patrick.net

tatupu70 says

I think most would consider it progress that people no longer have to go digging for gold when times get bad.

Why? Why is removing that option considered "progress"? Do you consider slavery a progress because the option of working to improve one's own condition is removed, and allegedly free food, free housing, free education and free medicine is provided by the slave owners?

tatupu70 says

Step back and take a look at the bigger picture. Money influences politics everywhere. Look at the military industrial complex. Look at health care. Look at Wall St. We need to stop the problem of money in politics and that problem is far bigger than the TBTF banks.

Money influences politics only because a small amount of political spending can net the spender a much bigger profit. Where's that profit from? Government spending in the case of most industries, and monetary privilege in the case of TBTF banks. Without the fiat money system, there wouldn't be the monetary privilege, and without the fiat money system the government would have much less money to give to the military industrial complex or the insurance companies or the meds-dependency industry. They would have to sell their goods and services to the sovereign individual consumer for a change.

Reality says

Why? Why is removing that option considered "progress"? Do you consider
slavery a progress because the option of working to improve one's own condition
is removed, and allegedly free food, free housing, free education and free
medicine is provided by the slave owners?

I don't think that deserves a reply.

As a matter of fact, I think we've exhausted this discussion. You think the Federal Reserve is the root of all evil--I don't.

tatupu70 says

I don't think that deserves a reply.

As a matter of fact, I think we've exhausted this discussion. You think the Federal Reserve is the root of all evil--I don't.

That's because you don't have a reply. A fiat money system pretending to provide everything to everyone for free is essentially a slave plantation running on plantation scrips: the housing, food, clothing, education, and medicine are all "free," at the discretion of the slave owner!

Reality says

That's because you don't have a reply. A fiat money system pretending to provide
everything to everyone for free is essentially a slave plantation running on
plantation scrips: the housing, food, clothing, education, and medicine are all
"free," at the discretion of the slave owner

lol--I figured you couldn't let it lie. That analogy is so ridiculous it doesn't deserve to be dignified with a reply. A fiat money system does not pretend to provide anything for anyone. It is a system that allows more freedom to address imbalances in the economy. Look at the booms/busts under a gold standard and compare it to the much greater stability under a fiat system.

There is no perfect system, but a fiat system has proved to be much more stable than the gold standard.

tatupu70 says

A fiat money system does not pretend to provide anything for anyone. It is a system that allows more freedom to address imbalances in the economy. Look at the booms/busts under a gold standard and compare it to the much greater stability under a fiat system.

The Fiat Money system is what enables the massive government spending and consequent slave plantation, where individual self-improvement is deprecated in favor of everything being "free" at the discretion of the slave owner.

An objective money system (like Gold Standard) allows more freedom by all individuals to address imbalances in the economy (including mining for gold as a way of increasing money supply). A Fiat Money system allows more central planning, allowing the Central Planner more unrestrained power to rig the game for the benefit of himself and his friends.

Boom/bust is much worse under the FED than before. Both the Great Depression and the current Greater Depression are caused by the FED money printing causing the bubbles.

There is no perfect system, but a fiat system has proved to be much more stable than the gold standard.

More stable only for the banking monopoly in terms of staying in power. For the rest of the society, it's far more drastic booms and bust in a money system manipulated by a few than in a money system under which everyone is equal.

The idea that the central planners that caused the imbalances to begin with are the very same ones to address the imbalance is more than absurd. It takes religious faith in believe that nonsense.

Reality says

Interest rate decline is the very purpose of the FED, and its primary tool of manipulation. That's how the FED robs the average savers for the benefit of the super-rich, who are far more likely to leverage than the little guys. Big banks are always the biggest leveragers. Who else can be leverage 50:1 to 500:1 like the top Wall Street banks just before the crash? The whole business model of fractional reserve banking is leveraging.

"US Economic Dominance" is first and foremost the institutional dominance over the individual Americans. . . just like the Roman Imperial dominance of the mediterranean meant the bankruptcy of the individual Roman farmers.

