I was reading about this earlier. It happens across party lines and it's very glaring. — BitconnectCarlos
Or then the loonies of Modern Monetary Theory are correct and I and you are wrong.Price of gold is shooting up. That reflects the fact that the dollar is being destroyed. Mnuchin said the total bailouts are adding up to $6 trillion. There's no corresponding increase in productivity or actual wealth. The dollars in your pocket are simply worth less ... soon to be worthless. — fishfry
Price of gold is shooting up. That reflects the fact that the dollar is being destroyed. Mnuchin said the total bailouts are adding up to $6 trillion. There's no corresponding increase in productivity or actual wealth. The dollars in your pocket are simply worth less ... soon to be worthless. — fishfry
Now, which politicians have that information first? — ssu
And in the end it ought to be the voters who decide what to do, if nothing is done and it's just business as usual. Unfortunately these kind of things will just die out because there is much bigger news. And the real corruption will happen when giving those trillions away of the freshly created money. — ssu
Really?The virus is a red herring. — Metaphysician Undercover
Many will agree with you that it's business as usual! But I don't know if that's sarcasm to you. Or just trolling.It is just business as usual. Why fuss over it now? — Metaphysician Undercover
The price of gas is down and we can celebrate! There's no sports, we need to celebrate something. In this case we're all winners and we can all celebrate together. — Metaphysician Undercover
Or then the loonies of Modern Monetary Theory are correct and I and you are wrong. — ssu
What has to be understood that in the end this con game the end, a monetary crisis, is about the credibility of the currency and about inflation. Now if inflation would start picking up...that would be a sinister sign.
But I think it won't. — ssu
You see, the money goes only to the rich and connected. It goes to prop up corporations. That's the secret. But this can indeed change if or when those trillions start flooding the real economy. But that can take time as otherwise things are quite deflationary now. — ssu
Gold crashed the first day of the DOW crash but it's up sharply. I think people are going to bet on big inflation as the Fed and Congress flood the country with what Ben Bernanke called Helicopter money. — fishfry
Yes, it is.Yes. This is the continuation of the fraud perpetrated on the public in the 2008 bailout. — fishfry
Ah. Good that you mentioned those stock buybacks. Think about all that money wasted in propping up the stock prices by stock buybacks, so the managers can get money from their options. And now they have disappeared into thin air. And all those index funds that have been propping up the price of Apple and Google and the like. Ouch! And of course, that's the thing Trump and his supporters are worried about.But now the airlines plow a decade's worth of profits into stock buybacks and now demand a public rescue for their greed and incompetence. It's obscene. — fishfry
Many will agree with you that it's business as usual! But I don't know if that's sarcasm to you. Or just trolling. — ssu
Inflation didn't happen after 2007-2008 in the "Great Recession". — ssu
either it happened in economic crash of the 1990's in my country (and other Nordic countries), which was a classic speculative bubble that started from deregulation of banking and ended in a banking crisis. In both cases many thought that inflation would kick next in. Others thought that deflation would happen. Either didn't happen. What simply happened is that the money stayed propping up the banks first stayed in the banks (with the banks sitting on the money as Uncle Scrooge) and then raised the prices stocks and financial instruments, created asset price inflation. That was different from classical inflation. — ssu
Now it's interesting what will happen when again trillions are poured into the system. Those money given to people will likely be either saved or with the poorest people spent on necessities. But here's the interesting million dollar question: if and when this pandemic is over, will the economy get going again. Or has the corona-virus shown that there wasn't any recovery and we will just continue having the Japanese-disease in our economy of low to negative growth? — ssu
Or will this spending with the recession create finally a dollar crisis? — ssu
Ah. Good that you mentioned those stock buybacks. Think about all that money wasted in propping up the stock prices by stock buybacks, so the managers can get money from their options. And now they have disappeared into thin air. — ssu
One theory is that the stock crash isn't about the virus at all. The market was in a huge bubble and if it wasn't the virus it would have been something else. Blowing 10,000 points out of the DOW was a much-needed pressure relief. In which case this might just be the start of the next leg up! Or maybe this is just the start of the great crash and the world economy's gone for good, and all the printing in the world won't help. Nobody knows. Could go either way. — fishfry
This massive corporate bailout though. I think there will be a lot of unintended consequences. You can't just keep subsidizing bad corporate behavior like this. It's far worse than the 2008 bailout. — fishfry
That's the view of the Modern monetary theory (MMT) and Chartalism say.Yes, for some reason the ultimate crash just never happens. Maybe they really can borrow and print their way to prosperity. It's been working far longer than you'd think it could. — fishfry
