The U.S. Economy: Stand by for more worse news

[krash661]

It's inflation.
The central bank creates money out of nothing, uses this new money to purchase government securities (e.g.: T-bonds) which increases the bank's monetary reserves. It's counterfeiting.

too add, when they purchase the bonds and bills, they lower the rate of these bonds and bills,[bonds and bills are nothing more than the government's loaning center, it allows the government to borrow money.] which define the borrowing cost to consumers of loans. which in turn funds the government for whatever they chose. yes, the fed charges the government a rate to print the physical paper to set the books right on the government's balance sheets. yes, which in turn creates a profit for the fed. yes it's counterfeiting. increase currency amongst the population to create fictitious wealth.

ahh yes, yes.. i have two more questions for you,
what is fiat currency ?
and what country that has a central bank, is not fiat currency? including the IMF.

 

[joepistole]

Soon US will be back as a big international buyer of oil. Our "good friends" the Saudis, plan to bankrupt the US shale industry.

I don't think so, and I don't think the Saudi's want to bankrupt American oil producers. Bankrupting American oil producers will not stop bankrupt oil producers from producing oil from existing wells. Low oil prices could prevent new wells from being sunk and as existing oil wells become depleted reduce the US oil production. But that isn't going to happen overnight, and that doesn't remove the oil from the ground. The oil is still there. At some price point, it will become profitable to sink new wells. It's an effective cap on oil prices. OPEC has lost its ability to completely dictate global oil prices as it has done for decades. All it can do is what it has done.

What we will likely see in the oil space is a consolidation of oil drillers. Big drillers will buy up smaller drillers. We have already seen this consolidation and we will likely see much more of it.

 

[Michael]

It's inflation...? Where is this inflation then?

Um, try the stock market. Try the price of medical treatment. Try, the price of a new home. The price of basic food.

Everything in the USA would be cheaper if not for QE. The stock market would most certainly be much lower - maybe even allowing for the bottom 50% to *GASP* purchase some and be part of the market other than a worker cog. Oh my Gawd, but what would the upper 1% (who own most of it) do with themselves. Houses would be cheaper. But, oh my Gawd, then what would the SlumLords do with themselves. Medical treatment would be cheaper. University would be cheaper. Food as well.

What you think of as a normal price, is an inflated price. That inflated price has been creeping along for decades. QE is the State's attempt to do any and everything in it's power to maintain that inflated price against what would otherwise be a much lower price.

Let's see how well they do.

 

[Michael]

what is fiat currency ?

A medium of exchange that gains value by State decree. For example, the State mandates that laborer's pay a tax on their hourly labor (backed by force - including the legal right for the State to escalate to cause violent death of said laborer should they refuse to pay the State its labor tax). Then the State decrees that labor tax must be paid in a currency it controls. Then the State sells T-bonds in said currency to rich bankers. This type of currency, is a fiat currency.

As opposed to natural money, like bitcoin or silver or sea shells.

and what country that has a central bank, is not fiat currency? including the IMF.

Good question. Not any worth mentioning.

 

[joepistole]

Um, try the stock market. Try the price of medical treatment. Try, the price of a new home. The price of basic food.

LOL, well Michael as you should know the stock market isn't an expense and it isn't a marker of inflation. In fact, stock markets are adversely affected by inflation because inflation raises the cost of doing business. Food costs, healthcare costs are all part of the inflation measure and as I showed you, the US has Zero inflation. Bu hey, you never trouble yourself with little things like facts.

Everything in the USA would be cheaper if not for QE. The stock market would most certainly be much lower - maybe even allowing for the bottom 50% to *GASP* purchase some and be part of the market other than a worker cog. Oh my Gawd, but what would the upper 1% (who own most of it) do with themselves. Houses would be cheaper. But, oh my Gawd, then what would the SlumLords do with themselves. Medical treatment would be cheaper. University would be cheaper. Food as well.

Well that depends. Yeah things would be cheaper because people wouldn't have jobs or the money they need o purchase little things like food, clothing, healthcare, etc. It's called a depression Michael.

What you think of as a normal price, is an inflated price. That inflated price has been creeping along for decades. QE is the State's attempt to do any and everything in it's power to maintain that inflated price against what would otherwise be a much lower price.

Let's see how well they do.

That's unmitigated nonsense.

 

[krash661]

A medium of exchange that gains value by State decree. For example, the State mandates that laborer's pay a tax on their hourly labor (backed by force - including the legal right for the State to escalate to cause violent death of said laborer should they refuse to pay the State its labor tax). Then the State decrees that labor tax must be paid in a currency it controls. Then the State sells T-bonds in said currency to rich bankers. This type of currency, is a fiat currency.