That's exactly it. Case closed.

http://www.zerohedge.com/news/2013-02-05/no-inflation-commodities-highest-ever-time-year

"While every central banker and policy-leech spews forth the government-supplied statistics on inflation - noting that all is well, carry on - we recently pointed out that Gas Prices are their highest ever for this time of year. Of course, the standard supply constraints (or technical) reasoning was applied to dismiss this as transitory (even though it has continued to rise since); but what is perhaps more worrisome is the broad-based nature of the real inflation that is leaking into our global supply chain. The 24-commodity heavy S&P GSCI index (widely recognized as a leading measure of general price movements and inflation in the world economy) has never been as high in early February as it is currently - ever. And with global growth stagnating at best, it seems a tough call to blame 'recovery' for this inflating (fastest pace in 8 years) raw material price leaking cost-push inflation (and margin-compression) into the real economy."

tatupu70 says

You think the Federal Reserve is the root of all evil--I don't.

Me neither -- I don't think it's the definition of evil to be a vassal to the mega banks; just terribly unfortunate.

Reality says

The FED is literally robbing the interest value of money by "legal" counterfeiting.

Exactly, and hence forcing, or trying to force, the robbed over into some risk trade. Preferably the highly manipulated housing market, or the High Frequency cesspool of the stock market.

Chris Martenson's take on recent Fed action.
"The Fed is in uncharted territory, having created a monster it can no longer control. In the process, it is blowing new asset bubbles that are benefitting those with first access to the newly-printed money (banks and corporations) at the expense of savers, pensioners, and anyone exercising fiscal prudence. This, of course, is creating a vast and growing inequality between the top 1% and everyone else"
http://www.peakprosperity.com/blog/80790/qe-for-dummies

Robert Sproul says

Reality says

The FED is literally robbing the interest value of money by "legal" counterfeiting.

Exactly, and hence forcing, or trying to force, the robbed over into some risk trade. Preferably the highly manipulated housing market, or the High Frequency cesspool of the stock market.

Yep that's it - there's a reason why joe sixpack is not allowed to print his own money. And it's not because counterfeiting is "good" or "not as effective" on the market, rates and inflation as we think ;)

Robert Sproul says

Exactly, and hence forcing, or trying to force, the robbed over into some risk trade.

Yep. Its a casino that forces everyone to play. At gunpoint. And if you win, you have to play again.

Great thread, fellas, thanks for this.

Reality says

That's why the real productive economy, the private small business and
individual sector, is being starved of capital running up huge real employment
rate while inflation looms . . . something that you Phillips Curve type claim
would never happen.

Starved of capital?? What in the hell are you talking about? Show me 1 business that is not hiring because it can't get capital. One.

Businesses aren't hiring because there isn't enough demand to justify increasing production. Period.

tatupu70 says

Starved of capital?? What in the hell are you talking about? Show me 1 business that is not hiring because it can't get capital. One.

Businesses aren't hiring because there isn't enough demand to justify increasing production. Period.

"Lack of demand" is just another way of saying the business can not lower price enough to attract more customers. Lower prices always bring in more demand, just look at the Black Friday madness. Why is the business not able to lower price further, perhaps to Black Friday price every day? Oh, because the cost of input factors. So why is the cost of input factors going up or not dropping? Because the government waste and money printing bidding up prices of input factors.

A business' capital is not the money it has per se, but the modus operandi that can turn certain input factors into output products and services that other people want. That is the business capital. FED money printing and giving it to the government to waste is drastically distorting the relative market price of input factors and output affordability, thereby destroying capital in the private sector. That's the root cause of high unemployment.

Reality says

Why is the business not able to lower price further, perhaps to Black Friday
price every day? Oh, because the cost of input factors. So why is the cost of
input factors going up or not dropping? Because the government waste and money
printing bidding up prices of input factors.

Come on. You don't really believe that, do you?

Reality says

A business' capital is not the money it has per se, but the modus operandi
that can turn certain input factors into output products and services that other
people want. That is the business capital. FED money printing and giving it to
the government to waste is drastically distorting the relative market price of
input factors and output affordability, thereby destroying capital in the
private sector. That's the root cause of high unemployment.

No, it's really not. The government is not perfect, I'll agree. But to imply that it is the root cause of high unemployment is ridiculous.

tatupu70 says

Come on. You don't really believe that, do you?

