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Elcapinyoazz
Social climber
Joshua Tree
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Oct 20, 2011 - 03:47pm PT
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All you gold buggery enthusiast, "end the FED", Keynsian-denier types need to read up on your history a bit. We had MUCH more frequent and destructive recessions and a less stable economy when we were on hard money.
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Mangy Peasant
Social climber
Riverside, CA
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Oct 20, 2011 - 04:04pm PT
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Yup, those big red patches on the chart above are one of the reasons the Fed was created in the first place.
But conspiracy theories are more fun!
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 04:11pm PT
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All you gold buggery enthusiast, "end the FED", Keynsian-denier types need to read up on your history a bit. We had MUCH more frequent and destructive recessions and a less stable economy when we were on hard money.
We have a economy that is less susceptible to recession now because of it's diversity, not the Federal Reserve. But recession itself has a purpose: Reagan allowed rates to rise which CAUSED a recession, but was followed by dramatic growth. Bush forced rates lower to AVOID a recession, and now we are dealing with the cost of putting off the necessary restructuring.
Moreover, "stability" in your graph is deceptive. Integrating over the "inflation/deflation" function in your graph gives you a currency that is worth nearly the same after 80 or so years under the gold and gold/silver standard, whereas the next 80 years it has lost over 99% of it's value. It is the SUSTAINED inflation (seen since leaving the gold standard) that is destructive to the currency. Is something that loses 99% of it's value "stable"?
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 04:16pm PT
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Yup, those big red patches on the chart above are one of the reasons the Fed was created in the first place.
But conspiracy theories are more fun!
That is deflation by the way, and the Government hates deflation because it collects less in taxes. These days, inflation is beneficial to the financial services industry. We are addicted to inflation!
But in reality deflation is beneficial to the consumer: it allows prices to come down to a level where the consumer can afford goods and services again. Not many people can afford to buy a house these days, but imagine how much smaller that fraction of people would be if prices were still at the 2006 levels!
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 04:39pm PT
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why the interest in Ron Paul, he's at what...... 5%
It's looking like Romney
If it comes down to Romney vs. Obama I will go Romney, but I doubt much will change.
95% of the people in this country would rather eat a donut than jump on the treadmill. Doesn't mean it is the right choice.
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Elcapinyoazz
Social climber
Joshua Tree
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Oct 20, 2011 - 04:49pm PT
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Reagan allowed rates to rise
The last I checked, Regan was POTUS, not the FED Chairman. Similarly, last I checked Paul Volker, the FED Chairman was first appointed by Jimmy Carter. And finally, the last I checked, the FED is an independent entity and POTUS has f*#k-all to do with rate setting decisions. By the time Ray-gun reappointed Volker, fed funds rate was dropping after Volker (and the end of an oil crisis) had broken the back of inflation.
You really don't want to get into a Austrian/Keynsian debate with me. When I was young and green, I was briefly swayed by the Austrians. And then I actually learned something. Perhaps your adolescent fascination with theoretical simplicity and attributing complex, multivariate system outcomes to one or another particular variable will pass. But I won't get my hopes up,and frankly it's not worth my time to have a back and forth with someone married to their ideology who is more interested in defending it than seeking truth. Now toddle along son, I believe it's time to rub one out to your latest Dagny Taggart fantasy. Give her a good rogerin' with some of that "Rearden Steel"
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Mangy Peasant
Social climber
Riverside, CA
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Oct 20, 2011 - 04:53pm PT
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We have a economy that is less susceptible to recession now because of it's diversity,
I thought the Fed was the source of all these boom/bust problems.
But now you are saying that there isn't even much of a problem?
How did our economy become so diverse in the past 100 years anyway?
Is this the same 100 years that we had the Fed?
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apogee
climber
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Oct 20, 2011 - 04:53pm PT
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"Now toddle along son, I believe it's time to rub one out to your latest Dagny Taggart fantasy. Give her a good rogerin' with some of that "Rearden Steel"
Oh, my!
+1 Quote of the Day
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 04:58pm PT
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the last I checked, the FED is an independent entity and POTUS has f*#k-all to do with rate setting decisions.
LOL you believe this? Well, I guess you are happy Santa is coming in a couple months!
Volcker wanted to let rates rise, but do you think he could have done it without a president who backed him up on it? And do you REALLY think Bernanke makes decisions independent of what the Federal government wants?
The idea behind a central bank is to CONVINCE investors that it is a independent entity, but no central bank has EVER been an independent entity, and ours is independent in name only.