As opposed to natural money, like bitcoin or silver or sea shells.

Good question. Not any worth mentioning.

ahh no, fiat currency is
DEFINITION of 'Fiat Money' Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.
in other words there's no such value to paper currency[every single currency to exist] except pure acceptance of. also, bitcoins and seashells are no value to anything. that bitcoin saga will implode.
now lets think about how oil is tied to currencies.
there's cross rates.
can you give an explanation as too your understanding with cross rates and ties to oil ?

 

[Michael]

ahh no, fiat currency is
DEFINITION of 'Fiat Money' Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material that the money is made of.

Explain what you mean by is 'backed by a physical commodity'.

Fiat currency is backed by violence. Is THAT what you mean by not backed by a physical commodity? I fail to see why I need to mention things that fiat currencies are not backed by. They're also not backed by hugs and kisses - so what? Bitcoins don't use a physical currency either - guess what? They're not fiat currency.

Fiat currencies are backed by State violence, it's that simple.

Suppose $1 USD = 0.1 oz of silver. Then tomorrow that government says that $10,000 USD = 0.1 oz of silver. And then a week later the government says $1 = 1 oz of silver. Further, implicit in this legal agreement between the State and It's Citizens is that every single fiat dollar WILL be traded accordingly. Any Citizen OF the State caught not trading exactly as prescribed by the State, will be arrested. Attempts by Citizens OF the State to resist arrest will lead to legal violent escalation by the State's militant arm (police) up to and including said Citizens' violent death. This IS a fiat currency, even if it IS 'backed' by a metal. Being 'backed' by a metal, or exchangeable into a metal, isn't what's important. It's the value that is gained by fiat via State violence that makes a currency fiat. Violence is the defining feature.

You can replace USD with whatever fiat currency North Korean's use if it helps you with the analogy.

So, I have a question for you in regards to your response: Are these fiat dollars 'backed' by a 'physical commodity' or by the 'physical violence of the State'?

 

[krash661]

Explain what you mean by is 'backed by a physical commodity'.

Fiat currency is backed by violence. Is THAT what you mean by not backed by a physical commodity? I fail to see why I need to mention things that fiat currencies are not backed by. They're also not backed by hugs and kisses - so what? Bitcoins don't use a physical currency either - guess what? They're not fiat currency.

Fiat currencies are backed by State violence, it's that simple.

Suppose $1 USD = 0.1 oz of silver. Then tomorrow that government says that $10,000 USD = 0.1 oz of silver. And then a week later the government says $1 = 1 oz of silver. Further, implicit in this legal agreement between the State and It's Citizens is that every single fiat dollar WILL be traded accordingly. Any Citizen OF the State caught not trading exactly as prescribed by the State, will be arrested. Attempts by Citizens OF the State to resist arrest will lead to legal violent escalation by the State's militant arm (police) up to and including said Citizens' violent death. This IS a fiat currency, even if it IS 'backed' by a metal. Being 'backed' by a metal, or exchangeable into a metal, isn't what's important. It's the value that is gained by fiat via State violence that makes a currency fiat. Violence is the defining feature.

You can replace USD with whatever fiat currency North Korean's use if it helps you with the analogy.

So, I have a question for you in regards to your response: Are these fiat dollars 'backed' by a 'physical commodity' or by the 'physical violence of the State'?

ahh, since you just proved that you have no clue, i just lost interest, sorry...
but anyways, currency use to be backed by gold, a commodity. when nixon was in office, he removed the gold standard, which means removed gold's value to paper currency.paper currency was developed from this precious metal. this in turn makes fiat currency. now there's no such currency backed by any kind of commodity that once was.
hence, no such value to paper currency except pure acceptance as. now when end times are talked about, humanity has this weird value on precious metals and minerals, so entities like gold, silver, palladium and diamonds are collect in the notion of this being value if humanity came to a collapse and reverted to back to true humanity, which i mean true freedom.. in the scenario of true freedom, human life is cheap. think about your glass of water. if there was no order on freedom, would you have that glass of water, and if not, how would you get it.
i apologize, i rambled on in thought. i tend to do this when on vodka.
but the point is, you need to comprehend deeper and the whole scenario.

Bitcoins don't use a physical currency either - guess what? They're not fiat currency.

correct, it's not even fiat currency. it's 100% shiit, it will implode.

So, I have a question for you in regards to your response: Are these fiat dollars 'backed' by a 'physical commodity' or by the 'physical violence of the State'?

neither.

 

[joepistole]

Explain what you mean by is 'backed by a physical commodity'.

