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Author Topic:   Testing The Financial Apologists
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(2)
Message 3 of 582 (888764)
10-03-2021 12:52 PM
Reply to: Message 1 by Phat
10-03-2021 10:45 AM


Phat writes:
CNN doesn't really count, nor does the mainstream media. They tell us what we want to hear and shelter us from what is really going on.
I think you should make this case in another thread before starting this one. So far the only one who's demonstrated he has no idea "what is really going on" is you. Your medicine cabinet must be full of snake oil.
--Percy

This message is a reply to:
 Message 1 by Phat, posted 10-03-2021 10:45 AM Phat has replied

Replies to this message:
 Message 6 by Phat, posted 10-05-2021 11:09 AM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 8 of 582 (888783)
10-05-2021 12:15 PM
Reply to: Message 5 by Phat
10-05-2021 10:32 AM


Re: First Article: Barrons
Phat writes:
Barrons recently had a good article on the macro-cosmic efforts of the Fed to control the economy: The Fed Is Deep in Uncharted Waters. Danger Ahead.
Barron's? You're citing Barron's? And a written article at that! What happened to Fred's Fly-by-night Filching Free-for-all video set?
The author, Karen Petrou, is a member of the Federalist Society, a staunchly conservative organization. Other members of the society are Brett Kavanaugh, Neil Gorsuch, Clarence Thomas, John Roberts, Samuel Alito, and Amy Coney Barrett, otherwise known as the conservative super-majority wing of the Supreme Court. I say this not as a way to dismiss her opinion out of hand but only to make clear that she has a distinctly strong conservative perspective.
I'm a financial conservative myself, but the Federalists tend toward extreme perspectives like originalism, the view that the constitution contains the wisdom of the ages, if only read correctly, and still perfectly applicable today, and so it's fine to let any untrained unlicensed wackadoodle walk around with any kind of gun. But I digress.
After reading the portions of the article you quoted my first reaction is that there's no way you understood it. Did you, for example, pick up on what QE refers to?
I may be no genius, but I can see that the Federal Reserve is essentially in checkmate. By allowing inflation to rise, the Fed may well plan on paying back the U.S. long-term National Debt or at least reducing debt to GDP ratio. In a very real sense, however, inflation is a hidden form of taxation. For the consumer, real purchasing power gets debased.
There is no consensus on whether we will see inflation or deflation, but one point that is repeatedly brought up is the difference between the inflation of the mid 1970's and todays challenges.
These comments have nothing to do with the quoted portion of the article they follow. The 1970's aren't mentioned once. Inflation is not "a hidden form of taxation" and she never says that it is. It is a cost, and not a hidden one. It's probably better described as indirect.
If we do enter a period of sustained inflation then, like past inflationary periods, wages will be one of the rising costs. The big losers when inflation begins rising are holders of fixed-rate debt. If you truly believe we're about to enter a sustained inflationary period then borrow as much money at fixed-rates as you can because you'll be able to invest it at higher rates and pay off the loans in cheaper dollars. The easiest way to do this is to mortgage your condo, though my guess is that it's already mortgaged to the max, probably at least a couple mortgages, am I right?
We know that the Fed has made an art form of saying that they may do something (raising or lowering interest rates, for example) and then letting the markets react to their announcement without actually carry the action through.
We know this? Really? How do we know this? It certainly isn't something Petrou wrote in her article.
The problem with inflation was finally halted in the late 1970s through the actions of Paul Volker. He raised interest rates to nearly 20%. This halted the runaway inflation. The Fed can not do this now, with a National Debt approaching 29 trillion dollars. The interest on such a debt would exceed the total tax revenues of the Federal Government.
Petrou said nothing remotely like this. Higher interest would only be paid on new debt, not existing debt, and if inflation occurs for a sustained period then the government would be paying off old debt in cheaper dollars.
--Percy
Edited by Percy, : Punctuation.

This message is a reply to:
 Message 5 by Phat, posted 10-05-2021 10:32 AM Phat has replied

Replies to this message:
 Message 12 by Phat, posted 10-05-2021 2:31 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 9 of 582 (888784)
10-05-2021 12:22 PM
Reply to: Message 6 by Phat
10-05-2021 11:09 AM


Re: Lies, Damned Lies and Statistics
Phat, I've offered explanations, several times, for why modern currencies cannot be based upon gold. You haven't responded to any of them. What would be the point of explaining again?
You're quoting people who are trying to sell you gold. You're a rube.
--Percy

This message is a reply to:
 Message 6 by Phat, posted 10-05-2021 11:09 AM Phat has replied

Replies to this message:
 Message 344 by Phat, posted 04-15-2024 2:44 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 11 of 582 (888786)
10-05-2021 12:33 PM
Reply to: Message 7 by Phat
10-05-2021 11:59 AM


