An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Tuesday, September 22, 2009
FDIC considers borrowing cash from banks
This is totally insane!!! Who are these morons controlling our government and vital institutions??? They are clueless!!!
The FDIC CANNOT run out of money!! In a nation where the government "spends" by crediting bank accounts and where the currency floats freely there can be no "running out of money." It is a totally inapplicable concept.
The deficit terrorists will cause an economic calamity of enormous proportions if this keeps up. In the meantime we are pushing many into poverty and lowering the standard of living of all but 1% of the citizens of this country because of irrational deficit fears!
maybe this is an artifical worry operation to raise anxiety so that people leave more money in the bank
ReplyDeletejust because 99% of the morons believe that the FDIC is fed by tax revenue doesn't mean that Bernanke and the ones calling the shots do ...
i'd like to add that the supposed Lauffer success of the 1980's tax cuts did nothing compared to the credits Reagan doled out to the banks which is measured by the level of debt Reagan created -
debt created is wealth created
Reagan spent more in his 8 years than all administration combined prior all the way to George Washington. right ? straight numbers no adjustment for inflation.
supply side economics is a smoke screen hoax
This is INSANE!!!
ReplyDeleteYep. We need the monetary expansion anyway.
ReplyDeleteAre you kidding me? LOL, LOL. Mike, and anyone else thst is crazy enough to believe what you say... STOP spreading ignorance. PLEASE!!!
ReplyDeleteFrom your P.O.V. all I have to do to become wealthy is go to the bank and get a loan!!! That way I will be rich cause I have just created wealth for myself. That might work for a small elite group of people but that is only because there are other actually working and saving so loans can be made possible. Also, the person that takes out the loan would have to pay interest on it. That should be a monthly reminder that the money (or whatever you bought with the money is not yours until you pay off your debt)!!!!
Any how are you going to pay off the debt??? Answer: With your SAVINGS!!! Money that is not owed to anyone else so that you can decide freely what to do with it.
Mike, you really scare me man. You scare me more than any "debt terrorist" ever could. You are only saying that you think that we should take on more debt so we can ignore that debt that we can't already pay back. LOL LOL LOL
You just won't learn will you??? Come on man, you got schooled in front of the whole world by Peter Schiff and now you have run off to create a little website so you can keep saying the same wrong things!!! Wake up man!! Please...Rhetoric like this is why every man, woman and child in America already owes the government about $63,000 (due to our debt).
OH WAIT!!!! I forgot... Using your logic, all we have to do is get another loan and we will be rich cause we can pay it off right??? LOL. Then we would just pay on the $63,000 loan (plus interest). LOL
I saw your youtube clip about how donald trump is a debtor but is rich and the bank is a creditor and "only" gets about a 6%-7% return on the loan they gave Donald.... LOL. Then you tried to tell me that it was better to be Donald cause he invests his money in real estate and get "TONS OF CASH". LOL
Then you tell me that the U.S.A. is in a good place cause we invest out loans and get returns on it. (you make my sides hurt from laughing so much). WE SPENT AND ARE SPENDING OUR MONEY ON FLAT SCREENS, AND NEW CARS (CASH FOR CLUNKERS), NEW HOUSES, THE WAR IN IRAQ AND AFGHANISTAN.
THESE ARE NOT INVESTMENTS MORON!!! We are losing money in every single catagory and at the same time expanding government are more people lose jobs.
The government has to shrink and spending has to be cut. We need to deregulate and inforce the laws that are already in place. Anyway, my fingers hurt from typing all of this stuff that I already know won't fit into your head... Good luck in the poor house (oh wait, you'll be rich cause you'll be in debt). Sorry, my fault! LOL LOL LOL
Gary
MORE IMPORTANTLY IS THE NOTION THAT THE BANKS NEED TO FUND THE FDIC - AS IF IT IS NECESSARY TO PRIVATIZE THE FDIC
ReplyDeleteWHAT'S NEXT - FDIC CREDIT SWAPS ?
IT IS INDEED "INSANE" - WE DO NOT NEED TO PRIVATIZE FDIC WHILE AT THE SAME TIME TRYING TO TELL EVERYONE THAT WE NEED TO REIGN IN BANK EXHUBERANCE WITH MORE REGULATIONS.
REGULATIONS SHOULD NOT BE A SMOKE SCREEN FOR CRASS REPUBLICAN'T PRIVATIZATION OF THE FDIC !!!
ESPECIALLY BASED ON THE FALSE BELIEF THAT THE FDIC IS FED BY TAX PAYER MONIES.
