U.S. Dollar Is Being Systematically Destroyed, And We Are On A Path That Inevitably Leads To Hyperinflation

If you think having 100k in cash means you then miss out on investing....you ain't got a pot to piss in. Originally Posted by WTF

Haha... of course most smart investors keep some of their powder dry, but McLame's ENTIRE PORTFOLIO is only worth a lousy $100k... plus he's such a novice, he only knows how to be fully invested or fully in cash, nothing in between!

If you think having 100k in cash means you then miss out on investing....you ain't got a pot to piss in. Originally Posted by WTF

Of course she doesn't. Lustylady is probably 30 years older than me and I could buy and sell her ass at the drop of a dime. One thing I'm sure of is that this pissburgh crew in here are illogical broke asses.

Lustylady, you are being quoted by other people. That's why I can read your dumb posts. It's hardly rocket science.

If Trump is printing money, that's what happens. It is simple macro economics. When you increase the money supply when you print money, things turn to shit and especially with inflation. Originally Posted by Lucas McCain

Just like Obama.

This is because the stimulus packages are NEVER about actually helping the bottom rungs of society. Its a statistical fact that when you give people with high incomes... extra money... they tend to save it. When you give lower income people an infusion of cash-- they spend it.


They are called "stimulus" because they are literally designed to stimulate the economy-- with spending.



Right now-- they are in no hurry to pass further stimulus packages because the stock market is doing fabulous. They don't care that there are people who will be getting evicted with the haste as soon as eviction moratoriums are lifted. In fact, that's an even bigger reason to avoid further stimulus-- those who normally blow it on consumer goods will likely spend it on bills instead-- in order to stay afloat. Which.... defeats the purpose of a stimulus. Originally Posted by Grace Preston

Watching Cnbc now. A package before Biden takes office is being negotiated with Trump, Mitch and Pelosi. Sounds a lot like the package the Democrats torpedoed before they stole the election.

Agreed. Pelosi and McConnell could not agree on a final number. That is why a second stimulus bill has not been passed so far. One may get passed before congress goes on their break. There are some republicans who want to get something done. Pelosi is not going to get everything she wants. Originally Posted by adav8s28

Pelosi got what she wanted. Biden. Fuck hurting Americans.

Grace doesn't have a problem with me. You clowns do and leave her alone. Come after a man. Don't be cowards and go after a woman. Trust me, I welcome your stupidity.

Unfortunately for you guys, you'll never be able to insult an arrogant motherfucker like me. Keep trying though!!! LOL Originally Posted by Lucas McCain

Your same repetitive post White Knight version for someone who can easily defend herself.

Lustylad is probably 30 times wealthier, wiser and classier than me. Originally Posted by Lucas McCain

You're probably right, Mucus. Try not to let it intensify your obvious inferiority complex.

How's that ignore button working out for you, punk?

Lustylad, you are being quoted by other people. That's why I can read your dumb posts. It's hardly rocket science. Originally Posted by Lucas McCain

There you go, lying again! You replied directly without anyone quoting me in posts #67, 71, 94 and 97 of this thread.

You're a pisspoor liar, Mucus. Everyone knows you can temporarily peek at comments made by someone you have on ignore. You do it all the time.

You would be well advised NOT to comment further, now that the educated adults in the room are discussing topics you know nothing about. The more you post, the more you give the lie to your ridiculous claim to have an Ivy League education!

You are the laughingstock of eccie!

Just like Obama.

Watching Cnbc now. A package before Biden takes office is being negotiated with Trump, Mitch and Pelosi. Sounds a lot like the package the Democrats torpedoed before they stole the election.

Pelosi got what she wanted. Biden. Fuck hurting Americans.



Your same repetitive post White Knight version for someone who can easily defend herself. Originally Posted by gnadfly

Pelosi did not get what she wanted. There were several things in the house of reps package that McConnell did not want. The new package that was being discussed today, the Republicans have come in with a higher number.

And over the past 2 decades Paul Krugman has written hundreds of columns in the NYT all saying the same thing - "Deficits good, Republicans evil, and I'm still an asshole!"

https://eccie.net/showthread.php?t=1922575 Originally Posted by lustylad

You missed the point. In post #20 HF posted incorrectly. HF posted that Dick Cheney never said deficits don't matter. That is a false statement, which was corrected in post #44.