I say it's definitely both. Our system was a reinflated bubble-economy, yet now the stock market is truly responding to events in the real economy.One theory is that the stock crash isn't about the virus at all. The market was in a huge bubble and if it wasn't the virus it would have been something else. — fishfry
I was too, with the exception that ordinary people with bank accounts up to 200 000$ would have been guaranteed by the Fed printing the money at the last case. I would have been for that horrific -20% deflation and shock and then have. The have bankers (banksters) who broke the existing laws worst to go to jail. That would have sent a message not only to the financial community, but also to the people. The close it came was that the Fed looked at the "Nordic Model" of rearranging the banking system. That they didn't do.I opposed the 2008 bailout. I was for actual capitalism. Let the "too big to fail" banks fail. If they managed their affairs in such a way as to not be able to continue to be in business, let them be liquidated and their assets absorbed into more profitable and sound companies. That's exactly how it's supposed to work. — fishfry
That's the view of the Modern monetary theory (MMT) and Chartalism say. — ssu
Rarely do you see stats like this: — ssu
I was too, with the exception that ordinary people with bank accounts up to 200 000$ would have been guaranteed by the Fed printing the money at the last case. I would have been for that horrific -20% deflation and shock and then have. The have bankers (banksters) who broke the existing laws worst to go to jail. That would have sent a message not only to the financial community, but also to the people. The close it came was that the Fed looked at the "Nordic Model" of rearranging the banking system. That they didn't do. — ssu
Wall Street was in charge, literally. Nobody went to jail except a con-man that simply was fed up of lying to the World. He too would likely have gone as nothing has happened, if only he would have denied it and gotten some of that bailout money. It's real ugly when you think about it.
And they are now trying to do the same thing: keep alive a bursting bubble. — ssu
Yep. Our whole financial system is so f*ed up that as crazy it may sound, they may have a point. But perhaps up only to a point I would argue. But I may be wrong.Very interesting reading! MMT is neo-chartalism. Today I learned! I actually understand MMT a bit now. Maybe they do have a point. Thanks for the links. — fishfry
Yes. Iceland is a great example. Estonia is also: they let the free market mechanism handle it and they had a quick and very sharp recession and then things got better. With stimulus and bail out you get the zombie economy of Japan. Here's a great short recap on what happened to Iceland when they didn't choose the "socialism for the few rich"-option:Yes didn't Iceland or somebody just let the banks fail and now they've come through the crisis in better shape? In the US we just papered it all over, created a huge moral hazard, and now here comes yet another bailout. — fishfry
From which we come to a really callous and despicable topic specifically on this thread:My little coastal town's a ghost town. It's shocking. — fishfry
Right, the market was a huge bubble set to burst. The real drop was triggered by Russia's refusal to cooperate with OPEC, Friday March 6, which sent the price of oil into the basement. Planned event? Lots of money to be made. The price of oil has a huge overall significance in the market, and coinciding with corona fears the drop was amplified. Notice the usual rebound now, lots of waves yet to come. Sell high, buy low. Social distancing isn't so bad when you're sitting at home with the same portfolio and lots of cash in the pockets. — Metaphysician Undercover
The problem might be foreign elements in the US markets. With the globalized economy, the factors with the greatest power to influence the markets have moved outside the country. Despite laws against inside trading, conspiracy, etc., much remains an honour system. If you cheat the market, you might get caught, therefore don't cheat the market. Foreigners might play by different rules, if I cheat the market, no one has the power to punish me. It would be a big problem if the US government was channelling huge amounts of money into bailouts, and that money was being siphoned off by foreigners who cheat the market. — Metaphysician Undercover
And that's the problem.People have been predicting the burst of this 2008 Fed-induced bubble since 2008! — fishfry
And will we have a long economic depression or can it be a shorter sharper depression? Is that easy to predict too?you didn't have to be a Senator to see this coming one way or the other. — fishfry
The Justice Department is investigating stock trades made by at least one member of Congress as the United States braced for the pandemic threat of coronavirus, according to a person familiar with the matter.
The investigation is being coordinated with the Securities and Exchange Commission, and is looking at the trades of at least one lawmaker, Sen. Richard Burr (R-N.C.), the chairman of the Senate Intelligence Committee.
As head of the powerful committee, Burr received frequent briefings and reports on the threat of the virus. He also sits on the Senate Health, Education, Labor and Pensions Committee, which received briefings on the pandemic.