Fiat currency is backed by violence. Is THAT what you mean by not backed by a physical commodity? I fail to see why I need to mention things that fiat currencies are not backed by. They're also not backed by hugs and kisses - so what? Bitcoins don't use a physical currency either - guess what? They're not fiat currency.

Fiat currencies are backed by State violence, it's that simple.

Suppose $1 USD = 0.1 oz of silver. Then tomorrow that government says that $10,000 USD = 0.1 oz of silver. And then a week later the government says $1 = 1 oz of silver. Further, implicit in this legal agreement between the State and It's Citizens is that every single fiat dollar WILL be traded accordingly. Any Citizen OF the State caught not trading exactly as prescribed by the State, will be arrested. Attempts by Citizens OF the State to resist arrest will lead to legal violent escalation by the State's militant arm (police) up to and including said Citizens' violent death. This IS a fiat currency, even if it IS 'backed' by a metal. Being 'backed' by a metal, or exchangeable into a metal, isn't what's important. It's the value that is gained by fiat via State violence that makes a currency fiat. Violence is the defining feature.

You can replace USD with whatever fiat currency North Korean's use if it helps you with the analogy.

So, I have a question for you in regards to your response: Are these fiat dollars 'backed' by a 'physical commodity' or by the 'physical violence of the State'?

That is nonsense.

 

[Billy T]

That is nonsense.

Michael does often overstate his POV to the extent it seems to be "nonsense." But I would like to answer his final question, which was:
"Are these fiat dollars 'backed' by a 'physical commodity' or by the 'physical violence of the State'?"
Neither.
One can with some justification say the dollar is backed internationally by an implied threat of violence - That is good part of why US military budget is greater than the total spent by the 16 next biggest spenders. And partly why the "petrodollar" is needed most places for buying oil. Saddam tried and did for a few months, sell Iraq's oil for currencies other than dollars - and literally had his head separated from his body in a badly done hanging. - That is pretty "violent."

On a domestic level, it is part of why several divisions of government exist. - Try selling whisky or cigarettes for small mark up over your production cost. Recently a poor NYC man selling un-taxed cigarettes was killed by the police, who suffocated him, while trying to arrest him.

And people who persistently don't pay their taxes (or other mandatory fee, like for driver's license, etc.) can and sometimes do go to jail - experience "government violence" if they willfully ignore these government requirements. Part of living in a modern society, is acceptance of its rules. Your life is highly regulated. Even if your sports car can do 150mph, that is not permitted on the public roads (except major hi-ways in Germany ?).

However the main, by far, "backing" of the dollar, is its public acceptance in trade, which "monopoly money" does not enjoy. Only barter systems do not rely on some generally accepted "currency," which when just printed paper has essentially zero intrinsic value but can have some intrinsic value too, as silver or gold coins do, or as salt did in the Roman era. The intrinsic value of the US "dime" was reduced more than 80% when it became copper with thin skin of silver alloy, but its valve was always based on it common acceptance, not the value of its silver, so basically unchanged. Although the pre -1964 dimes may be worth more than 25 cents now that the are no longer circulating "fiat currency."

I think the words "salt" and "salary" both derive from that Roman era. Salt, being of much lower value per kilogram, was a more practical way for paying men in armies, etc. than gold dust was and back when government printed fiat notes did not enjoy significantly more public acceptance than "monopoly money" would have.

 

[Michael]

However the main, by far, "backing" of the dollar, is its public acceptance in trade, which "monopoly money" does not enjoy. Only barter systems do not rely on some generally accepted "currency," which when just printed paper has essentially zero intrinsic value but can have some intrinsic value too, as silver or gold coins do, or as salt did in the Roman era. The intrinsic value of the US "dime" was reduced more than 80% when it became copper with thin skin of silver alloy, but its valve was always based on it common acceptance, not the value of its silver, so basically unchanged. Although the pre -1964 dimes may be worth more than 25 cents now that the are no longer circulating "fiat currency."

Why is there a monopoly in currency in the USA? There's no automotive monopoly. There's no smartphone monopoly. There's not even an OS monopoly. It'd certainly be more 'convenient' if we all used the same OS, but that's not how markets work. And when natural monopolies to arise, they don't last.

How has the USD come to dominate ALL other forms of currency within the USA? It's not even a well managed currency and hemorrhages value each day. But, because we're all forced to pay State and Federal tax IN said currency, it has gained a monopoly position as 'currency of choice' (and also, yes, I agree that the US-MIC ensures oil is priced in USD therefor it has gained international "acceptance", if you want to call it that).

