tag:blogger.com,1999:blog-2761684730989137546.post2977859513490152259..comments2024-03-29T02:19:19.866-04:00Comments on Mike Norman Economics: Interest on the debt equates to income to peoplemike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger64125tag:blogger.com,1999:blog-2761684730989137546.post-14867655830604420842010-02-14T14:17:27.276-05:002010-02-14T14:17:27.276-05:00And Mike,
Even if you think that you've some...And Mike, <br /><br />Even if you think that you've somehow answered my challenge on the Treasury/Fed issue by continuing to give vague replies that are NOT answers, how do you defend the myriad other areas where I have called you out for your ignorance of economics, and you have failed to defend your absurd arguments?Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-54252353474779849552010-02-14T14:14:35.746-05:002010-02-14T14:14:35.746-05:00Mike:
Sinking to the level of a child and calling...Mike:<br /><br />Sinking to the level of a child and calling names will not hide the fact that you cannot back up your idiotic claims (what’s next, a fight on the playground? (actually, I’ll take you on for that)). <br /><br />You are a fraud.<br /><br />By the way, Mike, dollar reserves are NOT money. Money is a medium of exchange that is used to constitute final payment. Reserves do not circulate in exchange for goods and services and do not constitute final payment. There are no market prices for reserves. They are RESERVES, not money.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-40364101738173300852010-02-14T14:13:44.527-05:002010-02-14T14:13:44.527-05:00Matt:
K, I suggest you invest some time at the l...Matt:<br /><br /><b> K, I suggest you invest some time at the links that bR has posted for you. It's better to know how the current arrangements really work rather than be focused on old N/A concepts of money and "wealth". You have your whole life ahead of you.</b><br /><br />Matt, how old do you think I am? I was a baby in 1971. It seems that you think the things I’m saying are somehow outdated, but that you somehow have the correct theories. You are sorely mistaken. What I said applies to any time through history, and it applies to the future—real economic cause and effect does not change; they are not matters of opinion.<br /><br />What I stated has nothing to do with “non convertability” (why don’t you just use the terms quasi-gold standard and fiat currencies?). I was talking about increases or lack of increases in quantity of money. This applies to the Fed and fiat money today. IF the money supply increases, blah blah blah. IF the money supply is static, blah blah blah. Do you think you have to be on a quasi-gold standard (We’ve never been on a full gold standard) in order NOT to print money and see prices fall?<br /><br />I think it’s you who should spend some time studying. And by the way, I use about 1% of the knowledge I learned in undergraduate and graduate economics programs. Most of those consist of Keynesian B.S. and are valueless. I had to learn real economic on my own. I’ve spent over 20 years, 50 books, 1000 journal articles, and 10,000 hours doing so—all related to multiple schools of thought. Do you know any economics besides what you read on these non-economics blogs?<br />Instead of saying that my arguments are wrong, and tell me to go read somebody else’s blogs, why don’t you actually try to prove them wrong?<br /><br />My assertions are correct and cannot be refuted. You all have merely asserted that I’m wrong, but none of you have attempted to actually rebut my arguments point for point. You can’t do it.<br /><br />(p.s. Matt, I appreciate your courtesy and respect)Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-39079272054401878532010-02-14T14:12:51.399-05:002010-02-14T14:12:51.399-05:00bR:
Why don't you ever say anything on warr...bR:<br /><br /> <b> Why don't you ever say anything on warrens blog?</b><br /><br />I don’t care about spending more time with incorrect theories on yet another blog that consists of misinformation by another non-economists who doesn’t know real economics.<br /><br />But, if you identify something in particular you want my comment on, (preferably where “Warren” asserts one of these crazy made-up ideas), send me the link and I’ll comment.<br /><br />I am (temporarily) on this blog for the reasons I explained before.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-62844269293804220302010-02-14T14:12:38.325-05:002010-02-14T14:12:38.325-05:00Finally reading and addressing these….
