tag:blogger.com,1999:blog-8702840202604739302.post695787925051297448..comments2024-03-28T03:38:53.734-07:00Comments on MacroMania: Fed Balance Sheet RisksDavid Andolfattohttp://www.blogger.com/profile/12138572028306561024noreply@blogger.comBlogger60125tag:blogger.com,1999:blog-8702840202604739302.post-29871602775084187502013-03-19T11:52:50.346-07:002013-03-19T11:52:50.346-07:00Tippit,
You might want to see how you score on th...Tippit,<br /><br />You might want to see how you score on this test:<br /><br />http://math.ucr.edu/home/baez/crackpot.html<br /><br />I'm guessing your number will be quite high. John D, you are invited as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-11600565508126097152013-03-19T08:48:53.016-07:002013-03-19T08:48:53.016-07:00So sad. What if you wrote an entire rant and no o...So sad. What if you wrote an entire rant and no one answered?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-85912096774370169892013-03-15T11:45:28.959-07:002013-03-15T11:45:28.959-07:00So currency debasement and the dollar rising at ti...So currency debasement and the dollar rising at times is not mutually exclusive. The value of dollars is dependent upon the supply of dollars, the demand for dollars, and the supply and demand of and for the things that dollars can buy, whether it's goods and services, or foreign exchange.<br /><br />This graph of M2 indicates quite clearly that we have had nonstop currency debasement since 1995:<br /><br />http://research.stlouisfed.org/fred2/series/M2<br /><br />So why isn't this reflected in consumer prices?<br /><br />1) The consumer price index is doctored so as to manage entitlement costs. How much so is up for debate.<br /><br />2) Productivity gains continue to offset currency debasement. Unfortunately consumers rarely see lower prices, and this wealth is transferred to non-producing actors who are friends of the Federal Reserve System.<br /><br />3) Asset prices have absorbed most of this new money, which is why bond yields are just off all-time lows, and global bond markets (with a few exceptions) are in bubble territory. <br /><br />4) Malinvestment caused by the Fed's perpetual subsidy of bondholders has served to destroy productive capital and shifted it to the government sector, causing massive private sector layoffs, and a decline in consumer demand. Prices have not cratered, because non-producers who enjoy Fed-sponsored capital gains continue to consume.<br /><br />All of this represents a regressive and inequitable transfer of wealth, regardless of what happens to the general price level. This is an important concept to grasp. Even if the so-called "cost-of-living" appears low, there is massive wealth condensation as financial asset prices diverge from historical norms. These are but a few reasons why the Fed must be abolished.Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-9458479369071088302013-03-15T09:01:06.679-07:002013-03-15T09:01:06.679-07:00Tippit calls himself a philosopher, which amounts ...Tippit calls himself a philosopher, which amounts to admitting he is a useless and/or parasitic member of society.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-63081588075439587322013-03-15T08:45:20.748-07:002013-03-15T08:45:20.748-07:00Wow, Tippit really is a nutjob. Just look at the ...Wow, Tippit really is a nutjob. Just look at the link on his name, it's like something out of a birther/truther wet dream.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-43013937231146269752013-03-15T08:38:59.171-07:002013-03-15T08:38:59.171-07:00Tippit and John D, two crackpots in a pod. Sad, a...Tippit and John D, two crackpots in a pod. Sad, angry little men who think the world owes them something, but aren't quite smart enough to figure out why they've failed in their lives.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-13571303688183073152013-03-15T03:39:24.307-07:002013-03-15T03:39:24.307-07:00http://wraltechwire.com/our-future-will-be-brighte...http://wraltechwire.com/our-future-will-be-brighter-than-you-think-but-more-disruptive/12185002/<br /><br />An interesting link on the near term arrival of unlimited energy and water, two additional game changers for economic models.Anonymoushttps://www.blogger.com/profile/07904132869021579763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-68575408762267820192013-03-15T03:23:18.134-07:002013-03-15T03:23:18.134-07:00Tippit, seems to be no helping you
The dollar is ...Tippit, seems to be no helping you<br /><br />The dollar is rising in value. So much for your currency debasing theory.<br /><br />http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/14/the-dollar-is-soaring-heres-what-that-should-tell-us-about-the-economy/<br /><br />The article also tends to explain that the actions of others effects us. Closing up the Fed will only leave us subject to further manipulation by others. Oh well, so much for reality.<br /><br />For those who understand economics, which does not include our other anon. troll, here is a link to a couple of very interesting charts, the first showing the decline of interest rates since 1990, from 9 to near zero<br /><br />http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/13/washington-hates-deficits-why-it-hates-them-is-less-clear/?wprss=rss_ezra-klein<br /><br />If information, the fourth factor of production, is a substitute for capital, that would be expected behavior.<br /><br />If you are so old school that you cannot understand information being a separate and distinct factor of production, well I cannot help you. All I can say is go back to Coase and start again, paying especially attention to Drucker.