patrick.net

A companion piece-discusses the Fed's highly accomodative monetary policy

http://smaulgld.com/the-dark-side-of-artificially-low-interest-rates/

Jack Lew- Which bills to pay?
http://www.cnbc.com/id/101085150
would make sense to prioritize the debt payments first!

More warnings from Jack Lew

http://www.usatoday.com/story/opinion/2013/10/03/jack-lew-debt-limit-government-shutdown-obama-column/2918587/

Here is a link to the treasury report-its in the original post too:

http://www.treasury.gov/initiatives/Documents/POTENTIAL%20MACROECONOMIC%20IMPACT%20OF%20DEBT%20CEILING%20BRINKMANSHIP.pdf

Jack Lew to hit the talk shows Sunday

http://www.politico.com/story/2013/10/jack-lew-sunday-shows-97814.html

Yea yea, end times, debt can't be paid back, buy gold.

Everybody gets the redundant message, buy gold.

upisdown says

Yea yea, end times, debt can't be paid back, buy gold.

Everybody gets the redundant message, buy gold.

vs the redundant message, we can always keep printing money to pay our debts and to borrow more because we always have?

smaulgld says

vs the redundant message, we can always keep printing money to pay our debts
and to borrow more because we always have?

So, printed money does NOT pay debts? huh. Who knew?

smaulgld says

vs the redundant message, we can always keep printing money to pay our debts and to borrow more because we always have?

Actually Paul Krugman has another solution-
Have the Treasury "stamp out a platinum coin, say it’s worth a trillion dollars, and deposit it at the Fed — thereby avoiding the need to issue debt."

As Archie Bunker would say "Case Closed"
http://krugman.blogs.nytimes.com/2013/01/02/debt-in-a-time-of-zero/

smaulgld says

Actually Paul Krugman has another solution-
Have the Treasury "stamp out a
platinum coin, say it’s worth a trillion dollars, and deposit it at the Fed —
thereby avoiding the need to issue debt."

That was a sarcatic answer to the buy gold freaks.

Apparently you didn't get the sarcasm either. That figures.

upisdown says

That was a sarcatic answer to the buy gold freaks.

Apparently you didn't get the sarcasm either. That figures.

As was Krugman's Alien Invasion?
http://www.youtube.com/embed/CgAUW_zcN9k

The guy is a comic sarcastic genius!

smaulgld says

smaulgld says

vs the redundant message, we can always keep printing money to pay our debts and to borrow more because we always have?

Actually Paul Krugman has another solution-

Have the Treasury "stamp out a platinum coin, say it’s worth a trillion dollars, and deposit it at the Fed — thereby avoiding the need to issue debt."

As Archie Bunker would say "Case Closed"

http://krugman.blogs.nytimes.com/2013/01/02/debt-in-a-time-of-zero/

Archie Bunker on how to stop skyjacking: Arm All Your Passengers!

http://www.youtube.com/embed/_ai_BkSN8jg

Call it Crazy says

upisdown says

So, printed money does NOT pay debts? huh. Who knew?

Its another Krugman joke!

smaulgld says

As was Krugman's Alien Invasion?

Really, you missed the sarcasm, didn't you. But buy gold, right?

You know, because the price is rising by the day, right? And it's going to go to ______________ (enter ridiculous dollar amount here).

FYI, there's a company that's soon to go public that makes an updated version of the cotton gin, you buying?

upisdown says

FYI, there's a company that's soon to go public that makes an updated version of the cotton gin, you buying?

Nah, I'll pass and buy shares in a digital printing press.

why doesn't the US just sell all its gold?

http://www.marketwatch.com/story/why-uncle-sam-is-hoarding-gold-2013-10-04

upisdown says

smaulgld says

As was Krugman's Alien Invasion?

Really, you missed the sarcasm, didn't you. But buy gold, right?

You know, because the price is rising by the day, right? And it's going to go to ______________ (enter ridiculous dollar amount here).

FYI, there's a company that's soon to go public that makes an updated version of the cotton gin, you buying?