Why not? Why are you married to the idea that money value is constant? All values are relative. People lived very happy lives on $8000/yr income when gasoline was 25cents a gallon back in the 50's. It is the relative values and purchasing power that decide one's standards of living, not nominal amount. The value of money fluctuates over time, the FED endeavors to make sure that its real owners the top banks get paid the nominal amount even when the value of money increases dramatically during economic retrenchment. That has the same effect as raising taxes dramatically on the rest of the economy: a "sin tax" on past behavior taking out the loans. Except with bailouts, the "sin tax" is assessed on the rest of the population to pay the bar tenders and drug pushers who let the bums run up the tab to begin with.

tatupu70 says

No, it's really not. The government is not perfect, I'll agree. But to imply that it is the root cause of high unemployment is ridiculous.

Government is of course the root cause for high unemployment:

1. Employment is rooted in division of labor and free market exchange.

2. Government taxation and regulation gets in the way of free market exchange and division of labor.

3. Government money printing distorts the relative price relationship between input factors and output goods/services, rendering existing business model / capital inoperative.

4. Any "job" that the government creates is essentially a bureaucratic job at a monopoly not subject to market competition, therefore has to be paid in more lost jobs in other sectors.

Reality says

4. Any "job" that the government creates is essentially a bureaucratic job at
a monopoly not subject to market competition, therefore has to be paid in more
lost jobs in other sectors.

But a government employee is stimulating the economy via their own purchases so how is that resulting in "more lost jobs in other sectors"?

Robert Sproul says

Reality says

The FED is literally robbing the interest value of money by "legal" counterfeiting.

Exactly, and hence forcing, or trying to force, the robbed over into some risk trade. Preferably the highly manipulated housing market, or the High Frequency cesspool of the stock market.

This is an interesting theory. Who then is their target mark? A potential millionaire that is sitting on lets say $1 million? I remember back in 2007 they could get around 4.5%-5% interest in their saving accounts which would be around 45-50K a year. So by lowering rates to 0.25% they can only get $2500 on their million. Seems like a good "target" to go after to force into a higher risk trade such as stock and bonds. I don't see a relationship to real estate purchases however. The primary determinant of primary residence is the expected lifetime renting costs, not the opportunity cost of investment per se. Now with investment properties, I guess that could be different.

dublin hillz says

But a government employee is stimulating the economy via their own purchases so how is that resulting in "more lost jobs in other sectors"?

I don't blame you, that scam of an idea promoted by typical statists is about as silly as one can solve hunger by eating one's own flesh! The government employee's entire salary comes from taxation or future taxation that has to be paid the businesses. If the latter, interest will have to be added. How many business would like to be "stimulated" by giving you your entire purchase for free or even paying you interest on top of that?

The key question is this. Yes, it is true that overnight lending rate, QE resulted in these pittances that we are seeing in savings accounts which hurts retirees. On the other hand these policies rescued market values of their 401Ks, IRAs and taxable investing accounts. So in terms of "net" did they benefit or not? I believe that they benefited since the savings rate was abysmally low for a long time and anything that they were able to save was most likely in a 401K vehicle.

Reality says

It is the relative values and purchasing power that decide one's standards of
living, not nominal amount.

I agree 100% with that statement. If we are in a period of deflation and your salary drops faster than the overall price level you lose just like if your salary doesn't rise as fast as inflation. Inflation or deflation doesn't matter. Rise of fall of real wages is what matters. The rest of your paragraph is just more garbage.

Reality says

Government taxation and regulation gets in the way of free market exchange and
division of labor.

The free market is not perfect. Regulation is designed to account for externalities that the free market will ignore.

Reality says

Government money printing distorts the relative price relationship between input
factors and output goods/services, rendering existing business model / capital
inoperative.

I don't agree with that. Money printing adjust noiminal prices, but the relationship between input and output shouldn't change. Inflation is very easily accounted for in business and capital models.

Reality says

Any "job" that the government creates is essentially a bureaucratic job at a
monopoly not subject to market competition, therefore has to be paid in more
lost jobs in other sectors.

See earlier answer about externalities.

dublin hillz says

The key question is this. Yes, it is true that overnight lending rate, QE resulted in these pittances that we are seeing in savings accounts which hurts retirees. On the other hand these policies rescued market values of their 401Ks, IRAs and taxable investing accounts. So in terms of "net" did they benefit or not? I believe that they benefited since the savings rate was abysmally low for a long time and anything that they were able to save was most likely in a 401K vehicle.

