I am saying they would be better off without holding worthless US debt. The companies can do whatever, but the national bank is buying up US debt by buying those US dollars from Chinese banks with newly printed yuan.
China has a trade surplus with USA but it has a trade deficit with Germany, so it clearly can benefit from trade with some countries.
I am suggesting that US reviews the Constitution and returns to it, but also makes it illegal for government to meddle with private economy in every single way.
Gov't has a role - border security, criminal and contract law, basic protection of freedoms and liberties. Everything else better be left to the market.
The entire 'interstate' clause should be reviewed to specify that the only thing meant by it must be leveling of the playing field between states, so if one state hands you a driver license, it's valid in other states, same with all professions - you get your medical or investor license in one state, it should be valid in others. There should be protection of liberties of people by the government, protection of liberties of people to be free and to choose what they want in terms of all products and services and money and government shouldn't be dictating any of it - that should be the job of the federal government, protecting your liberty to buy your health insurance form a provider in Hong Kong.
Well, that doesn't make sense. The government will be dismantled, obviously new one will have to be created in its place, it's not the first time in history that it would happen, and I don't remember a single time that it resulted in corporations rounding people up. However new government have rounded people up, I know that that's what happened in USSR after the revolution.
First they came for the richest of the rich, then for the rich, then for the middle class and those who could still support themselves and had some savings. This was all done for the "better" of the people, though the only people who got "better" from this were on the very top of that pyramid (those who didn't get shot).
There were never love and hugs, and dismantling the current government is not a sure way to attract love and hugs either.
However the way I see it, what's coming down the pipe is destruction of US dollar and bonds/bills, and insanely high interest rates, which would put the economic future of US into such a head spin, that it would take decades to get out of it, maybe more than decades.
Government is the force that is causing this, so AFAIC it's either people or the government, and I don't think many understand that this is their choice right now.
Yeah, sure they can. That's why in USA the States had power and then they set up the federal government to occupy this space, which otherwise could be filled in by private forces.
But the Constitution was created to restrict government power, not to give government unlimited power as it now basically usurped to itself.
What is needed is a complete restructuring, with the current system being dismantled, all offices shut down, all agencies and all departments shut down, all payments stopped, all assets sold and debts restructured.
Once that's done, the Constitution needs to be revised to make it a stronger document, so that it should specifically prohibit the government from meddling with business, from taxing income, from mandating any purchases upon any individuals, from waging wars, all of the nonsense that's taking place. Money creation and interest rates should be a function of market, not of government.
What I am advocating is that the government that exists RIGHT NOW is MUCH WORSE than what you are even describing in your comment.
They already HAVE private armies in government, they are using these private armies to fight illegal wars and they are stealing your money. They can already rape and murder you, they have been doing it enough already over the last half a century, you should take notice. Just because you may not look Arabic right now, who is to say you won't be in trouble if one of your acquaintances appears Arabic and you find yourself in Gitmo being exactly that - raped and tortured, maybe murdered by direct presidential order?
They can already confiscate your cash, if you have on you more than 10grand (or is it 5?), they can take it away and never return it even if you are not found guilty of anything. Same with imminent domain. Just you wait until some corporation that is close to gov't decides it needs to lay a road or put a cell phone tower where your house is.
Yeah, I know, this shouldn't exist as a concept, it destroys the market, money and causes further economic collapse.
I remember I spoke to a couple of German gov't workers about 2 years ago (going to Switzerland from London, but I took a detour to Belgium), and I asked them: when do you think Germany will say "enough is enough" with the entire Euro fiasco and will stop subsidizing the failing states? They said: it's better to pay than to have war. Obviously they were government workers, so I didn't expect much different.
But you see, subsidizing failing states is only marginally different from subsidizing failing individuals. There shouldn't be a concept such as Hartz IV, that destroys the economy by mis-allocating resources this way. Germans will eventually get around this concept, but it will come at even the greater cost.
I can agree on one thing, if that's what you meant:
different states should not be able to prevent free trade between states by creating barriers to entry to out of state companies. People should be able to buy insurance not only across state borders, but also across nation borders, anywhere at all.
THIS is what the interstate clause is supposed to be for - increasing freedom of trade.
look at any corporate quarterlies, they're running well below capacity because there's no demand.
- that's not production capacity they have, that's them using the free money to buy back something that at least is better than the currency, that is being inflated away - their own shares.
The US banks that were bailed out, they are all insolvent. They have long term low yielding loans on their books, should the interest rates go above 4%, they are all immediately bankrupt and then US will do what? Bail them out again?
what's missing, is consumer spending - and the way to get that back is to put money into the hands of people who will actually spend it.