Re: Lyn Alden
Phat writes:
Using information from the sites that you have provided, I found consensual agreement that supports my basic arguments.
Really? Quote them.
In addition, I cite several "financial apologists" whom I believe have enough solid credentials that they are worth a listen. Granted some of their YouTube titles are clickbait!
Stop watching YouTube videos. Your quote from the video is gobbledygook. I can't wait to hear the explanation for how our military ensures Chinese oil imports.
--Percy

This message is a reply to:
 Message 7 by Phat, posted 10-05-2021 11:59 AM Phat has replied

Replies to this message:
 Message 14 by Phat, posted 10-05-2021 3:44 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(1)
Message 16 of 582 (888792)
10-05-2021 4:31 PM
Reply to: Message 12 by Phat
10-05-2021 2:31 PM


Re: First Article: Barrons
Quantatative Easing, which is a euphemism for monetizing the debt.
Yeah, that's pretty much it, except I don't think too many people would call QE a euphemism. QE is one form of debt monetization, and debt monetization does have a euphemism: printing money.
And I argue that regardless of my sources, these sources have some points that are true. You can argue otherwise. Let's see the documentation.
Barron's articles are likely to make some legitimate points. Your other sources, especially on YouTube, not so much.
The world is always undergoing changes and one of the main problems in this world is greed.
You may as well say that one of the main problems with the world is people.
However...
Percy writes:
The big losers when inflation begins rising are holders of fixed-rate debt. If you truly believe we're about to enter a sustained inflationary period then borrow as much money at fixed rates as you can because you'll be able to invest it at higher rates and pay off the loans in cheaper dollars. The easiest way to do this is to mortgage your condo, though my guess is that it's already mortgaged to the max, probably at least a couple of mortgages, am I right?
Not even close. I owe nothing...nada...zero on this condo and I intend for it to stay that way. I may have been born at night but not last night!
Apologies for assuming your financial mismanagement was across the board. Should I also assume your condo fees are paid up? How's your credit card debt? Is your vehicle worth less than the loan? Sorry, it's just hard to believe that someone who can be taken in so easily about gold is otherwise spic-n-span financially.
I just Googled the historical annual return for gold, and a lot of sites put it around 10% going back to the 1980's. Other sites say gold has a spotty record as an investment, putting its annualized return at around 3%, though I don't know what time period they're looking at. So I'll do my own calculation using the average annual price from 1979 until 2021 (I was going to start at 1980, but that wouldn't have been fair since gold spiked that year):
YearAverage Price of Gold
1979$307.01
2021$1799.13
Oh, gee, what do you know, the annualized return is only 4.3%. Do you know what the price of gold would be now if the annualized return since 1979 were actually 10%? 18,000/oz! If those YouTube guys have been talking about 10% historical returns then since the current price of gold is not $18,000/oz but only $1800/oz, guess what? They're lying! Even if you go back to 1970 and $32/oz the return is only 8.22%.
You said you bought $40,000 in gold in 1993, so let's look at what the annualized return has been since then:
YearAverage Price of Gold
1993$360.05
2021$1799.13
The return was 5.92%. Not bad, but beaten badly by the stock market as measured by the Dow which has generated an 8.4% return.
But the original point was about inflation. With inflation the big losers are not consumers, whose wages, at least historically, have tended to keep up with inflation (with a lag), but holders of fixed-rate debt.
--Percy
Edited by Percy, : Got a year wrong in one spot.

This message is a reply to:
 Message 12 by Phat, posted 10-05-2021 2:31 PM Phat has seen this message but not replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 17 of 582 (888794)
10-05-2021 6:41 PM
Reply to: Message 14 by Phat
10-05-2021 3:44 PM


Re: Lyn Alden
Phat writes:
Phat writes:
Using information from the sites that you have provided, I found consensual agreement that supports my basic arguments.
Percy writes:
Really? Quote them.
From Message 105
quote:
The federal government’s interest payments depend largely on interest rates and the amount of debt held by the public. Other factors, such as the rate of inflation and the maturity structure of outstanding securities, also affect interest costs. (For example, long-term bonds generally carry higher interest rates than do short-term bills.) Interest rates are determined by market forces, such as the supply and demand for Treasury securities, and the policies of the Federal Reserve.
This is why the Fed has been checkmated. They cannot afford to raise interest rates, which was the main way that Volcker fought inflation in the late seventies early eighties.
Your excerpt from the definition of net interest from Federal Net Interest Costs: A Primer has nothing to do with the arguments Petrou advanced for why the Fed was checkmated (in essence, hemmed in by circumstances and its own responses to them). I'm not going to waste my time explaining why you're wrong and what the correct understanding is because when I do, when anybody does, you just ignore it and repeat your misunderstandings all over again.
History shows that inflation was only contained through rising interest rates.
From Message 107
Committee for a Responsible Federal Budget
quote:
Despite historically low-interest rates, this significant interest cost is the result of high levels of debt. This cost could be even worse if interest rates rise. Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion at today’s debt levels. Growing debt levels not only add to the likelihood of such increases, but also the cost and risk associated with them.
There's massive irony here. This is one of the very few times you've quoted a source that actually does support your claim (that rising interest rates cause immediate commensurate increases in interest payments on the national debt), so congratulations, but unfortunately you quoted from a webpage that I already noted had one significant error, and you've managed to find another.
I'm going to regret wasting my time explaining this, but anyway...
Your quote claims that "Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion," and that is obviously false. When interest rates rise then payments on interest can only increase if the debt is refinanced. The average maturity period for financial instruments funding the national debt is over five years, so only about 20% of the debt would be refinanced in any given year. If interest rates were to rise by 1% then over the next year only $5.8 trillion of our national debt would be refinanced, and a year from now our annual service of the debt would only have risen by $58 billion, not $225 billion.
The Committee for a Responsible Federal Budget seems like a reputable and competent organization, I have no idea why this webpage gets things so wrong.
--Percy