Is our Treasury Secretary warning of a catastrophe because we didn't borrow enough and don't have sufficient debt?

smaulgld says

why doesn't the US just sell all its gold?

http://www.marketwatch.com/story/why-uncle-sam-is-hoarding-gold-2013-10-04

Who cares? Ya think that legal ownership has already been changed to a different owner, and the US may not actually own that gold any longer?

You gold bugs still think that our economy could and should run on gold. If that's the case, you better start digging. With both hands. And your kids too.

smaulgld says

Is our Treasury Secretary warning of a catastrophe because we didn't borrow enough and don't have sufficient debt?

I'm sorry I just realized Jack Lew is ONLY KIDDING! I really got to understand this sarcasm thing

smaulgld says

Is our Treasury Secretary warning of a catastrophe because we didn't borrow
enough and don't have sufficient debt?

Is he? Maybe it's to pay the country's bills that have already been mandated/approved.

Maybe it's not. Again, your answer is to buy gold, right?

upisdown says

Who cares? Ya think that legal ownership has already been changed to a different owner, and the US may not actually own that gold any longer?

I could care less if the US owns any gold. And I don't think the economy should run on gold.

The printing press is the new gold standard:

http://smaulgld.com/why-the-end-of-quantitative-easing-may-be-bad-for-the-dollar/

Better that way-we won't run out of dollars- EVER

smaulgld says

I could care less if the US owns any gold. And I don't think the economy
should run on gold.

Well, we agree on something at least. But, why did you post the article then?

upisdown says

I could care less if the US owns any gold. And I don't think the economy

should run on gold.

Well, we agree on something at least. But, why did you post the article then?

The article is to highlight the dysfunctionality of Congress as it relates to their fiscal policy-ie they never pass a budget and the recklessness of The Fed's monetary policy-buying treasuries and mortgage backed securities from the too big to fail banks at nearly $4 trillion.

Could there not be better places to spend money printed out of thin air than at the TBTF banks?

Wouldn't it make sense for Congress to pass a budget?

Wouldn't it make sense for the US government NOT to default?

The parting shot about gold was that it (or any asset of tangible worth) does not rely on its value be set by those that have been shown to be bad stewards of what they have been entrusted.

We are better of with stocks of well run companies too.

I talked about it on a podcast yesterday: http://smaulgld.com/the-impact-of-the-government-shut-down-on-the-economy-podcast-10-4-13/

upisdown says

Is he? Maybe it's to pay the country's bills that have already been mandated/approved.

Maybe it's not. Again, your answer is to buy gold, right?

That's right-he is warning against the recklessness of congress who doesn't pass a budget and relies on continuing resolutions and raising the debt ceiling to meet its obligation.

The Fed facilitates some of this through QE by buying treasury bonds and agreeing to pay little interest so we can afford to continue borrowing.

So the combination of bad monetary and fiscal policies have brought us to where we are.

Also the treasury secretary should create a more flexible way of paying our bills as he is saying that we can't cherry pick so easily. Knowing that we have been in this no budget situation for years perhaps the treasury should have a better contingency plan worked out with Congress.

But if Congress was concerned they would pass a budget, so never mind!

smaulgld says

The article is to highlight the dysfunctionality of Congress as it relates to
their fiscal policy-ie they never pass a budget and the recklessness of The
Fed's monetary policy-buying treasuries and mortgage backed securities from the
too big to fail banks at nearly $4 trillion.

The nice thing is that by using a cont. res., a lot of senseless and uneeded spending(pork barrel) isn't added into the budget.

smaulgld says

Could there not be better places to spend money printed out of thin air than
at the TBTF banks?

Yes, but would the money that was printed out of thin air be just fine if it was paying for whatever pet projects/sectors that you like or believe to be justified?

smaulgld says

Wouldn't it make sense for the US government NOT to default?