- you can't spend if you don't produce.
"Putting money into hands" is a worthless exercise, if those hands don't produce anything. I just left a comment, explaining why the Chinese are not getting richer by selling to USA, this is the same thing.
Why DO people trade? It's called COMPARATIVE ADVANTAGE.
You see, you trade with people to get STUFF from them. Not paper currency that comes off Feds printing presses (figuratively speaking, they don't even print anymore, just add 0s to the accounts).
You trade with anybody so that you can buy THINGS that others make. So if YOU build a car engine, you want to sell it so that you can buy FOOD and shelter, etc.
If you are stuck in a weird one sided trade, where you build car engines all day long, but when you sell it, you get back pieces of paper but you can buy NOTHING with them, then why the hell did you even bother?
Do you see my point? USA has 53Billion USD/month trade deficit, that's all the food or whatever other products that USA is not producing, but it's consuming 53Billion USD/month stuff.
Do you know that USA imports 90% of its sea food? USA is SURROUNDED with oceans, why is it importing 90% of sea food?
It's because there is enough demand, but there is no production. The demand is fueled by the counterfeit currency, that's the problem, so when you say: "put money into hands of people", what do you mean exactly?
Do you think the people should be able NOT to reduce the trade deficit, but still have the money to buy goods from producing nations? If you think so, what will you do once they stop subsidizing your consumption habits?
In deflationary environment and in a real recession, the businesses that must go under would go under, while government would be forced to stop spending completely and would have to sell assets to start paying out not only the interest, but the principal.
If your advice is to keep inflating until the debt magically "disappears", you will find that the Dollar itself will magically disappear with it and your entire economy will be hit with incredible interest rates and you will be FORCED into deflation.
You think my solution is bad when the dollar is still worth something, try it when the dollar is worth precisely nothing.
The people, who you believe are benefiting from inflation, will have nothing once the dollar is gone and interest rates are in TRIPLE digits, forget double. Because that's what you are going to have and without any savings and production capacity, you'll have to sell your shirt, all of your natural resources with it before you could start accumulating enough savings to restart the production and the economy.
Your problem is that you are looking at this too near a term, like for the next election. I am looking at this from POV of 5 year deal, and at the rate of inflation that US is going at, with 3 month t-bills giving no yield, with 10 year bills giving no yield, with 53Billion USD/month trade deficit (for now) and with hundreds of trillions of dollars in debt, USA will find itself in an impossible situation, rebuilding not only the economy, but the money.
Does US have the gold reserves it's constantly boasting about? Because if that's not the case, it's ground 0 for the Americans.
As to the Great Depression - that was completely government manufactured, I wrote many comments on that.
By the way, the government then was trying to prop up Agriculture prices by destroying the stock (actually destroying grain, poultry, milk, etc.) and they were pumping hundreds of millions into the financial markets, same thing they did in 2008 (and same result they get with lowering interest rates to 1% back with Greenspan and now to 0% with Bernanke).
What do you think that does to the long term inflation outlook of US currency? OTOH 19 century USA had actual deflation and production was booming.
Businesses are not your government, they can only compete for your cash, they have to earn it, while government can just confiscate it, imprison you, even kill you without any evidence at this point. They can also steal from you without ever touching you physically by printing currency.
I choose free market. In that system there is competition and choice and prices go down, not up.
The Chinese are not getting richer from any of the dollars that they are accumulating, they are in fact getting poorer because they are buying those dollars up on national level with the newly printed yuan, but then what can they do with those dollars?
They can't spend them obviously, because they can't buy anything from USA, the US doesn't produce much for Chinese to buy, the 53Billion USD/month trade deficit shows it.
Chinese keep buying up US debt, but they can never sell it. It's only "liquid" as long as you don't try to sell the stuff, and if you sell it, you'll crash the price (which would be good for USA, don't take me wrong.)
But the Chinese are getting poorer as they are immediately hit with the inflation that they are importing from USA by buying up those dollars. China sees huge price increases immediately, 15-25% price hikes a year just for food.
As a country, the Chinese would be BETTER served dumping all of the goods they ship to USA into the ocean, you see. But of-course the best thing they could do is let their currency go where it must go - up due to market appreciation, and then they'll have enough purchasing power in China to be able to buy their own stuff they make and not sell kidneys for iPads.
No, they are not getting wealthier by selling to US.
The only way to fix this corruption problem is to remove the corrupting influence of government.