bR:
What ...Finally reading and addressing these….<br /><br />bR:<br /><br /><b>What constitutes proof? I can point you to papers, books, and bodies of literature written by PHD's that refute what you say. Where does that leave us?</b><br /><br />I already showed you proof mathematically in the previous post. If you want more I will email my detailed proof from my book.<br /><br />No, you can’t point to anything that disproves that prices can rose ONLY via an increase in the quantity of money because it’s mathematically impossible. Instead of giving me a link to a blog that does not clearly show an article related to the matter, why don’t you summarize the explanation for me. Neither you nor others can prove that this fallacious notion.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-32050157935784402142010-02-08T12:31:36.746-05:002010-02-08T12:31:36.746-05:00And it already has been explained to him 100 times...<i> And it already has been explained to him 100 times that the Fed's role is based on a technicality that can easily be removed by Congress, in which case the Treasury would credit bank accounts as needed without the Fed having to provide reserves to buy securities.</i><br /><b>Yes Mike and what he doesn't get, probably because he doesn't bother to study any of the new literature that we have taken time our valuable time to study, is that whenever the treasury department builds up its reserve account at the fed by selling bonds, the fed must ( they have no choice in the manner ) replenish those reserves back into the monetary base otherwise the fed will be violating their charter which is to maintain interest rate targets. So from this one can see that the treasury holds all of the cards, power etc, when it comes creating and destroying "money." As I showed with the accounting entries in a previous post, treasury spending creates private sector deposits whereas fed operations do not.</b>bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-58359673080354297232010-02-07T21:56:50.179-05:002010-02-07T21:56:50.179-05:00Klutzplatz, dumbo, yo...hello!!! This has been exp...Klutzplatz, dumbo, yo...hello!!! This has been explained to you six ways to Sunday already. Give it a rest.mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-78512683670120612782010-02-07T21:55:11.066-05:002010-02-07T21:55:11.066-05:00Klutzplatz states, as he always does..."The a...Klutzplatz states, as he always does...<i>"The actual fact is that the Treasury cannot engage <br />in additional spending beyond what it has borrowed or taxed, unless the Federal Reserve FIRST issues reserves to banks who buy <br />the NEW treasury bonds at auctions..."</i><br /><br />And it already has been explained to him 100 times that the Fed's role is based on a technicality that can easily be removed by Congress, in which case the Treasury would credit bank accounts as needed without the Fed having to provide reserves to buy securities. <br /><br />But Klutzplatz is just dumb.mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-71679610037037368812010-02-07T19:54:31.771-05:002010-02-07T19:54:31.771-05:00K,
Welcome back! Hope the party went well.
&quo...K,<br /><br />Welcome back! Hope the party went well.<br /><br /><i>"http://research.stlouisfed.org/fred2/series/MULT<br /><br />Do think they are just drawing a chart and making this up? </i><br /><br />YES! That whole St. Louis "money supply" group should have been shut down when we went off gold. Sometimes welfare takes on many forms.<br /><br />K, maybe you have earned alot of college credits in the past that taught you these old approaches to our monetary systems when we had a convertible currency, and you dont want to feel that your education dollars and efforts have been wasted because the US went to a different system in 1971. But this doesnt mean your education was wasted, "education is never wasted".<br /><br />When legislation changes the legal structures of our government and it's institutions, we just have to now familiarize ourselves with the new laws and operations. This happens all of the time in environmental, labor, taxes, etc...It's not uncommon or unreasonable to have to "re-educate" ourselves to the new reality. <br /><br />K, I suggest you invest some time at the links that bR has posted for you. It's better to know how the current arrangements really work rather than be focused on old N/A concepts of money and "wealth". You have your whole life ahead of you.<br /><br />Resp,Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-42687370729092912542010-02-07T18:13:19.804-05:002010-02-07T18:13:19.804-05:00Why don't you ever say anything on warrens blo...Why don't you ever say anything on warrens blog?bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-76253376782632747182010-02-07T18:08:41.692-05:002010-02-07T18:08:41.692-05:00What constitutes proof? I can point you to papers...What constitutes proof? I can point you to papers, books, and bodies of literature written by PHD's that refute what you say. Where does that leave us? <br />start here. <br /><br />http://neweconomicperspectives.blogspot.com/<br /><br />here<br />www.levy.org<br /><br />www.moslereconomics.org. <br />Dr Wray's book <br /><br />http://www.amazon.com/Understanding-Modern-Money-Employment-Stability/dp/1845429419/ref=sr_1_1?ie=UTF8&s=books&qid=1265583972&sr=8-1bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-76555109506075955512010-02-07T17:04:43.848-05:002010-02-07T17:04:43.848-05:00bR,