Two problems with that line of thinking:

1. The men/women with the savings account is not the same men/women with the 401k/IRA/etc.. In fact, it is statistically true that the lower income lower net-worth individuals have lower percentage of their net worth in the latter and more percentage in the former. So the result of the policy is reverse-RobbinHood. That's on top of the fact that high paper asset price benefit the much more wealthy bankers and fund managers even more than the average shareholders.

2. In the long run, 401ks/IRAs/etc. are also hurt by the bailout: the bad debts are not liquidated, so it functions as a burden on the economy like a tumor that is not removed. All other businesses suffer both because some of them would have to indirectly service the debt or would have to pay higher taxes thanks to the bailout transfer

tatupu70 says

The rest of your paragraph is just more garbage.

Care to elaborate?
Do you not believe that people in the 50's lived happy lives on much lower nominal income than today because the purchasing power of the dollar was higher?
Or do you want to dispute that FED policies are geared towards making big lenders whole in a monetary crunch?

tatupu70 says

The free market is not perfect. Regulation is designed to account for externalities that the free market will ignore.

Why the passive voice? Why don't you tell us "designed" by who? Would that be some very imperfect men who have their own self-interest? Of course market price is not perfect at any given moment. In fact if market price were perfect, there wouldn't be a market at all as people would stop trading!

Yes, every trade involves at least two people who do not agree on the relative value of two items. One thinks Apple is worth more (to himself) than Orange is, and the other Orange is worth more (to himself) than Apple is, therefore they can trade. If both agree that Apples are always worth more than Orange, there wouldn't be a one-to-one trade at all. So imperfection is the reason why market exits. Market exists as a result of individuals voting with their own wallet each attempting to take advantage/correct market price imperfection. So where does that leave your specially privileged "regulator" with his own prejudices and self-interest? Why should he have any more privilege than the rest of the market participants?

tatupu70 says

I don't agree with that. Money printing adjust noiminal prices, but the relationship between input and output shouldn't change. Inflation is very easily accounted for in business and capital models.

That's just more ridiculous Magical Average Thinking. If the Fed prints $1B to buy my paper weight as a way of injecting money into the economy, try to tell me the relative purchasing power between you and me would not change! With that $1Billion in my pocket, I can outbid you on everything you want to buy! Newly created money enter the economy at specific points. Those who get the money first reap the benefit, because the price hasn't gone up yet, at the expense of those who get the money later and have to cope with the result of risen prices.

Money and price are not some magical average, but instruments for information transmission. That instrument/device conveys both the information for new discovery from obscure labs (lower prices propagating from there as the inventor can buy input factors to make his new widget to do the work of existing widgets that cost more) and the information for shortage (as higher prices propagate from disaster zones drawing goods towards it as replacement). Fiat money printing is essentially simulating disaster, and it is a disaster. The logic is clearly illustrated when Krugman repeatedly claim that a war would be his Keynesian solution to a recession.

KarlRoveIsScum says

"With all the money the FED brings into existence it only ever PRINTS ABOUT 2%"

GET A GRIP PEOPLE

1. That 2% is the basis of enormous leverage on top of it. When you have the FED as your back stopper, you can leverage 50:1 or even 500:1.

2. The natural productivity increase rate in an economy (that does not have other more advanced economy to copy) is only 2-4%. The FED printing 2% has the effect of harvesting the bulk of productivity gain (hence individual living standard) to itself and its friends. That's precisely why in the 40 years since the Federal Reserve Note was entirely de-linked from Gold, the working class in America has witnessed their own living standards stall while those connected to the FED have beome extremely wealthy. That's the fundamental source of wealth disparity in this country.

Reality says

Do you not believe that people in the 50's lived happy lives on much lower
nominal income than today because the purchasing power of the dollar was
higher?

No, I don't believe that's the case. Real wages are significantly higher now than in the 1950s. Productivity advances are huge.

Reality says

Why the passive voice? Why don't you tell us "designed" by who? Would that be
some very imperfect men who have their own self-interest? Of course market price
is not perfect at any given moment

Well, obviously the regulations have been designed and put into law over hundreds of years by many, many people. I think it's safe to say all men are imperfect, but I certainly wouldn't assume they were put in out of self-interest. FDA, OSHA, EPA--those were put in out of self-interest??