I watch some current Russian TV programs sometimes and I see the people talking about corruption and how it's impossible to get rid of it. Everybody knows it and nobody can do anything about it. Well obviously it's the same exact thin in USA, it's just that in Russia some people are more ruthless and will literally kill you, drive over you with a car a few times as well, and cops will help them in this driving back and forward with concerned advice about how not to scratch your bumper.
But the problem is exactly the same - there is NO separation between political structure and corruption.
There is no separation, they are one and the same system, they are completely totally inseparable. The mere existence of the government system, which is over 1% of total population (Just about 10 million in Russia with population of under 120million and close to 30 million in USA with population just over 300million) you cannot separate corruption from governance.
In order to get rid of corruption you have to accept that in fact you need to get rid of over 90% of government itself.
What are you talking about? The inflation kills any incentive to invest, it's over 11% (again, my count says 13).
You can't invest in these insane conditions and expect a meaningful return! NO. A smart rich person is investing abroad, into various vehicles that keep their value during inflationary periods of time.
I have almost entire essays on these topics here, and they come in handy, because retyping the same thing over and over is tiring.
US stocks are only going up due to inflation, and they are really nowhere at all compared to commodities in the last 15 years by the way, but the US currency has gone down dramatically (as all of the above links indicate.)
Everyone needs it and no matter how expensive people think it is, they'll still pay for it.
- this is absurd, as it's NOT the individuals who are paying for health insurance in USA. It's the employers, who are paying for employee packages or it's the government directly via Medicare or Medicaid.
There is no empirical proof to back that argument "it should get cheaper" to my knowledge
- that's because you have no knowledge of history, as over the 100 years in 19 century USA, prices were coming down, ended up at half of where they started in the beginning of that century.
At the same time today countries with actual competition see lower and lower costs, I know of a number of clinics where costs are now lower than they were previously in such countries.
In USA you have a good example of this as well with lasic eye surgery. You can get it cheaper now than before, or at least it would cost you the same as it cost you 10 years ago, while the equipment quality and success rates are going up, so THERE IS empirical evidence even in USA and you don't even have to know history to see it in the past 10 years.
Has the cost of medical school gone down?
- THAT'S GOVERNMENT SUBSIDIZED. That's part of the overall problem of costs going up because of government money in education as well as in health care and insurance. You can't say: here, prices are higher in education and that SHOULD be that way.
Education ALSO would have lower prices today than it had 50 years ago if it weren't for government money in it. After all, we have technology to make education more accessible, cheaper. The communication between students and professors, it's possible to have lectures recorded and replayed, this entire notion that you are in a free market and that's why prices are going up is insane.
Has the cost of drugs gone down?
- and I said on top of this thread: thank the FDA for that. You can look at the provided links, the majority of cost is added because of FDA.
Has the cost of running a hospital gone down?
- thank the Federal reserve for all the inflation.
Has the cost of managing millions of subscribers gone down?
- OF-COURSE! Substantially! That's what the computers are for - so that the costs go down, since it's easier to manage your information.
Has medical treatment become more complex requiring specialization?
- assembly line workers at Ford were very productive, though they had to become more and more specialized, this is exactly where the economies of scale kick in, and specialization makes things cheaper, not more expensive, since more people can be processed by the specialists rather than having generic physicians look at all your problems.
Has liability insurance gone up?
- you can thank the government for all the nonsense there as well, because with all the "free" education loans, there are too many people graduating with mortgages and no houses, and they are taking sociology and other BS stuff, and after they are done with one degree, they see the job market and go right back to school. But they shouldn't have been there in the first place and now they are looking at a terrible situation - a huge debt.
So where is the money? Their second "education" becomes law.
This is a complex problem, totally created by government money in education and inflation of value of degrees.
How often does a hospital upgrade their equipment and how long does it take to break even on that equipment?
- who cares?
How often does Intel build a new chip factory?
The likelihood of costs going down over time is like saying inflation is -3%.
- you are funny, but not really, in a sad sort of way.
GDP in USA is cooked at the same rate that CPI is cooked, and CPI, the way it was calculated during Nixon's administration is at 11%, though I count 13.
GDP in USA has been on a steady decline for over 2 decades, and since 2000, the decline has been over 10% a year. Those are not the numbers you will find in government sources, you have to look at people who calculate the numbers as they were before the government came up with a clever way to reverse-engineer the numbers by applying statistics tricks, hedonic adjustments.
Again no, we are well below the median -- except for the Defense spending thing. We are far out in front there.
- USA outspends all other nations in health insurance and care, in education for example per capita, of-course wars are not helping at all.
