The period between 1947 and 1980? Well, there were about 15 years of monopoly on labour and capital that USA enjoyed, as the rest of the world was rebuilding their productive capacity and infrastructure, USA was selling into that market and collecting gold.
However you must have missed the 1970 to 1981 period, which was the result of the excesses that happened in the fifties and the sixties, with the space race and cold war and other wars, etc.
It's at the very least strange to hear that you are considering the lost decade of stagflation that USA suffered through 1970 to 1981 to be the 'least financially turbulent in history', given that USA actually DEFAULTED on the dollar in 1971 and had STAGFLATION - rising inflation and unemployment simultaneously, which must give Krugman a case of diarrhoea and constipation at the same time, as he tries to reconcile that problem in his Keynesian brain.
Looks like you are actually factually unfamiliar with the history, so what do you think you are going to accomplish making stupid comments?
As to bubbles that bursts that happened before - sure, because government was trying all sorts of tricks then too. Ever heard of the Continental? Ever heard of the "not worth a Continental"? Do you even know what that means?
In any case, a local bank run can't compare to the global collapse caused by the central banking and global type of government, and local bank runs only create a stronger banking system, because bad businesses do fail, but in case of central banking and global governments no monopoly is allowed to fail, and thus the entire system will fail.
Investment capital is fleeing USA for China because in USA the investment capital is being destroyed, devalued by inflation. I have a bunch of comments on that, here is one.
Cheaper labour is only a small part of the overall reason for the flight of capital, the much bigger problem is the inflation caused by the Federal reserve, the taxes that are growing, even when the nominal current taxes are cut a little (during Bush), the real taxes are growing, because the debt is growing, and that's taxes + interest and because of inflation tax and since the government ends up growing as it prints and borrows more, the other problem arises: huge amount of regulations and laws that government uses to promote some businesses and destroy others and have a kind of a command economy that is best described as fascist in nature, where the means of production are nominally owned privately, but the government ends up the real owners of the productive output through the tax code (that is also if it allows your business to exist at all, because government prefers and promotes monopolies, who give a bigger return to the government as they can maintain higher prices).
I know that somebody is laughing at you, and they are the parasites that reside in the government.
Again, there is nothing 'free market' about the banks today. They are no more free market businesses than military contractors or TSA.
The reasons for why banks have no money to give out as loans is because banks are used as proxies by the Fed to purchase Treasury debt, this is a giant ponzi scheme that the gov't is running, and the Fed pushes interest rates down by buying up Treasury debt. The interest rates that the MARKET would set today are very high, they are probably in triple digits actually, definitely in high double digits.
It took Paul Volcker with this 21.5% interest rates hike to stop stagflation of the seventies, and that was at the time when USA still had production capacity and was not such a huge debtor as today. Today to stop the inflation and start giving proper return on the loans the interest rates would be at least double that, but I think they'd be even higher, which means that NO BUSINESS can get a legitimate loan.
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Now to explain what a loan is, because I have a feeling you don't know (sorry). A loan is a way for somebody with some savings to make some money by investing into some form of business that will be able not only to pay the loan back, but also to give some return on top that beats the inflation and then something for profit.
There are properties of loans that need to be understood:
Loans are always risky, so there is a question always how much risk does a creditor take, will he get his money back? Will there be any money made? Will there be a loss? High risk requires high premium.
Loans can crowd each other out. Today almost all loans that banks make go towards government debt! Gov't crowds out all enterprise, gov't gets loans, that's because gov't is seeing as risk free, that's again, because there is a strong feeling that gov't WILL monetise the debt so it will return the nominal paper.
What business can compete with that type of a promise today, given that the banks are getting so much money basically free from the Fed and the real rate of inflation is 11 to 15% easily?
Almost no business can get a loan (if any at all), and the consumer loans are again, propped up by the fake government guarantee (fake, because it's not backed up by anything except the printing press).
In order for a legitimate loan to exist, somebody must save, somebody must under-consume and overproduce and save the difference. But in this high inflation environment nobody can save, all real investments and savings are elsewhere, either in productive economies of the world or are parked in commodities and real money (gold).
So how can a business get a loan - those are NOT government guaranteed, not even with fake money, and those HAVE to return something that is MUCH higher than the fake inflation numbers that are presented by the gov't. In fact the real interest rate has to be so huge, that no legitimate business can pay it in this environment, where people can only consume as long as they are given fake and or borrowed money.
Your employer cannot get a loan and if he needs it for the purposes you have describe, he is likely to go out of business within the next year or so.
It's a gov't system that created this problem. Gov't provides fake banking insurance - FDIC. There are no assets there, it's all 'guaranteed' with printed money or at best with taxes (which is also ridiculous, it's redistribution of wealth from some people to others because why? Gov't isn't supposed to backstop bad business behaviour, a bank loses money, a car company goes bust, whatever, it's a private matter).
Gov't destroys the currency by printing the shit out of it, its value drops, savings are destroyed, investments are moved out and nobody knows where to park their money and how to have any return on them, and this creates the bubbles in assets, like the one that was created by the Fed before the 1921 depression, the one that was created by the Fed starting from 1925, buying bad UK debt and propping up UK pound (combined with Hoover's and FDR's actions, this caused the Great Depression, which only ended as the war ended and gov't again, cut spending by near 70% and taxes by 30%).
The dollar and credit bubble that was inflated by the Fed through the fifties and the sixties and thus Nixon defaulting on the gold dollar, causing the stagflation of 1970s, which only ended as Paul Volcker set interest rates at 21.5%, finally beating inflation rate enough so people moved their value from gold to bonds and markets again, so gold went up from 35 to about 300, getting all the way up to 800 in the way.
