FED Change Interest Rate Timeliness due to INFLATION! - Page 3 - Politics Forum.org | PoFo

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#15184897
ckaihatsu wrote:
We Are Living Through The Scariest Economic Experiment In History Right Now...And No One Knows It



Anyone paying attention knows it...

There have been many economic disasters in history. Is this one of them? I doubt it, but doing nothing wasn't really an option.

I was amused by the way that guy assumes MMT was mainstream. Real expert...
#15184958
ckaihatsu wrote:We Are Living Through The Scariest Economic Experiment In History Right Now...And No One Knows It


I saw this video before.
IMO, the video doesn't support his conclusion.
The video said ---
1] China invented bank notes.
2] The Gov. issued paper money instead of more copper coins.
3] This was fine.
4] The Gov. issued more paper money and the economy boomed. [This is what MMT says will happen if there is more deficit spending.]
5] Everything was fine for 200 years.
6] China was conuered by Mongols, who had no understanding of money.
7] They (as the Gov.) reduced tax collections and increased Gov. spending with the paper money. This caused hyperinflation.

So, everything was fine for 200 years and only got screwed-up after ignorant foreigners took over and did stupid things.
Well, all this shows is ---
. . a] If the USA is conquered, things may get bad. Duh.
. . b] If the Gov. does stupid things, things will get bad. Duh.
But, it is always possible for a future Gov. to do stupid things. IMHO, this posibility is not a reason to avoid NOW using large amounts of deficit spending to fight ACC, aka AGW. Because if we don't stop ACC right now there will be no civilization with money in 100 years. Let alone 200 years.
.
#15184964
Steve_American wrote:
I saw this video before.
IMO, the video doesn't support his conclusion.
The video said ---
1] China invented bank notes.
2] The Gov. issued paper money instead of more copper coins.
3] This was fine.
4] The Gov. issued more paper money and the economy boomed. [This is what MMT says will happen if there is more deficit spending.]
5] Everything was fine for 200 years.
6] China was conuered by Mongols, who had no understanding of money.
7] They (as the Gov.) reduced tax collections and increased Gov. spending with the paper money. This caused hyperinflation.

So, everything was fine for 200 years and only got screwed-up after ignorant foreigners took over and did stupid things.



I didn't get any *xenophobic* vibes from it -- and since it's not due to 'culture' then all we're left with is *protocol* / practice, as in what *anyone* would do in 'x' economic situation, such as expanding the government balance sheet to the extent of turning the currency to shit (hyper-financially-leveraged) (bad debt). It could generically be called *poverty*, or lower-on-the-global-imperialism-food-chain.


Steve_American wrote:
Well, all this shows is ---
. . a] If the USA is conquered, things may get bad. Duh.
. . b] If the Gov. does stupid things, things will get bad. Duh.
But, it is always possible for a future Gov. to do stupid things. IMHO, this posibility is not a reason to avoid NOW using large amounts of deficit spending to fight ACC, aka AGW. Because if we don't stop ACC right now there will be no civilization with money in 100 years. Let alone 200 years.
.



Just for the record I'll reiterate that I'm not ideologically obligated to entertain 'fixing' capitalism, etc., so this is a perfunctory 'whatever', upfront.

That said, I'd rather see social service spending than austerity, so sure, government debt for anything that actually *helps* people.
#15185011
ckaihatsu wrote:We Are Living Through The Scariest Economic Experiment In History Right Now...And No One Knows It


I indeed found this video quite intriguing.


One of the key arguments I interpreted, presented by the video, was that in the situation whereby fiat currency has been created, it works its magic for a while, in the way you expect, given a well managed system.

When the elastic starts to stretch, it's potentiable to still keep this under control.

However, when there are unforeseen, sudden, giant shocks to the system, which are unable to be predicted, the systems face their biggest tests. I.e., major unforeseen calamities of any sort really--man made or natural--that demand a huge spending effort.

And when that happens, the elastic can eventually be stretched so far it snaps.
#15185024
Crantag wrote:I indeed found this video quite intriguing.


One of the key arguments I interpreted, presented by the video, was that in the situation whereby fiat currency has been created, it works its magic for a while, in the way you expect, given a well managed system.