<br /><br />It should, however, be apparent to anyone who considers such, that we are going to need an entirely new economics, an economics of information, well before all production is done by machines that build, repair, and replace themselves. We are also going to need a new Social Contract and form of Government.<br /><br />But, with our legion of economists trained only in the worship of dead economists who ever considers, writes, or talks about the how distinctly different the future of economics is going to be from the past, or about how expectations of that future are affecting actions today.<br /><br />No, we have dullards who think that their simple model that in 2030 we will have so many people on SS means something and we can project a deficit. We are getting ready for the Lightning Round but have few players standing and none, probably save Brad Delong, capable of scoring.<br /><br /><br /><br /><br /> Anonymoushttps://www.blogger.com/profile/07904132869021579763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-46751604744879828952013-03-14T22:59:54.855-07:002013-03-14T22:59:54.855-07:00Alexander, I am not a benefactor of the Fed. I ha...Alexander, I am not a benefactor of the Fed. I have a portfolio which includes precious metals with bases in about $270/oz for gold and $5/oz for silver, as well as real estate, and stocks. The unrealized gains in precious metals will be taxed at a 28% "collectible" rate, which is of course designed to punish gold owners. The "tax on the inflation tax" which accrues to the metals is ridiculous, and I'm not benefitting from the Fed's action as much as I'm merely not falling behind, like most people. The real benefactors of the Fed are the banks who, for example, get to perpetually borrow from it at 25 basis points, and then flip that into Greek debt yielding 1500 basis points, knowing full well in advance what the bailout policy of the IMF will be.<br /><br />I am not an economist, I am a philosopher, and I like to view things as simply as possible (but no simpler, as Einstein would put it). The Fed is a glorified counterfeiting operation. Nothing more, nothing less. All of the economists, apologists, and academics can't change that fact. I don't pretend that stocks and bonds should be fairly valued all the time, but this is not an argument for the perpetual manipulation of financial asset prices. Why would I spend a dime on George Soros? He's a criminal and a clown.<br /><br />I'm not jealous, I'm angry. Angry at what the monetary and banking system are doing to the world, and angry at the inability of most people to see it for what it is. If I were jealous, I would have moved to Wall Street or Washington and joined the legions of hardcore criminals and fraudsters a long time ago. I cannot be jealous of morally and intellectually bankrupt people. As for Andolfatto, he is merely a Fed apologist, and, as such, is the enemy. He failed to answer even a simple question about asset prices, and, in the usual fashion of most academics and apologists, obfuscated the issue. If I wanted to hear obfuscatory lies, why would I read Andolfatto when I can simply read or listen to Bernanke instead? The reason I am here is because I would like to see him attempt to defend what is, ultimately, indefensible.<br /><br />Anonymous:<br />You haven't said anything substantial, so your mockery is pointless. This blog is more or less a joke. I'm here, once again, to see Andolfatto attempt to defend the indefensible, and I will depart when it becomes tiresome or boring to do so, just as I have before.<br /><br />Andolfatto:<br />Don't take my attitude too personally. This is how normal people react when they're fed lies and spurious rationalizations, as you do repeatedly. Make no mistake about it, I hate the Fed, and it's defenders. I defy you to answer any of my questions sincerely, as they were asked, even though they are rhetorical.Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-69290678254912246142013-03-14T18:46:56.247-07:002013-03-14T18:46:56.247-07:00Tippit,
Don't let the Anon. troll get you dow...Tippit,<br /><br />Don't let the Anon. troll get you down. He is an econ prof so bad at his trade he won't use his name or write his on blog.<br /><br />Just disregard him. David is a straight up guy and you ought to read him with great care.<br /><br />And,if it makes you feel better, we are all jealous of Jamie Dimon and JPMorgan. But, with the House in control of Republicans and with the Senate subject to filibuster, nothing is ever going to be done about it. It is called "divided government." I suspect the people at the Fed are as jealous as you when it comes to Dimon and JPMorgan.Anonymoushttps://www.blogger.com/profile/07904132869021579763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-24024225268877848542013-03-14T13:16:38.908-07:002013-03-14T13:16:38.908-07:00Congrats, John D, you seem to have located a bigge...Congrats, John D, you seem to have located a bigger crackpot than yourself. I honestly didn't think that was possible. I will now pursue both of you until you stop polluting things with your nonsense. You're on notice, Tippit, I will mock you mercilessly until you depart this honorable blog.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-25281714889022470562013-03-14T13:13:44.040-07:002013-03-14T13:13:44.040-07:00The amount of misunderstanding of basic economics ...The amount of misunderstanding of basic economics that John D managed to pack into these posts is staggering.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-34620934897030655122013-03-14T13:11:20.373-07:002013-03-14T13:11:20.373-07:00Crackpot detected.Crackpot detected.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-56883765050330485412013-03-14T10:32:40.610-07:002013-03-14T10:32:40.610-07:00benefactors in jail
