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  #55  
Old 05-04-2012, 04:38 PM
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Logjam Logjam is offline
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Re: C B O says "Obama stimulus harmful over long h

Quote:
Originally Posted by kazza View Post
Companies need money to grow. They can obtain that money from a number of sources, but the two main sources are debt and equity.
WRONG! And the reason you are wrong is the reason that Obama has supporters.

Businesses make money by selling their product to customers!

To make profits business needs customers who have money to spend. Prosperity is not going deeper in debt, and increased debt can only be sustained when more product is sold and profits increase. A smart businessman NEVER borrows to sustain his business, that is the road to ruin. If a business cannot product a profit then it is time to go out of business, which is what is happening in huge numbers today.

To fix business, lower taxes so people have more money to spend, reduce government regulations so that businesses can be more efficient, reduce corporate taxes so that they can become more profitable. Make energy less expensive to improve efficiency and reduce overhead, cut out all redundant rules and regulations. Government should help small business and not discourage it, which is what they are doing now.

Is is not about credit it is about profit. To date fewer small businesses are being started than ever before (according to Rush this morning).

Our economic mess is easy to fix. Trouble is Obama is clueless as to how our economy runs and he is taking the exact opposit steps required to produce prosperity. I question if he actually wants us to be prosperous. Certainly he is waging a war against the rich, who are really the successful. Wealth should be encouraged and rewarded and not the other way around.





Last edited by Logjam : 05-04-2012 at 04:44 PM.
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  #56  
Old 05-04-2012, 07:17 PM
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kazza kazza is offline
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Re: C B O says "Obama stimulus harmful over long h

Quote:
Originally Posted by Logjam View Post
WRONG! And the reason you are wrong is the reason that Obama has supporters.

Businesses make money by selling their product to customers!

To make profits business needs customers who have money to spend. Prosperity is not going deeper in debt, and increased debt can only be sustained when more product is sold and profits increase. A smart businessman NEVER borrows to sustain his business, that is the road to ruin. If a business cannot product a profit then it is time to go out of business, which is what is happening in huge numbers today.

To fix business, lower taxes so people have more money to spend, reduce government regulations so that businesses can be more efficient, reduce corporate taxes so that they can become more profitable. Make energy less expensive to improve efficiency and reduce overhead, cut out all redundant rules and regulations. Government should help small business and not discourage it, which is what they are doing now.

Is is not about credit it is about profit. To date fewer small businesses are being started than ever before (according to Rush this morning).

Our economic mess is easy to fix. Trouble is Obama is clueless as to how our economy runs and he is taking the exact opposit steps required to produce prosperity. I question if he actually wants us to be prosperous. Certainly he is waging a war against the rich, who are really the successful. Wealth should be encouraged and rewarded and not the other way around.
Are you an idiot?

Where do you think a small business gets the money to start up? A loan from the bank, or a loan from a private investor (an owner-operator is essentially loaning the business money in the hopes of making a return on that investment).

If a smart business never issues debt or equities, WHY THE FUCK do you think there is a stock market? Or any financial system at all, for that matter? EVERY business begins with debt, either explicit or implicit.

If businesses DIDN'T borrow money, where do you think you could invest your hard-earned dollars? Why would a bank pay you interest? How would you earn money on your retirement savings? Our whole economy works on this system..


Smart businesses borrow money at a lower rate than the return they can make on it. Idiots think that any debt is bad debt, and that no one should ever borrow money for any reason. I am guessing that you have never run a business.

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  #57  
Old 05-04-2012, 07:39 PM
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Yawn... Yawn... is offline
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Re: C B O says "Obama stimulus harmful over long h

Quote:
Originally Posted by Logjam View Post
WRONG! And the reason you are wrong is the reason that Obama has supporters.

Businesses make money by selling their product to customers!

To make profits business needs customers who have money to spend. Prosperity is not going deeper in debt, and increased debt can only be sustained when more product is sold and profits increase. A smart businessman NEVER borrows to sustain his business, that is the road to ruin. If a business cannot product a profit then it is time to go out of business, which is what is happening in huge numbers today.

To fix business, lower taxes so people have more money to spend, reduce government regulations so that businesses can be more efficient, reduce corporate taxes so that they can become more profitable. Make energy less expensive to improve efficiency and reduce overhead, cut out all redundant rules and regulations. Government should help small business and not discourage it, which is what they are doing now.

Is is not about credit it is about profit. To date fewer small businesses are being started than ever before (according to Rush this morning).

Our economic mess is easy to fix. Trouble is Obama is clueless as to how our economy runs and he is taking the exact opposit steps required to produce prosperity. I question if he actually wants us to be prosperous. Certainly he is waging a war against the rich, who are really the successful. Wealth should be encouraged and rewarded and not the other way around.
Quote:
A smart businessman NEVER borrows to sustain his business....
wow

Hum... Logjam, how many exchange traded companies are debt free ?

Have you ever considered the weighted average cost of capital ?

Or why companies borrow via debt financing vs. equity financing ?