Greenspan and his 'put', that propped up the stock market and created the bubble there, while Clinton and Rubin put all the deficits onto the debt tab (so many believe that Clinton had no deficits, they are blind to the fact that he increased the debt year to year, having no deficits means being able to decrease the debts or at least not to grow them). Then Bernanke pushed rates even lower, all the way down to 0 actually, while FHA and F&F were guaranteeing ridiculously terrible mortgages left right and centre.
You think anything changed from the time that F&F and Fed created this bubble to the current time? Yeah, it's not F&F today, it's mostly FHA that guarantees the bad debts and Treasury today guarantees the Fed!!!!! Yeah, Fed can't go broke, all of their liabilities are YOURS through the Treasury, that little gem was pushed through last year, did you know?
The gov't created one asset bubble after another, while using inflation to grow and to increase everything, from taxes and regulations to every department and to creating so many new departments and laws, that USA has completely overshadowed the former USSR and China together in terms of how many laws exist in everything.
The entire system is set up to create bubbles in assets and destroy savings and investment, while the Fed prints the money (gives out credit at fake interest rate), buys all new Treasuries, uses the banks as a proxy to buy Treasuries, does the 'currency swaps' so other central banks would buy Treasuries.
I didn't even get technical yet. Basically what I am saying is that this is done not by the banks, this is done by the government system and the banks are no more free market businesses than for example the FDA or SS or Medicare or dep't of energy or education are.
It's not that the banks are 'allowed to get away with stuff like that', it's that the system is set up in a way that it turns legitimate businesses into an extension of government criminal enterprise.
I am in favor of vaccination efforts, and the ability to put a quick lid on what can become an epidemic, like what the CDC does.
- this immediately violates the right to liberty, life and property.
Right to freedom is violated when any gov't agency decides it has dominion over a person for reasons that are unauthorised by the Constitution.
Right to property is violated when gov't forces people to do something to their own most important property - their own bodies, that people may not want to do.
So vaccinations efforts are fine by me as long as they are not forced by threat of violence, otherwise it's a criminal activity by gov't thugs.
Freeway system built by gov't should not exist. By the way, H-1 (Hawaii), funny thing, it's an island.
Reason it has an 'interstate highway there'? Not to help people move from one state to another, but a way for federal gov't to steal more powers it's not authorised to have.
Dumping mercury onto the ground on your own property is absolutely fine. If it damages well water that OTHER property owners also share, then it's between them, and it has nothing to do with anything else. There can be no gov't restricting freedoms of individuals for any of these purposes.
No, it is not. A bank has power over an economy that no other institution can match.
- not in a free market economy. In a gov't controlled fake money, fake credit, fake insurance economy, with huge impossible to service debts - yes.
In a free market economy? Absolutely not, a bank is just another business - storing people's deposits that are not to be loaned out and making loans with deposits that can be loaned out, where the client of the bank is informed that his deposit is partially loaned out but he is making some interest on it. And of-course in case of making loans without gov't involvement, banks do require sufficient collateral.
My point is that a business that satisfies consumer demand (and I did put the word VOLUNTARY there, by the way), is not a crime.
Of-course I am not saying that a business of murdering people for example is not a crime, that is a criminal offence, I thought people don't need me to spell things out that precisely, but given this gem:
LOL. Tell that to the drug dealers, oh, everywhere.
, apparently they do.
And by the way, I don't see anything wrong with drug dealers, it's not the drug dealers that are the problem, it's the government there as well, because the government is stealing one of the fundamental rights of people - property right, by declaring drugs illegal.
How is that a property right? Well, first of all growing and possessing drugs is like any other property.
Secondly, property includes your body, your eyes, your kidneys, your brain, etc. Either you own them or you don't, and when gov't tells you that you can't put something into your body yourself voluntarily, they are also stealing your property rights.
It's the government that is immoral in all of these cases, banking or drugs, and it's the government that causes the criminality surrounding these activities.
Owning a bank is a business, like any other, except when government gets involved, guarantees the debt that is taken (FDIC), guarantees the credit and loans that are given out (FHA, F&F), creates environment where giving out fake loans is profitable (Fed, IRS, FHA, F&F, FDIC, HUD, all of this).
Banks are businesses, saying that a business is 'crime' is strange at least, since people use them voluntarily (until again, gov't makes it impossible not to use one).
The true questions should be: "which is a greater crime, to rob a bank or to rob the country to subsidise a bank?"
- I don't get it. I suppose you never saw my comments before and you clearly haven't looked at my journal. What do you mean by 'trolling'? Do you think I am saying something that I do not in fact believe in? Do you think everybody must agree with your position and anybody disagreeing with it is 'trolling'?
Does that make you just ignorant or does it also make you arrogant?
What's your alternative? Home schooling?
- everything except government being involved in it. Whatever the market comes up with, be it homeschooling, private schools, internet schools, NO schools, whatever the fuck people want in the market as long as it's completely VOLUNTARY.
This has been established for a couple thousand years
- this is political bullshit, gov't is not needed to build any infrastructure, that's how all infrastructure was built in USA for example BEFORE any gov't involvement in it that started after Theodore Roosevelt and on and on.
You've obviously never lived somewhere where a bunch of your neighbors have tuburculosis (sp).
- really? 1. You don't know me, so switching to a personal attack, isn't THAT trolling? 2. I lived in so many places, you haven't visited that many in your life. 3. This is your argument FOR gov't health care? Pffft. Why should I say anything in this paragraph? By the way, I have a journal entry on this, with data points and a bunch of data.
