. Someone like Rand would see guys like that as malicious levelers, men who seek to grab power from deserving elites and put it in the hands of the rabble.

 

It's also important to note that he never poses as if he has any answers (whereas Rand pretends that she has them all), but rather to start a new discussion in the West about the nature of power and the responsibility of culture to secure human happiness.

 

Anyway, sorry for the rant, but I've done a lot of work on Rousseau and I always feel the need to spout off about him whenever he comes up.

post #2672 of 2963

Good post, Randlett.

 

I initially did sort of a double take when Cylon accused me of believing in Rousseau's ideas but glossed over it. I thought, "Rousseau? As in Jean Jeacques Rousseau?" He thought I believed that? How much more could my ideas differ from that of Rousseau's? That's something that Cylon could have uncovered after about five minutes of inquiry.

post #2673 of 2963
post #2674 of 2963
Quote:
Originally Posted by D.S. Randlett View Post

 

I assume you mean "Rousseauian" there? If so, that's a pretty gross (but common) misinterpretation of the man's work. I think a lot of people get it after reading the two Discourses and The Social Contract in college, but nothing else. To really get a handle on his thoughts, one must read Emile and The Confessions. For one, "Natural Man" is, by his own admission, a thought experiment. But when he invokes that idea he's also intentionally flipping the work of both Hobbes and Locke on their heads. The Second Discourse is a response to what Rousseau sees as a wrongheaded interpretation of base human nature. Basically, Hobbes thinks the acquisition of power is the driving force behind human activity, while Locke see it as the acquisition of property. The key insight (among many others) that Rousseau brings in the Discourse on Inequality is that those human drives that were posited by Locke and Hobbes (and Rand, in fact) are socially constructed, are responses to particular social contexts.

 

As far as economics goes, he's actually pretty silent and hard to pin down, but it's readily apparent that in general he is skeptical of aggregations of power of any kind, governmental or corporate. The kind of government he tends to advocate is pretty socially democratic, and the people of history that he admires are the Solons and the Bruti. Someone like Rand would see guys like that as malicious levelers, men who seek to grab power from deserving elites and put it in the hands of the rabble.

 

It's also important to note that he never poses as if he has any answers (whereas Rand pretends that she has them all), but rather to start a new discussion in the West about the nature of power and the responsibility of culture to secure human happiness.

 

Anyway, sorry for the rant, but I've done a lot of work on Rousseau and I always feel the need to spout off about him whenever he comes up.

 

 

Very informative, however I used the term "Rousseauian" as a Metaphor for an economic philosophy that posits some "natural state" that has been corrupted by an "outside" force. In Stunt Poop's theology the "natural State" is Homo Economicus  and the "outside force" is Government. So whether Rousseau meant his idea of "Natural Man" in a "State of Nature" vs. "in Society" in a literal sense or as a thought experiment is irrelevant. I should have expected Stunt Poop to miss the point and take my comment in the most literal way imaginable. The Academic mind only knows what it knows.

post #2675 of 2963
Quote:
Originally Posted by Cylon Baby View Post

 

 

Very informative, however I used the term "Rousseauian" as a Metaphor for an economic philosophy that posits some "natural state" that has been corrupted by an "outside" force. In Stunt Poop's theology the "natural State" is Homo Economicus  and the "outside force" is Government. So whether Rousseau meant his idea of "Natural Man" in a "State of Nature" vs. "in Society" in a literal sense or as a thought experiment is irrelevant. I should have expected Stunt Poop to miss the point and take my comment in the most literal way imaginable. The Academic mind only knows what it knows.

