Zero Liability Voters

 

I thought this was quite good. It wouldn’t be as big of an issue if you had higher interest rates. Now look at all of the debt that the Fed is swallowing. Smart hedge fund guys say that the Fed and the Treasury are one thing now. How can libertarianism and conservatism get any traction in this environment? How is it supposed to work or sell in this environment?

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  1. Kozak Member
    Kozak
    @Kozak

    I’m for Heinlein’s system in Starship Troopers.

     

    • #1
  2. Dr. Bastiat Member
    Dr. Bastiat
    @drbastiat

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future.  Like, way up.  That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply. 

    He’s a financial guy, so I hesitated to argue with him.  He knows his stuff. 

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates.  The US government would default in a matter of months.

    My friend than explained to me the difference between the Fed and the Treasury.  What a convoluted mess.  Who came up with this?

    Either way, I don’t see how this can end well.

    But what do I know?  This is complicated stuff.

    But it looks bad.  And when you try to simplify it for someone like me, it looks even worse.

    To me, it looks like a house of cards.  And I can’t tell what’s holding it up.

    I really hope I’m missing something here.  Maybe I am…

    • #2
  3. RufusRJones Member
    RufusRJones
    @RufusRJones

    Dr. Bastiat (View Comment):
    Either way, I don’t see how this can end well.

    I just watched this this morning. Part of what is going on is, you have 7 trillion in government pensions that need higher interest rates, but that would destroy too many corporations, and obviously the U.S. government can’t afford it. Two hundred twenty basis points higher on the five year treasury and every single western government goes broke. 

    This all started when Alan Greenspan started blowing bubbles in the mid 90s. 

     

     

    Here is another one. They are both explicit about the non-separation between the Treasury and the Fed. They can’t let the stock market collapse or any company collapse because peoples retirements and welfare depend on it. 

     

     

    Start at 46:00 approximately

     

     

     

     

    • #3
  4. RufusRJones Member
    RufusRJones
    @RufusRJones

    I just watched the end from 46:00. This is the summary. Discretionary central banking misallocates capital. This reduces distributed opportunity. That makes people need government. Furthermore it facilitates the growth of government separate from that. Everything moves left all the time and conservatism and libertarianism can’t work or sell under these circumstances.

    Act accordingly.

    Also, I don’t see how you don’t get serious CPI inflation.  It’s the path that has the lowest political problems.

    • #4
  5. Django Member
    Django
    @Django

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    My friend than explained to me the difference between the Fed and the Treasury. What a convoluted mess. Who came up with this?

    Either way, I don’t see how this can end well.

    But what do I know? This is complicated stuff.

    But it looks bad. And when you try to simplify it for someone like me, it looks even worse.

    To me, it looks like a house of cards. And I can’t tell what’s holding it up.

    I really hope I’m missing something here. Maybe I am…

    Rashida Tlaib has revived the concept of the platinum trillion-dollar coin. And there is a Nobel Prize winning economist at the NYTimes who supported the idea originally back in 2011. If those two fools are representative of TPTB, we’ll be Venezuela soon.  

    • #5
  6. RufusRJones Member
    RufusRJones
    @RufusRJones

    delete

    • #6
  7. DonG (2+2=5. Say it!) Coolidge
    DonG (2+2=5. Say it!)
    @DonG

    If we could move more people from negative liability voters to zero liability voters, that would be a good start.

    • #7
  8. kedavis Member
    kedavis
    @kedavis

    I can’t speak for anyone else, but I just got some more canned hams that are good for at least 5  years.

    • #8
  9. RufusRJones Member
    RufusRJones
    @RufusRJones

    If you want to understand ‘the system’ this is very good. This guy leans towards statist solutions because he’s trying to keep the dollar hegemony intact, but he lays out all of the problems really well.

    https://investresolve.com/podcasts/mike-green-the-fourth-turning-and-reimagining-the-american-dream/

    • #9
  10. Old Bathos Moderator
    Old Bathos
    @OldBathos

     Deficits from spending are OK.  I have it on the highest authority that deficits do not matter if caused by excessive spending.

    Deficits only matter if they result from tax cuts for the rich.  

    • #10
  11. kedavis Member
    kedavis
    @kedavis

    Old Bathos (View Comment):

    Deficits from spending are OK. I have it on the highest authority that deficits do not matter if caused by excessive spending.

    Deficits only matter if they result from tax cuts for the rich.

    But the result of tax cuts for the rich is excessive spending…

    • #11
  12. Django Member
    Django
    @Django

    Old Bathos (View Comment):

    Deficits from spending are OK. I have it on the highest authority that deficits do not matter if caused by excessive spending.

    Deficits only matter if they result from tax cuts for the rich.