The Chinese have mortgaged there entire environment - the actual land - by polluting it to an extent that is unimaginable in the US.
- it's the consequence of LACK OF PROPERTY RIGHTS (unlike some idiots in this thread are implying, I am absolutely not saying that China HAS strong property rights). That's what you get when one of the three FUNDAMENTAL individual right is negated by the government.
The three rights: life, liberty, property.
Without any one of those three rights no individual can have a true free life and ability to move the socio economic ladder and no economy can be sustainable in the long run.
The regulations that are really stifling the economy they do not have. These regulations are all part of the executive branch, all the shit that everyday business has to deal with.
EPA, FDA, FCC, FAA, FHA, HUD, FDIC, SS, Medicare, minimum wage laws, all types of labour discrimination laws, all types of regulations and licenses for all types of activities, departments that regulate all of that, dep't of energy, education, commerce, interior, agriculture, small business, etc.
There are millions of regulations in USA that don't exist in China.
There are income taxes in USA that don't exist in China neither on the books or in real life.
China is still mostly a cash economy, no IRS can meddle and have all the knowledge and information.
When a guy wants to sell popcorn, he figures his costs and approximates his sales, saves money, buys a machine and supplies, puts a stand on a corner somewhere, he DOES NOT CARE ABOUT ANY LICENSE, he does not need to win any lottery and buy a sticker or a marker or a badge.
You have no idea what the fuck you are talking about, you have no idea what regulations are, you have fucking clue what it means to have to be liable to all sorts of gov't regulations that allow EITHER employees or customers to sue somebody.
Just the amount of legal liability that US gov't adds to a business makes businesses want to minimise their hiring.
In China people save money and they make loans to each other, family members, friends loan money to each other and that's how many small businesses start.
They buy equipment, they rent space, they hire help. They may have to buy some politician, but that is much FASTER than the processes that exist in USA, where a supposedly 'capitalist' society really puts a bunch of bureaucratic processes in front of entrepreneurs that are much harder to overcome than just simply paying a bribe.
A bribe is NOTHING, cost of doing business, a process that is set up by various gov't agencies, all of which are enforced with police action or FBI or other armed gov't agents is much more totalitarian or fascist than simply paying a bribe to some local party member to open a small shoe factory.
Obviously the audience was quite biased, too many expatriates, and one of the pro-motion team members was a staunch socialist himself, so totally wrong person to argue pro-capitalism, but in case you can watch it if you want.
creating externalities that make their current path unsustainable
- no, the Chinese problem only extends to the government destroying their own currency by printing it to buy US dollars and subsidise US consumer and government involvement in a number of industries (in terms of taxes, regulations and just ownership).
As China becomes richer and richer, the quality of life will go up there, and the real problem for environment that exists there, will only continue to the extent that the private property rights are not protected.
Not true, taxes are just part of the equation, there are also regulations that gov't isn't allowed to do and there is inflation, which destroys savings and investments.
Too many people are arguing pro-Finish type of socialism, but that's why Finland is going to lose more and more jobs. All socialists do is drive investment capital out of their countries somewhere else. Good for 'somewhere else', bad for those socialist countries.
The good thing about this will be that eventually all socialism will end, which is great, because all of these countries will run out of other people's money to spend and nobody will loan to them also, because they don't produce anything.
The advances in minituarisation of electronics and battery tech is ridiculous, but what is more ridiculous is that hearing aids still are that expensive.
The reason is lack of competition, government intervention, government money, FDA.
So, the massive increases in productivity and efficiency certainly cannot be attributed solely to deflation over a century.
- and I am not making that type of attribution, I am confronting your assertion that deflationary environment is somehow a detriment to the increase in prosperity. Aren't you now making an argument I didn't make to attack it (a straw type of argument)?
However I'll go further than my previous comment here, the technological improvements did NOT happen in vacuum in USA in that time period, they were only possible because people were saving money and investing to try and do things, all WITHOUT government money by the way, so all the improvements in technology and all the new infrastructure was built privately.
It wouldn't have been POSSIBLE to build all of that infrastructure without savings, which is what makes the investment capital, and people do not save money in times of high inflation (which is what the world is facing today, with all the governments trying hard to destroy the purchasing power of their citizens by all this counterfeiting).
Where do you think money comes from to build infrastructure and to put into research and development? It comes from savings. Where do you think savings come from, the Fed, central banks? No.
Savings come from people who save. They come from businesses that are able to save. They don't come from governments that destroy capital and steal investment money through taxes, they come from people who want to achieve something, maybe they want to make more money and they understand that to make money they need to take their savings and invest them into some research and infrastructure.
And by the way 'territorial expansion' doesn't happen without savings and investments either, and again, it was done privately with private savings and private investments.
Influx of immigrants that USA enjoyed came to the country for freedoms, freedoms from their own tyrannical governments, this is not what USA can boast about today - being free.
As to 'uninterrupted economic stability' - yeah, there were panics and recessions, they all had to do with government trying very hard to create fiat money a number of times, sometimes banks failed.
But you know the GREAT thing about those panics and recessions? The banks that failed, they weren't bailed out. The fiat that was introduced (a few times, there is an expression - not worth the Continental, learn where it came from), those fiat currencies disappeared for a reason.
Imagine a world where your currency didn't devalue.
- the horror of 1800 to 1913 in USA, when dollar doubled in value, prices were falling, efficiency was increasing, productivity was growing, capitals were growing, investments and savings were growing enough to create the most competitive market on the planet, that ended up creating entire new industries that didn't exist before. All of this allowed USA to become biggest manufacturer, exporter and creditor from being a debtor and a net importer, all of this allowed USA to build infrastructure that didn't exist before.