Davy,
ReplyDeleteGood job! Another fine example of unintelligible commentary by a Schiff follower. Bravo!!
By the way, Davy, from what I understand from reading numerous articles about Schiff's actual performance (including a piece in the Wall Street Journal), the "Poor House" is well populated with investors who gave Schiff their money.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteDavy, you are clearly a buffoon incapable of creating any kind of coherent argument. If you are going to criticize views expressed here, why don't you do so in an intelligible way that advances the debate rather than acting like a pre-pubescent jackass?
ReplyDeleteDavy is right on the mark, and you're totally off mark Mike. It's your boneheaded policies that got the country into the mess that it is in. And it's interesting how you use "Schiff" as a smear. To the contrary, most people here on earth consider themselves proud to be part of the Schiff camp. He correctly told his "followers" to stick to commodities and hold a negative view of the dollar right through the dollar's temporary rally. He was dead right. Those like you who decided to ignore his advice and sell commodities missed out one of the most powerful commodity rallies that began in March. Many of Schiff's clients have erased their losses accrued in late 2008. The WSJ article you point to are publicity attacks- they pick on a couple of bad EuroPac accounts and claim they represent Schiff's performance- a complete lie.
ReplyDeleteIt's about time you gave him some credit without bashing him on baseless accusations.
Mikes call on the homebuilders has blown Shiffs calls out of the water.
ReplyDeleteMost of the mainstream has been down on the builders and Mike was right here. Anyway, everything has gone up since March.
Ishkbob, explain in detail how Mikes view is wrong and Shiffs view is right if you can? Shiff is outta paradigm. The few times I've heard him his strategy is usually talk over people by saying stuff like *can't have debt* *debt is bad* *debt this* *debt that.* He makes no economic arguments whatsoever. Just like you.
I dare you to make an logical economic argument on this forum
Bubble, you pretty much answered your own question in saying "the few times" you've seen him. Maybe you should see him more than just a "few times" so you can understand his theories better. Schiff is not against all debt. In fact, he favors debt as long as it is used for capital investment purposes. Debt used to build a factory is good...debt used spend on a cruise is bad. It's not Schiff who's the focus here...it's the Austrian school of economics. We're not "disciples" of Schiff, but of the school. Schiff simply carries the message.
ReplyDeleteHahah you praise Mike for his "homebuilding call"?? The homebuilding index (XHB) bottomed on March 9th along with the rest of the market. It's not a big deal. A rising tide lifts all boats. Citigroup has bounced 450% since it bottomed on March 9th...but that does not make it a good stock. Homebuilders are amongst the worst investments out there...and soon you and your buddy Mike will realize that and recognize how clueless you both are.
Mike's
Ishkbob, explain in detail how The few times I've heard him his strategy is usually talk over people by saying stuff like *can't have debt* *debt is bad* *debt this* *debt that.* He makes no economic arguments whatsoever. Just like you.
I dare you to make an logical economic argument on this forum
Ok, I'll bite. What does the Shiff-Austrian school say about how to fix 11% unemployment and possibly 20% under-employment? How do we close the output gap in the Austrian Model?
ReplyDeleteWhat are the Austrian policy remedies, other than pain and suffering?
Ishkabob:
ReplyDeleteActually the WSJ piece was a whitewash on Schiff. I know, because I had contact with the reporter who wrote the story. Actually, some of the most damaging material was left out.
Bubble's right...you only need to see Schiff a few times...once, really...because his message has always been the same: America is impoverished and going down.
ReplyDeleteJust because you can't stand to hear the truth doesn't mean you can dodge reality. The only way to overcome the current crisis is to admit that we overconsumed and undersaved. We have been living on top of a credit driven bubble for decades, with no capacity to "repay" that credit in the form of production or what not. We need to come to terms with reality, and let the natural forces of the free market deleverage this monstrous godforsaken toxic bubble. No pain no gain. There will be massive unemployment and pain. But it will be relatively short and swift- and before you know it we will have stable foundation to build a viable economic foundation on- a foundation based on savings, investments, production, exports etc- not consumerism and debt. The alternative to the free market is to allow a deep, prolonged Depression/major recession that will take forever to dig out of and cause prolonged suffering for both us and our children.
ReplyDeletehttp://www.cnbc.com/id/33004753
ReplyDeleteHere is a link to a CNBC article that helps to back up what we (Ishkbob and I) are saying and hopefully will show that we are not "Schiff Followers" but simply believers in the Austrian school. It came out today.
Iskbob, I think everybody -Mike included- agrees that the American consumer is overleveraged. We all get it. So no argument there.