Reality says

So where does that leave your specially privileged "regulator" with his own
prejudices and self-interest? Why should he have any more privilege than the
rest of the market participants?

He shouldn't. Your example is completely off topic. The regulator doesn't promote apples over oranges.

Reality says

That's just more ridiculous Magical average thinking. If the Fed prints $1B to
buy my paper weight as a way of injecting money into the economy, try to tell me
the relative purchasing power between you and me would not change! With that
$1Billion in my pocket

The Fed doesn't pay $1B for a paper weight either.

tatupu70 says

No, I don't believe that's the case. Real wages are significantly higher now than in the 1950s. Productivity advances are huge.

But not nearly as much as the nominal wages would lead one to believe. The period from 50's through 1970 did witness real wage increase for the working class. However, there has been practically no net increase in real wages for the working class in the 40 years since the early 1970's, despite the productivity gains.

tatupu70 says

Well, obviously the regulations have been designed and put into law over hundreds of years by many, many people. I think it's safe to say all men are imperfect, but I certainly wouldn't assume they were put in out of self-interest. FDA, OSHA, EPA--those were put in out of self-interest??

Of course they were and continue to be. FDA was a classic example of patent drug makers trying to stamp out street competition.

tatupu70 says

He shouldn't. Your example is completely off topic. The regulator doesn't promote apples over oranges.

Bravo! If you agree that the regulator shouldn't have privileges in the market place, then you agree that the regulations that give the regulator privileges should be abolished. That's all regulations are: spelling out the privileges of the regulators in over-riding the wishes of other market participants. For example, the FDA promotes drug makers that have the money to pay for certification process over inexpensive remedies that can not afford the extremely expensive certification process, over-riding the wishes of doctors and consumers who prefer the latter solution on pain of massive fines and jail terms.

tatupu70 says

The Fed doesn't pay $1B for a paper weight either.

The defaulted bad debts that it does buy is worth even less than paper weight. The point is that whatever the FED buys, it has to over-pay; otherwise the seller wouldn't sell to the FED. That puts money in the pocket of the seller. Obviously, you and I do not qualify when the FED is handing out money in exchange for worthless "assets."

Reality says

But not nearly as much as the nominal wages would lead one to believe. The
period from 50's through 1970 did witness real wage increase for the working
class. However, there has been practically no net increase in real wages for the
working class in the 40 years since the early 1970's, despite the productivity
gains.

lol, so now living in the 50's isn't actually better after all. But, you're right that the top 1% has been capturing all the productivity gains in the last 20 years. Here's my question for you: if the Federal Reserve is to blame, why did the top 1% only start getting all the gains in the last 20 years??? You can't answer that because your theory is completely wrong.

Reality says

Of course they were and continue to be. FDA was a classic example of patent
drug makers trying to stamp out street competition.

Really? And here I thought the FDA made sure I didn't die from eating contaminated food. If a drugmaker has a patent, why does it need the FDA to stop competition?

Reality says

Bravo! If you agree that the regulator shouldn't have privileges in the
market place, then you agree that the regulations that give the regulator
privileges should be abolished. That's all regulations are: spelling out the
privileges of the regulators in over-riding the wishes of other market
participants. For example, the FDA promotes drug makers that have the money to
pay for certification process over inexpensive remedies that can not afford the
extremely expensive certification process, over-riding the wishes of doctors and
consumers who prefer the latter solution on pain of massive fines and jail
terms.

Poor logic. I see this a lot. Difficult problems seldom have perfect solutions. Sure--regulations have some drawbacks, but I think the vast majority of people would gladly pay a little extra for products or services to ensure their safety. As long as a regulation has a net positive effect, I say keep it. Even if it means that there might be someone, somewhere, that is inconvenienced by it.

Reality says

The point is that whatever the FED buys, it has to over-pay; otherwise the
seller wouldn't sell to the FED. That puts money in the pocket of the seller.
Obviously, you and I do not qualify when the FED is handing out money in
exchange for worthless "assets."

Do you think the Federal Reserve is in the habit of buying worthless assets? Where did you get that idea?

tatupu70 says

lol, so now living in the 50's isn't actually better after all.