Rosseau regarded natural man as a solitary actor, literally in nature, that was best when he could avoid all interaction with others. That's aside from Rousseau's many other beliefs about class and society that I don't agree with. As a metaphor, you could hardly have chosen one that stands in further contrast to what I believe. You lumped in Rand with Rousseau, both of whom I disagree with, yet both of them had views that were almost the antithesis of each other. Then you summed up by saying that I believe in some kind of rational man that always makes right decisions, my response to which, being that I don't, and a discussion can't go further if you're going to make up beliefs to me, can't go forward. If words are to mean anything, you should try to say what you mean. Even at what you described, it would be much more of a Randian thing, though she seemed to think that lots of private actors were irrational, such as with religion. Even as you described it and are describing it in this post, I responded. I didn't come in here saying government monetary policy is bad and bothers me and leave it at that; I explained the causal forces at work and, step by step, why these forces are bad. Funny how you didn't offer a single point on that, but meekly said that people act irrationally in the absence of government, a counter point to nothing I've ever said. Your point would indeed stand in opposition to the statement, "Government is only irrational, and private actors only rational". If it's going to bother you that I point out that I didn't say that and don't believe that, you should stop making things up and realize that you should stop blaming other people for your mistakes and correct your assumptions. You even said, and I quote, "There is plenty of research showing that human beings rarely if ever operate as the rational Optimizers depicted in classic economics.". I believe that people are neither such an illusory term as rational optimizers, nor do I subscribe to classical economics.

 

I took the time to explain why your examples of people you knew making bad business decisions doesn't stand as a counter example to business cycle theory in any way, and you cried uncle and said that you didn't like my answer; I addressed what you had to say and then some. I can explain what I think, but I can't be expected to make you pay attention. Further, I explained why it would be pointless to address such a broad conclusion as to how you don't like Austrian views of government. You didn't have an answer for that; you just didn't like it. Maybe if you had researched your beliefs more so that you didn't feel so threatened by views that made you uncomfortable you could offer a counter point to anything, literally anything at all, about Austrian business cycle theory. And by maybe, I mean definitely. The time your client lost his business isn't a counter point to anything I've said. If you had an idea with some explanatory power that described the causal mechanisms behind why some businesses fail, and asserted those, you could have said them.


Edited by stunt poop - 12/19/12 at 8:31pm
post #2676 of 2963

http://hir.harvard.edu/debt-deficits-and-modern-monetary-theory

 

Very interesting article/interview regarding a theory I tend to subscribe to more often than not.

 

 

Quote:
There is a debate to be had about that, but there is no reason to obsess over the level of outstanding public debt. The government can always honor its debt; it can never go bankrupt. There’s no question that the debt obligations will be met. There’s no risk. What’s more, this debt provides firms, households, and others in the private sector a vehicle to park their saved wealth in a risk-free form.

 

Quote:

Why do we want governments? We want them because they can do things that improve our welfare that we can’t do individually. In that context, it becomes clear that public policy should be devoted wholly to making sure that there are enough jobs, that poverty is eliminated, that the public health and public education systems are first class, that people who are less well off are able to become better off, etc.

 

From a macroeconomic point of view, the spending and tax decisions of government should be such that total spending in the economy is sufficient to produce the level of real output at which firms will employ the available labor force. This is the goal, and the particular budget outcomes must serve this goal.

post #2677 of 2963

This is a somewhat depressing concept....

 

Quote:

Is Growth Over?

The great bulk of the economic commentary you read in the papers is focused on the short run: the effects of the “fiscal cliff” on U.S. recovery, the stresses on the euro, Japan’s latest attempt to break out of deflation. This focus is understandable, since one global depression can ruin your whole day. But our current travails will eventually end. What do we know about the prospects for long-run prosperity?

 

The answer is: less than we think.

 

The long-term projections produced by official agencies, like the Congressional Budget Office, generally make two big assumptions. One is that economic growth over the next few decades will resemble growth over the past few decades. In particular, productivity — the key driver of growth — is projected to rise at a rate not too different from its average growth since the 1970s. On the other side, however, these projections generally assume that income inequality, which soared over the past three decades, will increase only modestly looking forward.

 

This was the part that I find really interesting...