Imagine if today, you were given the mandate to use State violence to force each and every Citizen OF the USA to pay a tax in your particular currency (in place of USD). How long would it be before your currency became the 'Currency of Choice" due to convenience? And, once you gained this monopoly position, you would probably be able to start selling 2 year bonds in your currency, and then 10 and then 30 and 50 and etc.... Who wouldn't want to buy your bonds knowing the State would kill any future born tax-chattel if they refused to pay (regardless of how the proceeds of those bonds were spent).

You'd become the most powerful human on the face of the planet - in history.

Underlying what gave your new currency it's "monopoly" advantage would be State violence. Your ability to have agents of the State kill every and any "Citizen" who refused to pay tax in your currency.

That's unmitigated privilege and power. Which is what the State now enjoys. The US Government - which was supposed to be 'LIMITED', is now the single largest, most corrupt and powerful human institution in human existence. The so-called "Servants" have become, again, The Masters. Just imagine if an employee from Apple Inc (the largest company in the USA) rang you up wanting to talk to you about an iPhone. You'd just as likely hangup on them. Without a care in the world. Now imagine if it were instead a lowly desk clerk public "servant" at the IRS, just wanting to talk to you about your taxes. Maybe send some BlueKluxKlan over to sort your receipts with you.

What backs the USD is violence. Both internally and externally. And, that's the way it's going to be. IMO there's not going to be a 'collapse' of the USD. Instead, much like North Koreans, Americans will get used to living in a Police State with never ending war and a lower standard of living - as a matter of fact, we already do and have. One day the functionally illiterate public will 'vote' for some clown and The Great Redistribution will begin. It's a story as old as time.

 

[Michael]

HuffP: Low-Income Workers Have Nowhere Affordable To Live, New Report Shows

Low-income workers and their families do not earn enough to live in even the least expensive metropolitan American communities, according to a new analysis of families’ living costs published Wednesday.

The analysis, released by the left-leaning Economic Policy Institute, is an annual update of the think tank’s Family Budget Calculator that reflects new 2014 data. The Family Budget Calculator is a formula designed to determine the income “required for families to attain a secure yet modest standard of living” in 618 different communities across the country that the U.S. Census Bureau defines as metropolitan areas. The formula uses data collected by the government and some nonprofit groups to measure costs of housing, food, child care, transportation, health care, “other necessities” like clothing, and taxes for families of 10 different compositions in these specific locales.

The updated Family Budget Calculator shows that even the most affordable metropolitan areas in the country are beyond the reach of millions of American families with incomes above the official federal poverty level. The official federal poverty level for a family of two parents and two children in 2014 was $24,008, according to the EPI. But the least expensive metropolitan area in the country for this family type is Morristown, Tennessee, where a family needs an income of $49,114, according to the Economic Policy Institute’s budget calculator.

Central Planners, destroying one society at a time.

The Oligarch Recovery. It should be noted that the VERY SAME oligarchs whom Helicopter Ben bailed out, now pay him millions of dollars to give 'economic speeches' - interesting to note, many of these businesses would have gone bankrupt and thus much of the money used to pay for Benny Boy's insight and wisdom (what a farce) comes directly FROM the bailouts via T-bonds sold on YOUR labor (and your children, and their children, and their children).

Yes, Central Planning at it's finest. The US Government is the largest most corrupt human institution in human history. It pollutes the most land, air and water. It wastes the most limited energy (often polluting). It starts phony wars - which is looses (note that one of the most revered Roman archaeological sites in the ME was just blown up today via ISIS in USA USA USA 'mission complete' Iraq. What a total farce. One in five of its Government 'school' graduates are functionally illiterate. And etc...

Yup, enjoy the "Great Recovery" - it's going to be with us for a couple generations.

 

[Michael]

CNBC
Debt, deficits and entitlement programs are all coming to a head in a few months, all over the world. If countries don't tackle fiscal problems, monetary policy will be "become utterly irrelevant".
- Greenspan (10/09/2015)

Maybe someone neglected to inform Sir Knight Commander of the Order of the British Empire Alan Greenspan that we're in the midst of THE Great Recovery from THE Great Recession!



Soon THE Great Redistributor will come and usher in THE Greater Recovery .... LOL

 

[Michael]

Tokyo, Japan
“I think it (a 0.25 rate increase) would be a terrible mistake to move. But I’m not confident (have faith in) that they (THE Great Central Planners) won’t make a mistake."
- Paul Krugman (10/09/2015)


Maybe Krugman missed the Mission Complete sign Our Great Hero Ben THE $10-million-per-hour-economic-speech Bernakenator held above THE country's head?
LOL

 

[Michael]

Reuters

Minneapolis Central Bank Employee / THE Nations's Top Central Planner, Narayana Kocherlakota has just come up with a clever way to deal with the problems of THE Great Recovery. What's this new plan you ask?