This message is a reply to:
 Message 14 by Phat, posted 10-05-2021 3:44 PM Phat has replied

Replies to this message:
 Message 18 by Phat, posted 10-06-2021 11:49 AM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 20 of 582 (888799)
10-06-2021 12:42 PM
Reply to: Message 18 by Phat
10-06-2021 11:49 AM


Re: Lyn Alden
Phat writes:
Well, what mystifies me is how and why you are so convinced that you have things right.
It isn't that I'm so sure I'm right as that I'm able to muster facts and reason in support of what I think true and you're not.
1) Do you believe and/or agree that the purchasing power of your money is decreasing year by year? If not, why? I have seen statistics that essentially say that a 1940 dollar is worth 5 cents in today's money.
Are you seriously asking if I know there's inflation every year (deflation is rare - we had a deflationary year in 2010 after the mortgage security financial collapse). Here's a chart of real wages in constant 2017 dollars, it's the red line. There's inflation every year, and there's wage increases every year. Sometimes wage increases keep up with inflation, sometimes they don't:
No one here thinks inflation doesn't exist. Everyone here thinks your prognostications about the coming inflationary apocalypse are driven by your susceptibility to YouTube snake oil salesmen.
--Percy
Edited by Percy, : 1917 => 2017

This message is a reply to:
 Message 18 by Phat, posted 10-06-2021 11:49 AM Phat has seen this message but not replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 23 of 582 (888804)
10-07-2021 9:49 AM
Reply to: Message 22 by AZPaul3
10-06-2021 7:09 PM


Re: Lyn Alden
In 1969 Hess gas was 29.9¢/gallon, they pumped it for you, checked the oil and tire pressure if you wanted, and gave you a free glass. There was a gas station in Freehold (NJ) that had gas for 25.9¢/gallon.
Things are much better now. Gas is $3.099/gallon, you have to pump it yourself and check your own oil, and good look finding an air pump.
--Percy

This message is a reply to:
 Message 22 by AZPaul3, posted 10-06-2021 7:09 PM AZPaul3 has not replied

Replies to this message:
 Message 34 by Phat, posted 10-09-2021 3:22 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(2)
Message 32 of 582 (888826)
10-08-2021 8:40 PM
Reply to: Message 25 by Phat
10-08-2021 1:29 PM


Re: Nomi Prins
Your "ignore responses, repeat claims" approach is a waste of people's time. You've been doing this for a while now, for my own posts most recently completely ignoring Message 16 and Message 20, and responding to Message 17 but not addressing a single point. If you're not going to respond to what people say, why should anyone respond to you?
You remind me of people who don't realize they've been idiots until they end up on ventilators and realize that maybe they should have listened and gotten the vaccine. In your case I don't think it's that you haven't learned to listen but that you haven't learned how to achieve an understanding of things you don't yet understand. Instead of expending the effort necessary to understand something you follow whoever captures your fancy. Entire industries have been built upon reliance that people like you exist, like religion, Dutch tulip futures, and South Sea Company stock.
--Percy

This message is a reply to:
 Message 25 by Phat, posted 10-08-2021 1:29 PM Phat has seen this message but not replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(2)
Message 37 of 582 (888845)
10-10-2021 12:42 PM
Reply to: Message 34 by Phat
10-09-2021 3:22 PM