 

It would seem that we really need a 'new' industrial revolution...hopefully something based on developing clean, renewable energy.

Quote:

Recently, Robert Gordon of Northwestern University created a stir by arguing that economic growth is likely to slow sharply — indeed, that the age of growth that began in the 18th century may well be drawing to an end.

 

Mr. Gordon points out that long-term economic growth hasn’t been a steady process; it has been driven by several discrete “industrial revolutions,” each based on a particular set of technologies.

 

The first industrial revolution, based largely on the steam engine, drove growth in the late-18th and early-19th centuries. The second, made possible, in large part, by the application of science to technologies such as electrification, internal combustion and chemical engineering, began circa 1870 and drove growth into the 1960s. The third, centered around information technology, defines our current era.

 

And, as Mr. Gordon correctly notes, the payoffs so far to the third industrial revolution, while real, have been far smaller than those to the second. Electrification, for example, was a much bigger deal than the Internet.

 

It’s an interesting thesis, and a useful counterweight to all the gee-whiz glorification of the latest tech. And while I don’t think he’s right, the way in which he’s probably wrong has implications equally destructive of conventional wisdom. For the case against Mr. Gordon’s techno-pessimism rests largely on the assertion that the big payoff to information technology, which is just getting started, will come from the rise of smart machines.

post #2678 of 2963

On the subject of gold, there have been more than a few concerns raised recently by several countries (many of them South American seeking to protect themselves from capital flight) that say global gold reserve figures simply don't add up. For those don't know, almost all gold is stored either at the Bank of England or in the US (still Fort Knox, I think).

 

When a nation agrees to purchase a sum of gold it rarely leaves these repositories. Instead something as simple as a ticket is attached identifying such-and-such a pile as the property of that nation. But when curious number-crunchers compared declared gold figures against quantities actually available there were considerable discrepancies.

 

Some analysts are suggesting this may ultimately dwarf the LIBOR scandal as the potential ramifications don't bear thinking about.

post #2679 of 2963

Supposedly there are private firms in Taiwan that store Bullion in their own facilities. I say "supposedly" because I can easily see said companies showing the same Bullion to 10000X the customers who pay for it. So whenever an investor gets nervous they can see "their" bullion not realizing many other people think it's there's as well.

 

Mind, I have no proof of any of this, I just think there is a movement to fleece investors with Gold investments. Spend time listening to any Right Wing oriented radio show in the US, you will hear numerous commercials for buying Gold, all tied to the theory that the Federal Government is going to collapse soon, and Gold will become currency. In the town where I live, an affluent area with lots of Professionals, there are easily a dozen stores offering to sell Gold.

post #2680 of 2963
Quote:
Originally Posted by Geoff Foster View Post

On the subject of gold, there have been more than a few concerns raised recently by several countries (many of them South American seeking to protect themselves from capital flight) that say global gold reserve figures simply don't add up. For those don't know, almost all gold is stored either at the Bank of England or in the US (still Fort Knox, I think).

 

 

 

Has DIE HARD WITH A VENGEANCE been lying to me?  I thought most of our gold was in the NY Federal Reserve Bank Depository.  

post #2681 of 2963

I believe Germany has been demanding its gold back from the US for a while now, and its a big to-do (because maybe the gold isn't actually there).

http://www.spiegel.de/international/germany/german-politicians-demand-to-see-gold-in-us-federal-reserve-a-864068.html

post #2682 of 2963
Quote:
Originally Posted by Cylon Baby View Post

Supposedly there are private firms in Taiwan that store Bullion in their own facilities. I say "supposedly" because I can easily see said companies showing the same Bullion to 10000X the customers who pay for it. So whenever an investor gets nervous they can see "their" bullion not realizing many other people think it's there's as well.

 

Mind, I have no proof of any of this, I just think there is a movement to fleece investors with Gold investments. Spend time listening to any Right Wing oriented radio show in the US, you will hear numerous commercials for buying Gold, all tied to the theory that the Federal Government is going to collapse soon, and Gold will become currency. In the town where I live, an affluent area with lots of Professionals, there are easily a dozen stores offering to sell Gold.

