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The Biggest Currency Printers Will Be The Biggest Losers - Business Insider


By bgamall4   Follow   Sat, 2 Feb 2013, 11:44pm PST   1,493 views   51 comments   Watch (1)   Share   Quote   Permalink   Like   Dislike (1)  

http://say-no-to-recourse-loans.blogspot.com/2013/02/the-biggest-currency-printers-will-be.html All is not lost if countries print currency. That is where I disagree with Schiff. He has a right to be worried, however, his libertarian views prevent him from strongly opposing speculation.

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P N Dr Lo R   befriend   ignore   Tue, 5 Feb 2013, 12:03am PST   Share   Quote   Like (1)   Dislike     Comment 12

bgamall4 says

Hey Mell, price controls probably do a number on speculation. It forces the product to get to market for less or it gets rejected. Not sure the mechanics of that but Nixon did it in the 60's

Nixon did it in '72 as one of his gimmicks to get re-elected. I remember how relieved we were that gasoline would remain at 29 cents awhile longer. However, they caused all kinds of distortions because costs couldn't be passed through on some products. I remember the instance of the drowned chicks because either the increased cost of feed couldn't be passed along or vice versa. The scheme was working so poorly that they even went to a Phase II sometime in 1973 before throwing up their hands and abandoning the whole business. The result was that all the pent-up pressures, in addition to the Arab oil embargo at the end of '73 resulted in double digit inflation every month of 1974, I think 13% for the whole year, and pretty well set the tone for the remainder of the 70's as the decade of uncontrollable inflation.

gsr   befriend   ignore   Tue, 5 Feb 2013, 12:07am PST   Share   Quote   Like   Dislike     Comment 13

Bill gates cannot sit on "it". He will have to sell that water to buy other necessary stuff. Unless he has connections with the government, he will have pay market price for everything he would buy.

iwog   befriend   ignore   Tue, 5 Feb 2013, 12:11am PST   Share   Quote   Like (1)   Dislike     Comment 14

gsr says

Bill gates cannot sit on "it". He will have to sell that water to buy other necessary stuff. Unless he has connections with the government, he will have pay market price for everything he would buy.

Who said?? This guy bought 2.2 million acres:

http://management.fortune.cnn.com/2012/09/27/john-malone-billionaire-landowner/

He's a speculator who will squat on this land and wait for it to increase in value. What makes you think that a billionaire "needs" to do anything with wealth producing assets?

errc   befriend   ignore   Tue, 5 Feb 2013, 12:18am PST   Share   Quote   Like (2)   Dislike     Comment 15

How does a rich person, take a billion dollars out of circulation? Is there any means to this other than literally storing dollars in their basement vault, aside from throwing the currency into the fire?

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 12:25am PST   Share   Quote   Like (1)   Dislike     Comment 16

No one has taken more money out of circulation than the banks who have excess reserves sitting on their balance sheets from the Fed.

My point above about Zero Hedge is that they have written against austerity and they have written against excess printing. That is why all these folks, and maybe they have, need to all come out against the speculation, which, since 2000, has become unprecedented.

errc   befriend   ignore   Tue, 5 Feb 2013, 12:30am PST   Share   Quote   Like   Dislike (2)     Comment 17

Speculation is good!

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 12:38am PST   Share   Quote   Like (1)   Dislike     Comment 18

errc says

Speculation is good!

It used to be good, before the markets in oil and foodstuffs were cornered. One guy was able to corner the cocoa market. Can you imagine what the investment banks, working together can do to screw the pocketbooks of Americans? They actually create scarcity not of the underlying commodity, but of the contracts for the commodity.

gsr   befriend   ignore   Tue, 5 Feb 2013, 1:15am PST   Share   Quote   Like   Dislike     Comment 19

Speculation on any item is a way to predict a future crisis, which brings more immediate investment to that. Banning speculation on food will only make sudden food crisis appear from nowhere. Of course, some get free money from the fed to speculate.

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 1:18am PST   Share   Quote   Like (1)   Dislike     Comment 20

gsr says

Banning speculation on food will only make sudden food crisis appear from nowhere.

That was the intent of speculation. But now the markets are cornered and the speculators drive up the prices prior to delivery of the item. That is also what happened in the Great Depression, causing Will Rogers to say:

"We never will have any prosperity that is free from speculation till we pass a law that every time a broker or person sells something, he has got to have it sitting there in a bucket, or a bag, or a jug, or a cage, or a rat trap, or something, depending on what it is he is selling. We are continually buying something that we never get from a man that never had it." DT #1301, Sept. 24, 1930

gsr   befriend   ignore   Tue, 5 Feb 2013, 1:23am PST   Share   Quote   Like (1)   Dislike     Comment 21

iwog says

Who said?? This guy bought 2.2 million acres:

So he put his 2.2 million dollar IN circulation. Didn't he? He taking a risk with his money. Would you rather have his money stuffed under his mattress?

errc   befriend   ignore   Tue, 5 Feb 2013, 1:34am PST   Share   Quote   Like (2)   Dislike     Comment 22

"We are continually buying (a paper promise to) something that we never get from a man that never had it."