Re: Addressing Old Posts
Phat writes:
OK Percy I will give it the old college try.
In your response you only quoted me to launch into remaking your old points. You never addressed anything I said.
Message 16-- I own my car, though it is a clunker and a money pit. (2002 Buick). The price of used cars has shot up exponentially just in the past year and I don't have much of a nest egg.
If you "don't have much of a nest egg" then you have no business messing with speculative financial vehicles like gold. Gold mostly makes money for dealers, not their customers.
Gold is not an investment. It is an insurance policy to protect against bad investments and financial corrections.
Since you "don't have much a nest egg", you have no meaningful investments that need protection from financial corrections.
I'm better off buying stable groceries to save up and use once inflation does its work on our prices.
One of the significant contributors to inflation is wages. If inflation causes significant price increases, wages will increase, too.
Consider this. Too many dollars chasing too few goods causes price inflation. Once prices have increased to the point where excess dollars have been soakded up then sales decrease because there's no longer any excess dollars. Decreasing sales cause prices to drop or at least stop rising. Price inflation is self limitiing.
But wage increases can keep price inflation going by providing an increasing number of dollars to chase the price of inflated goods. It's known as an inflationary spiral. Artificially slowing business activity by raising interest rates is the way inflationary spirals have traditionally been halted, as you yourself note later.
Current conservative predictions average 6% a year for 3 years...
Here's an inflation projection from Statista - The Statistics Portal for Market Data, Market Research and Market Studies showing nothing higher than 2.5% for the next five years. This projection is from April and likely the projections are a little higher now, but not by much:
You're being scaremongered, and even if inflation ever did rise to 5% or 10% annually your wages would rise, too.
Message 17 --
Percy writes:
Your quote claims that "Each one percent rise in the interest rate would increase FY 2021 interest spending by roughly $225 billion," and that is obviously false. When interest rates rise then payments on interest can only increase if the debt is refinanced. The average maturity period for financial instruments funding the national debt is over five years, so only about 20% of the debt would be refinanced in any given year. If interest rates were to rise by 1% then over the next year only $5.8 trillion of our national debt would be refinanced, and a year from now our annual service of the debt would only have risen by $58 billion, not $225 billion.
I learn slowly through trial and error...etc...
None of that and what follows has anything to do with what I said. I explained in pretty good detail why that article is wrong. Look at it this way. Say you buy a nice used car for $20,000 and finance it with a fixed-rate 5% 5-year loan that costs you $377/month. But let's say that by the end of the year inflation has really taken hold and car loans go up to 10%. How much will you then pay on your car loan. Still $377/month, right? It's not going to change, right?
So if interest rates rise, why do you think the federal government's loan payments would increase for existing loans? Yes, it would increase for loans that mature and have to be refinanced, but less than 20% of the federal governments loan portfolio has to be refinanced every year. The interest rate would only increase on less than 20% of the national debt, not all of it.
...but I also am intuitive beyond what most critical thinkers dare not do.
You are not intuitive. All you do is respond to emotional appeals like scare mongering ("the coming inflationary apocalypse will destroy civilization"), and that's how you decide who to listen to.
For reasons having nothing to do with facts or rational thinking you've decided that the YouTube guys are right, and nothing can talk you out of it. In particular facts and reason cannot talk you out of it because it wasn't facts and reason that talked you into it in the first place. You find these YouTube guys appealing, and because you lack the math skills and reasoning capabilities to see the fallacious nature of what they're telling you, and because they're skilled at making emotional appeals, you fall for it, and then you come here and fill posts with their lines of malarkey.
You'd probably find my arguments a lot more appealing if they were accompanied by predictions of the end of civilization.
Granted I am anxious yet fascinated by doomsday prognostications for reasons yet unknown.
You're aware you're a sucker for "doomsday prognostications" yet you come here and repeat the nonsense anyway, and then defend it here at length for days and days on end. Please stop.
It feels good thinking that the majority of people do not see what I see.
You've just defined delusional.
My challenge now is figuring out what if anything I actually DO see. So lets keep talking.
There is no point in continued discussion with you about gold and inflation. Your blood sugar addled brain is hopeless on this topic.
Message 20--
Percy writes:
It isn't that I'm so sure I'm right as that I'm able to muster facts and reason in support of what I think true and you're not.
Im still learning which facts are relevant and which are part of a con.
A lifetime spent in puzzlement at what makes the world work is unlikely to be remedied now.
I think that you think that everything is cyclical and that life goes on year after year with out any major reset, apocalyptic or otherwise.
Yeah, right, I never heard of WWI, the Depression, WWII, the Vietnam War, the World Trade Center attack, Iraq, Afghanistan, or the Great Recession of 2008.
But we can both agree that global warming is potentially apocalyptic and they seem slow at addressing that.
Climate change has the potential to end "life as we know it" in many parts of the world. The world lacks the resolve to cut back on greenhouse gases in the necessary timeframe. We're going to need other solutions, and radical ones may have to be considered, like space sunshades.
I don't want to see the US middle class and myself suffer.
Who does, but your messianic mission is misinformed.
We have gone off the rails since 2007 and I'm not sure we will ever return to where we were as a nation and indeed globally with secure financial resources.
You're ranting again.
--Percy

This message is a reply to:
 Message 34 by Phat, posted 10-09-2021 3:22 PM Phat has seen this message but not replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 40 of 582 (895918)
07-25-2022 11:42 AM
Reply to: Message 39 by Phat
07-19-2022 10:02 AM