When the elastic starts to stretch, it's potentiable to still keep this under control.

However, when there are unforeseen, sudden, giant shocks to the system, which are unable to be predicted, the systems face their biggest tests. I.e., major unforeseen calamities of any sort really--man made or natural--that demand a huge spending effort.

And when that happens, the elastic can eventually be stretched so far it snaps.

Well what I see in the US now and for the last 40 years is --- the Repud Party uses MMT thinking to increase the deficit by "spending" by cutting taxes on the rich. While the Dem. Party doesn't use MMT thinking. It uses neo-liberal thinking.

So, in 1981 the so-called national debt stood at $1T.
Now it is over $27T, and 3/4 of that increase happened in years the budget was written by a Repud Pres. Also, when a Dem. was Pres. the tax rates on the rich never went back up. So, those rates are at the feet of the Repuds.

We now need to spend a lot on ACC, aka AGW. This is my priority. Yes, the Dems are spending on the people with child care, 2 years free community college, etc. IMHO, that is better than giving money to the rich, like Trump did in March or April 2020.

The video said the in China in about 1200 to 1300 fiat paper money worked fine and did make the economy boom. But then China was conquered by the Mongols and they increased paper money spending and I think let tax collections slip.

So, the problem that caused the hyperinflation in China was that the new Gov. was ignorant and did stupid things. And no, I'm not being racist against the Mongols. It is just a fact that they had not had paper money before and so didn't understand the limits. They had never seen inflation EVER. So, they had no fear of it.

It is always possible that the US Gov. 100 years from now will do stupid things. IMHO, that is not a good reason why the people now should not deficit spend to save civilization from ACC or to help the pepole for that matter.
. . . Isn't this thinking a lot lot asking the Gov. to ban drilling for oil so that people 100 years from now will still have some oil to use?
#15185118
Steve_American wrote:Well what I see in the US now and for the last 40 years is --- the Repud Party uses MMT thinking to increase the deficit by "spending" by cutting taxes on the rich. While the Dem. Party doesn't use MMT thinking. It uses neo-liberal thinking.

So, in 1981 the so-called national debt stood at $1T.
Now it is over $27T, and 3/4 of that increase happened in years the budget was written by a Repud Pres. Also, when a Dem. was Pres. the tax rates on the rich never went back up. So, those rates are at the feet of the Repuds.

We now need to spend a lot on ACC, aka AGW. This is my priority. Yes, the Dems are spending on the people with child care, 2 years free community college, etc. IMHO, that is better than giving money to the rich, like Trump did in March or April 2020.

The video said the in China in about 1200 to 1300 fiat paper money worked fine and did make the economy boom. But then China was conquered by the Mongols and they increased paper money spending and I think let tax collections slip.

So, the problem that caused the hyperinflation in China was that the new Gov. was ignorant and did stupid things. And no, I'm not being racist against the Mongols. It is just a fact that they had not had paper money before and so didn't understand the limits. They had never seen inflation EVER. So, they had no fear of it.

It is always possible that the US Gov. 100 years from now will do stupid things. IMHO, that is not a good reason why the people now should not deficit spend to save civilization from ACC or to help the pepole for that matter.
. . . Isn't this thinking a lot lot asking the Gov. to ban drilling for oil so that people 100 years from now will still have some oil to use?

I'm not a back and forth, tit-for-tat, beat a topic to death, and debate on and on type.

But, yes, the Republicans suck, and the Democrats also suck, but it is somewhat irrelevant, when we are talking about the system itself.

The video presented a lot more nuanced analysis than as you interpret it, vis a vis the Mongols and Chinese.

The mongols modified the system which they inhereted, but it isn't like, the Mongols were bad, like Republicans are bad, and therefore it was a failure of leadership under the bad people, sort of proposition.

The video is an analysis of the systems, and in particular, the institution of fiat currency.
#15185126
Crantag wrote:
I'm not a back and forth, tit-for-tat, beat a topic to death, and debate on and on type.


The video is an analysis of the systems, and in particular, the institution of fiat currency.