It was 12 years ago. 12 years is quite a long time in the lifespan of anybody. And typically the forecasters can be divided into "bears" and "bulls" that unfortunately turn into permabears and permabulls, talking just to a specific crowd that either wants to be pessimistic or optimistic. It's hard first to paint a picture of doom & gloom and then suddenly change it to a rosy dawn with great optimism. Or vice versa. I remember this one commentator I've followed who was very bullish about gold (before and in the start of the great recession), yet then changed his view and finally disregarded the hyperinflation argument. He got at first so much flak from his audience that basically he stopped answering questions of the public. — ssu
And people politicize these issues. Those buying gold started to be the Tea-party type libertarians while on the other side the liberals upholded Paul Krugman etc. as real economists to be listened to. The idea of "right" and "wrong" economists isn't the way one should approach these issues: one economist has one point, another has another point. Hopefully we won't see a similar politicization of the response to corona-virus, but those lines can be seen emerging with Trump "let's go back to work" attitude and with his opposition. — ssu
And will we have a long economic depression or can it be a shorter sharper depression? Is that easy to predict too? — ssu
Now that's a great way to put it!I've heard it said that Trump's supporters take him seriously but not literally; and his detractors take him literally but not seriously. — fishfry
Well, what will happen is the technical rebound at some stage: when the first pandemic wave is over, when the infections and deaths decrease and when people come out after the "all clear, but use caution" sign is given. When they open the restaurants again I'll go to eat with my family. I think many others will too. Life continues. With the massive halt now taken there will be that uptick. I assume that rebound won't go far and naturally will not erase the destruction already taken place. So the question is as we have lost this year, how about the next one?I think a lot of damage is being done to the economy the longer this drags on. Tomorrow's rent day, millions of unemployed people and small business owners won't be paying their rent. This thing could go south. I have no idea. — fishfry
Well, what will happen is the technical rebound at some stage: when the first pandemic wave is over, when the infections and deaths decrease and when people come out after the "all clear, but use caution" sign is given. — ssu
The technical rebound will happen. Now consumption is dramatically reduced. Travel is banned. The downturn is a free fall. Shelter in place will have it's consequences. Once you stop it, there is the technical rebound. Even if you are midst of the worst economic depression of all time and that rebound doesn't correct anything. — ssu
Even a gold standard is a confidence game. I'd the best role for gold is what it has now. It's a good investment and performs well along other currencies. And those that think that it has no value, you are wrong: if gold cost 1 cent per kilo, we would use it in a lot of things starting with coating our water pipes with it.Some economists are predicting a return to the gold standard. I hope they are right. In the long term that will be good. But it would definitely not be easy or painless. — Nobeernolife
Fun fact: the divide between the rich and poor closes during economic depressions. But then there's the "recovery". The outcome might be less rich people, more poor people with the gap widening again.↪ssu Prepare for the next jobless recovery. — Benkei
Even a gold standard is a confidence game. I'd the best role for gold is what it has now. — ssu
The system prior 1973? Or 1933? And even then, there was the lure to borrow that gold, because people wouldn't demand the solid metal. — ssu
I'd say that was a confidence game. A system where the dollar was valued in gold and other currencies in the dollar gives the leeway for the US to be irresponsible as it did. Other countries didn't believe in it and so it was left for Nixon to face to the obvious and pull out from the system.Prior to 1973. I am not saying everything was perfect then, but there was less freedom to create fictional wealth with empty promises. — Nobeernolife
I'd say that was a confidence game. A system where the dollar was valued in gold and other currencies in the dollar gives the leeway for the US to be irresponsible as it did. Other countries didn't believe in it and so it was left for Nixon to face to the obvious and pull out from the system. — ssu
I am sure there was and is lots of shady stuff going on in the system. That is why e.g. Russia keeps its gold at home. But that is a question of cheating within the system, not setting up a system that is based on cheating.And this is the problem when gold is held somewhere as the reserve. Just who's gold is it is a real question. — ssu
To have today's politicians in charge of a monetary system, think it will be a solid base?I do not see that. If the base is solid, then everything is solid. — Nobeernolife
It's meaningless to have a constitution and the rights of the individual written in law if the rulers disregard them totally. And so is when you have in the monetary environment the foxes guarding the hen house.I am sure there was and is lots of shady stuff going on in the system. That is why e.g. Russia keeps its gold at home. But that is a question of cheating within the system, not setting up a system that is based on cheating. — Nobeernolife
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