 

Pretty sure when the federal government collapses, bullets, machetes, fists and other blunt objects will be the currency of choice.

post #2683 of 2963
Quote:
Originally Posted by Rando View Post

 

Has DIE HARD WITH A VENGEANCE been lying to me?  I thought most of our gold was in the NY Federal Reserve Bank Depository.  

 

I honestly don't know. But "Fort Knox" certainly sounds better. 

post #2684 of 2963
Quote:
Originally Posted by Cylon Baby View Post

Supposedly there are private firms in Taiwan that store Bullion in their own facilities. I say "supposedly" because I can easily see said companies showing the same Bullion to 10000X the customers who pay for it. So whenever an investor gets nervous they can see "their" bullion not realizing many other people think it's there's as well.

 

Mind, I have no proof of any of this, I just think there is a movement to fleece investors with Gold investments. Spend time listening to any Right Wing oriented radio show in the US, you will hear numerous commercials for buying Gold, all tied to the theory that the Federal Government is going to collapse soon, and Gold will become currency. In the town where I live, an affluent area with lots of Professionals, there are easily a dozen stores offering to sell Gold.

 

Well, gold is traditionally a reasonably good barometer for the health of an economy. And gold prices have undoubtedly rocketed. Whether we are on the verge of a catastrophic meltdown (a doomsday prepper's wet fantasy) I'm not sure. I mean, I understand the basic principles of and differences between money and wealth. But the global economy is such a mind-bendingly complex and chaotic system it defies even simple analysis - and that's leaving aside the dizzying web of socio-political interactions, motivators and so forth.

 

However, you don't need a Ph.D. in Chicago-style economics to know America (not to mention the rest of the world) is facing enormous challenges.

 

A quick and rough search (apologies in advance for errors) tells me that yet another recession is threatening to break upon us. Whilst wallowing in more money than they know what to do with America's banks seem completely unwilling to open the faucet. 

 

Approximately 40 million Americans are now reliant on food stamps. 

Since 2008 the US has spent several trillion dollars and yet debt has increased by approximately five trillion. 

By the end of the decade the "official" national debt will pass twenty trillion dollars.

Unofficial estimates (including off-the-books expenditure by the likes of the Pentagon) are anywhere between fifty and one-hundred trillion dollars.

 

Sure, the FED has kept the economy afloat, but only with the help of its magical printing press. In terms of GDP, debt is somewhere close to what is was at the end of WWII. But the US economy was just cranking into gear at that time and the country experienced the best part of thirty years of not just good but great times. 

 

I really don't know whether the above adds up to a giant warning light flashing "IMMINENT CATASTROPHE". But I do know it's going to be incredibly difficult - perhaps even impossible - to balance the books and get back to the days of milk and honey given the perfect storm of potential mega-calamities which is bearing down on us like a stolen eighteen-wheeler. 

 

1. If we haven't already passed peak oil (which would explain the recent oscillations in fuel costs we've been experiencing) we surely can't be far away. Even if we come up with some magical technological fix it will take the best part of forty years to install the necessary infrastructure. And those years will likely be hard. 

2. Ditto various other mineral resources which are becoming increasingly difficult to extract from the earth at a cost-effective price. 

3. We are less than twenty years away from anywhere up to a third of the world's population living in areas of extreme water stress. I find it more than disturbing that most of the world's biggest rivers now no longer reach the ocean. 

4. Global food production is currently maxed out feeding the current population figure. Given that production increases at a linear rate whilst population growth is exponential, and the not-so-irrelevant fact that the former is entirely dependent on cheap oil (which we no longer have), it's difficult to see where the solution is coming from.