It was a horrid time of terrible terrible freedom and prosperity, nobody was buying anything because money was growing in value... no wait, that's not true. Everybody was buying everything even though that knew that in some time things would fall in price and dollar would gain value.
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Or maybe it's today, that people don't buy computers, TVs, phones and other electronics because they know all these things fall in price all the time.....
No, wait, most people weren't buying plasma screens when they were 25000 USD a piece, but today households have one in every room and everybody has had more than one mobile phone and computer and laptop.
Then you'd be discouraged to find out that the 19th century in USA was a century of deflation (actually more than a century, it lasted until the Fed was established in 1913).
Yet that was the time when most of the US wealth was created, the USA became largest manufacturer, exporter and creditor nation from being just an afterthought to Europe for a few hundred years.
That was the time when real money was made, entire industries were created, real infrastructure was built. All done in a deflationary situation, as the dollar started in 19th century at half the value it ended with by 1913.
The competition was growing, businesses were springing up and everybody wanted to come to USA to start their own business free of government regulations and taxes (income taxes didn't exist, neither did most of the current departments).
Oh god, it's not because they will do everything to avoid paying taxes. Their economy is fucked because it is economy of debt, exactly the type of economy that ALL modern 'main stream economists' are proposing.
There are so many people that for example defend Krugman (a thread with examples in it), believing he is an economist rather than a politician used to justify gov't fiscal and economic behaviour, that they completely miss the point that the 'solutions' given by these 'main stream economists' have been tried thousands of times and are still being tried today, and IF, IF these types of solutions ever worked, there wouldn't have been such cases as Greece or USSR economic failures for that matter, Argentina, Zimbabwe, Weimar Republic, USA today, etc.etc., they would all be great huge wealthy strong economies.
It is not that Greeks don't like to pay taxes, that's a very good healthy sign of people who still value their own freedoms, by the way. It's that Greeks are for the type of gov't spending that does NOT correspond to their earnings, so it's borrowed.
Of-course Greece hits the wall, because it can't print Euro (thus the misplaced calls to exit Euro and use Drachma again, so they can print it), USA didn't hit the wall yet because it's subsidised by foreign production (Asia, Germany...) and foreign central banks and governments willing to accept inflation of their own in order to subsidise USA and Europe for that matter.
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Now, Bitcoin is just another worthless fiat, it's only redeeming quality is that it is mathematically limited to a specific number of coins, it's worthless because it has no intrinsic value at all, there is no backing. It is used because it is easy to use over the networks and it is a game of musical chairs, you don't want to be the last person stuck with those, but it doesn't matter it can't continue being used for some time and traded and it doesn't mean its relative value cannot go up and down for some time before it crashes and burns.
Sure, right now Euro looks really bad, and it IS bad, but that is inevitable for all fiat currencies (those imposed by decree of gov't and not actually intrinsically worth anything more than paper they are printed on). There is nothing special about Euro, it will eventually collapse, but I think it will stabilise first, especially if Germany decides to print a bunch of them to bail out all these failures.
Of-course people who understand what's going on are moving on or have already moved out of Euro and dollars actually, they moved into commodities, into ownership of agriculture stocks, mining company stocks, whatever. Right now the gold mining stocks for example are very under-valued. They are valued lower than they were when gold was HALF the price in dollars than it is now, so this shows you huge lack of confidence of the market in the future of gold.
Market is still operating on principles it was programmed to believe in over these last 50 years, market is mostly agnostic when it comes to fundamentals and it cheers any gov't action that results in easy credit in fake money. Unfortunately for the market, this is what is going to rob people of most of their purchasing power and the currencies themselves.
Real money is not made up of ephemeral bits stored on the Internet, real money is something that can be used when the power goes down and real money cannot be faked by politicians and bankers.
What you perceive to be a weakness is actually the strength.
The fact that the Internet does not have a central government is a positive, not a negative. You can view different attempts at regulating the Internet as opportunities for competition among various networks.
If there was a central government of some sort, then it would become a tyranny on its own, while it would also become the single point of failure, how would such a structure protect itself from all the other governments of the world exactly?
Slashdot Mirror
Context? CONTEXT?
Saying this:
'least financially turbulent in history'
about the decade when the world has gone through the shock of Nixon's dollar default?
Context indeed.
sure, I can recommend some stuff
(here is a video you can watch, a little example of what you can learn through online videos, it comes from this site, there is a good radio show that discusses economic situation daily here).
As to books, yeah, I have a list, here is some of the newer stuff:
How an Economy Grows and Why it Crashes
The Real Crash
The Forgotten Man: A New History of the Great Depression
New Deal or Raw Deal?: How FDR's Economic Legacy Has Damaged America
A Return to Common Sense
A Bull in China: Investing Profitably in the World's Greatest Market
GREENSPAN'S BUBBLES: THE AGE OF IGNORANCE AT THE FEDERAL RESERVE
Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
The Revolution: A Manifesto
Financial Armageddon: Protecting Your Future from Four Impending Catastrophes
Mobs, Messiahs, and Markets: Surviving the Public Spectacle in Finance and Politics
Empire of Debt: The Rise of an Epic Financial Crisis
The Dollar Crisis: Causes, Consequences, Cures , Revised and Updated
At the Crest of the Tidal Wave: A Forecast for the Great Bear Market
Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression, Expanded and Updated Edition
Investme
The period between 1947 and 1980? Well, there were about 15 years of monopoly on labour and capital that USA enjoyed, as the rest of the world was rebuilding their productive capacity and infrastructure, USA was selling into that market and collecting gold.