I can’t keep going in circles with you. You (...bR,<br /><br />I can’t keep going in circles with you. You (or these two non-economists you follow) are merely making things up. I have offered information to you from the Federal Reserve itself to prove my case. There are also textbooks you can read and any single college economics professor will explain it to you. <br /><br />You have offered no evidence whatever to support the claims you are creating. When you can offer proof to refute my claims (which I have proved) then we will once again pay attention to your assertions, which cannot be found in any formal literature in the entire world.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-9451967113236361382010-02-07T14:28:29.533-05:002010-02-07T14:28:29.533-05:00Reserves are not spent, but reserves enable banks ...<i>Reserves are not spent, but reserves enable banks to lend, and borrowers to spend. </i> <b>How do reserves enable banks to lend? Its a vague statement</b>bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-43923619700312783562010-02-07T14:26:03.911-05:002010-02-07T14:26:03.911-05:00“There is no multiplier and even your buddy Klutzp...<i>“There is no multiplier and even your buddy Klutzplatz agrees on that one. Money multipliers are applicable under a gold standard, not floating FX/non-convertible currency.”<br /><br />This is idiocy!!! With a fractional reserve banking system, there is always a money multiplier—both under a gold standard and today. Here is the Federal Reserve money multiplier:<br /><br />http://research.stlouisfed.org/fred2/series/MULT<br /><br />Do think they are just drawing a chart and making this up? Do you think that we don’t have a fractional reserve banking system? Do you think we don’t have reserves? Do you think we don’t really have a banking system? WTF!!!??? </i><br /><b>Calm down dude. Once again we are confusing words here. We do not have a fractional reserve banking system where money multipliers are applicable. We have reserve requirements and bank capital requirements. That is not fractional reserve banking in the textbook sense. For the 1000th time, Kluz, banks use reserves to clear checks from each other and to make payments to the fed and treasury. They don't play a role in lending</b>bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-26456919526010167912010-02-07T14:12:34.646-05:002010-02-07T14:12:34.646-05:00Ok, gang, I'm back.
First, and most important...<i>Ok, gang, I'm back.<br /><br />First, and most important, my reply to Mike: Mike, you have offered, again, as an answer to my question, an incidental comment (a largely correct one) <br />that does not answer my question.<br /><br />Folks, let it be known here that Mike Norman cannot answer my question, and cannot support his claims.<br /><br />Let me be very clear about this. Please refer to his youtube video:<br /><br />http://www.youtube.com/watch?v=RenZi1DgI8g<br /><br />View specifically minutes 2:45 through 4:50<br /></i><br /><br /><b><br /> Ok I watched this. I didn't see anything incorrect in what mike said. Bear in mind, economics it is easy to get<br /> terms confused when you are talking about money, reserves, the treasury, and the fed. Whenever the treasury spends,<br /> it spends by having reserves debited from its reserve account at the fed and then credited to a banks reserve account<br /> at the fed and then the bank turns around and creates a bank deposit for a private individual. <br /> <br /> Here are the accounting entries: <br /> Part 1: Klutzpatz get paid a 100 welfare check from treasury. <br /> Treasury account at fed -100 <br /> Bank Of America reserve account +100<br /> Bank of America treasury account at fed unchanged <br /> Klutzpatz's personal checking account +100. <br /> Bank of America total liability +100 <br /> change in monetary base(total reserves) +100<br /><br /><br /> Part 2: the fed decides to remove the +100 in reserves in order to maintain the federal funds rate at targets <br /><br /> Treasury account at fed -100 <br /> Bank Of America reserve account -100<br /> Bank of America treasury security account at fed +100 <br /> Klutzpatz's personal checking account +100. <br /> Bank of America total liability +100<br /> change in monetary base(total reserves) -100 <br /><br /> So how should this be interpreted ? Does it matter? In part 1 the treasury added reserves to the system <br /> In part 2 the fed took them out. But net net, there is 100 dollars in new deposits in the private sector, that <br /> did not exist the day before. <br /></b><br /><i><br />He states, as he always does, that the treasury's spending creates new reserves. The actual fact is that the Treasury cannot engage <br />in additional spending beyond what it has borrowed or taxed, unless the Federal Reserve FIRST issues reserves to banks who buy <br />the NEW treasury bonds at auctions. Reserves come first, not government spending.<br /></i><b> The treasury maintains a target balance of reserves in its account at the fed at all times. So it auctions bonds continuosly as needed for<br />this target. The fed will add the reserves to the monetary base in order to providing the funding for somebody to buy the auctioned<br />treasury. They fed does this by buying bonds and adding reserves to the system and the treasury takes them back out. This process<br />can be repeated ad-infinitem. So the treasury in conjunction with the fed can fill its reserve account as much as it wants and when<br />it spends, it adds reserve to the monetary base.</b>bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-11523448950300358732010-02-07T12:52:53.263-05:002010-02-07T12:52:53.263-05:00Just to be clear:
Reserves are not spent, but res...Just to be clear:<br /><br />Reserves are not spent, but reserves enable banks to lend, and borrowers to spend.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-87069358384359892572010-02-07T12:50:45.684-05:002010-02-07T12:50:45.684-05:00“IF you're disputing the fact that prices can ...“IF you're disputing the fact that prices can only rise or fall with the money supply. You have to prove it. If you want me to prove it I will. I dispute this because we do not agree on what money is. You have not shown that you have a full understanding of modern money by virtue of the fact that you said the fed controls the supply of the money. You seem to think that reserve balances have an effect on the supply of money in the system as evidenced by your previous post in the other article.”<br /><br />Come on, man, just go to your local bank and ask them how things work. Or, go the Fed’s web site or pick up a money and banking 101 text book. You can keep making stuff up that is contrary to the whole economics profession but that does not mean you’re right.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-24855545827733013492010-02-07T12:50:32.260-05:002010-02-07T12:50:32.260-05:00“The answer I was looking for was "dollar res...“The answer I was looking for was "dollar reserves," which can only be created by government spending. The government either collects back some of the money it already spent into existence (in the case of taxation) or, destroys some by selling securities so that interest rates are maintained at their desired level.”<br /><br />What is your obsession with “dollar reserves”?? Reserves can only be created by the Federal Reserve. (Do you understand the difference between the central bank and the federal government!!?? I know, the government can effectively control the bank, but there is still a difference. You really don’t know how the central bank works, do you?<br /><br />Saying that the government creates money by spending is like saying consumers create gasoline by going to fill their car up at the pumps.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-87233599949592190862010-02-07T12:50:19.917-05:002010-02-07T12:50:19.917-05:00“There is no multiplier and even your buddy Klutzp...“There is no multiplier and even your buddy Klutzplatz agrees on that one. Money multipliers are applicable under a gold standard, not floating FX/non-convertible currency.”<br /><br />This is idiocy!!! With a fractional reserve banking system, there is always a money multiplier—both under a gold standard and today. Here is the Federal Reserve money multiplier: <br /><br />http://research.stlouisfed.org/fred2/series/MULT<br /><br />Do think they are just drawing a chart and making this up? Do you think that we don’t have a fractional reserve banking system? Do you think we don’t have reserves? Do you think we don’t really have a banking system? WTF!!!???Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-30378910705749392252010-02-07T12:49:48.853-05:002010-02-07T12:49:48.853-05:00"To buy a Treasury, you need reserve balances..."To buy a Treasury, you need reserve balances, as that’s how they settle at auction. Where do reserve balances come from? From previous govt deficits (either already circulating or put into circulation when the Fed buys a Tsy security, which is obviously the result of a previous deficit). The only other option is to borrow the reserve balances from the Fed (repo, standing facilities, overdraft).”<br /><br />Indeed you need reserve balances to buy a treasury. But they do not come from previous government deficits. This is just plain ignorance. Once the government already has deficits, once it’s previous bonds have been bought, once the banking system is already used its reserves and has no excess reserves, once all the money previously created is out there in the system, HOW CAN BANKS BUY NEW AND ADDITIONAL TREASURY BONDS WITHOUT HAVING EXCESS RESERVES AND WITHOUT BEING ABLE TO CREATE MONEY!!!!!????? How could they pay for more and more bonds? How could the supply of government bonds keep on doubling and tripling by using currently-existing money to buy them, without all the money in the economy leaving other goods and services and assets and going solely into bond purchases? The only way this can happen is be the creation of NEW reserves by the Fed. <br /><br />The argument above is the the same money that is existing in the economy (even though it did not used to), ban buy more and more and more things. There is never a need for new money, only for the same money to buy more and more bonds. In that case, the government only needs $1 to operate. 1$ can pay for everything it does because it will just keep using the same one dollar to spend more and more.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-27605345882178254312010-02-07T12:49:32.161-05:002010-02-07T12:49:32.161-05:00Ralph,
You seem to know your stuff – real economi...Ralph,<br /><br />You seem to know your stuff – real economics. Logical economics.Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-1259685653238734902010-02-07T12:49:16.316-05:002010-02-07T12:49:16.316-05:00Ok, gang, I'm back.