4. Bad enough that climate change is already having a tragic and costly impact in third world countries, many of our leading climatologists (such as James Hansen) are now saying we may already have passed the point where catastrophic runaway warming (up to 10 degrees) is inevitable. 

 

And then there are the "little" issues such as the spread of drug-resistant diseases that ten years ago we thought we'd licked, the looming question of what to do with the mountain of lethally radioactive waste sitting in supposedly "temporary" storage pools beside reactors (not to mention the astronomical costs of decommissioning) etc. etc.

 

It would be bad enough facing just one of the above challenges. And that's with a balanced and functioning economy which now almost seems like a thing of the past.  

post #2685 of 2963

I find the modern day fixation on gold really amusing. 

 

Assuming all of society crashes (libertarian wet dream) and we all end up in a 'Walking Dead', 'Mad Max' type world, I can't help but think that gold will be the last thing that people will be interested in.

 

You can't eat or drink gold.

 

Food, water, guns+ammo, medicine, fuel, etc. will be what is needed and desired. Knowledge of how things work and how to fix them if they break will be way more important than a piece of shiny metal.

If you have water, you might be willing to trade some for food for it but If some guy offers you a gold bar for your water, big deal, that won't keep you alive.

 

I am reminded of the speech that Alan Moore wrote in the Miracleman graphic novel (compilation) 'Olympus'. In it, MM and his compatriots have decided to remake (fix) the world.

Quote:

“Hello. Let’s talk about money. For lack of it, Brazil must level precious forests, with other nations hunting precious whalemeat to survive. Poor people cannot put the environment before their children’s bellies. And yet, what is money? Money is a promise, to redeem the cash of every bearer for its worth in gold or merchandise. An empty promise. Should we all demand at once redemption of our coins, we’d learn such wealth does not exist. Money’s imaginary, real if we believe in it. Rich nations, honoring each other’s empty promises, assure their mutual credibility...and always with the force of arms to see that everyone believes! No more. From August, everything is free; national surplus teleported to those nations most in need until they master self-sufficiency. Each soul shall have free clothing, food and shelter, entertainment, education, all requirements for a worthwhile life...with greater luxuries for those who wish to work providing the above. Come summer, money won’t exist...but then, it never did. Good night.”

post #2686 of 2963
Quote:
Originally Posted by VTRan View Post

I find the modern day fixation on gold really amusing. 

 

Assuming all of society crashes (libertarian wet dream) and we all end up in a 'Walking Dead', 'Mad Max' type world, I can't help but think that gold will be the last thing that people will be interested in.

 

That's certainly the intuitive feeling I have. But humans and rational behavior are not always good companions. Gold has been a strange object of fascination since it was first chipped out of the earth. And I know from my reading of Greek and Roman histories that it was often the currency of last resort. I can't explain why. 

 

My guess is that whilst we may well experience some pretty sharp economic downturns in the near future - complete catastrophe will likely be averted. However, I do think as we slide into a post-peak oil economy the trend insofar as standard-of-living is concerned will be negative. Indeed, until we come up with some kind of a solution I expect newer generations will look upon mine and my parents' with a certain degree of envy and anger (for allowing us to get into a mess which could have been averted with sufficient foresight and will).

post #2687 of 2963

I think Peak Oil is way overblown: the US is estimated to have a 300 year supply of oil and Natural Gas. Currently major corporations (FedEx for one) are converting their trucks fleets to run on Natural Gas. The US still subsidizes alternatives like Solar and Wind while drastically reducing the regulations blocking rollouts of these technologies. It IS getting more costly to extract oil since most of the easy extraction is done, but right now there are oil fields where a drill goes straight down for half a mile, then goes sideways for another half mile, and successfully gets to the Oil/Gas.

 

I do agree with Geoff about water: I think the world is going to have some really bad alternatives to consider. Not only is the amount of potable water decreasing, the amount of shit in the water supplies that do exist is increasing all the time. It's already a huge issue in the Western US. Global warming is decreasing our snowfall in California, States all up the West coast are fighting with each other and Nevada, Utah etc over water rights, and God knows what's going to happen in Saharan Africa in the next decades.