Re: Making A Case For The claims of Peter Schiff
Phat writes:
You all are wrong about finance in general. It may take me a while to prove it, using my own words. But I will try.
It's been nearly a week. Is "a while" longer than a week?
I don't know for sure, but I get the impression that a number of people here have engineering or engineering-like backgrounds. That means they are *very* good with numbers, logical thinking, and attention to detail. The likelihood that they're all "wrong about finance in general" is miniscule.
You, on the other hand, are terrible with numbers. I can pretty much predict which of my messages you won't reply to. If they contain numerical arguments, I won't get a reply.
If only you could begin recognizing what your strengths and weaknesses are. I don't know your strengths, but your weaknesses are clear. You have to stop basing your decisions upon whose YouTube videos or websites you like best. Anyone who's found the secret to making a fortune in gold would keep it to themselves, not make YouTube videos encouraging you to buy gold from them.
I'm at Schiff's website now. The only options for purchase are email or phone. I chatted with a William Xiong who sent me two price lists, one for purchase and one for buyback. Delivery is a $25 flat rate for orders less than 10oz (i.e., orders less than about $18,000), free for more. Here's an example using 2 10oz gold bars, which has free delivery:
DescriptionAmountEffective price per ounce
Purchase Price:$35,655$1,782.75/oz
Sale Price:$33,927$1,696.35/oz
Spread:$1,728 (4.8%)
Gold has to rise 4.8% before you break even. The current price is $1,731, so it would have to rise to$1,814 before you make a penny.
At a discount broker the commission on $35,000 worth of stock is around $5.00. If you bought $35,000 worth of stock at $100/share you would pay a total of $35,005, but when you sell you pay $5.00 again, so let's add it in now and make your total cost $35,010. Before you broke even and your stock began making money it would have to rise to $100.03, an increase of 0.03%. Compare that to the 4.8% your gold would have to rise before you make money. Stocks and gold have behaved comparably over the past 10 years, but gold carries that 4.8% overhead.
Gold is a fine investment. Keep it as part of your portfolio. But gold isn't some stellar performer that outshines other investment vehicles, and it certainly isn't practical as a store of value for currencies.
--Percy

This message is a reply to:
 Message 39 by Phat, posted 07-19-2022 10:02 AM Phat has replied

Replies to this message:
 Message 41 by Phat, posted 07-25-2022 11:39 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


Message 45 of 582 (895989)
07-27-2022 5:08 PM
Reply to: Message 41 by Phat
07-25-2022 11:39 PM


Re: An Apologist Who Explains His Logic On A Whiteboard
I repeat, the fact that you're numbers-challenged means that you shouldn't be questioning what people here explain to you about financial matters. Maybe they're right, maybe they're wrong, but you don't have the ability to tell. You should be saying, "I don't understand," a lot more than you do, but instead you do a lot of arguing while not having a clue what you're talking about. Why do you argue? Because you've seen videos. You don't really understand the videos, you can't explain what they say, all you can do is implore us to watch them.
So please stop recommending videos you don't understand. First make the effort to understand them and only then post about them, and only in your own words. Do not say something like, "Watch this video that explains the macroeconomics of a financial war that threatens the hegemony of the currently weaponized dollar." All you've done is dropped some lingo from the video into a paragraph followed by a link to the video (There's a [YouTube] code you should use to when posting YouTube videos). Please stop doing that.
The right way to accept an argument is to understand it. Your way, the wrong way, is to look for the most compelling stories or presentations.
Phat writes:
George Gammon explains it quite well on a whiteboard. I can almost see the logic, but admit that I don't understand economics all that well.
If you can't quite see the logic, why do you think Gammon is worth listening to? Did the sensational title catch your attention? Does Gammow have a compelling style of presentation? A compelling story? What?
Clearly you have no valid reason for accepting Gammow. I watched the first 10 seconds of his video:
Yeah, he's got one of those captivating styles of presentation. Good for him, it gets eyeballs on his videos, including yours.
When you can explain what he's saying in your own words then come back and we'll talk about it. I'm certainly not going to watch a video that you don't understand yourself and that I'll have to explain to you but that you won't believe the explanation because he just feels so right to you about whatever it is he's saying that you don't understand.
You remind me of a friend's elderly parents who had to get completely new checking accounts every year or so because some scammer would call them on the phone and convince them to provide all their financial information, and then the money in the checking account would disappear. How many turnip twaddlers do you own?
--Percy

This message is a reply to:
 Message 41 by Phat, posted 07-25-2022 11:39 PM Phat has replied

Replies to this message:
 Message 46 by Phat, posted 07-28-2022 11:11 AM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(4)
Message 50 of 582 (896014)
07-28-2022 2:06 PM
Reply to: Message 46 by Phat
07-28-2022 11:11 AM


