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The Danger Posed By The Deficit is: Zero?
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prozacrefugee
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PostPosted: Mon May 17, 2010 8:01 pm    Post subject: The Danger Posed By The Deficit is: Zero? Reply with quote

Not sure how I feel about this article, but definitely an interesting read. On one hand the actual debt we owe in the form of interest is not helping anyone but bondholders. On the other when dealing with inflation somewhere between zero and negative as we are now running the presses has not only a priming effect but the ability to focus productive power to projects which the false externalities of our markets make artificially expensive, such as green power.

http://voices.washingtonpost.com/ezra-klein/2010/05/galbraith_the_danger_posed_by.html

Oh, and VoiceOfBeck don't even bother. If I want your barely understood paraphrasings of Paul's mistaken Austrian school I'll go to the originals and scoff at those. Or wait till you come up with an actual idea to reduce the debt you suddenly care about.
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voiceofTruth
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PostPosted: Mon May 17, 2010 9:16 pm    Post subject: Reply with quote

Ron Paul
Wrote
Quote:
Countries don’t go bankrupt. What they do is they default on the debt. It doesn’t mean they won’t pay it. They pay it off in bad money. And literally, the purpose of the Federal Reserve right now is to lower the real debt. So, if you destroy 50% of the value of the dollar in the next year or two, the real debt has gone down 50%. Literally, the Federal Reserve Board is praying for and encouraging inflation to lower the real debt because it can’t be sustained.

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prozacrefugee
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PostPosted: Tue May 18, 2010 12:14 pm    Post subject: Reply with quote

Oh, and VoiceOfBeck don't even bother. If I want your barely understood paraphrasings of Paul's mistaken Austrian school I'll go to the originals and scoff at those. Or wait till you come up with an actual idea to reduce the debt you suddenly care about.



And yes, defaulting means not paying. Driving down the price of a currency to pay off a debt is inherently impossible.

If a country is continuing to run deficits their deficit will increase by the exact amount the dollar is devalued, leaving the country in exactly as much debt growth in actual value. In addition their service on the debt now becomes expensive as bond prices rise to match the actual value of the currency. The numbers might change, but actual value owed does not. You can't make something both more and less expensive at the same time, and that's what Paul is claiming is happening. The only net effect of reducing a currency by 50% would be to devalue current bond holders and immediately reward by an equal amount new bond holders, something that has no effect on debt as a whole.

Now devaluing a currency RELATIVE to another currency can be valuable in a situation like Greece, in that it makes imports more expensive and exports cheaper, thus propping up aggregate domestic demand.

Money is a symbol of value, not value, which you can't seem to understand.
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DifferentDrummer
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PostPosted: Wed May 19, 2010 3:11 am    Post subject: Reply with quote

prozacrefugee wrote:
Money is a symbol of value, not value, which you can't seem to understand.


Most people don't seem to understand this.

Being "out of money" is as ridiculous as being "out of inches".
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voiceofTruth
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PostPosted: Wed May 19, 2010 10:41 am    Post subject: Reply with quote

Great more commodities for me to buy, have fun wiping your ass with $100 bills.
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A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
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prozacrefugee
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PostPosted: Wed May 19, 2010 12:34 pm    Post subject: Reply with quote

voiceofTruth wrote:
Great more commodities for me to buy, have fun wiping your ass with $100 bills.


Actually gold is slightly down from December. Guess the GREAT SPIRIT of the FREE MARKET isn't as worried as it should be about the BLACK SOCIALIST in the WHITE HOUSE?

Please tell me you've been buying gold from Beck's sponsor, who is currently under investigation. Seems that the fees they stack on has those conspiracy nuts requiring the price of gold double before they'll break even.

And yes, I have started selling some of my gold antique coins. The people buying gold now are the same idiots that bought houses in 2006, and they're always good for making a buck off of. With that money I will be buying many nice rocking chairs.


Last edited by prozacrefugee on Wed May 19, 2010 1:21 pm; edited 1 time in total
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DifferentDrummer
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PostPosted: Wed May 19, 2010 12:50 pm    Post subject: Reply with quote

^ http://www.youtube.com/watch?v=3GDts0Q1dK8
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voiceofTruth
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PostPosted: Wed May 19, 2010 5:07 pm    Post subject: Reply with quote

http://www.weinerfacts.com/weiner/


Lol, Glen Beck is such a threat. Lolololololololol.

LOSERSZ!!!!!!!!!
Soros funded dribbles, Von Jones, QWeiner. LOL You are such weak losers!!!
_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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voiceofTruth
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PostPosted: Wed May 19, 2010 5:11 pm    Post subject: Reply with quote

Quote:
MUR 4995 resulted in a $47,000.00 fine (“civil penalty”) against Weiner because of financial misconduct in one of his reelection campaigns. MUR 5429 involved an illegal $28,000.00 loan that Weiner’s parents made to one of his campaign committees.

It’s really sad when friends and families of Weiner cause so much Weiner pain.





WEEEEEEIIIIIINNNNNNNNEEERRRRRRRR!!!!!!!!!!!~!!!!!!
_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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voiceofTruth
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PostPosted: Wed May 19, 2010 5:20 pm    Post subject: Reply with quote

Why was a gold ounce $20 in 1930 and 1200 today, actually 2200 with inflation.