And the solution is, to print more paper. It would be funny if it wasn't so gotdamned stoopid. The American solution should have been to let the whole thing fali. If it can't "succeed" without the government stepping in and putting a gun to a couple trillion dollars worth of future labor not yet toiled, demanding to make the gamblers whole, than it deserves to fail. Cui bono from that type of "solution"

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 1:43am PST   Share   Quote   Like   Dislike     Comment 23

errc says

The American solution should have been to let the whole thing fali.

While I agree with your sentiment, mass failure may have been really bad. It would have been better to have taken the TBTF banks down one at a time. But instead the Fed printed a gazillion dollars which sits on their books in case they go down again. But will it be enough?

So, I agree with your sentiment Errc, but toxic derivatives are sitting first in line at the FDIC in front of your bank deposit.

errc   befriend   ignore   Tue, 5 Feb 2013, 2:09am PST   Share   Quote   Like (3)   Dislike     Comment 24

bgamall4 says

errc says

The American solution should have been to let the whole thing fali.

While I agree with your sentiment, mass failure may have been really bad. It would have been better to have taken the TBTF banks down one at a time. But instead the Fed printed a gazillion dollars which sits on their books in case they go down again. But will it be enough?

So, I agree with your sentiment Errc, but toxic derivatives are sitting first in line at the FDIC in front of your bank deposit.

Mass failure may have been really bad? For who? Relative to what? This which we've been gifted instead? You cannot let fear of the unknown dictate your life, you will never progress into anything better!

Societies outgrow institutions, like children outgrow clothing.

How bad off would I have been if the 1% of folk that own everything? Worse than I am now? Being forced to work more for their devalued dollars, buying their ever expensive neccessities, and being forced to pay more and more taxes? And you tell me, this is good for me?! You can't think outside the box, because you are the box!

We are now stuck "living" in a system, built on fear, political privilege, and privatized gains with socialized losses. But we ought be happy with it, because the alternative may have been worse. Please, by all means, explain to me how it could be any worse for those of us at the wrong end of the political privilege barrel?

I'm plenty smart/strong/adaptable enough to survive and thrive in any environment. However, I reject the premise of all you leftist hypocrits that whine about how everything is republicans faults, and hey, if you can't beat um join um. Nobody gave me the friggin rule book, and I wouldn't bother reading it anyways. RULES ARE MADE TO BE BROKEN by those that make them, for everyone else, theyr made to corrall the pigs and fatten them up prior to slaughter.

errc   befriend   ignore   Tue, 5 Feb 2013, 2:11am PST   Share   Quote   Like (1)   Dislike     Comment 25

Sorry for the rant, nothing urks me more than this horseshit

" mass failure may have been really bad."

Well we know that mass bailouts are really bad!

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 2:25am PST   Share   Quote   Like   Dislike     Comment 26

errc says

" mass failure may have been really bad."

Well we know that mass bailouts are really bad!

Again, we should have clawed back money, made the banks pay more, made the banks loan to the real economy. That all could have been done and it wasn't. And bailouts are really bad. Yet, capital flight from America is really bad too.

Again, your sentiment is commendable, but capital flight is a disaster. And the derivatives are a disaster that should be wound down now. But in this lull between crises, they are doing nothing. That is stupid and I hope you would agree.

mell   befriend   ignore   Tue, 5 Feb 2013, 4:37am PST   Share   Quote   Like (2)   Dislike     Comment 27

No, we should have let the banks FAIL - that is what capitalism is built upon and it won't work otherwise, failure is encouraged, but NOT REWARDED. Insurances are here for a reason, small and middle class people would have been protected up to 100K/250K per account. If you have more, you can distribute your accounts. It would have been much better to let this crap fail and prosecute the fraud and let small, sustainable banks/credit unions emerge who can actually hedge their risk and don't run criminal ponzi schemes and mortgage fraud. Stop the looting and being the eternal apologist and start the prosecuting.

mell   befriend   ignore   Tue, 5 Feb 2013, 4:43am PST   Share   Quote   Like (2)   Dislike     Comment 28

Btw. that preemptive "reasoning" is no better than the neocons justifying every fucking war at every corner in the world. If we don't bomb Iraq they will eventually have/use WMDs, same for Iran, Syria, blah blah blah. If we don't print money, shit will happen. If we don't bail out the banks, shit will happen. But we know how to make everyone prosper! All we need is special interests, Paul Krugman and a printing press!