However you must have missed the 1970 to 1981 period, which was the result of the excesses that happened in the fifties and the sixties, with the space race and cold war and other wars, etc.
It's at the very least strange to hear that you are considering the lost decade of stagflation that USA suffered through 1970 to 1981 to be the 'least financially turbulent in history', given that USA actually DEFAULTED on the dollar in 1971 and had STAGFLATION - rising inflation and unemployment simultaneously, which must give Krugman a case of diarrhoea and constipation at the same time, as he tries to reconcile that problem in his Keynesian brain.
Looks like you are actually factually unfamiliar with the history, so what do you think you are going to accomplish making stupid comments?
As to bubbles that bursts that happened before - sure, because government was trying all sorts of tricks then too. Ever heard of the Continental? Ever heard of the "not worth a Continental"? Do you even know what that means?
In any case, a local bank run can't compare to the global collapse caused by the central banking and global type of government, and local bank runs only create a stronger banking system, because bad businesses do fail, but in case of central banking and global governments no monopoly is allowed to fail, and thus the entire system will fail.
Investment capital is fleeing USA for China because in USA the investment capital is being destroyed, devalued by inflation. I have a bunch of comments on that, here is one.
Cheaper labour is only a small part of the overall reason for the flight of capital, the much bigger problem is the inflation caused by the Federal reserve, the taxes that are growing, even when the nominal current taxes are cut a little (during Bush), the real taxes are growing, because the debt is growing, and that's taxes + interest and because of inflation tax and since the government ends up growing as it prints and borrows more, the other problem arises: huge amount of regulations and laws that government uses to promote some businesses and destroy others and have a kind of a command economy that is best described as fascist in nature, where the means of production are nominally owned privately, but the government ends up the real owners of the productive output through the tax code (that is also if it allows your business to exist at all, because government prefers and promotes monopolies, who give a bigger return to the government as they can maintain higher prices).
I know that somebody is laughing at you, and they are the parasites that reside in the government.
Of-course they are booming, China is a much more capitalist country than almost everybody else.
Again, there is nothing 'free market' about the banks today. They are no more free market businesses than military contractors or TSA.
The reasons for why banks have no money to give out as loans is because banks are used as proxies by the Fed to purchase Treasury debt, this is a giant ponzi scheme that the gov't is running, and the Fed pushes interest rates down by buying up Treasury debt. The interest rates that the MARKET would set today are very high, they are probably in triple digits actually, definitely in high double digits.
It took Paul Volcker with this 21.5% interest rates hike to stop stagflation of the seventies, and that was at the time when USA still had production capacity and was not such a huge debtor as today. Today to stop the inflation and start giving proper return on the loans the interest rates would be at least double that, but I think they'd be even higher, which means that NO BUSINESS can get a legitimate loan.
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Now to explain what a loan is, because I have a feeling you don't know (sorry). A loan is a way for somebody with some savings to make some money by investing into some form of business that will be able not only to pay the loan back, but also to give some return on top that beats the inflation and then something for profit.
There are properties of loans that need to be understood:
Loans are always risky, so there is a question always how much risk does a creditor take, will he get his money back? Will there be any money made? Will there be a loss? High risk requires high premium.
Loans can crowd each other out. Today almost all loans that banks make go towards government debt! Gov't crowds out all enterprise, gov't gets loans, that's because gov't is seeing as risk free, that's again, because there is a strong feeling that gov't WILL monetise the debt so it will return the nominal paper.
What business can compete with that type of a promise today, given that the banks are getting so much money basically free from the Fed and the real rate of inflation is 11 to 15% easily?
Almost no business can get a loan (if any at all), and the consumer loans are again, propped up by the fake government guarantee (fake, because it's not backed up by anything except the printing press).
In order for a legitimate loan to exist, somebody must save, somebody must under-consume and overproduce and save the difference. But in this high inflation environment nobody can save, all real investments and savings are elsewhere, either in productive economies of the world or are parked in commodities and real money (gold).
So how can a business get a loan - those are NOT government guaranteed, not even with fake money, and those HAVE to return something that is MUCH higher than the fake inflation numbers that are presented by the gov't. In fact the real interest rate has to be so huge, that no legitimate business can pay it in this environment, where people can only consume as long as they are given fake and or borrowed money.
Your employer cannot get a loan and if he needs it for the purposes you have describe, he is likely to go out of business within the next year or so.
Didn't you read what I wrote?
It's a gov't system that created this problem. Gov't provides fake banking insurance - FDIC. There are no assets there, it's all 'guaranteed' with printed money or at best with taxes (which is also ridiculous, it's redistribution of wealth from some people to others because why? Gov't isn't supposed to backstop bad business behaviour, a bank loses money, a car company goes bust, whatever, it's a private matter).
Gov't destroys the currency by printing the shit out of it, its value drops, savings are destroyed, investments are moved out and nobody knows where to park their money and how to have any return on them, and this creates the bubbles in assets, like the one that was created by the Fed before the 1921 depression, the one that was created by the Fed starting from 1925, buying bad UK debt and propping up UK pound (combined with Hoover's and FDR's actions, this caused the Great Depression, which only ended as the war ended and gov't again, cut spending by near 70% and taxes by 30%).
The dollar and credit bubble that was inflated by the Fed through the fifties and the sixties and thus Nixon defaulting on the gold dollar, causing the stagflation of 1970s, which only ended as Paul Volcker set interest rates at 21.5%, finally beating inflation rate enough so people moved their value from gold to bonds and markets again, so gold went up from 35 to about 300, getting all the way up to 800 in the way.