Et Tu? (for like it or not, y...benefactors in jail<br /><br />Et Tu? (for like it or not, you have been a benefactor).<br /><br />Tippit, you missed the first day of economics. There is no rule or law of economics saying that the amount of money available to be lent is equal to the amount of good loans. No rule of economics says that stocks or bonds are fairly valued.<br /><br />Life in an advanced society is a confidence game, played on the same golf course where Bobby Jones triumphed, the six inches between your ears. Money, finance, etc., are all man-made, suffering from the same human flaws as all other endeavers. Do your parents, spouse, children, and friends view you are more or less flawed than the Fed?<br /><br />Get online. Spend a very few dollars on Soros, The Open Society, then chill.<br /><br />Presently you merely sound jealous. You, like everyone else, what the best of both worlds. You want the value of your house to go up, but your assessed value and taxes to go down. The World doesn't work that way.Anonymoushttps://www.blogger.com/profile/07904132869021579763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-87590339277183755802013-03-14T02:46:56.924-07:002013-03-14T02:46:56.924-07:00The fact that the Fed remits its profit to Treasur...The fact that the Fed remits its profit to Treasury isn't exactly exclusive to the fact that it is a cabal of bankers, when you consider that the Fed is primarily in the business of a) providing endless cheap money to crony banks around the world for the purposes of flipping sovereign debt, and b) absorbing any losses of this same class by diluting the public's currency.<br /><br />One would hope, ostensibly, that the Fed remits it's "profits" (perhaps loot would be a better word?) to the Treasury, since it is the public who presumably granted it the license to perpetually debase its currency. Unfortunately, the story doesn't quite end there.<br /><br />Why don't we just do away with the middle man and let Treasury dilute our currency directly, without the smokescreen of monetizing public debt? After all, only an idiot would believe the argument for Fed "independence".<br /><br />The only thing worse than the idea of politicians being able to engage in unlimited deficit spending (as of course they are now) would be to delegate the right to create money and credit ex nihilo to a quasi-private central bank.Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-36475070901180126512013-03-14T02:15:55.105-07:002013-03-14T02:15:55.105-07:00I can assure you that I'm not a troll, and tha...I can assure you that I'm not a troll, and that everything I typed was in earnest. I don't want the Fed to change it's policy, I want the Fed to be abolished, all of its cronies and benefactors in jail, and you out of a job.Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-60762001531625409252013-03-13T12:25:53.059-07:002013-03-13T12:25:53.059-07:00No, I don't think it matters: you will remain ...No, I don't think it matters: you will remain a troll whether or not the Fed changes its policy rate.David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-44364168214008612522013-03-13T10:19:39.869-07:002013-03-13T10:19:39.869-07:00So, implicit in your assertion is that saving = in...So, implicit in your assertion is that saving = investing in assets. Funny, I thought saving meant saving money, either in a bank account paying anemic interest rates, or under a matress - the exact opposite of your definition of saving. In fact, the cost of living should be a lot lower, so that the unemployed as a result of Fed policy could afford to live. In fact, the benefactors of Fed policy, first and foremost its money center bank cronies, and secondly those who are fortunate enough to own assets so that they are at least somewhat insulated from the Fed's perpetual debasement are the only ones bidding for consumer goods. Everyone else is busy looking for a job.<br /><br />You seem to have a hard time answering a very simple and direct question Mr. Andolfatto. Does the Fed's manipulation of financial asset prices matter?Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-77360073981078160492013-03-13T06:24:50.443-07:002013-03-13T06:24:50.443-07:00Miss Tippit:
YOU are the one saying that the Fed ...Miss Tippit:<br /><br />YOU are the one saying that the Fed has increased the return to saving (the Fed is inflating asset prices, remember?). <br /><br />Sure, not everyone owns assets, but for those that do not, even you admitted that the Fed is keeping the cost of living (CPI inflation) low. David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-83234803657126532012013-03-12T22:30:32.533-07:002013-03-12T22:30:32.533-07:00Actually, I'm blaming the Fed for a massive, s...Actually, I'm blaming the Fed for a massive, surreptitious, and regressive transfer of wealth. Not all bondholders are pensioners, as if this were relevant. Are you really saying that the Fed's financial repression is "increasing the returns on savings"? Can you even say that with a straight face? It's increasing the capital gains for bondholders, stockholders, and select Fed cronies, at the expense of everyone else (no, not everyone owns financial assets, Mr. Andolfatto).<br /><br />So, once again, do you maintain that the Federal Reserve's manipulation of financial asset prices doesn't matter?<br />Tippithttp://forums.randi.orgnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-59361160207360149162013-03-12T20:59:34.095-07:002013-03-12T20:59:34.095-07:00Is cashless extreme or is it the end the game?