Most definietly, but the teabag morons seem to be OK with that, and it looks as though they haven't even thought about the ramifications of the government defaulting. Those same politicians are irrational only think in terms of reactive behavior, and all come from the same region or area. But, most of them except the really goofy ones from texas will probably not be relelected.

smaulgld says

The parting shot about gold was that it (or any asset of tangible worth) does
not rely on its value be set by those that have been shown to be bad stewards of
what they have been entrusted.

Yes, but you are the one to determine who is a good steward, and are advocatiing something other than a representative democracy?

smaulgld says

We are better of with stocks of well run companies too.

Well run companies, yes, but not a total reliance upon stocks because of fees and commissions. Of those fees and commissions, do you recieve either as any income?

upisdown says

The nice thing is that by using a cont. res., a lot of senseless and uneeded spending(pork barrel) isn't added into the budget.

smaulgld says

Could there not be better places to spend money printed out of thin air than

at the TBTF banks?

Yes, but would the money that was printed out of thin air be just fine if it was paying for whatever pet projects/sectors that you like or believe to be justified?

yes the problem with continuing resolutions and just about every way budgetary issues are negotiated in Congress results in wasteful spending.

Re money printed out of thin air-its never fine to just print money for what you want. My point was IF that is what you are going to do, at least it might go somewhere more useful than back to the banks. I do realize however that the problem remains that the money would go to place that have political connections and not everyone would be happy with the result.

upisdown says

Wouldn't it make sense for the US government NOT to default?

Most definietly, but the teabag morons seem to be OK with that, and it looks as though they haven't even thought about the ramifications of the government defaulting. Those same politicians are irrational only think in terms of reactive behavior, and all come from the same region or area. But, most of them except the really goofy ones from texas will probably not be relelected.

Yep, Republicans will risk default (but blink at the last minute so they are wasting everyone's time) and the Democrats won't give an inch on any spending which is partially to blame for the spending problem- and as Ralph Nader points out-who is leading the charge to cut military spending-its certainly not the Democrats.

Re reelection- many democrats who vote for Obama care got shown the door in 2010

smaulgld says

The Fed facilitates some of this through QE by buying treasury bonds and
agreeing to pay little interest so we can afford to continue borrowing.

But cheap interest isn't good for the government to pay? The government would still have to pay interest, and still have to issue those bonds, but a higher cost would somehow be good and end borrowing?

smaulgld says

Also the treasury secretary should create a more flexible way of paying our
bills as he is saying that we can't cherry pick so easily. Knowing that we have
been in this no budget situation for years perhaps the treasury should have a
better contingency plan worked out with Congress

Well, maybe if there was a surefire way to account for everybody's income for tax purposes, like a W2 for self -employed and others. In 2001 the IRS did a National Research Program and the results showed a tax gap of the difference between taxes owed and paid was $345 billion, or about 1/5 of all the taxes collected by the IRS.
Clear that up and treat all forms of income equal, coupled with some reduced spending in numerous areas and big problems becaome little problems real fast.

The parting shot about gold was that it (or any asset of tangible worth) does
not rely on its value be set by those that have been shown to be bad stewards of
what they have been entrusted.

Upside down says

Yes, but you are the one to determine who is a good steward, and are advocatiing something other than a representative democracy?

Smaulgld:

Wasn't commenting on the form of government, was pointing out that whenever your investment is reliant on the actions of others it is more at risk that one that is not dependent on others. That would be the case under any form of government.

The way to analyze a government's stewardship is by its track record.My point is recently the US does not have a good one because of congress and the fed. This has nothing to do with democracy but rather with the implementation of bad policy

smaulgld says

Re money printed out of thin air-its never fine to just print money for what you
want. My point was IF that is what you are going to do, at least it might go
somewhere more useful than back to the banks.

But it's a private sector driven financial system. Are you advocating for something other than that?
You don't want the government to be the sole issuer of currency, considering the antigovernment leanings that you've just posted, do you?

upisdown says

We are better of with stocks of well run companies too.

Well run companies, yes, but not a total reliance upon stocks because of fees and commissions. Of those fees and commissions, do you recieve either as any income?