The GDP is a joke for yet another reason - the "domestic" part, but 70% of it is spending on consumption, and USA has 53Billion USD trade deficit, which tells you something about that "domestic" part being a very loaded term.
AFAIC there shouldn't be any income or payroll taxes, but that's a different story.
The entire point of having a government is so that your liberties and freedoms are protected, but government was usurped by private interests and now it truly does exist only to protect special corporate interests. That's why the inflation exists, that's why monopolies are protected, that's why the government is of the size that it is, that's why you can be ordered to be assassinated by your president.
General Welfare doesn't have anything to do with personal welfare, but it has everything to do with making sure that the field is level, there are no abuses, especially by government.
inflation is a way for governments to spend what they don't have by taking away your purchasing power through currency counterfeiting, that's why they hate real money.
deflation hurts the government, because it's the biggest debtor AND in deflationary environment the nominal salaries/prices go down, which decreases the absolute number of dollars that can be collected as taxes, while the debt becomes more difficult to deal with.
That's why government love inflation, hate deflation and they push this propaganda into your heads through the bought academia and MSM.
As to inflation - the people with real money understand how to save the purchasing power by buying the necessary assets that go up in value in inflationary times, and you, with your fixed income end up paying more and more of your after-tax income for the basic necessities.
Do you realize that $25000 in 1957 was enough for a man to have a family, with stay at home wife, 4-5 kids, paid out house, maybe another property, a couple of paid out cars, no debt, with vacations, etc.? Today that's just above the poverty line and you are talking about inflation helping the middle class and the poor and hurting the rich?
IF INFLATION HURT THE RICH, YOU WOULDN'T HAVE IT. It would be just as terrible an idea in terms of propaganda, as deflation is today.
Of-course it makes the rich richer, because who do you think gets the FIRST STAB at the money that is being printed by the Fed?
Those who get the money directly are the real benefactors, they get to gamble with all that counterfeit currency, while they are gambling they are making profits on money they never actually saved to be investments, and then the higher prices hit YOU, not them, they don't care, they can shift their consumption elsewhere.
However there is another little problem with inflation: it creates the bigger DISPARITY between the really rich and the really poor, which ends up benefiting the rich more, as now they have more poor people as cheap resources.
Of-course this used to be a problem with revolutions and such, but today the world is very mobile, the money moves around the globe with the arm of the clock, so you can't even touch it.
that's because Warren Buffet is a liar. His tax rate is his company's tax, which is over 35%, and then he pays 15% dividend on that. All of the taxes that his company pays is the money that he is not earning as the largest shareholder.
He is also a two faced liar for the reason, that his company is the sole benefactor of the death tax in USA, since he profits from the fire-sales that happen when an estate must be liquidated to pay the death tax, he then restructures the companies and sells them at profit.
Unfortunately, the recession you're welcoming with open arms would end up being deflationary.
- no, that's FORTUNATELY, not unfortunately. Recession must be deflationary, as bad investments must be restructured, debt must be paid out partially and the investors must eat part of the loss as well.
Deflation is much better than inflation in case of recession, because it allows the poorest people to survive, as they can buy more with whatever meager savings they have.
The important point to understand that deflation in this case is the cure. The disease is the counterfeit currency printing and vendor financed consumption and debt and trade deficit and lack of production.
Inflation isn't good, but deflation is deadly..
- that's nonsense, both of those statements. Inflation is actually eating your economy alive right now, while deflation would have allowed the bad debts to be liquidated and people would save and restart production.
Inflation is Adam Smith's way of forcing the wealthy to invest their money
- pure nonsense on its face, as what you have in USA (and in the West) is inflation - counterfeiting of the fiat currencies, which is then being distributed to the largest government propped monopolies and the poorest and middle class end up shafted with higher prices.
but a small, stable amount of annual inflation (let's say ~3%) is a good thing.
If you are making over say $10,000,000/year, you'll pay marginal tax rate on 99% of your income, so that's 35% + SS + payroll + Medicare + State. State taxes vary and in some cases they are 0, which is why people move to Texas or Florida out of places like Connecticut or Illinois for example.
Of-course the other taxes will also add up, like property, sales, gas, etc.
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I am saying they would be better off without holding worthless US debt. The companies can do whatever, but the national bank is buying up US debt by buying those US dollars from Chinese banks with newly printed yuan.
China has a trade surplus with USA but it has a trade deficit with Germany, so it clearly can benefit from trade with some countries.
I am suggesting that US reviews the Constitution and returns to it, but also makes it illegal for government to meddle with private economy in every single way.
Gov't has a role - border security, criminal and contract law, basic protection of freedoms and liberties. Everything else better be left to the market.