 

I think the US is in a Recession now. We haven't had one in 3 years, so we're due. The fact that when we weren't in a recession the economy wasn't exactly roaring doesn't matter. It is easy to be gloomy, but we could have had the same discussion in 1992, and we would have been right, but then the Internet happened. I have no idea what industry could have that kind of affect on the US economy (and by extension, the world's). Healthcare maybe? The US, Europe, China and Japan all have a majority of the population approaching old age, so maybe there will be a revolution in medicine, robotics etc.

post #2688 of 2963
Quote:
Originally Posted by Cylon Baby View Post

I think Peak Oil is way overblown: the US is estimated to have a 300 year supply of oil and Natural Gas. Currently major corporations (FedEx for one) are converting their trucks fleets to run on Natural Gas. The US still subsidizes alternatives like Solar and Wind while drastically reducing the regulations blocking rollouts of these technologies. It IS getting more costly to extract oil since most of the easy extraction is done, but right now there are oil fields where a drill goes straight down for half a mile, then goes sideways for another half mile, and successfully gets to the Oil/Gas.

 

 

I don't think anyone is suggesting oil is about to run out. And yes, we still have significant reserves of gas and coal. Although they are every bit as finite and anywhere up to ten/twenty times more troublesome as oil in terms of greenhouse emissions. The problem is one of energy density. How much energy it takes to produce a single barrel of oil - often labelled the EROEI factor. 

 

Fifty years ago we were pumping out sweet crude at an EROEI of 1 barrel in to 100 barrels out.

Today even the big Saudi fields are doing well retrieving 50% water-cut heavy sour crude at an EROEI of 1 to 10. 

At best the much vaunted Canadian tar sands offer an EROEI of 1 to 2. 

 

It is possible to convert both natural gas and coal, but the EROEI is roughly comparable to tar sand extraction. Natural gas conversions for cars is a temporary fix, but we still need oil in its natural state as it is a/the primary ingredient in the production of plastics, medicines, pesticides etc. 

 

We have become so reliant on technology its easy to think there's a quick fix out there when really there are none. Sure, there are plenty of interesting ideas and one or two promising inventions. But as things stand at the moment we are, at best, forty years away from replacing the $45 trillion oil economy with an energy alternative which is a) easily stored, b) transferrable, c) doesn't require large inputs of existing energy sources to manufacture or maintain, d) can be scaled to national levels, e) doesn't pose tricky technical challenges, f) isn't intermittent and g) is easy on the environment. 

 

And those forty years are going to be bumpy. 

post #2689 of 2963

FYI- Krugman on Moyers & Co.

 

Paul Krugman Explains the Keys to Our Recovery

post #2690 of 2963

So you thought previous tactics by the banks were bad? I think this new one hits a new low. I cant understand how this is even legal. Just despicable. Screw you banks!

 

http://www.nbcnews.com/business/zombie-titles-haunt-victims-home-foreclosure-1B7933378

post #2691 of 2963
Quote:
Originally Posted by Arturo RJ View Post

So you thought previous tactics by the banks were bad? I think this new one hits a new low. I cant understand how this is even legal. Just despicable. Screw you banks!

 

http://www.nbcnews.com/business/zombie-titles-haunt-victims-home-foreclosure-1B7933378


The moral of the story: make the fuckers come force you out.

post #2692 of 2963

Eat the rich... and I'm not being facetious. 

post #2693 of 2963
Quote:
Originally Posted by Clarence Boddicker View Post

Eat the rich... and I'm not being facetious. 


I don't know, I think a lot of it would be really unhealthy. Most cuts would be either really stringy or incredibly fatty....and there would probably be some parasites as well.

post #2694 of 2963

That's so maddening.
 

post #2695 of 2963

Fixing the foreclosure disaster by making the banks eat &^%$ should have been the first order of business.  This is what government is for.  Instead, the banks have held sway in Washington and been allowed to walk through the raindrops, leaving ordinary citizens to fight this crap alone.  It's shameful. 