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  #58  
Old 05-06-2012, 04:31 PM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

Quote:
Originally Posted by Barbie Zirconia View Post
Here's a quote from Paul Krugman in the New York Times:


"I mean, what is the un-artificial, or if you prefer, ďnaturalĒ rate of interest? As it turns out, there is actually a standard definition of the natural rate of interest, coming from Wicksell, and itís basically defined on a PPE basis (thatís for proof of the pudding is in the eating). Roughly, the natural rate of interest is the rate that would lead to stable inflation at more or less full employment.

And we have low inflation with high unemployment, strongly suggesting that the natural rate of interest is below current levels . . . "


So, based upon that definition, the interest rates we have today on T-bills (Treasury bills) are not too low, but around where they should be.

But I suppose this doesn't matter to the people who hate the Fed, and want to see it destroyed. It doesn't matter to them whether the Fed is right or wrong. Their primary concern is that the free market must control everything, regardless of the outcome.

To me, that's called insanity.


Paul Krugman is a discredited fool

He knows nothing about economics.

Think about this logically

Your household is broke. You already owe piles of money you can never pay back, and every year you go further and further in debt

Are you AAA credit? Should you be able to borrow all the money you want, and the lowest rates possible?

Does that make any sense at all?

I mean think of our creditor, who own all these treasuries, listening to our dope President, telling the world, that if the debt ceiling doesn't get raise, the US could default on some of its obligations.

So.....we are AAA credit , entitled to the borrow at the lowest rates , yet if we cant borrow any more money, we are toast

Does that sound like a natural interest rate to you??

Its called a ponzi scheme

The US has been given has been riding this gravy train for too long, because of the dollar being the worlds reserve currency

You are witnessing that then end of an empire, and sadly, its not going to end well.

The Fed is the problem, government is the problem, and markets forces always will win

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  #59  
Old 05-06-2012, 04:35 PM
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kazza kazza is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
Paul Krugman is a discredited fool

He knows nothing about economics.

Think about this logically

Your household is broke. You already owe piles of money you can never pay back, and every year you go further and further in debt

Are you AAA credit? Should you be able to borrow all the money you want, and the lowest rates possible?

Does that make any sense at all?
And yet.... people are still willing to lend money to the US government at a fraction of a percentage point.

Bruce, what you are trying to convince is of, is that you know better than the market. Sorry bud, but that's not going to happen.

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  #60  
Old 05-06-2012, 08:26 PM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by kazza View Post
And yet.... people are still willing to lend money to the US government at a fraction of a percentage point.

Bruce, what you are trying to convince is of, is that you know better than the market. Sorry bud, but that's not going to happen.

Wrong

Just the opposite actually

The only reason we have held rates down , with this level of debt is the Fed

Somehow I dont think they are part of the free market

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  #61  
Old 05-06-2012, 08:54 PM
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
Wrong

Just the opposite actually

The only reason we have held rates down , with this level of debt is the Fed

Somehow I dont think they are part of the free market
Why don't you think the 'Fed' is NOT part of the 'free market' ?

The Fed sells and redeems U.S. government securities: Savings bonds, bills, notes and bonds. It acts as the clearing house for the US government.

Anyone can freely purchase, and bid, on US Government Securities.

The price of the securities are not determined by the 'FED', rather by the market.

Below is a list of recent Treasury Auctions.

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  #62  
Old 05-06-2012, 09:41 PM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

Not someone who enters the market to expand the supply of currency to purchase bonds

Its called monetizing the debt, what they said under oath they would never do

You really asked that question?

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  #63  
Old 05-06-2012, 10:47 PM
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Re: C B O says "Obama stimulus harmful over long h

Quote:
Originally Posted by brucefan View Post
Not someone who enters the market to expand the supply of currency to purchase bonds

Its called monetizing the debt, what they said under oath they would never do

You really asked that question?
Monetizing the debt ....

Yes, this is exactly what the FED does. They have done so for 200 plus years.

When has anyone said that they don't monetize debt ?

That doesn't make any sense.



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  #64  
Old 05-06-2012, 10:55 PM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by Yawn... View Post
Monetizing the debt ....

Yes, this is exactly what the FED does. They have done so for 200 plus years.

When has anyone said that they don't monetize debt ?

That doesn't make any sense.


He did

The helicopter guy


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  #65  
Old 05-06-2012, 11:12 PM
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
Not someone who enters the market to expand the supply of currency to purchase bonds

Its called monetizing the debt, what they said under oath they would never do

You really asked that question?
Semantics.

I will then assume what you mean by 'monetizing the debt' is any open market operations, or any policy by the FED.

Hum... Have you ever taken a Macro Econ class, or Finance Class?

Back to my question: How is the FED not part of the free market ?

Quote:
Originally Posted by brucefan View Post
Wrong

Just the opposite actually

The only reason we have held rates down , with this level of debt is the Fed

Somehow I dont think they are part of the free market

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  #66  
Old 05-07-2012, 06:58 AM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by Yawn... View Post
Semantics.

I will then assume what you mean by 'monetizing the debt' is any open market operations, or any policy by the FED.

Hum... Have you ever taken a Macro Econ class, or Finance Class?