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 4:54am PST   Share   Quote   Like   Dislike (1)     Comment 29

mell says

No, we should have let the banks FAIL

Perhaps if we had had state banks willing to lend to the local banks that would have been ok. But only North Dakota has a state bank that works. And it is not exactly a flaming liberal state. Ellen Brown has the right idea.

You don't know what would have happened, Mell, had all the capital left the country. You don't know. So until you know why do you keep saying no bailouts? It should have been done very differently, but you don't know what the derivatives consequences could have been.

When you know, let me know will you?

You may be right, but unless you can prove it, no one really knows what could have happened if all the banks would have melted down all at once.

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 4:55am PST   Share   Quote   Like   Dislike     Comment 30

mell says

Btw. that preemptive "reasoning" is no better than the neocons justifying every fucking war at every corner in the world. If we don't bomb Iraq they will eventually have/use WMDs, same for Iran, Syria, blah blah blah. If we don't print money, shit will happen. If we don't bail out the banks, shit will happen. But we know how to make everyone prosper! All we need is special interests, Paul Krugman and a printing press!

Again, there are rules of war, and the consequences of war are well known. The consequences of a mass meltdown of 65 trillion dollars of derivatives held by Bank of America ALONE is not known.

But I am open to someone trying to explain that outcome!

iwog   befriend   ignore   Tue, 5 Feb 2013, 4:57am PST   Share   Quote   Like   Dislike     Comment 31

gsr says

iwog says

Who said?? This guy bought 2.2 million acres:

So he put his 2.2 million dollar IN circulation. Didn't he? He taking a risk with his money. Would you rather have his money stuffed under his mattress?

As is frequently pointed out, dollars are NOT WEALTH. They are simply a marker for wealth. If everyone sold every asset to hoarders at inflated prices, then everyone would be rich and there would be nothing to buy and we'd be Zimbabwe.

gsr   befriend   ignore   Tue, 5 Feb 2013, 6:35am PST   Share   Quote   Like   Dislike     Comment 32

iwog says

As is frequently pointed out, dollars are NOT WEALTH. They are simply a marker for wealth.

You quickly change topic. I never claimed a paper dollar is wealth.
It's you who said circulation of money is necessary to create wealth. He just did that. Whether dollar is a wealth or not is a separate topic. It is valued as much as anyone is willing to accept it.

There are two more comments.

First, I have no objection if he earned those dollars honestly. He can do whatever he wants with it. You do the same with your real estate. It seems you dislike anyone who is a bigger fish in the market than you are.

Second, using that dollar, he can accumulate as much natural resources he wants as long as he pays fair market price. It does not always guarantee a future wealth or prosperity. China is doing the same across the world using the paper dollars.

To me, human brain is the best resource. Neither you, nor this guy can hoard human brain as a resource.

iwog   befriend   ignore   Tue, 5 Feb 2013, 7:02am PST   Share   Quote   Like   Dislike     Comment 33

gsr says

It's you who said circulation of money is necessary to create wealth.

Yup.

gsr says

He just did that.

All he did was lock up 2.2 million acres so no one could use it to create wealth. What if I wanted to mine that land? Ranch that land? Grow crops on that land?

He's speculating and will only release the hostage if he's paid a significant sum of money over his cost. This is precisely what is wrong with having high wealth disparity. You're getting too wrapped up in semantics instead of examining what is going on.

gsr says

First, I have no objection if he earned those dollars honestly. He can do whatever he wants with it. You do the same with your real estate. It seems you dislike anyone who is a bigger fish in the market than you are.

First of all it doesn't seem like I dislike anyone. I passed no judgement on this man, in fact if I was a billionaire I might do exactly the same thing. The problem is with unrestrained capitalism and the fiction that a free market will correct imbalances.

Second of all, my real estate is wealth being exploited to the fullest extent possible. People are living on my land and in my houses. There is a massive difference between productive real estate and hoarded real estate with a keep out sign.

gsr says

Second, using that dollar, he can accumulate as much natural resources he wants as long as he pays fair market price. It does not always guarantee a future wealth or prosperity. China is doing the same across the world using the paper dollars.

Right, and if I was rich enough I could corner the world market on silver, buy every available ounce, and close all the silver mines. Then entire industries from plasma TVs to computers to medical devices would be utterly destroyed and the world would plunge into a massive depression that might last decades.