The entire 'interstate' clause should be reviewed to specify that the only thing meant by it must be leveling of the playing field between states, so if one state hands you a driver license, it's valid in other states, same with all professions - you get your medical or investor license in one state, it should be valid in others. There should be protection of liberties of people by the government, protection of liberties of people to be free and to choose what they want in terms of all products and services and money and government shouldn't be dictating any of it - that should be the job of the federal government, protecting your liberty to buy your health insurance form a provider in Hong Kong.
Well, that doesn't make sense. The government will be dismantled, obviously new one will have to be created in its place, it's not the first time in history that it would happen, and I don't remember a single time that it resulted in corporations rounding people up. However new government have rounded people up, I know that that's what happened in USSR after the revolution.
First they came for the richest of the rich, then for the rich, then for the middle class and those who could still support themselves and had some savings. This was all done for the "better" of the people, though the only people who got "better" from this were on the very top of that pyramid (those who didn't get shot).
There were never love and hugs, and dismantling the current government is not a sure way to attract love and hugs either.
However the way I see it, what's coming down the pipe is destruction of US dollar and bonds/bills, and insanely high interest rates, which would put the economic future of US into such a head spin, that it would take decades to get out of it, maybe more than decades.
Government is the force that is causing this, so AFAIC it's either people or the government, and I don't think many understand that this is their choice right now.
Yeah, sure they can. That's why in USA the States had power and then they set up the federal government to occupy this space, which otherwise could be filled in by private forces.
But the Constitution was created to restrict government power, not to give government unlimited power as it now basically usurped to itself.
What is needed is a complete restructuring, with the current system being dismantled, all offices shut down, all agencies and all departments shut down, all payments stopped, all assets sold and debts restructured.
Once that's done, the Constitution needs to be revised to make it a stronger document, so that it should specifically prohibit the government from meddling with business, from taxing income, from mandating any purchases upon any individuals, from waging wars, all of the nonsense that's taking place. Money creation and interest rates should be a function of market, not of government.
What I am advocating is that the government that exists RIGHT NOW is MUCH WORSE than what you are even describing in your comment.
They already HAVE private armies in government, they are using these private armies to fight illegal wars and they are stealing your money. They can already rape and murder you, they have been doing it enough already over the last half a century, you should take notice. Just because you may not look Arabic right now, who is to say you won't be in trouble if one of your acquaintances appears Arabic and you find yourself in Gitmo being exactly that - raped and tortured, maybe murdered by direct presidential order?
They can already confiscate your cash, if you have on you more than 10grand (or is it 5?), they can take it away and never return it even if you are not found guilty of anything. Same with imminent domain. Just you wait until some corporation that is close to gov't decides it needs to lay a road or put a cell phone tower where your house is.
Yeah, I know, this shouldn't exist as a concept, it destroys the market, money and causes further economic collapse.
I remember I spoke to a couple of German gov't workers about 2 years ago (going to Switzerland from London, but I took a detour to Belgium), and I asked them: when do you think Germany will say "enough is enough" with the entire Euro fiasco and will stop subsidizing the failing states? They said: it's better to pay than to have war. Obviously they were government workers, so I didn't expect much different.
But you see, subsidizing failing states is only marginally different from subsidizing failing individuals. There shouldn't be a concept such as Hartz IV, that destroys the economy by mis-allocating resources this way. Germans will eventually get around this concept, but it will come at even the greater cost.
I can agree on one thing, if that's what you meant:
different states should not be able to prevent free trade between states by creating barriers to entry to out of state companies. People should be able to buy insurance not only across state borders, but also across nation borders, anywhere at all.
THIS is what the interstate clause is supposed to be for - increasing freedom of trade.
look at any corporate quarterlies, they're running well below capacity because there's no demand.
- that's not production capacity they have, that's them using the free money to buy back something that at least is better than the currency, that is being inflated away - their own shares.
The US banks that were bailed out, they are all insolvent. They have long term low yielding loans on their books, should the interest rates go above 4%, they are all immediately bankrupt and then US will do what? Bail them out again?
what's missing, is consumer spending - and the way to get that back is to put money into the hands of people who will actually spend it.
- you can't spend if you don't produce.
"Putting money into hands" is a worthless exercise, if those hands don't produce anything. I just left a comment, explaining why the Chinese are not getting richer by selling to USA, this is the same thing.
Why DO people trade? It's called COMPARATIVE ADVANTAGE.
You see, you trade with people to get STUFF from them. Not paper currency that comes off Feds printing presses (figuratively speaking, they don't even print anymore, just add 0s to the accounts).