Oh yes, I would like to engage you on Keynesianism. In fact, I would like any Keynes adherent to explain that graph to me, so far I have never heard a word from a Keynesian on it. It is almost like they don't see it, I guess they only see what fits in their World view.
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Mangy Peasant
Social climber
Riverside, CA
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Oct 20, 2011 - 04:58pm PT
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These days, inflation is beneficial to the financial services industry.
So lenders like inflation now?
Even Ron Paul's ideas aren't that stupid.
Please learn a little Econ 101 before you embarrass yourself any more.
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Mangy Peasant
Social climber
Riverside, CA
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Oct 20, 2011 - 05:03pm PT
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"Now toddle along son, I believe it's time to rub one out to your latest Dagny Taggart fantasy. Give her a good rogerin' with some of that "Rearden Steel"
It took me a moment to recall the reference, but once it hit me...
Absolutely hilarious!
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 05:03pm PT
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I thought the Fed was the source of all these boom/bust problems.
But now you are saying that there isn't even much of a problem?
How did our economy become so diverse in the past 100 years anyway?
Is this the same 100 years that we had the Fed?
An economy that has diverse manufacturing, services, technology, etc. is more diverse and less likely to have a lasting recession by it's nature. If there is country that ONLY makes cars, they are more likely to suffer a recession than one that makes hundreds of goods.
So by the nature of our economy we should not have recessions as often, but we are - and they are more severe than they should be. This is due to the Fed's intervention.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 05:19pm PT
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So lenders like inflation now?
Even Ron Paul's ideas aren't that stupid.
Please learn a little Econ 101 before you embarrass yourself any more.
I think Paul Krugman wrote the textbook for Econ 101, so I will defer to common sense instead.
Lenders don't care much about inflation as long as it is not volatile and interest rates compensate for it. They don't want inflation rates to increase dramatically, but the rate itself is not that important because it is usually offset by interest rates. Banks made more profit during the high inflation of the early 80s than they are making now with (supposedly) low inflation. Banks are more concerned with the yield curve: if long term rates fall below short term rates. This happened in the late 80s and wiped out hundreds of Savings and Loans.
But Wall Street loves it for the same reason Realtors love it - it makes the price of everything go up, and makes people want buy in. The Government loves it because it makes people spend more (since prices are rising), and forces everyone to pay more in Capital Gains taxes, and in higher income tax brackets.
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Nohea
Trad climber
Living Outside the Statist Quo
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Oct 20, 2011 - 05:37pm PT
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When I was young and green, I was briefly swayed by the State. And then I decided to study something other than the State sponsored historical interpretations.
But on this point we agree…
it's not worth my time to have a back and forth with someone married to their ideology who is more interested in defending it than seeking truth
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Gary
climber
Desolation Row, Calif.
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Oct 20, 2011 - 05:44pm PT
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So lenders like inflation now?
That is funny. They like nothing more than being paid back in dollars worth less than what they lent.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 05:47pm PT
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How did our economy become so diverse in the past 100 years anyway?
Is this the same 100 years that we had the Fed?
LOL, for example it was really Bernanke producing all the cool Apple products, not Steve Jobs.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 06:14pm PT
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So lenders like inflation now?
That is funny. They like nothing more than being paid back in dollars worth less than what they lent.
Very few lenders actually HOLD loans anymore. They go to Investors, hedge funds, pension funds, etc.
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CrackAddict
Trad climber
Canoga Park, CA
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Oct 20, 2011 - 06:32pm PT
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The securitization market has been pretty much closed for the last three years, one deal did get done last week. My families bank makes the loans and holds the loans.
Uh... not true, except maybe for very small banks. Private label securitization is close to dead, so now everything gets Uncle Sam's stamp of approval before it is passed on to investors (so taxpayers now hold the risk!)
I am querying the database right now... Let's see:
HFI/Originations < 0.03
This is for one of the largest lenders in the country.
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Elcapinyoazz
Social climber
Joshua Tree
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Oct 20, 2011 - 06:40pm PT
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Nohea the hypocritical state employee clown wrote:
When I was young and green, I was briefly swayed by the State. And then I decided to...
Well, he decided to WORK for the State. Suckle at the teet of the taxpayer as it were. He despises the State so much, that he felt forced to divert his Johnny Galt-like unparelleled powers of productiveness to the State.
Nohea, the prime exmaple of a "Keep your govt hands off my medicare" Randian clownshow-extraordinaire.
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