Why would the treasury come up with treasury inflation protection securites. its hedge against there own failed fiat system. Keep telling yourselves inflation is a moot point. Your blind, bonds are the new hedge ,gold and bonds are still climing. They don't want people to protect themselves.
_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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voiceofTruth
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PostPosted: Wed May 19, 2010 5:37 pm    Post subject: Reply with quote

Quote:
The Better Business Bureau, which has given Goldline an A+ rating, said Tuesday that it was standing by that. A representative of the bureau said it had recently re-reviewed Goldline in response to Mr. Weiner’s accusations and saw no reason for a change. “It’s a company with not that many complaints,” said Gary Almond, from the bureau. When compared with other companies that sell gold, “there was a remarkable difference in how each one addressed complaints,” noting that some of those other companies had F ratings.”






WWWWWWWWWWWWWEEEEEEEEEEEEEEEEEEEEEEEEEEIIIIIIIIIIIIIIIIIIIIINNNNNNNNNNNNNNNEEEEEEEEEEEEEEEEEEEERRRRRRRRRRRRRRRRRR!!!!!!!!!
_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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prozacrefugee
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PostPosted: Wed May 19, 2010 8:31 pm    Post subject: Reply with quote

voiceofTruth wrote:
Why was a gold ounce $20 in 1930 and 1200 today, actually 2200 with inflation.


AND COKE USED TO COST A NICKEL YOU DAMN WHIPPERSNAPPERS! Try using constant dollars, things make quite a bit more sense that way.

Quote:

Why would the treasury come up with treasury inflation protection securites. its hedge against there own failed fiat system.


Let me guess - the joos?

Quote:
Your blind, bonds are the new hedge ,gold and bonds are still climing. They don't want people to protect themselves.


My blinds are quite lovely. And gold is down $100 from December.
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voiceofTruth
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PostPosted: Wed May 19, 2010 8:34 pm    Post subject: Reply with quote

WWWWWWWWEEEEEEEEEEEEEIIIIIIIIIIINNNNNNNNEEEEEEERRRRRRRR!!!!!
_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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voiceofTruth
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PostPosted: Thu May 20, 2010 8:31 am    Post subject: Reply with quote

Quote:
Galbraith's primary mistake lies in his faulty and unimaginative assumptions about how actors in a rational market might behave. He's overlooking the following possibilities, along with many others I haven't personally thought of:

* The international market is rational enough to realize that the dollar (and US debt) is a temporary safe haven compared to international currencies and debt, so the temporarily increased demand is driving interest rates down. However, fleeing to Treasury debt in the short term doesn't necessarily mean anyone is actually planning to hold that debt until it matures. People are temporarily fleeing to Treasury debt in times of panic and few options, as a stop-gap measure while they take the time to consider better investments. In other words, Galbraith is confusing the right "price" at the moment with the right "price" in the long run, but the very existence of the bond market demonstrates that there's another option: People aren't looking at the long-term fundamentals of Treasury debt, because they don't matter for a short-term "greater fool" strategy.
* The market is "rational," but the large players - like China - are already in too deep. At this point, they might be deliberately sacrificing some money on more Treasuries at current rates to keep the dollar from crashing, which would cause them to face much greater losses. (For instance, they might want to buy time for the world to institute an international currency before the dollar fails.)
* The market is rational, but the large players - like China - might be taking their chances with obtaining the Treasury's "collateral" (real assets stolen through eminent domain) down the road instead of dollar payments. Of course, the Fed will eventually just monetize the debt, so only gigantic actors or international coalitions could ever hope for collateral, and they could likely only obtain it through credible economic/military/etc. threats.
* There's also always the possibility that the Fed/PPT is directly or indirectly manipulating the Treasury market to keep Treasury interest rates low, thereby demonstrating the dollar and government's "stability." They have every reason to do so, if they think they can get away with it. The very existence of the PPT (President's Working Group on Financial Markets) makes this a very real possibility, and the criminal and civil probes against JP Morgan for silver market rigging demonstrate that if a single company can rig the silver market, the US government (and Fed) would clearly have the resources to manipulate the Treasuries market. (Heck, even causing uncertainty in the stock market would cause people to temporarily move into Treasuries; that's why some people have been suspicious about the Fed's possible involvement in last Thursday's drop.)


The market is rational in the absence of manipulation, in the sense that it sets the correct prices based on supply and demand. However, Galbraith is making too many assumptions about the absence of manipulation, the underlying reasons for demand (on both the collective and individual levels), and the likely duration of that demand (on both the collective and individual levels).

Obviously, Galbraith is right that the Fed can just monetize the debt and/or any other payments, but he's being outrageously naive about the destructive inflationary effects and market distortions. A lot of the comments on this article are like, "Yeah, Greece failed because they can't just print money, but any government that can print money is a-okay forever and ever, Amen!" Yeah, tell that to Zimbabwe, Weimar Germany, and every other place in the world that has ever had hyperinflation. Anyone who uses, "Well, they didn't coin the world's reserve currency," as an excuse, should tell it to the Roman Empire instead. Not only does monetary debasement come at a cost, but the cost is high enough to bring entire civilizations to their knees.
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_________________
A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be your constant companion of your walks.
Thomas Jefferson
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prozacrefugee
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PostPosted: Thu May 20, 2010 12:19 pm    Post subject: Reply with quote

Still waiting for your hyperinflation. Where is it?
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