Companies have the same issue of relying on others for the safety of your investment. The difference is that to some extent companies are regulated and if they screw up you might have standing to get your money back. When the government screws up we are all screwed. That is why government need to be held to an even higher standard like if they don't pass a budget they don't get paid and a restriction on the Fed that they can't monetize debt .

I don't receive any commissions for stock sales! LOL but that is irrelevant to my analysis

smaulgld says

Re reelection- many democrats who vote for Obama care got shown the door in
2010

As has most of those teabag morons, except for the ones in the South and Texas. Texas never disappoints when it comes to showing their level of stupidity.

upisdown says

smaulgld says

Re money printed out of thin air-its never fine to just print money for what you

want. My point was IF that is what you are going to do, at least it might go

somewhere more useful than back to the banks.

But it's a private sector driven financial system. Are you advocating for something other than that?

You don't want the government to be the sole issuer of currency, considering the antigovernment leanings that you've just posted, do you?

My point of view is not anti government, its against the implementation of the government right now. If you are against Republicans or Democrats are you anti government? Of course not. If you are served bad pizza at a restaurant and complain, that doesn't make you against pizza!

Re currency-no point in being theoretical, if the issuer is sound it works for me. Indeed the US is and should be the issuer of US dollars. We however have abused the status of worlds reserve currency to go on debt spending spree.

Japan is even worse!

smaulgld says

Wasn't commenting on the form of government, was pointing out that whenever your
investment is reliant on the actions of others it is more at risk that one that
is not dependent on others. That would be the case under any form of government.

I agree. While neither my wife nor I are the equivelant of John Templeton, we try to keep our financila futures in our hands as much as possible for just the reasons of risk that you stated, and also the compounding effect of fees and commissions.

smaulgld says

The way to analyze a government's stewardship is by its track record.My point
is recently the US does not have a good one because of congress and the fed.
This has nothing to do with democracy but rather with the implementation of bad
policy

True. But, somehow I get the feeling that if there was a lot more politicians with an R behind their name to include the president, you would be fine with that.

upisdown says

smaulgld says

Re reelection- many democrats who vote for Obama care got shown the door in

2010

As has most of those teabag morons, except for the ones in the South and Texas. Texas never disappoints when it comes to showing their level of stupidity.

Plenty of morons on both sides. Are you anti government because you call certain Tea Party congressmen and senators "teabag morons'?

upisdown says

True. But, somehow I get the feeling that if there was a lot more politicians with and R behind their name to include the president, you would be fine with that.

Hardly! I can't get enthusiastic about either party. I see the hypocrisy in both sides and very little to like in either. I am more apolitical and more interested in analyzing economics than supporting politicians or causes.

smaulgld says

Plenty of morons on both sides. Are you anti government because you call
certain Tea Party congressmen and senators "teabag morons'?

That's true, there are many morons on both sides, and super rich ones that seem to get richer the longer that they are in office.

No, I am anti stupid, that's why those teabag idiots irk me and a large portion of our society. Temper tantrums and screaming beligerently is not an effective or rational way to govern or legislate.

upisdown says

I agree. While neither my wife nor I are the equivelant of John templeton, we try to keep our financila futures in our hands as much as possible for just the reasons of risk that you stated, and also the compounding effect of fees and commissions.

That is the key with investments- maintaining a level of control over your future. All investments have down sides.

upisdown says

No, I am anti stupid, that's why those teabag idiots irk me and a large portion of our society. Temper tantrums and scramingbeligerently is not an effective or rational way to govern or legislate.

Good to know- I hope you are not anti -pizza. It's one of my favorite meals!

smaulgld says

That is the key with investments- maintaining a level of control over your
future. All investments have down sides.

It's how we decided to invest(real estate), and also where the majority of our income comes from. The wife has an administrative job that I can't get her to quit because she likes it so much and because of the security of the income/benefits. I guess that it's a woman thing to worry about that.

Obamacare just changed a lot of things for us in that health insurance won't be quite as big of problem with cost and access now.