Greenspan and his 'put', that propped up the stock market and created the bubble there, while Clinton and Rubin put all the deficits onto the debt tab (so many believe that Clinton had no deficits, they are blind to the fact that he increased the debt year to year, having no deficits means being able to decrease the debts or at least not to grow them). Then Bernanke pushed rates even lower, all the way down to 0 actually, while FHA and F&F were guaranteeing ridiculously terrible mortgages left right and centre.
You think anything changed from the time that F&F and Fed created this bubble to the current time? Yeah, it's not F&F today, it's mostly FHA that guarantees the bad debts and Treasury today guarantees the Fed!!!!! Yeah, Fed can't go broke, all of their liabilities are YOURS through the Treasury, that little gem was pushed through last year, did you know?
The gov't created one asset bubble after another, while using inflation to grow and to increase everything, from taxes and regulations to every department and to creating so many new departments and laws, that USA has completely overshadowed the former USSR and China together in terms of how many laws exist in everything.
The entire system is set up to create bubbles in assets and destroy savings and investment, while the Fed prints the money (gives out credit at fake interest rate), buys all new Treasuries, uses the banks as a proxy to buy Treasuries, does the 'currency swaps' so other central banks would buy Treasuries.
I didn't even get technical yet. Basically what I am saying is that this is done not by the banks, this is done by the government system and the banks are no more free market businesses than for example the FDA or SS or Medicare or dep't of energy or education are.
It's not that the banks are 'allowed to get away with stuff like that', it's that the system is set up in a way that it turns legitimate businesses into an extension of government criminal enterprise.
I am in favor of vaccination efforts, and the ability to put a quick lid on what can become an epidemic, like what the CDC does.
- this immediately violates the right to liberty, life and property.
Right to freedom is violated when any gov't agency decides it has dominion over a person for reasons that are unauthorised by the Constitution.
Right to property is violated when gov't forces people to do something to their own most important property - their own bodies, that people may not want to do.
So vaccinations efforts are fine by me as long as they are not forced by threat of violence, otherwise it's a criminal activity by gov't thugs.
Freeway system built by gov't should not exist. By the way, H-1 (Hawaii), funny thing, it's an island.
Reason it has an 'interstate highway there'? Not to help people move from one state to another, but a way for federal gov't to steal more powers it's not authorised to have.
Dumping mercury onto the ground on your own property is absolutely fine. If it damages well water that OTHER property owners also share, then it's between them, and it has nothing to do with anything else. There can be no gov't restricting freedoms of individuals for any of these purposes.
No, it is not. A bank has power over an economy that no other institution can match.
- not in a free market economy. In a gov't controlled fake money, fake credit, fake insurance economy, with huge impossible to service debts - yes.
In a free market economy? Absolutely not, a bank is just another business - storing people's deposits that are not to be loaned out and making loans with deposits that can be loaned out, where the client of the bank is informed that his deposit is partially loaned out but he is making some interest on it. And of-course in case of making loans without gov't involvement, banks do require sufficient collateral.
My point is that a business that satisfies consumer demand (and I did put the word VOLUNTARY there, by the way), is not a crime.
Of-course I am not saying that a business of murdering people for example is not a crime, that is a criminal offence, I thought people don't need me to spell things out that precisely, but given this gem:
LOL. Tell that to the drug dealers, oh, everywhere.
, apparently they do.
And by the way, I don't see anything wrong with drug dealers, it's not the drug dealers that are the problem, it's the government there as well, because the government is stealing one of the fundamental rights of people - property right, by declaring drugs illegal.
How is that a property right? Well, first of all growing and possessing drugs is like any other property.
Secondly, property includes your body, your eyes, your kidneys, your brain, etc. Either you own them or you don't, and when gov't tells you that you can't put something into your body yourself voluntarily, they are also stealing your property rights.
It's the government that is immoral in all of these cases, banking or drugs, and it's the government that causes the criminality surrounding these activities.
The answer is to rob a bank of-course.
Owning a bank is a business, like any other, except when government gets involved, guarantees the debt that is taken (FDIC), guarantees the credit and loans that are given out (FHA, F&F), creates environment where giving out fake loans is profitable (Fed, IRS, FHA, F&F, FDIC, HUD, all of this).
Banks are businesses, saying that a business is 'crime' is strange at least, since people use them voluntarily (until again, gov't makes it impossible not to use one).
The true questions should be: "which is a greater crime, to rob a bank or to rob the country to subsidise a bank?"
I think you're trolling. But, none-the-less...
- I don't get it. I suppose you never saw my comments before and you clearly haven't looked at my journal. What do you mean by 'trolling'? Do you think I am saying something that I do not in fact believe in? Do you think everybody must agree with your position and anybody disagreeing with it is 'trolling'?
Does that make you just ignorant or does it also make you arrogant?
What's your alternative? Home schooling?
- everything except government being involved in it. Whatever the market comes up with, be it homeschooling, private schools, internet schools, NO schools, whatever the fuck people want in the market as long as it's completely VOLUNTARY.
This has been established for a couple thousand years
- this is political bullshit, gov't is not needed to build any infrastructure, that's how all infrastructure was built in USA for example BEFORE any gov't involvement in it that started after Theodore Roosevelt and on and on.
I have a comment on it from a couple of years ago, I still remember. Saying that I am 'trolling' on this, what does that mean again?
You've obviously never lived somewhere where a bunch of your neighbors have tuburculosis (sp).
- really?
1. You don't know me, so switching to a personal attack, isn't THAT trolling?
2. I lived in so many places, you haven't visited that many in your life.
3. This is your argument FOR gov't health care? Pffft. Why should I say anything in this paragraph? By the way, I have a journal entry on this, with data points and a bunch of data.