You'd think that should be obvious. The living standards hasn't gone back 60 years, but has lost 40 years of progress. BTW, the original "50's" reference entered this discussion by a typo. I meant the 60's: $8k salary and 25cents per gallon gas. The 50's salary for the working class was lower; $8k in the 50's would be mid to upper level management positions depending on end vs. beginning of that decade. 2-4% a year real wage increase meant serious advancement in just one decade! Something the American people have lost in the past 4 lost decades.

But, you're right that the top 1% has been capturing all the productivity gains in the last 20 years. Here's my question for you: if the Federal Reserve is to blame, why did the top 1% only start getting all the gains in the last 20 years??? You can't answer that because your theory is completely wrong.

Not just the last 20 years, but the last 40 years' progress is all lost for the working class. The asnwer is quite simple: the final de-linking of gold making the US dollar into pure fiat in the early 70's.

tatupu70 says

Really? And here I thought the FDA made sure I didn't die from eating contaminated food. If a drugmaker has a patent, why does it need the FDA to stop competition?

You are confusing FDA with USDA and local department of health. FDA is primarily concerned with drugs, not food. Patent drug makers wanted FDA because they were selling patent preparations of opioids (like morphine, methodone, etc.) They faced stiff price competition from street happy drugs also made from the opium plant. That's how FDA and the original war on drugs began: a profit enhancing racket for the patent drug makers.

tatupu70 says

Poor logic. I see this a lot. Difficult problems seldom have perfect solutions. Sure--regulations have some drawbacks, but I think the vast majority of people would gladly pay a little extra for products or services to ensure their safety. As long as a regulation has a net positive effect, I say keep it. Even if it means that there might be someone, somewhere, that is inconvenienced by it.

Preference for quality does not mean the need for regulations. Private labels and brands as well as voluntary industry associations can easily provide the quality assurance without the revolving door government regulators bought and paid for by the industry to keep out competition.

tatupu70 says

Do you think the Federal Reserve is in the habit of buying worthless assets? Where did you get that idea?

It has to be. Its primary mission is to be "the lender of last resort"; i.e. buys papers that nobody else wants. The FED has to over pay to buy anything; otherwise, it would be sued for forcible taking without due process.

Reality says

You'd think that should be obvious. The living standards hasn't gone back 60
years, but has lost 40 years of progress.

OK--you're the one that said things were better in the 50s, not me.

Reality says

Not just the last 20 years, but the last 40 years' progress is all lost for the
working class. The asnwer is quite simple: the final de-linking of gold making
the US dollar into pure fiat in the early 70's

I strongly disagree. And I think history does as well. If you'll remember, wealth disparity was extreme in the 20s as well. Then it was much better through most of the mid 20th century before starting to rise again after Reagan.

Reality says

You are confusing FDA with USDA and local department of health. FDA is
primarily concerned with drugs, not food. Patent drug makers wanted FDA because
they were selling patent preparations of opioids (like morphine, methodone,
etc.) They faced stiff price competition from street happy drugs also made from
the opium plant. That's how FDA and the original war on drugs began: a profit
enhancing racket for the patent drug makers.

No, I don't think so. FDA regulates nearly all food products in the US--exception being meat derived from domesticated animals which falls under USDA regulation. Regardless, the point is that we need the regulation to ensure safe foods.

Reality says

Preference for quality does not mean the need for regulations. Private labels
and brands as well as voluntary industry associations can easily provide the
quality assurance without the revolving door government regulators bought and
paid for by the industry to keep out competition

You're kidding right? History has shown that businesses will always measure human life in monetary terms and make decisions to maximize profit. Is that how you want it to be? 25 deaths is OK? Because only 10% will sue and only half of those will win. It's a net positive for corporate profit and executive bonuses.

Reality says

It has to be. Its primary mission is to be "the lender of last resort"; i.e.
buys papers that nobody else wants. The FED has to over pay to buy anything;
otherwise, it would be sued for forcible taking without due process.

OK--first of all, if it's lending money, the Federal Reserve is not "buying" anything. A loan is not a purchase.

tatupu70 says

OK--you're the one that said things were better in the 50s, not me.