I have never seen such immaturity among grown men, than in this thread. Originally Posted by Chung Tran

Don't be silly. Over the years, Assup and I'va biggen/bamscram have ruined dozens of intelligent threads with their incredibly juvenile, annoying and repetitive spam posts. Your memory must be failing, chungy.

You missed a couple of points about Japan and us. We are becoming like them, which is to say an older population, with many citizens off the payroll, not contributing to GDP. Our birthrate is falling fast, as theirs did before us. That makes economic capacity lag, which in turn allows massive money increase with no inflation. Think of the old inflation definition.. ''Too much money chasing too few goods''. The money supply increase is designed to fuel growth and goods, it is working. If it stops, inflation starts. Like I said earlier, this has been a 4 decades+ policy, that has yet to stir meaningful inflation. Deficits don't matter. They may, in theory, later. But not for the last 40 years. It is an accounting entry that means nothing. As long as the deficit delivers the goods. Originally Posted by Chung Tran

This is a rich topic for discussion, and there are plenty of points to be considered. I don't pretend to be presenting all of them.

I agree that Japan, the US, China and most of the EU countries are dealing with aging populations and declining birth rates. But that just makes it easier to reach full employment as retirees exit and shrink the labor force. I don't see that as an argument for more stimulus. If it "makes economic capacity lag" then we should favor less stimulus, not more, since inflation accelerates as we bump up against production constraints.

Fiscal policy and monetary policy are two very different tools. It is important to use the right tool for the right economic target. Fiscal policy (e.g. deficit spending) is more appropriate for getting out of an economic recession. Monetary policy is a more appropriate tool for hitting inflation targets. Increasing the money supply is a highly inefficient way to "fuel growth and goods". Fiscal policy is preferable to monetary policy as a way to perk up GDP growth and drive down unemployment.

I think it is highly superficial and overly simplistic to summarize anything as a "4 decades+ policy". Overall US economic policy-making since 1980 has been characterized by numerous stops and starts. Inflation, broadly speaking, has been on a downtrend since peaking at around 12% (12-month CPI) back in 1980. Quantitative easing was only rolled out in a big way starting in 2009. QE is the tool that has blown up the money supply over the past decade. The reason we haven't seen a commensurate burst of inflation is because the velocity of money (the rate at which each dollar turns over) has fallen to an all-time low, largely neutralizing the impact on prices.

We had this discussion before (about velocity) but you seem to have forgotten, chungy.

Here's an excellent article on where the debate stands:

https://www.bloomberg.com/news/artic...lions-at-stake

Deficits don't matter. They may, in theory, later. But not for the last 40 years. It is an accounting entry that means nothing. As long as the deficit delivers the goods. Originally Posted by Chung Tran

How much later? The rolling total debt for the USA will 27 trillion at the end of 2020. Obama turned over to Trump a growing economy. Trumps deficits got larger and his GDP growth percentages are essentially the same as Obama's. Trump did not hit 6,5,4 or 3 percent GDP growth. Right now it would take 27 years of 1 Trillion dollar surpluses to balance out the USA total debt. The Paul Ryan budget plan was not a good plan, 20 million plus citizens would lose their health care and seniors would get reduced social security payments, after putting in for 30 years. Military spending would increase during peace time.

https://www.thebalance.com/national-...events-3306287

You missed the point. In post #20 HF posted incorrectly. HF posted that Dick Cheney never said deficits don't matter. That is a false statement, which was corrected in post #44. Originally Posted by adav8s28

I didn't miss your point. You missed mine. Krugman is still an asshole.

Btw do you agree with Dick Cheney? Do you think "deficits don't matter" regardless of their size or the underlying health of the economy?

I didn't miss your point. You missed mine. Krugman is still an asshole.

Btw do you agree with Dick Cheney? Do you think "deficits don't matter" regardless of their size or the underlying health of the economy? Originally Posted by lustylad

HF should not have brought up Krugman to begin with. I don't agree with Dick Cheney on his "deficits don't matter" phrase. The USA can carry some rolling debt, but not 27 trillion dollars worth.