Oh, throw in the SS, Minimum wage and inflation, illegality of income taxes, something on USPS and the latest developments from Sweden for good measure.
The Chinese have mortgaged there entire environment - the actual land - by polluting it to an extent that is unimaginable in the US.
- it's the consequence of LACK OF PROPERTY RIGHTS (unlike some idiots in this thread are implying, I am absolutely not saying that China HAS strong property rights). That's what you get when one of the three FUNDAMENTAL individual right is negated by the government.
The three rights: life, liberty, property.
Without any one of those three rights no individual can have a true free life and ability to move the socio economic ladder and no economy can be sustainable in the long run.
It doesn't matter what the product is, Nokia can't compete with Apple in manufacturing costs and flexibilities, that's that.
No they don't.
The regulations that are really stifling the economy they do not have. These regulations are all part of the executive branch, all the shit that everyday business has to deal with.
EPA, FDA, FCC, FAA, FHA, HUD, FDIC, SS, Medicare, minimum wage laws, all types of labour discrimination laws, all types of regulations and licenses for all types of activities, departments that regulate all of that, dep't of energy, education, commerce, interior, agriculture, small business, etc.
There are millions of regulations in USA that don't exist in China.
There are income taxes in USA that don't exist in China neither on the books or in real life.
China is still mostly a cash economy, no IRS can meddle and have all the knowledge and information.
When a guy wants to sell popcorn, he figures his costs and approximates his sales, saves money, buys a machine and supplies, puts a stand on a corner somewhere, he DOES NOT CARE ABOUT ANY LICENSE, he does not need to win any lottery and buy a sticker or a marker or a badge.
You have no idea what the fuck you are talking about, you have no idea what regulations are, you have fucking clue what it means to have to be liable to all sorts of gov't regulations that allow EITHER employees or customers to sue somebody.
Just the amount of legal liability that US gov't adds to a business makes businesses want to minimise their hiring.
In China people save money and they make loans to each other, family members, friends loan money to each other and that's how many small businesses start.
They buy equipment, they rent space, they hire help. They may have to buy some politician, but that is much FASTER than the processes that exist in USA, where a supposedly 'capitalist' society really puts a bunch of bureaucratic processes in front of entrepreneurs that are much harder to overcome than just simply paying a bribe.
A bribe is NOTHING, cost of doing business, a process that is set up by various gov't agencies, all of which are enforced with police action or FBI or other armed gov't agents is much more totalitarian or fascist than simply paying a bribe to some local party member to open a small shoe factory.
Cheers.
So? I am correct, that's all that matters. US founders were extremist, terrorists even by current definition.
China is much more capitalist than almost anybody else, they have more free market than USA has.
Here is a debate on it
and here is a transcript (PDF)
Obviously the audience was quite biased, too many expatriates, and one of the pro-motion team members was a staunch socialist himself, so totally wrong person to argue pro-capitalism, but in case you can watch it if you want.
Because some socialism is good
- completely disagree.
Public schools are good.
- strongly disagree.
Public roads are good.
- strongly disagree.
Public health initiatives are good.
- strongly disagree.
creating externalities that make their current path unsustainable
- no, the Chinese problem only extends to the government destroying their own currency by printing it to buy US dollars and subsidise US consumer and government involvement in a number of industries (in terms of taxes, regulations and just ownership).
As China becomes richer and richer, the quality of life will go up there, and the real problem for environment that exists there, will only continue to the extent that the private property rights are not protected.
Not true, taxes are just part of the equation, there are also regulations that gov't isn't allowed to do and there is inflation, which destroys savings and investments.
Yeah, these jobs and the Angry Birds jobs, and this will continue.
Too many people are arguing pro-Finish type of socialism, but that's why Finland is going to lose more and more jobs. All socialists do is drive investment capital out of their countries somewhere else. Good for 'somewhere else', bad for those socialist countries.
The good thing about this will be that eventually all socialism will end, which is great, because all of these countries will run out of other people's money to spend and nobody will loan to them also, because they don't produce anything.
FDA.
FDA and other forms of government intervention, that's the only reason.
Look, the first cellphones cost thousands of dollars, today a comparable cellphone is under 20 bucks, if you can find one without camera and various other features, and even at that price they have dual SIMs.
The advances in minituarisation of electronics and battery tech is ridiculous, but what is more ridiculous is that hearing aids still are that expensive.
The reason is lack of competition, government intervention, government money, FDA.
So, the massive increases in productivity and efficiency certainly cannot be attributed solely to deflation over a century.
- and I am not making that type of attribution, I am confronting your assertion that deflationary environment is somehow a detriment to the increase in prosperity. Aren't you now making an argument I didn't make to attack it (a straw type of argument)?
However I'll go further than my previous comment here, the technological improvements did NOT happen in vacuum in USA in that time period, they were only possible because people were saving money and investing to try and do things, all WITHOUT government money by the way, so all the improvements in technology and all the new infrastructure was built privately.
It wouldn't have been POSSIBLE to build all of that infrastructure without savings, which is what makes the investment capital, and people do not save money in times of high inflation (which is what the world is facing today, with all the governments trying hard to destroy the purchasing power of their citizens by all this counterfeiting).
Where do you think money comes from to build infrastructure and to put into research and development? It comes from savings. Where do you think savings come from, the Fed, central banks? No.
Savings come from people who save. They come from businesses that are able to save. They don't come from governments that destroy capital and steal investment money through taxes, they come from people who want to achieve something, maybe they want to make more money and they understand that to make money they need to take their savings and invest them into some research and infrastructure.