 

If it had been me, I would have forced the banks to nationalize all of those loans at a huge markdown, and then make the govt the lender of last resort until everything was straightened out, and then the govt could have liquidated the loans once they were stable.  Of course that would be the sane thing to do in any country that's not this one.

post #2696 of 2963
post #2697 of 2963

Here's a good prefix/addendum to the above....

 

Quote:

FRONTLINE investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages.

 

The Untouchables

 

In The Untouchables, premiering tonight, FRONTLINE examines why not one Wall Street executive has been prosecuted for fraud tied to the sale of bad mortgages. Through interviews with prosecutors, government officials and industry whistleblowers, the film raises new questions over whether senior bankers either ignored or contributed to fraud while inflating the bubble through the purchase and securitization of shoddy loans.

post #2698 of 2963

Ah, yeah, the Untouchables is actually what I was referring to. Guess the Post left that part out (I originally read about it at Zerohedge, and decided to post something from a more reputable source). Good to see him go. Will be happy to see Holder follow him, sooner rather than later.

 

post #2699 of 2963
Quote:
Originally Posted by yt View Post

Fixing the foreclosure disaster by making the banks eat &^%$ should have been the first order of business.  This is what government is for.  Instead, the banks have held sway in Washington and been allowed to walk through the raindrops, leaving ordinary citizens to fight this crap alone.  It's shameful. 

 

If it had been me, I would have forced the banks to nationalize all of those loans at a huge markdown, and then make the govt the lender of last resort until everything was straightened out, and then the govt could have liquidated the loans once they were stable.  Of course that would be the sane thing to do in any country that's not this one.

The government made bank profiteering possible by insuring fractional reserves and being a lender of last resort and then issuing large quantities of currency and credit to banks, which they could gamble with by loaning out at artificially low rates. Without the government propping up this bank cartel, banks would have been forced to operate honestly with 100% reserves and making loans responsibly. Your solution is an after the fact fix that doesn't address the root of the problem. I think elsewhere you've said you support 100% reserves, but I don't think you have the faintest idea why that's a good policy (since it's a market oriented solution, and you believe markets are to blame).


Edited by stunt poop - 1/25/13 at 4:46am
post #2700 of 2963
Quote:
Originally Posted by VTRan View Post

I find the modern day fixation on gold really amusing. 

 

Assuming all of society crashes (libertarian wet dream) and we all end up in a 'Walking Dead', 'Mad Max' type world, I can't help but think that gold will be the last thing that people will be interested in.

 

You can't eat or drink gold.

 

Food, water, guns+ammo, medicine, fuel, etc. will be what is needed and desired. Knowledge of how things work and how to fix them if they break will be way more important than a piece of shiny metal.

If you have water, you might be willing to trade some for food for it but If some guy offers you a gold bar for your water, big deal, that won't keep you alive.

 

I am reminded of the speech that Alan Moore wrote in the Miracleman graphic novel (compilation) 'Olympus'. In it, MM and his compatriots have decided to remake (fix) the world.

Well, you don't know how money emerges out of barter or why it's useful for society to have a money as opposed to doing all transactions in barter, so your confusion is understandable (money already has, historically, emerged in societies where survival wasn't a given and people had to live subsistence lifestyles). Economists struggled with the question of why precious metals are valuable when you can live without gold, but you can't live without water (it's known as the diamond-water paradox).

 

Any halfway decent economics text from the last 130 years or so could help you with this. Really, 250 years, but I want to keep a narrower scope for where you should be searching. If basic things like how or why a commodity money like gold or silver emerges are mystifying to you, you shouldn't have strong opinions on the subject.


Edited by stunt poop - 1/25/13 at 5:36am
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