No I never did. I said people could make a happy living on as little a nominal number as $8k/yr back then, largely because purchasing power of the dollar was much higher.

tatupu70 says

I strongly disagree. And I think history does as well. If you'll remember, wealth disparity was extreme in the 20s as well. Then it was much better through most of the mid 20th century before starting to rise again after Reagan.

What do you think caused the wealth disparity in the 20's? The Fed was founded in 1913! The Fed bailout of the Florida land bubble in the mid to late 1920's blew a huge stock market bubble, creating enormous paper wealth.

Much of the mid 20th century was spent on recovering from the war destructions for much of the world. Wealth disparity expressed itself not in dollar terms but in power terms.

tatupu70 says

No, I don't think so. FDA regulates nearly all food products in the US--exception being meat derived from domesticated animals which falls under USDA regulation. Regardless, the point is that we need the regulation to ensure safe foods.

FDA gives blank approval to food, focus regulation on drugs. USDA and local health departments address most food safety issues in a post facto manner. The fact that we can't even agree on which agency regulates what goes to show the irrelevance of regulations. The US FDA has about 2000 staffers, whereas the Chinese FDA has 200,000 bureaucrats. Which country do you think has safer food?

tatupu70 says

You're kidding right? History has shown that businesses will always measure human life in monetary terms and make decisions to maximize profit. Is that how you want it to be? 25 deaths is OK? Because only 10% will sue and only half of those will win. It's a net positive for corporate profit and executive bonuses.

Would you then go buy food from such a company? How long do you think such a company would last without customers buying their goods? The big-3 car makers that you are really talking about was an oligopoly resulted from labor union action driving all other carmakers out of business and prevent domestic new entrants from succeeding. So people had no other choices. It was not a free market, but a oligopolistic market due to labor union violence.

Measuring human lives in monetary terms is exactly what cartels do, including cartels sponsored by government. In fact, the government itself is the biggest monopoly. Governments have a long history of measuring human lives in monetary terms. Haven't you heard of the British NIH and soon the US formula on whether an elderly person is worth certain treatment?

tatupu70 says

OK--first of all, if it's lending money, the Federal Reserve is not "buying" anything. A loan is not a purchase.

Securities like loan paper are bought and sold everyday by the FED. You are going to tell me the $3+ Trillion listed on the FED Balance Sheet report is all a big lie? It never bought anything? When someone makes a $100 loan to you at 5%, the usual way of discounted paper works is for he to pay you $95 for your promise to pay back $100 in a year's time. Then he can sell that promisory note to anyone afterwards, just like any other goods.

The problem with the FED is that it's been buying a lot of promisory notes that are pure junk. Say if you had signed on a piece of paper promising to pay back $500k borrowed for your house, but has stopped payment a year ago because the value of the house dropped to $100k. How much is the paper worth on the market? Probably around $50k ($100k collateral value minus about $50k to evict you). The FED has been paying 90-95% of MBS papers to take them off the banks' hands. In this illustrative case, $450k for something that's worth only $50k if one can find a market at all. That's how "lender of last resort" works in real life.

Reality says

FDA gives blank approval to food

You've obviously never worked in a food grade plant.

Reality says

The fact that we can't even agree on which agency regulates what goes to show the irrelevance of regulations.

No offense, but your ignorance doesn't show irrelevance of regulations--I'd argue the opposite. They work so well that you don't need to know. If people were dying from food contamination, you'd sure as hell know which agency was involved...

Reality says

Would you then go buy food from such a company? How long do you think such a company would last without customers buying their goods?

That's the whole point. You wouldn't know. Companies would come and go--they'd change names as needed to avoid the bad publicity. You'd never know until you ate the contaminated food.

Reality says

The big-3 car makers that you are really talking about was an oligopoly resulted from labor union action driving all other carmakers out of business and prevent domestic new entrants from succeeding. So people had no other choices. It was not a free market, but a oligopolistic market due to labor union violence.

Really? Unions? That's where you're going now?

tatupu70 says

You've obviously never worked in a food grade plant.

You don't have to work at a food plant to know that FDA gives you blank approval unless either there is complaint or you are marketing your product as having medicinal value.

tatupu70 says

No offense, but your ignorance doesn't show irrelevance of regulations--I'd argue the opposite. They work so well that you don't need to know. If people were dying from food contamination, you'd sure as hell know which agency was involved...