You trade with anybody so that you can buy THINGS that others make. So if YOU build a car engine, you want to sell it so that you can buy FOOD and shelter, etc.
If you are stuck in a weird one sided trade, where you build car engines all day long, but when you sell it, you get back pieces of paper but you can buy NOTHING with them, then why the hell did you even bother?
Do you see my point? USA has 53Billion USD/month trade deficit, that's all the food or whatever other products that USA is not producing, but it's consuming 53Billion USD/month stuff.
Do you know that USA imports 90% of its sea food? USA is SURROUNDED with oceans, why is it importing 90% of sea food?
It's because there is enough demand, but there is no production. The demand is fueled by the counterfeit currency, that's the problem, so when you say: "put money into hands of people", what do you mean exactly?
Do you think the people should be able NOT to reduce the trade deficit, but still have the money to buy goods from producing nations? If you think so, what will you do once they stop subsidizing your consumption habits?
In deflationary environment and in a real recession, the businesses that must go under would go under, while government would be forced to stop spending completely and would have to sell assets to start paying out not only the interest, but the principal.
If your advice is to keep inflating until the debt magically "disappears", you will find that the Dollar itself will magically disappear with it and your entire economy will be hit with incredible interest rates and you will be FORCED into deflation.
You think my solution is bad when the dollar is still worth something, try it when the dollar is worth precisely nothing.
The people, who you believe are benefiting from inflation, will have nothing once the dollar is gone and interest rates are in TRIPLE digits, forget double. Because that's what you are going to have and without any savings and production capacity, you'll have to sell your shirt, all of your natural resources with it before you could start accumulating enough savings to restart the production and the economy.
Your problem is that you are looking at this too near a term, like for the next election. I am looking at this from POV of 5 year deal, and at the rate of inflation that US is going at, with 3 month t-bills giving no yield, with 10 year bills giving no yield, with 53Billion USD/month trade deficit (for now) and with hundreds of trillions of dollars in debt, USA will find itself in an impossible situation, rebuilding not only the economy, but the money.
Does US have the gold reserves it's constantly boasting about? Because if that's not the case, it's ground 0 for the Americans.
As to the Great Depression - that was completely government manufactured, I wrote many comments on that.
By the way, the government then was trying to prop up Agriculture prices by destroying the stock (actually destroying grain, poultry, milk, etc.) and they were pumping hundreds of millions into the financial markets, same thing they did in 2008 (and same result they get with lowering interest rates to 1% back with Greenspan and now to 0% with Bernanke).
What do you think that does to the long term inflation outlook of US currency? OTOH 19 century USA had actual deflation and production was booming.
Businesses are not your government, they can only compete for your cash, they have to earn it, while government can just confiscate it, imprison you, even kill you without any evidence at this point. They can also steal from you without ever touching you physically by printing currency.
I choose free market. In that system there is competition and choice and prices go down, not up.
The Chinese are not getting richer from any of the dollars that they are accumulating, they are in fact getting poorer because they are buying those dollars up on national level with the newly printed yuan, but then what can they do with those dollars?
They can't spend them obviously, because they can't buy anything from USA, the US doesn't produce much for Chinese to buy, the 53Billion USD/month trade deficit shows it.
If China comes to USA and asks to buy a port, say in New Orleans, would US sell them the port for all those trillions? Unlikely.
Chinese keep buying up US debt, but they can never sell it. It's only "liquid" as long as you don't try to sell the stuff, and if you sell it, you'll crash the price (which would be good for USA, don't take me wrong.)
But the Chinese are getting poorer as they are immediately hit with the inflation that they are importing from USA by buying up those dollars. China sees huge price increases immediately, 15-25% price hikes a year just for food.
As a country, the Chinese would be BETTER served dumping all of the goods they ship to USA into the ocean, you see. But of-course the best thing they could do is let their currency go where it must go - up due to market appreciation, and then they'll have enough purchasing power in China to be able to buy their own stuff they make and not sell kidneys for iPads.
No, they are not getting wealthier by selling to US.
The only way to fix this corruption problem is to remove the corrupting influence of government.
I watch some current Russian TV programs sometimes and I see the people talking about corruption and how it's impossible to get rid of it. Everybody knows it and nobody can do anything about it. Well obviously it's the same exact thin in USA, it's just that in Russia some people are more ruthless and will literally kill you, drive over you with a car a few times as well, and cops will help them in this driving back and forward with concerned advice about how not to scratch your bumper.
But the problem is exactly the same - there is NO separation between political structure and corruption.