Re: An Apologist Who Explains His Logic On A Whiteboard
Phat writes:
In ten seconds, nobody could even critique what he said.
You either didn't read or didn't understand my message. I never had or expressed any intent of critiquing Gammon. I watched 10 seconds to get an idea of his style of presentation to see if maybe that's what has you captivated, and I think that must be it, because you're unable to actually describe his ideas yourself. Schiff affects you the same way.
I have told you many times that I won't watch videos, barring some compelling reason. I have asked you many times to stop posting videos, to instead argue for your position in your own words.
You should go back and reread my message, with better comprehension this time.
Someone else asked me why I should take youtube videos seriously rather than Barron's or the Wall Street Journal, which is a valid point. Quite frankly, I don't think that the likes of Jerome Powell and Janet Yellin are ignorant. I DO think that they are very aware that what they say publically itself could spook the markets and not be encouraging to investors. Thus, I think that the public hears very little of what is actually happening.
Jerome Powell and Janel Yellin are probably extremely infrequent contributors to Barron's and the WSJ. Both those publications have many contributors with knowledge and insight of economics and financial matters. Read these publications. Don't watch Gammon or any other self-professed experts.
Perhaps the question is "do the YouTubers have any real education or training in economics or investing? I think that you error on the side of skepticism,(1) you trust what the mainstream investment papers tell you(2) and you tend to see such competing narratives as wither con-artist(101) or the theories of Republicans(3).
You're way off. The actual problem is that you're a rube extraordinaire, a fat chicken just waiting to be plucked. Schiff is plucking you one little feather at a time, but you're at high risk of someone taking you for everything you've got.
To b e fair, I am under the impression(illusion?) that Democrats are more likely to see things from a global perspective and are not as worried about Fiat money being backed by nothing except the faith of the people. You know as do I that the US Middle class will take the hit either way if a hit is forthcoming, but it seems to be nowhere near as bothersome for you and the rest of EvC.
You keep saying this. People keep correcting you, but you just ignore it and keep on saying this and things like this. When it comes to matters financial you're a hayseed, a yokel, a bumpkin who refuses to learn anything.
Even if a middle-class individual has to pay more and save less, you would still advocate not only being taxed more to help the lower middle class here in the United States but would even go so far as to help the global poor more aggressively. I'm not being heartless by questioning your logic for it is not (or should not be) an emotional no-brainer. It should be viewed practically.
I can see that you're trying to translate something I said into terms you can understand, but I never advocated raising taxes. What I believe (and what I said) is that it is worthwhile spending money improving the situations of the poor and homeless, because then we as a society are richer because instead of being a drain the poor and homeless will have become jobholders and taxpayers and homeowners.
You can't see this because to you it is a zero sum game where someone can only become richer by someone else becoming poorer. You feel threatened by efforts to improve the situations of the poor and homeless because you imagine that that can only happen if you become poorer.
I doubt you understand any of this, but we do have to do something for the poor and homeless. Borrowing on a Lincoln quote, "This nation cannot endure, permanently, half rich and half poor."
Are all of you prepared to have maybe as much as 25% of your wealth value wiped out?
You're a selfish little bastard, aren't you, but why are you saying it this way? We don't tax wealth, and no one here is proposing we tax wealth. We tax income. For myself, I'd be willing to make financial sacrifices if it meant meaningful declines in poverty and homelessness. We are all better off when beggars living on the streets become productive members of society, when those living on the periphery enter the mainstream.
--Percy

This message is a reply to:
 Message 46 by Phat, posted 07-28-2022 11:11 AM Phat has replied

Replies to this message:
 Message 51 by Phat, posted 07-29-2022 3:20 PM Percy has replied

  
Percy
Member
Posts: 22610
From: New Hampshire
Joined: 12-23-2000
Member Rating: 4.5


(3)
Message 57 of 582 (896070)
07-30-2022 8:03 PM
Reply to: Message 51 by Phat
07-29-2022 3:20 PM