Dems and Republicans need to come up with a balanced plan to reduce the debt. Paul Ryan did not have a balanced plan.

Ok tiny, I'll try to get back on track here with a few comments. You can expect the frauds and poseurs like Mucus McLame to punctuate our intelligent conversation with semi-literate posts that serve no useful purpose other than to underscore the vast chasm between their phony claims of academic pedigree and their appalling ignorance with respect to every topic under discussion.

1. Regarding Japan, it was one of the first major industrial countries to embark on a course of massive fiscal and monetary stimulus starting in the early 1990s following the collapse of the real estate bubble. Japan was the first to experience large-scale QE and negative interest rates. I've not been able to wrap my brain around the latter. Once interest rates fall to zero or less, you might as well toss traditional rules of prudence to the winds. Government debt is no longer a burden since investors are PAYING to hold it, instead of demanding a real rate of return. (Of course, if deflation - defined as falling prices - is severe enough, investors can still earn a real rate of return despite negative interest yields, but I digress.)

Your question seems to be - how did Japan get away with racking up twice the debt/GDP ratio we have without seriously impairing its international creditworthiness or unleashing runaway inflation? One reason has to do with the country's chronic trade and BoP surpluses. They suck in liquidity and help finance its domestic spending sprees. (Thirty years ago, everyone complained about the need for Japan to reduce its massive trade surpluses - today it's China.) By contrast, the US has run huge trade deficits (rather than surpluses) for decades. As for inflation, not only has Japan avoided a major outburst, it's proven very difficult for the Bank of Japan even to raise the pace of inflation significantly.

For more answers, I would suggest doing a little research on what Milton Friedman and Paul Krugman had to say about Japan's QE efforts. I know Friedman wrote about it before he died in 2006. Krugman did a paper back in 1998 analyzing it through a Keynesian IS-LM "liquidity trap" framework. I hesitate to recommend it since Krugman is an idiot and he has been bragging about that paper ever since it was published 22 years ago, but it might still offer a few useful insights:

https://www.brookings.edu/wp-content...uez_rogoff.pdf

Besides the differences in our economic models, there are important cultural and banking differences between the US and Japan which affect any comparisons between their experience and ours. For instance, when Japan's real estate bubble burst in the early 1990s, it took years for the major Japanese banks and other lenders to write down their impaired loans to reflect market reality. They avoided this in part because they were supported by the keiretsu system of interlocking bank-corporate relationships. In the US, we had the opposite problem during the 2008/09 Great Recession. Because of our strict mark-to-market GAAP rules and mentality, our banks were way too quick to write down stricken mortgage-backed assets on their books. (Assets held in the trading inventory rather than the investment account were supposed to be repriced DAILY.) The economic recovery only started after those mark-to-market rules were suspended in Q2 2009.


2. The fact that fraud has run rampant in many of the CARES Act pandemic relief programs was entirely predictable. There are always bad actors out there ready to game the system. You know, dishonest liars like Mucus McLame. In an emergency like the covid shutdown where you need to get money out in a hurry to where it is urgently needed, you can't spend weeks drafting foolproof anti-fraud rules. You have to learn as you go. Rules for the PPP program were changed several times after it was rolled out last April. Because the loans are forgiven if a borrower follows the rules, Mark Cuban called PPP loans the best deal ever invented for small businesses. A lot of stories came out last week about how prison inmates, gang members and other unqualified applicants in California have stolen billions of dollars from the CARES Act unemployment assistance program. I don't think many other states outside of CA, IL and NY experienced such a high level of fraud. Red states administered their portions of the program more carefully and responsibly than blue states that are governed by incompetent dim-retards. No surprise there. Originally Posted by lustylad

Great post. I never thought about how Japan's trade or current account surplus would enable the country to “rack up twice the debt/GDP ratio we have without seriously impairing its international creditworthiness or unleashing runaway inflation.” That's a little bizarre -- I should have, for reasons I'll explain:

I worked for a multinational in Indonesia during the Asian economic crisis of 1998/1999. So I observed up front and close what happens to a currency and inflation when you combine a current account deficit with large foreign debt (in this case in the private sector) and a crisis of confidence. The Indonesian currency went from 2500 per dollar to 14000 in less than a year, and inflation shot up to over 50%. What Indonesia did with the banks was more along the lines of what you described above in the USA, they shut them down, because the IMF forced them to. The situation was different there though because every tycoon in the country started up his own bank his businesses could borrow from.