Fine, it's crap.

https://www.amazon.com/Debt-Updated-Expanded-First-Years/dp/1612194192/ref=sr_1_1?crid=1IDHWKMXXQUMP&dchild=1&keywords=debt%2C+the+first+5%2C000+years+by+david+graeber&qid=1628801038&sprefix=debt%2C+th%2Caps%2C179&sr=8-1
#15185128
late wrote:Fine, it's crap.

https://www.amazon.com/Debt-Updated-Expanded-First-Years/dp/1612194192/ref=sr_1_1?crid=1IDHWKMXXQUMP&dchild=1&keywords=debt%2C+the+first+5%2C000+years+by+david+graeber&qid=1628801038&sprefix=debt%2C+th%2Caps%2C179&sr=8-1

I've read the book, and liked it.

I also liked the video.

And, was critiquing what I considered @Steve_American's (from my perspective) rather simplistic and somewhat contrived critiques of it.

On the book, the part I was influenced by, was the bit on how, as a sort of social construct, paying back one's debt is contrived as a moral responsibility.

It is a good and deep book, and hard to paraphrase, but a goodie for sure.
#15185147
Crantag wrote:I've read the book, and liked it.

I also liked the video.

And, was critiquing what I considered @Steve_American's (from my perspective) rather simplistic and somewhat contrived critiques of it.

On the book, the part I was influenced by, was the bit on how, as a sort of social construct, paying back one's debt is contrived as a moral responsibility.

It is a good and deep book, and hard to paraphrase, but a goodie for sure.

Today in the other thread I argued that national debts are like a bank and the person who owns the land and building the bank rents (and the bank can't move). Does the bank really want the land's owner to increase the rent it pays to pay off the loan?
. . . Paying off the US debt can only be done with dollars of a surplus that are taxed away from the holders of the debt. [Or by creating new dollars to pay it with, but this seems worse than rolling the debt over forever.] So, paying off the debt means the bond holders gain nothing *and* the economy will be sent into a permanent depression by the taxes sucking money out of it.
.
#15185175
Steve_American wrote:Today in the other thread I argued that national debts are like a bank and the person who owns the land and building the bank rents (and the bank can't move). Does the bank really want the land's owner to increase the rent it pays to pay off the loan?
. . . Paying off the US debt can only be done with dollars of a surplus that are taxed away from the holders of the debt. [Or by creating new dollars to pay it with, but this seems worse than rolling the debt over forever.] So, paying off the debt means the bond holders gain nothing *and* the economy will be sent into a permanent depression by the taxes sucking money out of it.
.

You are rambling, man.

This hardly makes any sense, and I tried to read it like 4 times.

On the, "what if the bank's land lords"

You think banks have landlords, and rent their lands?

You have a lot to learn, but keep up the studying.
#15185192
Crantag wrote:You are rambling, man.

This hardly makes any sense, and I tried to read it like 4 times.

On the, "what if the bank's land lords"

You think banks have landlords, and rent their lands?

You have a lot to learn, but keep up the studying.

@Crantag
So, you are unwilling to grant my assumptions. At least for the sake of the point I'm trying to make.

Please, keep responding, though.
#15185235
Crantag wrote:
I've read the book, and liked it.

I also liked the video.

And, was critiquing what I considered @Steve_American's (from my perspective) rather simplistic and somewhat contrived critiques of it.

On the book, the part I was influenced by, was the bit on how, as a sort of social construct, paying back one's debt is contrived as a moral responsibility.

It is a good and deep book, and hard to paraphrase, but a goodie for sure.



I'm loving it. In Ch 4 (I think) he links Adam Smith, Comte, and Nietzsche by the way they think about debt. For me, that was a great moment.

I have a couple issues with that video. One is that it looks to me like it's pushing a Right wing agenda. It also seems to think MMT speaks for the discipline of economics.

Oh well..
#15185257
Regarding debt:



First imposed in the 1980s and then continuing into the 1990s and the present century, countries that sought assistance from the IMF were required to meet strict conditions including the privatisation of public services, deregulation of financial markets and reduction of social spending, including on health.

Between 1980 and 2014, 109 out of 137 developing countries had to enter at least one structural adjustment program.