ReplyDeleteI disagree on consumerism and exports. Exports are a cost, imports are a benefit. Consumerism is good. Consumerism is the point.
We may disagree on what are worthwhile goods and services to consume, but we should not disagree that the overall well-being of a group of people can be measured in how much they are able to consume in a macro sense. A house, car, doctor visit, meal, medicine, clothing, are all consumption items and the more, the better.
Now the question becomes how do we get those consumption items to as many people in our economy. The best way to do that is to create enough demand for them. Aggregate demand comes from a group of people having the money and desire to purchase things. Right now people don't have the money, and they are in the mood to save, and pay off debt, so aggregate demand is down and therefore aggregate supply has adjusted down to meet the lower demand and thus you have slack in the economy( higher unemployment, lower business investment). So how can policy makers fix things? How can we restore aggregate demand? We can do it your way -the dumb way, the do nothing way, the current Obama way- and just let the automatic fiscal stabilizers like unemployment, food stamps, and federal spending continue until we, the private sector, has paid off enough debt and saved enough money that we feel comfortable spending more(its been a year of strong recession).
Or we can be good Keynesians and suspend payroll taxes, for example,
putting significant amounts of money back into peoples pockets. The tax reduction would be like giving every working American a raise until aggregate demand is restored. It would take probably a few a few months?
Davy, I read the story. Here is a
ReplyDeletequote from the story:
“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”
The analyst is using the wrong government finance model to make those conclusions. This is among the most common mistake most macro-international finance analysts make. Here are a few points on why he is wrong.
1) The US Federal government does not borrow money in order to spend.
2) Interest rates on government treasury notes, bills, and bonds are under control of the FED.
3) Japan and china can stop buying bonds. Who cares? That is their problem. They will no longer earn interest on their dollar deposits if that happens. Big Whoop.
4) When japan and china sell back bonds to the treasury or market, its simply exchanging one type of deposit for another. The FED/Treasury can do this to infinity as long as we don't have a convertible currency system -which we no longer have.
If Japan and China no longer want to save our dollars, that is another story. Say they want to exchange those dollars for gold or Euro's, then we can see inflation due to the exchange rate on the dollar floating down. Since Japan and China are mercantilists', they don't want to do this. They want to sell America cars, computers, cell phones, etc. So, their policy is to weaken their currencies in order to keep their products competitive on price.
Now, lets say they don't do that anymore. Whats the worse case scenario? Well the worse case scenario is that American products and services are suddenly cheaper to the rest of the world because of the weakened dollar and the rest of the world begins to buy American. Terrible huh? Mind you, we will see inflation if this happens and our standard of living we be much lower than we have become accustomed to as a net importer. We should encourage our Asian friends to be our slaves and produce all of goods and services except those vital to national security. But you want the former, correct? You want pain and suffering?
Davy says "We should encourage our Asian friends to be our slaves and produce all of goods and services except those vital to national security."
ReplyDeleteI think this kind of mentality sums it up. Enjoy your pseudo slave world that you live in because it is not going to last long. The Asians will dump the dollar sooner than later. Who the hell wants to get paid the measly rates that US treasuries pay?? Brazil, Russia, and India are have already started trading in an alternative currency to the dollar. They don't need our scum currency. The Chinese and Singaporean sovereign wealth funds have vowed to never touch any US banks again...and are now investing in resource companies.
Ishkabob,
ReplyDeleteYou know what your problem is? It has nothing to do with economics. It has to do with a deep rooted and personal belief that you have that America is immoral. To you, Americans are all sinners, right? We consume too much. We're a bunch of deadbeats. We don't save...the people that export goods and services to us are our slaves. We're exploiting the world. Our money is no good.
Facts mean nothing to you; you just keep repeating this garbage.
It's the same thing with Schiff, but in Schiff's case, his father went to prison because he didn't pay his taxes, so his son got emotionally scarred from that and is now a hater of America and the gov't.
What is your story, man? Listen to you. Why don't you go somewhere else and peddle your miserable outlook? I'm sick and tired of listening to your crap, now get off this site!
!st off, Mike, calm the hell down. Stop trying to be a little website dictator and relax. We are here to express our views. If you feel you are right then please base it off of facts. If you have not noticed already, you have not chimmed in for anything else but to support what your guy (bubblerefuge) says. If you are right and we are wrong then try to tell us what you believe. I don't think I should have to tell a man that is your age to act like a mature man. Please, stop with the attacts.
ReplyDeleteNow, on another note. Bubblerefuge, you ARE RIGHT when you say that we could keep going like this and survive for a while on a weak dollar. Yes, we could do taht but only for what... a few years (maybe). What we are talking about is a long term solution and we realize that it won't provide people 900% returns on some stocks because with a global gold standard we could project prices of goods YEARS into the furture because inflation and money printing would be held in check.