Re: Attempting to explain my understanding without a video
Phat writes:
This is as you all requested in that it is either in my own words or in words which I see no reason to disagree with...from others.
After reading ahead, it seems you're mostly just repeating baseless claims you heard on videos that have seen countless rebuttals that you almost always ignore. But you start by quoting from Investopedia:
Fiat money system means that a currency is no longer backed by physical assets, such as gold or silver. This means that USD 100.00, JPY 1,000, or other currencies are not equal to a certain weight of gold. Instead, the value of each currency derives from the reputation of a national central bank and economic stability.
You neglected to cite the source, which is the What Is Fiat Money? article at Investopedia. What they say is true, of course. A better way of saying the same thing might be to say that fiat money is not backed by any commodity or package of commodities. Fiat money has no intrinsic value. Investopedia might be making too grand a claim when they deem the national central bank as a primary contributor to value. More accurate might be to say that competent management of the currency is necessary. I think most people would say that the value of fiat money derives primarily from the stability of the government and the strength of the economy.
  • The Western Fiat Money System is by necessity a debt-based monetary system.
  • The only people who use the term "debt-based monetary system" are those hoping to get the reaction, "Gee, that sounds like a really awful thing." But in this context it's really just another way of saying "fiat currency," which probably also sounds really bad to the uninitiated.
    But as has been explained to you numerous times, fiat money is the only way modern economies can operate. All you're doing is finding different ways to say, "Fiat money is bad," but this has been refuted nine ways from Sunday. Please stop ignoring the refutations while repeating your original claim over and over. This is getting really old.
  • Over 50% of all dollars were essentially created since 2020.
  • I'm not sure what you're trying to say since most dollars don't have any physical existence, but M2, the most commonly used measure of the money supply, has risen dramatically over the past few years. Too many dollars chasing too few goods is one of the common causes of inflation. Decreasing the money supply can be accomplished by raising interest rates or by increasing bank reserve requirements, but the Fed isn't the only player that can affect the money supply. The velocity of money (the frequency rate of transactions) and the willingness of banks to make loans also have a significant effect on the money supply. Here's a graph of the money supply through the present from M2:
    The large and sudden increase at the beginning of 2020 isn't due to any actual change in the money supply but to a change in the definition of M2 to include time deposits less than $100,000. (M3 includes all time deposits, which are deposits that cannot be withdrawn until a previously specified date or a maturity date, such as a certificate of deposit.)
  • Gold has always been stable. Throughout History since even before the United States, 1 oz of gold could purchase a mans suit--be it a suit of Roman Armor for a Centurion, a Zoot Suit from the 1920's, or a suit that a man of means would buy today. ($1600.00+)
  • You must have gotten this from one of your videos. This is just silly. By the way, here's how gold's doing when adjusted for inflation up through 2018:
    Schiff, Gammon, and others whom I listen to (Rick Rule, Robert Kiyosaki, Ray Dalio, and many of the guests on Daniella Cambone, who works for Stansberry Research, an investment firm) all unanimously agree that the US Dollar has a limited time left where it holds its value relative to US commercial needs.
    First, I doubt they all agree.
    Second, what does it matter what self-appointed experts think?
    Third, what does "holds its value relative to US commercial needs" even mean? The value of the dollar, known as the exchange rate with other currencies, affects the price of goods from other countries. Is that what you're talking about, that the value of the dollar will drop and make foreign goods more expensive, thereby putting further upward pressure on inflation.
    They all agree that the Federal Reserve really can't and won't fight inflation but is trying to avoid a Depression.
    Again, I doubt they all agree, but even if they do, who cares? They're YouTube gadflies.
    The Fed has raised the fed funds rate somewhere around 2.25% this year. That will act as a significant restraint on economic activity, reduce the demand for goods, put downward pressure on inflation, and possibly cause a recession if we aren't already in one. Stagflation, which we last experienced during the Carter years when there was simultaneously both high inflation and a recession, is also a possibility. No one knows because economics is not an exact science. It *is* called the dismal science, after all.
    What irritates me about jar and the rest of you Democrats, in particular, is that you don't seem to want to fight this.
    First, I'm not a Democrat. I'm an independent. More concisely, I'm a financial conservative and a social liberal.
    Second, fight what? You haven't convinced a single person here that you have any idea what you're talking about. Every person who's discussed this with you, almost to a man, has told you you have your head up your ass. You're Chicken Little sounding the alarm about a non-existent crisis.
    The US has always had an advantage by the dollar being the primary Global Reserve Currency which has led the basket of currencies formed at Bretton Wood.
    It's impossible to understand what your saying. There was no basket of currencies defined at Bretton Woods, and the world shifted away from a significant part of the Bretton Woods agreement in 1973 when the major currencies went to a floating exchange rate. Perhaps you meant to talk about SDR (Special Drawing Rights) which is based upon a basket of five currencies, although it seems unlikely that that's what you mean since it's fairly obscure.
    Essentially, I have been told that the US is primarily a consumer and that we produce very little with which to exchange goods for goods.
    Whoever told you that is wrong. Perhaps you're thinking about the US shifting from a manufacturing economy to a services economy. That's not an absence of manufacturing, just a shift in what economic sectors dominate.