And by the way 'territorial expansion' doesn't happen without savings and investments either, and again, it was done privately with private savings and private investments.
Influx of immigrants that USA enjoyed came to the country for freedoms, freedoms from their own tyrannical governments, this is not what USA can boast about today - being free.
As to 'uninterrupted economic stability' - yeah, there were panics and recessions, they all had to do with government trying very hard to create fiat money a number of times, sometimes banks failed.
But you know the GREAT thing about those panics and recessions? The banks that failed, they weren't bailed out. The fiat that was introduced (a few times, there is an expression - not worth the Continental, learn where it came from), those fiat currencies disappeared for a reason.
Real money was growing in value for a reason.
Soon we'll be saying: not worth a Federal.
Imagine a world where your currency didn't devalue.
- the horror of 1800 to 1913 in USA, when dollar doubled in value, prices were falling, efficiency was increasing, productivity was growing, capitals were growing, investments and savings were growing enough to create the most competitive market on the planet, that ended up creating entire new industries that didn't exist before. All of this allowed USA to become biggest manufacturer, exporter and creditor from being a debtor and a net importer, all of this allowed USA to build infrastructure that didn't exist before.
It was a horrid time of terrible terrible freedom and prosperity, nobody was buying anything because money was growing in value... no wait, that's not true. Everybody was buying everything even though that knew that in some time things would fall in price and dollar would gain value.
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Or maybe it's today, that people don't buy computers, TVs, phones and other electronics because they know all these things fall in price all the time.....
No, wait, most people weren't buying plasma screens when they were 25000 USD a piece, but today households have one in every room and everybody has had more than one mobile phone and computer and laptop.
You must be a great student of history.
Then you'd be discouraged to find out that the 19th century in USA was a century of deflation (actually more than a century, it lasted until the Fed was established in 1913).
Yet that was the time when most of the US wealth was created, the USA became largest manufacturer, exporter and creditor nation from being just an afterthought to Europe for a few hundred years.
That was the time when real money was made, entire industries were created, real infrastructure was built. All done in a deflationary situation, as the dollar started in 19th century at half the value it ended with by 1913.
The competition was growing, businesses were springing up and everybody wanted to come to USA to start their own business free of government regulations and taxes (income taxes didn't exist, neither did most of the current departments).
Oh god, it's not because they will do everything to avoid paying taxes. Their economy is fucked because it is economy of debt, exactly the type of economy that ALL modern 'main stream economists' are proposing.
There are so many people that for example defend Krugman (a thread with examples in it), believing he is an economist rather than a politician used to justify gov't fiscal and economic behaviour, that they completely miss the point that the 'solutions' given by these 'main stream economists' have been tried thousands of times and are still being tried today, and IF, IF these types of solutions ever worked, there wouldn't have been such cases as Greece or USSR economic failures for that matter, Argentina, Zimbabwe, Weimar Republic, USA today, etc.etc., they would all be great huge wealthy strong economies.
It is not that Greeks don't like to pay taxes, that's a very good healthy sign of people who still value their own freedoms, by the way. It's that Greeks are for the type of gov't spending that does NOT correspond to their earnings, so it's borrowed.
Of-course Greece hits the wall, because it can't print Euro (thus the misplaced calls to exit Euro and use Drachma again, so they can print it), USA didn't hit the wall yet because it's subsidised by foreign production (Asia, Germany...) and foreign central banks and governments willing to accept inflation of their own in order to subsidise USA and Europe for that matter.
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Now, Bitcoin is just another worthless fiat, it's only redeeming quality is that it is mathematically limited to a specific number of coins, it's worthless because it has no intrinsic value at all, there is no backing. It is used because it is easy to use over the networks and it is a game of musical chairs, you don't want to be the last person stuck with those, but it doesn't matter it can't continue being used for some time and traded and it doesn't mean its relative value cannot go up and down for some time before it crashes and burns.
Sure, right now Euro looks really bad, and it IS bad, but that is inevitable for all fiat currencies (those imposed by decree of gov't and not actually intrinsically worth anything more than paper they are printed on). There is nothing special about Euro, it will eventually collapse, but I think it will stabilise first, especially if Germany decides to print a bunch of them to bail out all these failures.
Of-course people who understand what's going on are moving on or have already moved out of Euro and dollars actually, they moved into commodities, into ownership of agriculture stocks, mining company stocks, whatever. Right now the gold mining stocks for example are very under-valued. They are valued lower than they were when gold was HALF the price in dollars than it is now, so this shows you huge lack of confidence of the market in the future of gold.
Market is still operating on principles it was programmed to believe in over these last 50 years, market is mostly agnostic when it comes to fundamentals and it cheers any gov't action that results in easy credit in fake money. Unfortunately for the market, this is what is going to rob people of most of their purchasing power and the currencies themselves.
Real money is not made up of ephemeral bits stored on the Internet, real money is something that can be used when the power goes down and real money cannot be faked by politicians and bankers.
What you perceive to be a weakness is actually the strength.
The fact that the Internet does not have a central government is a positive, not a negative. You can view different attempts at regulating the Internet as opportunities for competition among various networks.
If there was a central government of some sort, then it would become a tyranny on its own, while it would also become the single point of failure, how would such a structure protect itself from all the other governments of the world exactly?
I have a journal entry that provides an example of a tax payer trying to have some influence on the outcome of a government body negotiating with special interests on how the tax payer money is going to be spent and what exactly the role of government will be related to a specific matter (FHA). It does not look good for the tax payer.
So why are these Hungarians trying to solve a Kazakh problem?