We both want the same thing man (in general). We don;t want our families to suffer anymore. We don;t want more and more jobs lost. We don't want America to go down the toilet and have to rely on other countries to bail us out. This is something that I think we can all agree on man (maybe even Mike (maybe, ha ha)).
However, the short term would be bad. why? Cause we have not been living the way that Austrian economists suggest, the way our founding fathers suggested, the way out grandparents suggested. If you think about it, out way of living has not been around very long.
If we are honest with ourselves, we will see that just because we are used to something doesn't mean it is the way that it should be. I am sure that many Russian are used to living the way that they live but it doesn't mean that they should continue to live that way. They could try to change things, but it would mean that they would have to deal with some hard times. However, in that case, the ends would justify the means. I will post the other part in a 2nd post because there is a character limit. (To be continued)
What we are suggesting is only that "stabilize" things. We are not trying to limit anything. We are simply trying to allow the free market to do it's job without any outside intervention. Think about how nice it would be if the market truly reflrect the accurate interest rate. You would never have to worry about inflation, price controls being placed on businesses due to economic crisis, etc...
ReplyDeleteI think one issue that we keep wunning into is that we are looking at the short term issue and not the long term solution. Allowing businesses to fail amd our economy to correct ITSELF would make things hard for a while. However, if you ask a relative that remembers what investing was like 50-60 years ago, they should be able to tell you how they were about the invest for the long term. Imagine being able to buy a stock and sleep well at night knowing that it will be there in the morning. Imagine being able to go to a bank and know that they have the equivalent value in gold in their vault. That would take alot of stress out of your life when it came to finances.
The current fiat monetary system was only put in place (1971) to allow governent free range when it came to bdgeting with your future. However, I do understand that some(probably a lot) of the people had good intentions when we came off of the bretton woods system. BUT, the road to hll is paved with good intentions.
I know that it is an uphill climb to get others to understand the austrian way of thinking when they are surrounded by "free" money. BUT we support this way of thinking because we will have to deal with the results eventually and I don't want my daughter to have to pa for mistakes that we and our politicians made. Sadly enough, she will already have to pay for them if we do not change things soon, so I guess that I am thinking about my grandchildren (funny, since my daughter is only 19 months old).
Anyway man, there is tons of info out there if you are interested and I only type about things I care about and Ishkbob, myself, you Schiff, Mike, all care about this country and our families. So lets not tras each other or use it as a stepping stone to "progress" our reputations. It's not the right thing to do. I think you understand my point bubblerefuge and I hope you know that we love this country too, we just believe that the Austrian way of thinking promotes a strong America and allows us to be self sufficient. I look forward to talking to ya'll again...In an adult way. :)
Davy,
ReplyDeleteThis site is full of fact and analyses that refute the Austrian view. If your choice is to ignore these points then that's up to you; but don't tell me there are no facts up here to back up my (and others') views on this.
Second point: when people start saying things like we enslave others because they sell us stuff, or that our currency is scum, then they're no longer welcome to express their views because one thing I detest is ignorance and outrageous hyperbole.
You can hold hands with Ishkabob all day long if you want, but do it somewhere else.
Like I said Mike, this site is not supposed to be dictated by what you like and don't like. It is supposed to be about people that are interested in finance and economics. Please don't be a dictator and please stop being so rude to me and others. I think we can all learn to express our views like adults.
ReplyDeleteHowever, you are right. I have not looked around your site very much and I will do so before I even make another post here. I owe you the same respect that I owe Austrian thinkers/writers. I don't think that I will agree with you once I'm done but you have my word I will try. (This is me trying to be fair and civilized, I hope that you will recognize it and return the favor from now on).
Ok Davy, I appreciate your response and the fact that you are willing to have a fair discussion. Lets to it.
ReplyDeleteI am absolutely convinced that if you are willing to dig a little deeper and make an attempt to understand economics beyond generalities, talking points, and sound bites that you will agree with what Mike, Warren and Company are saying. I have two children myself and worry about their future.
Can we have a focused discussion?
Lets try to focus on the fundamental differences. The problem with the Austrian school is that its a 100% reserve banking economy which basically means that the quantity of money is fixed. Modern fiat money regimes in place today have flexible money. The amount of money in the economy is free to expand and contract based upon the performance of the economy. So, right off the bat, I would argue that the Modern money
is more free than the Austrian school, because the quantity of money is free to change based upon how much money the economy 'needs'