    I once heard a Demo-rat politician say, “We don’t have a spending problem. We have a revenue problem.”

    • #12
  13. RufusRJones Member
    RufusRJones
    @RufusRJones

    The Federal Reserve retards the revenue. All they do is misallocate capital, put off the day of reckoning, and grow government. 

     

    • #13
  14. Dr. Bastiat Member
    Dr. Bastiat
    @drbastiat

    Django (View Comment):
    I once heard a Demo-rat politician say, “We don’t have a spending problem. We have a revenue problem.”

    Wow.

    That’s amazing.

    • #14
  15. kedavis Member
    kedavis
    @kedavis

    Dr. Bastiat (View Comment):

    Django (View Comment):
    I once heard a Demo-rat politician say, “We don’t have a spending problem. We have a revenue problem.”

    Wow.

    That’s amazing.

    It shouldn’t be, really.  In the primaries for the 2020 Presidential election, Bill de Blasio said during one of the Democrat debates “There is plenty of money in this world, and there’s plenty of money in this country, it’s just in the wrong hands. Democrats have to fix that.”

    • #15
  16. RufusRJones Member
    RufusRJones
    @RufusRJones

    The issue is, how much capital you have as defined by this article, and what is the yield on it? Then you have to discuss how much of it the government is going to take.

    When capital is mentioned in the present-day political debate, the term is usually subject to a rather one-dimensional interpretation: Whether capital saved by citizens, the question of capital reserves held by pension funds, the start-up capital of young entrepreneurs or capital gains taxes on investments are discussed – in all these cases capital is equivalent to “money.” Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience. Money is “only” the simplifying aid that enables us to record the incredibly complex heterogeneous capital structure in a uniform manner. It serves as a basis for assessing the value of these diverse forms of capital.

    Modern economics textbooks usually refer to capital with the letter “C”. This conceptual approach blurs the important fact that capital is not merely a single magnitude, an economic variable representing a magically self-replicating homogenous blob but a heterogeneous structure. Among the various economic schools of thought it is first and foremost the Austrian School of Economics, which stresses the heterogeneity of capital. Furthermore, Austrians have correctly recognized, that capital does not automatically grow or perpetuate itself. Capital must be actively created and maintained, through production, saving, and sensible investment.

     

    Through capital formation, one creates the potential means to boost productivity.

    https://mises.org/wire/were-living-age-capital-consumption

     

     

    • #16
  17. RufusRJones Member
    RufusRJones
    @RufusRJones

    It is beyond question that massive capital consumption is taking place nowadays, yet not all people are affected by it to the same extent.

     

    On the other hand, counteracting capital consumption are technological progress and the rapid expansion of our areas of economic activity into Eastern Europe and Asia in recent decades, due to the collapse of communism and the fact that many countries belatedly caught up with the monetary and industrial revolution in its wake. Without this catching-up process it would have been necessary to restrict consumption in Western countries a long time ago already.

    At the same time, the all-encompassing redistributive welfare state, which either directly through taxes or indirectly through the monetary system continually shifts and reallocates large amounts of capital, manages to paper over the effects of capital consumption to some extent. It remains to be seen how much longer this can continue. Once the stock of capital is depleted, the awakening will be rude. We are certain, that gold is an essential part of any portfolio in this stage of the economic cycle.

    • #17
  18. Randy Webster Member
    Randy Webster
    @RandyWebster

    RufusRJones (View Comment):
    Two hundred twenty basis points

    Is that the same as 2.2%?

    • #18
  19. RufusRJones Member
    RufusRJones
    @RufusRJones

    Randy Webster (View Comment):

    RufusRJones (View Comment):
    Two hundred twenty basis points

    Is that the same as 2.2%?

     

    Yes. 2.2 percentage points 

    • #19
  20. RufusRJones Member
    RufusRJones
    @RufusRJones

    RufusRJones: Smart hedge fund guys say that the Fed and the Treasury are one thing now.

     

     

     

     

    • #20
  21. RufusRJones Member
    RufusRJones
    @RufusRJones

    The other thing they were saying in that Mike Green interview was, PPE is forgivable. You don’t have to pay it back. What they are doing is the Fed is cutting a check for bonds that pay for PPE, but if the Fed is buying so many bonds including those, it’s literally just the government printing money and giving it to businesses and they are going to eat the cost of it with Monopoly money. Supposedly this is against the law.

    • #21
  22. Miffed White Male Member
    Miffed White Male
    @MiffedWhiteMale

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    My friend than explained to me the difference between the Fed and the Treasury. What a convoluted mess. Who came up with this?

    Either way, I don’t see how this can end well.

    But what do I know? This is complicated stuff.

    But it looks bad. And when you try to simplify it for someone like me, it looks even worse.