"He can do what he wants" is fucking stupid and will wreck any society. He can't do what he wants just as Teddy Roosevelt said when he broke up Monopolies and sent the Robber Barons packing.

Unrestrained capitalism is a dismal failure and will ALWAYS end in misery and war. When I talk about hording wealth in the modern economy, I am talking about specific small examples that by themselves have few implications.

However these actions DO have tragic consequences. It is perfectly legal to fill a supertanker with oil and park it offshore waiting for the price to rise. It is also perfectly legal to buy so many supertankers and hoard so much oil that it drives the price up to $200 a barrel.

It will fuck every working American, it will make their standard of living worse, it will replace other expenses like medical care and might even kill a few people. But hey........he can do what he wants right?

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 1:47pm PST   Share   Quote   Like   Dislike     Comment 34

errc says

You cannot let fear of the unknown dictate your life, you will never progress into anything better!

I don't know. John Denver didn't let fear control his life and he died in a littl reckless plane. Depressions are bad, unless they are a non credit crisis recession.

bgamall4   befriend   ignore   Tue, 5 Feb 2013, 1:54pm PST   Share   Quote   Like   Dislike     Comment 35

gsr says

You quickly change topic. I never claimed a paper dollar is wealth.

You should. Paper money has never been more stable. Other wealth could be manipulated, and yes paper money can too. But it is liquid. That is a big advantage. But I would be interested in listening to Iwog's argument further. I say cash is king.

Reality   befriend   ignore   Tue, 5 Feb 2013, 3:16pm PST   Share   Quote   Like   Dislike     Comment 36

bgamall4 says

You don't know what would have happened, Mell, had all the capital left the country.

What the heck are you talking about? All the factories would have been moved overseas? (the ones not already) All the farms and soil scraped up and shipped over seas? All the stores packed up and shipped overseas? What exactly are you calling capital? Do you honestly believe the world would end tomorrow if the US Dollar paper money disappeared? The South seemed to have carried on just fine even as the Confederate money was made illegal overnight!

Money is not capital. Productive asset is capital (until it is replaced by another asset that is even more productive, just like old mode computer replaced by new model). Money is only an accounting unit. If the current monetary system dies, a new monetary system will replace it. If all the existing banks die, new banks will rise up to replace them without the existing debt burden.

Reality   befriend   ignore   Tue, 5 Feb 2013, 3:21pm PST   Share   Quote   Like   Dislike     Comment 37

iwog says

As is frequently pointed out, dollars are NOT WEALTH. They are simply a marker for wealth. If everyone sold every asset to hoarders at inflated prices, then everyone would be rich and there would be nothing to buy and we'd be Zimbabwe.

How is that even possible? What would hoarders do with productive assets like land and factories? Mothball them? That would only make their neighbor's land and factories all the more valuable . . . and make the hoarders poor for lack of productive return while having to maintain the property, plus paying property taxes.

Zimbabwe was a case of government destroying the economy by hyperinflation. The economy got back to footing by trading on gold grams for a while and then re-based the currency. Life became a lot better after the old monetary system was swept away.

gsr   befriend   ignore   Tue, 5 Feb 2013, 3:22pm PST   Share   Quote   Like   Dislike     Comment 38

bgamall4 says

gsr says

You quickly change topic. I never claimed a paper dollar is wealth.

You should. Paper money has never been more stable. Other wealth could be manipulated, and yes paper money can too. But it is liquid. That is a big advantage. But I would be interested in listening to Iwog's argument further. I say cash is king.

In that case, you will be happy to have 2.2 million instead of the natural resource. Iwog prefers something else. That supports my argument. That's why we need more business, and capitalism. Each of us value things differently.

gsr   befriend   ignore   Tue, 5 Feb 2013, 3:29pm PST   Share   Quote   Like   Dislike     Comment 39

iwog says

First of all it doesn't seem like I dislike anyone. I passed no judgement on this man, in fact if I was a billionaire I might do exactly the same thing. The problem is with unrestrained capitalism and the fiction that a free market will correct imbalances.

There is nothing called unrestrained capitalism, unless by capitalism you mean corporate oligarchy. First, you always _have_to_ produce first before you can consume.

Unless you are a well-connected individual, you have to have to produce stuff with your hard work, before you can consume. And even if you so called "hoard" resources, you need to pay for other things you need by using those resources. There is nothing magical about one specific resource.

For example, this is exactly why housing speculation with unrealistic expectation fails, and will fail.

Reality   befriend   ignore   Tue, 5 Feb 2013, 3:30pm PST   Share   Quote   Like   Dislike