There is no separation, they are one and the same system, they are completely totally inseparable. The mere existence of the government system, which is over 1% of total population (Just about 10 million in Russia with population of under 120million and close to 30 million in USA with population just over 300million) you cannot separate corruption from governance.
In order to get rid of corruption you have to accept that in fact you need to get rid of over 90% of government itself.
What are you talking about? The inflation kills any incentive to invest, it's over 11% (again, my count says 13).
You can't invest in these insane conditions and expect a meaningful return! NO. A smart rich person is investing abroad, into various vehicles that keep their value during inflationary periods of time.
I have almost entire essays on these topics here, and they come in handy, because retyping the same thing over and over is tiring.
US stocks are only going up due to inflation, and they are really nowhere at all compared to commodities in the last 15 years by the way, but the US currency has gone down dramatically (as all of the above links indicate.)
Everyone needs it and no matter how expensive people think it is, they'll still pay for it.
- this is absurd, as it's NOT the individuals who are paying for health insurance in USA. It's the employers, who are paying for employee packages or it's the government directly via Medicare or Medicaid.
There is no empirical proof to back that argument "it should get cheaper" to my knowledge
- that's because you have no knowledge of history, as over the 100 years in 19 century USA, prices were coming down, ended up at half of where they started in the beginning of that century.
At the same time today countries with actual competition see lower and lower costs, I know of a number of clinics where costs are now lower than they were previously in such countries.
In USA you have a good example of this as well with lasic eye surgery. You can get it cheaper now than before, or at least it would cost you the same as it cost you 10 years ago, while the equipment quality and success rates are going up, so THERE IS empirical evidence even in USA and you don't even have to know history to see it in the past 10 years.
Has the cost of medical school gone down?
- THAT'S GOVERNMENT SUBSIDIZED. That's part of the overall problem of costs going up because of government money in education as well as in health care and insurance. You can't say: here, prices are higher in education and that SHOULD be that way.
Education ALSO would have lower prices today than it had 50 years ago if it weren't for government money in it. After all, we have technology to make education more accessible, cheaper. The communication between students and professors, it's possible to have lectures recorded and replayed, this entire notion that you are in a free market and that's why prices are going up is insane.
Has the cost of drugs gone down?
- and I said on top of this thread: thank the FDA for that. You can look at the provided links, the majority of cost is added because of FDA.
Has the cost of running a hospital gone down?
- thank the Federal reserve for all the inflation.
Has the cost of managing millions of subscribers gone down?
- OF-COURSE! Substantially! That's what the computers are for - so that the costs go down, since it's easier to manage your information.
Has medical treatment become more complex requiring specialization?
- assembly line workers at Ford were very productive, though they had to become more and more specialized, this is exactly where the economies of scale kick in, and specialization makes things cheaper, not more expensive, since more people can be processed by the specialists rather than having generic physicians look at all your problems.
Has liability insurance gone up?
- you can thank the government for all the nonsense there as well, because with all the "free" education loans, there are too many people graduating with mortgages and no houses, and they are taking sociology and other BS stuff, and after they are done with one degree, they see the job market and go right back to school. But they shouldn't have been there in the first place and now they are looking at a terrible situation - a huge debt.
So where is the money? Their second "education" becomes law.
This is a complex problem, totally created by government money in education and inflation of value of degrees.
How often does a hospital upgrade their equipment and how long does it take to break even on that equipment?
- who cares?
How often does Intel build a new chip factory?
The likelihood of costs going down over time is like saying inflation is -3%.
- you are funny, but not really, in a sad sort of way.
well actually there is more regulation per business today in USA than ever before.
And if you want to get a feel of what it means, to be regulated, read this little opus on regulating babysitting in California.
GDP in USA is cooked at the same rate that CPI is cooked, and CPI, the way it was calculated during Nixon's administration is at 11%, though I count 13.
GDP in USA has been on a steady decline for over 2 decades, and since 2000, the decline has been over 10% a year. Those are not the numbers you will find in government sources, you have to look at people who calculate the numbers as they were before the government came up with a clever way to reverse-engineer the numbers by applying statistics tricks, hedonic adjustments.
Again no, we are well below the median -- except for the Defense spending thing. We are far out in front there.
- USA outspends all other nations in health insurance and care, in education for example per capita, of-course wars are not helping at all.
The GDP is a joke for yet another reason - the "domestic" part, but 70% of it is spending on consumption, and USA has 53Billion USD trade deficit, which tells you something about that "domestic" part being a very loaded term.
AFAIC there shouldn't be any income or payroll taxes, but that's a different story.
You are on the right track, you are almost there.