    To me, it looks like a house of cards. And I can’t tell what’s holding it up.

    I really hope I’m missing something here. Maybe I am…

    I can’t figure out how we made it this far.  I’d thought it would all come falling down long before now.

    • #22
  23. The Reticulator Member
    The Reticulator
    @TheReticulator

    RufusRJones (View Comment):

    RufusRJones: Smart hedge fund guys say that the Fed and the Treasury are one thing now.

     

     

    I suspect it won’t take long for most of us to wish we had the old structural problems back. 

     

     

     

    • #23
  24. MISTER BITCOIN Member
    MISTER BITCOIN
    @MISTERBITCOIN

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    Inflation as measured by Consumer Price Index (CPI) usually lags increase in money supply by 2 years… You are already seeing gasoline prices going up all over the country

     

    • #24
  25. RufusRJones Member
    RufusRJones
    @RufusRJones

    FYI, this is the other side of the inflation argument. Since these idiot central bankers have facilitated so much excess debt on the planet, this is very deflationary. When you pay back a loan, that is absorbing money. It’s not going into anything real. What’s worse is, when a loan goes bad it literally destroys dollars. This makes dollars more valuable and it makes the dollar stronger. Then, the strong dollar makes more loans go bad mostly because there are $13 trillion of debt outside of the United States denominated in dollars. A strong dollar is a disaster, so then what do they do? They make interest rates go down to zero and then they use all kinds of tricks because you can’t go negative, basically. Then you can’t get any interest on savings and it kills all of the pensions and insurance companies. The whole thing is insane.

    • #25
  26. RufusRJones Member
    RufusRJones
    @RufusRJones

    Also, all of this debt makes critical things like shelter, any kind of rent,  and education unaffordable. It makes the PE of stocks insane, even though they may go higher. 

    This is why people are speculating on bitcoin and don’t give a damn if it brings down any government. It’s also why people are becoming radical socialists and populists. 

    • #26
  27. RufusRJones Member
    RufusRJones
    @RufusRJones

    RufusRJones (View Comment):
    Part of what is going on is, you have 7 trillion in government pensions that need higher interest rates, but that would destroy too many corporations, and obviously the U.S. government can’t afford it.

    One of Mike Green’s points is, corporations are effectively welfare and security in this country. The Fed and the government can’t allow any creative destruction, which just makes everything worse. Zombi companies.


    This just popped into my head. Stock buybacks theoretically are only for when executives can’t find decent projects for capital. That’s not what is happening. They are doing it to cash in on their options. This is another thing that is just retarding growth. They literally float bonds to buy stocks. They cash out. They might as well do this because they know the whole damn system is screwed up, and it’s not illegal to protect yourself in this way. It’s antisocial but nobody is going to do anything about it.

    Government Is How We Steal From Each Other™

    • #27
  28. Kozak Member
    Kozak
    @Kozak

    MISTER BITCOIN (View Comment):

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    Inflation as measured by Consumer Price Index (CPI) usually lags increase in money supply by 2 years… You are already seeing gasoline prices going up all over the country

     

    The can’t let interest rates rise.  If they do the national debt explodes as they have to refinance all the short term debt at higher rates.  

    • #28
  29. kedavis Member
    kedavis
    @kedavis

    Kozak (View Comment):

    MISTER BITCOIN (View Comment):

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    Inflation as measured by Consumer Price Index (CPI) usually lags increase in money supply by 2 years… You are already seeing gasoline prices going up all over the country

     

    The can’t let interest rates rise. If they do the national debt explodes as they have to refinance all the short term debt at higher rates.

    The total debt itself wouldn’t change, but the cost of servicing it at higher rates could easily wipe out the entire federal budget.

    • #29
  30. Django Member
    Django
    @Django

    Kozak (View Comment):

    MISTER BITCOIN (View Comment):

    Dr. Bastiat (View Comment):

    RufusRJones: the Fed and the Treasury are one thing now.

    A friend of mine told me recently that interest rates will be going up in the near future. Like, way up. That’s the only way that the fed can control inflation, after the enormous recent increases in the money supply.

    He’s a financial guy, so I hesitated to argue with him. He knows his stuff.

    But I disagreed, saying that as long as our government’s debt is this mind-bogglingly huge, that there’s no way they’re going to raise interest rates. The US government would default in a matter of months.

    Inflation as measured by Consumer Price Index (CPI) usually lags increase in money supply by 2 years… You are already seeing gasoline prices going up all over the country

     

    The can’t let interest rates rise. If they do the national debt explodes as they have to refinance all the short term debt at higher rates.

    Between a rock and a hard place. If inflation goes higher and other investments pay better, no one will invest in US government securities, and further debt can’t be financed. At least it seems that way to me. 

    • #30