MOOOOOOAR DEBT!!!!!

“I am not saying that it is appropriate for fiscal policymakers (Regulators/Tax Farmers) to increase the long-run level of public debt. I am simply pointing to one benefit associated with such an increase: It allows the central bank (Central Planners) to be more effective in (the use of State violence) mitigating (Central Planning) the impact of adverse shocks (due to Central Planning) to aggregate demand (mass consumption)".
- Narayana Kocherlakota (08/09/2015)

OOOOOOoooohhhhh, he also wanted to note:
"Younger workers (as well as those tax chattel yet to be born into THE Great Farm for the next four generations) have to pay the taxes to fund this extra debt issuance"
- Narayana Kocherlakota (08/09/2015)


Hahaha LOL....

 

[joepistole]

CNBC
Debt, deficits and entitlement programs are all coming to a head in a few months, all over the world. If countries don't tackle fiscal problems, monetary policy will be "become utterly irrelevant".
- Greenspan (10/09/2015)

Except, your quotation is a lie - one of "dem" damn details again. Greenspan never said such a thing...oops.

Maybe someone neglected to inform Sir Knight Commander of the Order of the British Empire Alan Greenspan that we're in the midst of THE Great Recovery from THE Great Recession!

Greenspan isn't a Knight Commander, because he isn't a citizen of the Commonwealth and therefore ineligible for membership. He was given an honorary membership.

Soon THE Great Redistributor will come and usher in THE Greater Recovery .... LOL

Unfortunately for you Michael, yes the economic recovery is real once again disproving your economic theology.

 

[joepistole]

Tokyo, Japan
“I think it (a 0.25 rate increase) would be a terrible mistake to move. But I’m not confident (have faith in) that they (THE Great Central Planners) won’t make a mistake."
- Paul Krugman (10/09/2015)

I agree with Krugman and here is why. The problem in the world today is the developing world (e.g. China, Brazil, et al). If he US raised interest rates, more money would flow from the developing world and into the US thus further exacerbating the woes of the developing world.

PS
You have been told countless times central banker


Maybe Krugman missed the Mission Complete sign Our Great Hero Ben THE $10-million-per-hour-economic-speech Bernakenator held above THE country's head?
LOL

Reuters

Minneapolis Central Bank Employee / THE Nations's Top Central Planner, Narayana Kocherlakota has just come up with a clever way to deal with the problems of THE Great Recovery. What's this new plan you ask?



MOOOOOOAR DEBT!!!!!

“I am not saying that it is appropriate for fiscal policymakers (Regulators/Tax Farmers) to increase the long-run level of public debt. I am simply pointing to one benefit associated with such an increase: It allows the central bank (Central Planners) to be more effective in (the use of State violence) mitigating (Central Planning) the impact of adverse shocks (due to Central Planning) to aggregate demand (mass consumption)".
- Narayana Kocherlakota (08/09/2015)

OOOOOOoooohhhhh, he also wanted to note:
"Younger workers (as well as those tax chattel yet to be born into THE Great Farm for the next four generations) have to pay the taxes to fund this extra debt issuance"
- Narayana Kocherlakota (08/09/2015)


Hahaha LOL....

Yeah, you have no clue.

 

[joepistole]

Tokyo, Japan
“I think it (a 0.25 rate increase) would be a terrible mistake to move. But I’m not confident (have faith in) that they (THE Great Central Planners) won’t make a mistake."
- Paul Krugman (10/09/2015)

And Krugman is correct and here is why, an increase in would further drain capital from developing countries like China and Brazil at a time they need it the most and it would further exacerbate the woes these countries are experiencing. Christine Lagarde of the IMF issued this warning to American central bankers a few months ago. A rate increase would strengthen the dollar and slow the US economy.

No one knows what the Fed will decide. American banks as represented by Federal Reserve Bank presidents want higher interest rates. But the power of their vote is constrained by Federal Reserve governors. So we will have to see how it works out. I'm betting, I hope, sanity wins. This really is a no brainer.

Maybe Krugman missed the Mission Complete sign Our Great Hero Ben THE $10-million-per-hour-economic-speech Bernakenator held above THE country's head?
LOL

That's nonsensical fiction. No one has even hinted all is done. It's never done. The economy is ongoing.

 

[Michael]

Except, your quotation is a lie - one of "dem" damn details again. Greenspan never said such a thing...oops.

Ooops but he did.

 

[Michael]

Unfortunately for you Michael, yes the economic recovery is real

LOL