A...Is cashless extreme or is it the end the game? <br /><br />And, instead, Why are both models of no use because they have no fourth factor of production: information?<br /><br />There are four factors of production, of which the most important is information for information is a substitute for all the others. Information will shortly be able to turn lead into gold. When machines can build, design, repair, and replace themselves, will there be any role for labor or capital (including money)?<br /><br />And, on a separate track, we are approaching a point where our ability to write and enforce contracts making forward promises will replace any need for capital (or money). Units or measures of exchange may well, themselves, become ever less important. Consider a totally robotic store where the only cost is of the raw materials in the products and packaging and replacement parts.<br /><br />Given that we can see this just over the horizon, who is to say that today is not an accurate reflection of future expectations, a world in which neither labor nor capital have value? Doesn't that picture most accurately mirror reality?<br /><br />In particular, if information is a substitute for capital, what does that do to the so-called real rate of interest? Are we seeing low rates of interest and lack of aggregate demand because our future expectations are that capital will have no value?<br /><br />In sum, if you want to picture the past as primitive, doesn't the known future tell us such is equally true for the current models you have outlined above?<br /><br />Anonymoushttps://www.blogger.com/profile/07904132869021579763noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-80584538137370452732013-03-12T18:29:02.509-07:002013-03-12T18:29:02.509-07:00Tippit:
Earlier you said:
There isn't much ...Tippit:<br /><br />Earlier you said: <br /><br /><i>There isn't much "inflation" because the way that inflation is measured does not include financial asset prices, specifically bond prices.</i><br /><br />And now you say:<br /><br /><i>The fact that as others lose their jobs as the real economy implodes due to the Fed-induced malinvestment does tend to hold down CPI-measured "inflation" though.</i><br /><br />So, if I understand you correctly, you are blaming the Fed for increasing the returns on pension funds and other savings, while at the same time keeping the cost of living in check.<br /><br />There's no pleasing some people, it seems. David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-8902352512156315712013-03-12T15:18:42.777-07:002013-03-12T15:18:42.777-07:00How is the fact that you cannot eat a financial as...How is the fact that you cannot eat a financial asset relevant to the fact that wealth is being transferred via this process? I can sell financial assets, even government bonds, and use the capital gains to buy food. Or I can buy rental real estate, and let the peasants pay for my food as they pay their rent.<br /><br />The fact that as others lose their jobs as the real economy implodes due to the Fed-induced malinvestment does tend to hold down CPI-measured "inflation" though.<br /><br />Are you, David Andolfatto, proclaiming from your ivory tower that the Fed's manipulation of asset prices doesn't matter?Tippithttp://forums.randi.org/forumdisplay.php?f=83noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-12548409147564612162013-03-12T12:17:06.543-07:002013-03-12T12:17:06.543-07:00Tippit, the last time I checked, one cannot actual...Tippit, the last time I checked, one cannot actually eat a financial asset. The CPI (consumer price index)I report above is a measure of the cost of a "typical" basket of consumer goods and services -- you know, the things that actually have a direct bearing on material living standards.David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-71572215144771109292013-03-12T12:06:56.496-07:002013-03-12T12:06:56.496-07:00I think the division between "New Keynesian&q...I think the division between "New Keynesian" and "New Monetarist" to a certain extent obscures the fact that they are largely equivalent theories looked at through different lenses. Although New Keynesian models take a short-cut by simply assuming that the Fed sets the nominal interest rate by fiat, the implicit assumption is that it does this through balance sheet operations. In that regard, New Monetarist theories are basically just New Keynesian theories but with an explicit framework about how the Fed achieves interest rate targets.Matthew Martinhttps://www.blogger.com/profile/10254244795963585737noreply@blogger.com