The entire point of having a government is so that your liberties and freedoms are protected, but government was usurped by private interests and now it truly does exist only to protect special corporate interests. That's why the inflation exists, that's why monopolies are protected, that's why the government is of the size that it is, that's why you can be ordered to be assassinated by your president.
General Welfare doesn't have anything to do with personal welfare, but it has everything to do with making sure that the field is level, there are no abuses, especially by government.
inflation is a way for governments to spend what they don't have by taking away your purchasing power through currency counterfeiting, that's why they hate real money.
deflation hurts the government, because it's the biggest debtor AND in deflationary environment the nominal salaries/prices go down, which decreases the absolute number of dollars that can be collected as taxes, while the debt becomes more difficult to deal with.
That's why government love inflation, hate deflation and they push this propaganda into your heads through the bought academia and MSM.
As to inflation - the people with real money understand how to save the purchasing power by buying the necessary assets that go up in value in inflationary times, and you, with your fixed income end up paying more and more of your after-tax income for the basic necessities.
Do you realize that $25000 in 1957 was enough for a man to have a family, with stay at home wife, 4-5 kids, paid out house, maybe another property, a couple of paid out cars, no debt, with vacations, etc.? Today that's just above the poverty line and you are talking about inflation helping the middle class and the poor and hurting the rich?
IF INFLATION HURT THE RICH, YOU WOULDN'T HAVE IT. It would be just as terrible an idea in terms of propaganda, as deflation is today.
Of-course it makes the rich richer, because who do you think gets the FIRST STAB at the money that is being printed by the Fed?
Those who get the money directly are the real benefactors, they get to gamble with all that counterfeit currency, while they are gambling they are making profits on money they never actually saved to be investments, and then the higher prices hit YOU, not them, they don't care, they can shift their consumption elsewhere.
However there is another little problem with inflation: it creates the bigger DISPARITY between the really rich and the really poor, which ends up benefiting the rich more, as now they have more poor people as cheap resources.
Of-course this used to be a problem with revolutions and such, but today the world is very mobile, the money moves around the globe with the arm of the clock, so you can't even touch it.
that's because Warren Buffet is a liar. His tax rate is his company's tax, which is over 35%, and then he pays 15% dividend on that. All of the taxes that his company pays is the money that he is not earning as the largest shareholder.
He is also a two faced liar for the reason, that his company is the sole benefactor of the death tax in USA, since he profits from the fire-sales that happen when an estate must be liquidated to pay the death tax, he then restructures the companies and sells them at profit.
Oh, so then you are for minute tax CUT for highest earners in USA? 16:30
Good.
Unfortunately, the recession you're welcoming with open arms would end up being deflationary.
- no, that's FORTUNATELY, not unfortunately. Recession must be deflationary, as bad investments must be restructured, debt must be paid out partially and the investors must eat part of the loss as well.
Deflation is much better than inflation in case of recession, because it allows the poorest people to survive, as they can buy more with whatever meager savings they have.
The important point to understand that deflation in this case is the cure. The disease is the counterfeit currency printing and vendor financed consumption and debt and trade deficit and lack of production.
Inflation isn't good, but deflation is deadly..
- that's nonsense, both of those statements. Inflation is actually eating your economy alive right now, while deflation would have allowed the bad debts to be liquidated and people would save and restart production.
Inflation is Adam Smith's way of forcing the wealthy to invest their money
- pure nonsense on its face, as what you have in USA (and in the West) is inflation - counterfeiting of the fiat currencies, which is then being distributed to the largest government propped monopolies and the poorest and middle class end up shafted with higher prices.
but a small, stable amount of annual inflation (let's say ~3%) is a good thing.
- more Keynesian nonsense, but also funny, because the real inflation in USA is over 11% and I count it as 13.
It's due to a lack of spending. Which means there is no need for production, let alone production capacity, because nobody is buying.
- orly? And that's what you derive from the 53Billion USD/month trade deficit?
That's 53Billion USD/month that USA consumes more than it produces, and you are telling me that nobody is buying and it does not need production?
Well, your logic is weirding me out, but it's not unusual for a Keynesian to mis-understand the simplest of things.
OECD provided graph? ! for 2005 as well. Graph that doesn't include State taxes.
Here is a better source.
This again, does not include State income taxes.
Here they are
If you are making over say $10,000,000/year, you'll pay marginal tax rate on 99% of your income, so that's 35% + SS + payroll + Medicare + State. State taxes vary and in some cases they are 0, which is why people move to Texas or Florida out of places like Connecticut or Illinois for example.
Of-course the other taxes will also add up, like property, sales, gas, etc.