Now the reason I said it's "bizarre" is because it never occurred to me, until I read your post, that this would work the opposite way when you've got a current account surplus, and when you own a ton of U.S. dollar and European debt, and the Gaijins (white devils) hold relatively little of your debt. OK, yeah, I've thought about that with respect to forex movements, but not with respect to inflationary pressures.

The Japanese have been huge savers, which as we've discussed goes hand in hand with large current account and trade surpluses. Not only is this going to result in the Japanese owning lots of foreign debt, but that's got to dampen inflation too.

OK, my knowledge of macroeconomics is "0" compared to yours, so I'm probably going to get myself in trouble. The only positive thing I can say is that the professor in my one and only class was maybe even more famous than the prof in your introductory class, who you've mentioned here. Mine literally used to take dictation from LBJ while the president was taking a dump. When LBJ said "I want someone who will kiss my ass in Macy's window and say it smells like roses," he was probably referring to this guy.

Sorry, I digressed. I don't have the background in macroeconomics to understand, if you've got negative interest rates, and negative real interest rates, why don't people borrow as much as they can and why doesn't inflation go to the moon? Even in Japan.

I have actually risked money based on this belief. "100K" seems to be getting thrown around a lot in this thread. Well, I lost over 100K in two or three weeks a few years ago shorting German long term bunds (bonds) when German long term rates were negative. I couldn't figure out what kind of an idiot would pay the government to borrow his money when he could just put a bunch of cash in a safety deposit box instead. Turns out the idiot was me.

I'll take a look at Krugman's paper, thanks. I read the good parts of Capitalism and Freedom, which you recommended, btw.

About pandemic relief fraud, that might have been too strong a word in my earlier post. When they first came out with the Covid loans that would be forgiven provided you continued to employ people, a lot businesses which were 100% solvent and had no intention of laying anyone off took the loans because they were free money. Yes, you've got a good point about getting the money out and circulating. I was really critical of the Bush and Obama administrations for their bailouts in 2008 and 2009, but looking back, I was wrong. They kept people in business and employed and most of the money was paid back.

Fiscal policy and monetary policy are two very different tools. It is important to use the right tool for the right economic target. Fiscal policy (e.g. deficit spending) is more appropriate for getting out of an economic recession. Monetary policy is a more appropriate tool for hitting inflation targets. Increasing the money supply is a highly inefficient way to "fuel growth and goods". Fiscal policy is preferable to monetary policy as a way to perk up GDP growth and drive down unemployment. Originally Posted by lustylad

So, in layman's terms, fiscal policy is Keynesian pump priming, and that's what you do in a recession to increase demand and consumption, right? Why is monetary policy, like cutting interest rates or QE, not as appropriate? Because you're risking that inflation will get out of control?

So, in layman's terms, fiscal policy is Keynesian pump priming, and that's what you do in a recession to increase demand and consumption, right? Why is monetary policy, like cutting interest rates or QE, not as appropriate? Because you're risking that inflation will get out of control? Originally Posted by Tiny

Fiscal Policy is about decisions Congress makes with money it has, or doesn't have when it allows spending to go over it's budget. Monetary policy is the Fed buying or issuing bonds, to reduce or increase the money supply. Which in turn pressures interest rates to go higher or lower, depending on the objective. It hasn't been desired for higher rates, in 40 years, and then to curb inflation.

We haven't had inflation in 40 years, despite massive debt and money supply increases. The textbooks and Theorists have been saying big inflation is ''right around the corner'' since then.

That huge deficit is an accounting entry. That's it. The asset side of our balance sheet shows all the goods and services we bought with that money. The Right Wing always whines about deficits, yet they are the biggest spenders, by far.

What I don’t understand Chung Tran is that you look at our foreign debt and trade balance and we look more like Indonesia than Japan, in what I wrote above.

Maybe LustyLad will weigh in. When we had a similar discussion about the trade balance, I think he said one of the reasons we don’t have a currency melt down is we have the world’s reserve currency. Maybe something similar is happening here.