US food market is one of the safest in the world, especially considering the wide variety of different cuisines offered here. However, there has been a few incidents of food poisoning in recent years. For example, the Kroger Spinach incident, the Listeria outbreak of 2012, etc.. In each case, the merchant initiated the recall. The CDC gives some press release on food borne illness. Only after the outbreak did the FDA propose a new set of rules (i.e. rules that did not exist) that won't be implemented until at least a year from now. You are here praising the FDA for the consumer protecting effect of non-existent rules. How faithful of a government-God religion do you have to be?

As the US FDA promulgate more and more rules in the future, the result won't be safer food for Americans, but more like the 100 times more heavily staffed Chinese FDA controlled Chinese food market: full of sub-par and dangerous food because the food producers have to cut corners after paying for inspection and bribes to the myriads of bureaucrats, and there will be less competition to enable consumers reject sub-part producers.

That's the whole point. You wouldn't know. Companies would come and go--they'd change names as needed to avoid the bad publicity. You'd never know until you ate the contaminated food.

The FDA doesn't do jack about new entrants either, nor should it, as that would be prima facie entry barrier against new competition. Food safety is primarily the responsibility of you the consumer, then the store that you trust. If you really want to be safe, buy only the brands that you know. . . while giving up on all the interesting new food offered. What, you think the Gods working at FDA knows all the food that will ever be invented and check every new food against that list?

Really? Unions? That's where you're going now?

Yes, Union work rules and industry-wide benefit package standards were extremely effective at driving the smaller carmakers out of business and prevent new entries. That's how we got the big-3 car makers. Read some of the memos in the 50's at the GM headquaters; the management realized the labor union was a very helpful tool for breaking the competition.

robertoaribas says

shadowstats. If you don't like reality, make up data to fit your own fake world!

While I'm personally skeptical of all econometrics, Shadowstats does not invent its own methodology but simply extend the consumer basket chosen by the BLS as it existed before the revisions in the last couple decades designed to reduce social security payout and TIPS payout.

Hey, when do I get to print my own moolah? I want to start doing good things for society! I could create so many jobs and lend some of it out at only 2%, how awesome is that for the borrowers? Fuck, I'll just print a 16 trillion dollar note and cure this nation of its debt. Brilliant! Wait, it's illegal? Why do you hate freedom and progress?

Reality says

You were the one truncated a chart attempting to prove that the QE drove up
rates. I knew the original chart quite well, so I pointed your intellectual
dishonesty. Then you show us the original chart showing QE driving down rates
then argue that the bond rates always go down anyway. I don't know if you
realize by making the last statement you are essentially saying the bonds always
go up!

What he was proving to you was that the MARKET was setting the rates, not the Federal Reserve. You can't be this dim.

And I'm not going to debate the FDA with you either, short of saying that I don't think you understand what they do. Their focus is the production, inspection, and recordkeeping. When you say the companies initiated the recall--it's because the FDA requires them to have a recall process that must be initiated under said circumstances. And they must be able to trace every product made from that lot. Things like GMP, HAACP, etc, those are terms you should probably look up before you talk about the FDA.

tatupu70 says

What he was proving to you was that the MARKET was setting the rates, not the Federal Reserve. You can't be this dim.

Market is not magic, especially with extremely thinly traded securities that have no market. Federal Reserve's job is to manipulate the market. You can't be this dim.

tatupu70 says

And I'm not going to debate the FDA with you either, short of saying that I don't think you understand what they do. Their focus is the production, inspection, and recordkeeping. When you say the companies initiated the recall--it's because the FDA requires them to have a recall process that must be initiated under said circumstances. And they must be able to trace every product made from that lot. Things like GMP, HAACP, etc, those are terms you should probably look up before you talk about the FDA.

Do you eat food because the government tells you to? Do you go to bed because the government tells you that you need certain hours of sleep everyday? Do you drink water because the government tells you water is good for you?

Producers and manufacturers initiate recalls even when there is no government requirement, in order to avoid law suits and maintain customers. FDA's regulates drugs much more than it does on food. Comparing these two industries, the detriment of pre-emptive regulation on both product safety and availability/price should be quite obvious.

Reality says

Market is not magic, especially with extremely thinly traded securities that
have no market

Are you implying that government treasuries are a thinly traded security? huh?