First, and most important...Ok, gang, I'm back.<br /><br />First, and most important, my reply to Mike: Mike, you have offered, again, as an answer to my question, an incidental comment (a largely correct one) that does not answer my question.<br /><br />Folks, let it be known here that Mike Norman cannot answer my question, and cannot support his claims. <br /><br />Let me be very clear about this. Please refer to his youtube video: <br /><br />http://www.youtube.com/watch?v=RenZi1DgI8g<br /><br />View specifically minutes 2:45 through 4:50<br /><br />He states, as he always does, that the treasury's spending creates new reserves. The actual fact is that the Treasury cannot engage in additional spending beyond what it has borrowed or taxed, <b>unless the Federal Reserve FIRST issues reserves to banks who buy the NEW treasury bonds at auctions.</b> Reserves come first, not government spending. <br /><br />I've asked Mike over an over to explain just how the government/treasury can spend, once it's already spent taxed and borrowed money, BEFORE the reserves are created by the Fed. He simply can't do it.<br /><br />Let it be known that Mike is preaching false, pseudo economics that he can't support.<br /><br />Let me quickly give you examples of other things he says but can't support (even if he could APPEAR to support one or two, he could not support the rest):<br /><br />1. For one person to be employed another must loose money<br /><br />2. We need the Federal Reserve because the gold standard didn't work in the 1800s.<br /><br />3. Increases in the money supply result from increases in price indices.<br /><br />4. Government is a net supplier of savings.<br /><br />5. Deficit spending creates wealth<br /><br />6. Oil prices are driven by speculators<br /><br />7. To employ new people, more money must be created.<br /><br />The list goes on and on...Klusplatzhttps://www.blogger.com/profile/11653203746162265070noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-91191231134354689112010-02-07T11:30:00.478-05:002010-02-07T11:30:00.478-05:00BTW, I dispute this:
IF you're disputing the ...BTW, I dispute this: <br /><i>IF you're disputing the fact that prices can only rise or fall with the money supply. You have to prove it. If you want me to prove it I will. </i> I dispute this because we do not agree on what money is. You have not shown that you have a full understanding of modern money by virtue of the fact that you said the fed controls the supply of the money. You seem to think that reserve balances have an effect on the supply of money in the system as evidenced by your previous post in the other article.<br />We can't go further without agreeing on what money is? Mike was trying to get you to clarify that.bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-64211517305696777972010-02-07T10:40:05.343-05:002010-02-07T10:40:05.343-05:00Klutzplatz has already admitted that the fed-treas...Klutzplatz has already admitted that the fed-treasury hereby coined as the government-fed complex has the power to create unlimited amounts of money. He was also correct in that the treasury must create reserves by selling bonds (absent taxation) in order to maintain a reserve balance at the fed in order to write checks. He was wrong in saying the fed controls the overall supply of money( the fed manipulates reserves to maintain<br />interest rate targets.)<br />Dr Fulwiller has stated he is going to write a paper explaining the fed-treasury "gymnastics" involved in creating ever increasing reserve balances for treasuries fed account on the KC blog soon. But what Klutzplats doesn't realize by way of his admission is that by agreeing that the government-fed complex can create unlimited money he is about to become a post-Keynesian. <br /><br><br> So what is the big picture as far as this discussion? We have all agreed that the government-fed complex has unlimited power to spend. So where does that leave us? How should the government-fed complex use this power? <br /><br />Post-Keynesians argue, and what rational person would not, that this power should be excersized to benefit society by proactively managing the economy using fiscal policy to heat up or cool down the economy without fear of running out of money or leaving our kids to pay for it. IE FULL EMPLOYMENT AND PRICE STABILITY.bubbleRefugehttps://www.blogger.com/profile/17519418009762139033noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-32532168930149721682010-02-06T21:01:35.125-05:002010-02-06T21:01:35.125-05:00Ralph,
There is no multiplier and even your buddy...Ralph,<br /><br />There is no multiplier and even your buddy Klutzplatz agrees on that one. Money multipliers are applicable under a gold standard, not floating FX/non-convertible currency.<br /><br />The answer I was looking for was "dollar reserves," which can only be created by government spending. The government either collects back some of the money it already spent into existence (in the case of taxation) or, destroys some by selling securities so that interest rates are maintained at their desired level.mike normanhttps://www.blogger.com/profile/03296006882513340747noreply@blogger.com