    What you say is also impossible because it contradicts reality. Have you noticed the US having any difficulty exchanging "goods for goods?" I'm not even sure what that means since it implies a bartering system.
    We exchange dollars for goods and simply inflate the currency in order to pay for what we consume.
    Again, this is contrary to reality. Meaningfully higher inflation is a recent phenomenon, only just starting this year. I was always surprised that the Trump deficits didn't cause inflation to begin sooner. The recent annualized decline of .9% in economic activity is small and the American economy is still very robust, but because our population is so large, a .9% decline will affect a lot of people. For example, let's say it causes a 1% rise in unemployment up to 4.6%. That would affect around 1.5 million people, which is a lot of people and a lot of misery. But it's still only a 1% increase.
    Also, trade with the rest of the world is very strong. They buy stuff from us, we buy stuff from them.
    Now, as this abstract bill is getting paid, we find ourselves over 30 trillion in national debt.
    I have rebutted this many times and you've never replied once, so I'm not falling for this again. I'll just say your alarmism on this is unwarranted and you're making discussion very hard on everyone else by making the same rebutted arguments over and over again as if they'd never been rebutted. You just ignore all the rebuttals. A decent human being wouldn't treat other people that way.
    The other nations buy our US T-Bills because of our previous reputation for always settling our debts. China and Japan are two of the biggest purchasers of Dollar denominated financial assets.
    What would happen if China lost trust in or no longer desired to finance our debt?
    Why don't globalists care?
    A better question is why you think you've got a proper handle on the situation. Because you listen to some YouTube fantasists?
    Finally...what is the fate of the US Middle class who is left holding the bag?
    Money is fungible, so revenue from all sources, including the American tax payer, will be making the principle and interest payments on the national debt. Your actual objection should be to tax policy, where the rich are taxed at a disproportionately low rate compared to the middle class.
    And why am I a "selfish little prick" for suggesting that we all will lose 25% of our asset values by paying this bill, which will only be the death of one global financial superpower and the birth of another?
    I never called you a "selfish little prick." I called you a selfish little bastard, and I called you that because of the clarity with which you expressed your determination to not help the poor and homeless.
    Why are the BRIC nations creating a new global reserve system backed by precious metals and rare earth minerals? They seem to know that a debt-based fiat system cant dominate forever.
    The BRIC nations are doing no such thing. When will you ever stop listening to those YouTube dingbats. They're just trying to get you all riled up so you come back and listen some more, and they're succeeding. Their goal isn't to tell you things that are true. Their goal is to keep you coming back.
    So without watching my speculative convincing videos, explain why you see no problem with what the Federal Reserve is doing.
    You neglected to read on to see what else Investopedia had to say about the gold standard:
    quote
    Why Do Modern Economies Favor Fiat Money?
    Prior to the 20th century, most countries utilized some sort of gold standard or backing by a commodity. As international trade and finance grew in scale and scope; however, the limited amount of gold coming out of mines and in central bank vaults could not keep up with the new value that was being created, causing serious disruptions to global markets and commerce. Fiat money gives governments greater flexibility to manage their own currency, set monetary policy, and stabilize global markets. It also allows for fractional reserve banking, which lets commercial banks multiply the amount of money on hand to meet demand from borrowers.
    What Are Some Alternatives to Fiat Money?
    Virtually every country today has legal tender that is fiat money. While you can buy and sell gold and gold coins, these are rarely used in exchange or for everyday purchases and tend to be more of a collectible or speculative asset. Cryptocurrencies, such as Bitcoin, have emerged over the past decade as a challenge to the inflationary nature of fiat currencies; but despite increased interest and adoption, these virtual assets do not seem to approach being "money" in the traditional sense.
    As has been explained many times here, and as you've ignored time after time, you can't run modern economies using a commodity backed currency. It puts severe constraints on the money supply. The current US money supply (M2) is around $20 trillion. The current value of all gold throughout the world is around $11 trillion, so even if we sent out our military to confiscate all the gold that we don't already have stored at Fort Knox everywhere throughout the world, including here, we still wouldn't have enough gold to back our currency. You could back it at about 50%.
    But we don't have all the world's gold. We really only have the gold at Fort Knox, about $290 billion. That would back our currency at about 3%.
    So there you go, I've explained yet again why the gold standard is impossibly unworkable with modern economies. Please refrain from babbling about the gold standard again until you've addressed the explanations about why it's not practical.
    --Percy

    This message is a reply to:
     Message 51 by Phat, posted 07-29-2022 3:20 PM Phat has not replied

      
    Percy
    Member
    Posts: 22610
    From: New Hampshire
    Joined: 12-23-2000
    Member Rating: 4.5


    (4)
    Message 58 of 582 (896071)
    07-30-2022 8:08 PM
    Reply to: Message 54 by Phat
    07-30-2022 2:44 PM


    Re: Attempting to explain my understanding without a video
    Phat writes:
    Taxes make no sense anymore. Why do they bother taxing people when they give us stimulus checks? It would seem that one cancels out the other.
    Oh, the stupid. It hurts. It's impossible that you don't know the stimulus checks were temporary, so why did you say this?
    And I might ask why debt is in any way good when it seems mathematically impossible to pay back?
    You've topped yourself.
    I fear that this whole debt thing won't end pleasantly.
    I'm speechless.
    --Percy

    This message is a reply to:
     Message 54 by Phat, posted 07-30-2022 2:44 PM Phat has not replied

      
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