A recent article by Adele Walton in the UK Tribune magazine pointed out that some 25 countries were spending “more on debt than healthcare, education, and social protection combined in 2019, meaning the intense strain of an international health care crisis has left swathes of populations without access to essential services and resources.”

The measures imposed by international finance capital via the IMF have had a particularly significant impact on two of the countries that have been hardest hit by the pandemic, South Africa and India.

According to Walton’s article a study in South Africa has found “privatisation to be the primary cause of deprivation of most of the population’s access to health care.”

In India, privatisation of health care “significantly reduced the government’s capacity to prioritise public health needs over private profit interests.” And the lack of resource coordination had “cataclysmic consequences for the country when it experienced oxygen shortages at the height of its second wave.”



https://www.wsws.org/en/articles/2021/0 ... r-a09.html
#15185345
Krugman: "I’m Sure Many Senators Really Haven’t Done The Math" that is $3.5T / 10 years in a decade = $350B / year when the US GDP is around $30T/year is
$350B / $30,000B = 35/3000 = 1.167% of the yearly GDP over the next 10 years = decade. Krugman said.

He said this would also be partly piad for with taxes and saving on Medicare provided drugs.

He said this is not a lot when it is compared to the size of the American GDP over 10 years.

It would not cause inflation.

He also said something that seems to say that I'm right that the US debt level is not now a problem.
Just 11 min. long.


.
#15186186
late wrote:
doing nothing wasn't really an option.



ckaihatsu wrote:
Now it's getting to where doing nothing isn't really an option, and *not* doing nothing isn't really an option, either.



---



Lord Michael Forsyth, the chair of the committee, said the BoE “has become addicted” to QE using it as the “answer to all the country’s economic problems.”

The report said there were wide perceptions the bank was “using QE mainly to finance the government’s spending priorities” and if these continued to grow “it would lose credibility destroying its ability to control inflation and maintain financial stability.”



But as the FT reported this “breeziness” seemed odd given the “market upheavals” when the Fed sought to reduce its balance sheet in 2013 and 2018. In 2013 the initial move to end QE resulted in a spike in interest rates.

In 2018, when Fed chair Powell indicated further rate rises in 2019 following four rises over the previous 12 months and that the reduction in asset holdings was on “autopilot,” Wall Street responded with a significant fall, recording its worst December since the Depression.



https://www.wsws.org/en/articles/2021/0 ... k-a18.html
#15186730
late wrote:"179 reasons you don't need to panic about inflation."

https://www.nytimes.com/interactive/2021/08/18/opinion/inflation-economy-transitory.html

I didn't read the linked article because I don't pay or even sign-up to sites in most cases.

I'm not sure I read the thread some time ago, either.

However, from other sources I have gathered that, the Fed. Chairman has announced that instead of acting because MS Econ. "experts" say there may, or even will, soon be inflation that is 'too' high; he has decided to wait until the too high inflation actually happens. This is great.!!

OTOH, IMHO, the Fed. should raise interests rates to close to 1%, just because zero% interest rates are bad, because they cause asset bubbles (stocks & real estate).
.
#15186770
Steve_American wrote:
OTOH, IMHO, the Fed. should raise interests rates to close to 1%, just because zero% interest rates are bad, because they cause asset bubbles (stocks & real estate).
.



Here's what happened last time around they tried that, though:



After Fed rate hike, global economic fault lines deepen

Nick Beams
19 December 2015

After an initial rise following the decision by the US Federal Reserve to lift interest rates by 0.25 percentage points on Wednesday, stock markets around the world have experienced significant declines over the past two days.

The biggest falls were in the United States, where the Dow was down by 368 points at the close of trade on Friday, a drop of more than 2 percent, while the more broadly based S&P 500 fell by 1.8 percent. The CBOE VIX index, which measures market volatility and is often referred to as the “fear gauge,” went over 20, a level regarded as indicating a high degree of market stress.

Markets also fell around the world after rising in the immediate aftermath of the Fed decision. The Euro Stoxx index dropped by 1.4 percent on Friday after rising earlier in the week. In Japan, the Nikkei index closed 1.9 percent lower.



https://www.wsws.org/en/articles/2015/1 ... s-d19.html

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