Back to my question: How is the FED not part of the free market ?
Yes, I did, Finance major actually. Iam glad you are so interested in background so I now I guess I am qualified to have a conversation with you

The Fed, a private bank that can print and debase our currency, not based on the supply and demand for money from investors who cant, is not part of the free market to determine the true demand for treasuries

Where were you educated, watching sesame street reruns?

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  #67  
Old 05-07-2012, 11:16 AM
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
Yes, I did, Finance major actually. Iam glad you are so interested in background so I now I guess I am qualified to have a conversation with you

The Fed, a private bank that can print and debase our currency, not based on the supply and demand for money from investors who cant, is not part of the free market to determine the true demand for treasuries

Where were you educated, watching sesame street reruns?
OK, 'Monetizing the debt' - Can you explain the meaning of the term in the context of what Bernake was saying?

How is it that that the FED is not part of the free market?

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  #68  
Old 05-07-2012, 12:41 PM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by Yawn... View Post
OK, 'Monetizing the debt' - Can you explain the meaning of the term in the context of what Bernake was saying?

How is it that that the FED is not part of the free market?

Seemed like I just explained that, and I have no idea what his meaning was

He must have hid under your sematics argument

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  #69  
Old 05-15-2012, 11:33 PM
Barbie Zirconia Barbie Zirconia is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
He did

The helicopter guy

It's hard to tell what was really being discussed from a 5 second video.

First, let's see what the definition of monetization is.

From wikipedia:

Monetization is the process of converting or establishing something into legal tender. It usually refers to the coining of currency or the printing of banknotes by central banks.

So, based upon that definition, I'm assuming what Bernanke meant was that the central bank is not printing trillions of dollars of banknotes to pay for the deficit. Instead, the Fed is selling T-bills to the free market. In other words, the government is borrowing money instead of creating it.

That means that they're not monetizing the debt.

Again, I'm assuming that's what Bernanke meant. I don't think he would lie on national television. That would be stupid.

And he's not a stupid man.

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  #70  
Old 05-16-2012, 12:07 AM
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by Barbie Zirconia View Post
It's hard to tell what was really being discussed from a 5 second video.

First, let's see what the definition of monetization is.

From wikipedia:

Monetization is the process of converting or establishing something into legal tender. It usually refers to the coining of currency or the printing of banknotes by central banks.

So, based upon that definition, I'm assuming what Bernanke meant was that the central bank is not printing trillions of dollars of banknotes to pay for the deficit. Instead, the Fed is selling T-bills to the free market. In other words, the government is borrowing money instead of creating it.

That means that they're not monetizing the debt.

Again, I'm assuming that's what Bernanke meant. I don't think he would lie on national television. That would be stupid.

And he's not a stupid man.
Bruce seems to think that the term monetization means monetization of existing debt. (I suppose it could mean that)

Apparently when Bernanke was asked the question as to monetization, the congressman was asking about the afore mentioned (popular?) meaning - of debt monetization.

Bernanke is indeed a smart fellow - He understood what the congressman was asking.

And no we are not monetizing debt - there simply is no need to do so.

I am surprised that a person that purports to have taken classes in finance, and/or claims to hold a 'Major' in finance, holds such strange and conspiracy ridden views on economics.

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  #71  
Old 05-16-2012, 07:07 AM
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brucefan brucefan is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by Yawn... View Post
Bruce seems to think that the term monetization means monetization of existing debt. (I suppose it could mean that)

Apparently when Bernanke was asked the question as to monetization, the congressman was asking about the afore mentioned (popular?) meaning - of debt monetization.

Bernanke is indeed a smart fellow - He understood what the congressman was asking.

And no we are not monetizing debt - there simply is no need to do so.

I am surprised that a person that purports to have taken classes in finance, and/or claims to hold a 'Major' in finance, holds such strange and conspiracy ridden views on economics.


Conspiricy view? What?

61% of our debt was purchased by the Fed in the last year!

http://www.moneynews.com/Headline/fe...3/28/id/434106

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  #72  
Old 05-16-2012, 02:34 PM
Barbie Zirconia Barbie Zirconia is offline
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Re: C B O says "Obama stimulus harmful over long h

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Originally Posted by brucefan View Post
Conspiricy view? What?

61% of our debt was purchased by the Fed in the last year!

http://www.moneynews.com/Headline/fe...3/28/id/434106
Brucefan, do you realize that the Fed is always buying and selling T-bills? That's normal.

If you buy a 1 year T-bill, the Fed will buy it back from you one year later. You get all of your money back, plus interest.

I didn't know that the Fed purchased 61% of the debt in the last year, but let's see if we can figure this out.

First, here's a statement from the Federal Reserve Bank of New York:

Statement Regarding Purchases of Treasury Securities

Under the existing reinvestment policy, principal payments from agency debt and agency mortgage-backed securities (MBS) are reinvested in longer-term Treasury securities.

The only change to the distribution is that the two maturity sectors beyond 10 years from the earlier purchase program will be combined into a single maturity sector of 10 to 30 years in order to achieve greater operational simplicity.


So, if I understand this correctly, the Fed is saying that it purchased T-bills, but will sell them again (at a different maturity date) in order to "achieve greater operational simplicity".

I'm assuming that's what it means. I'm not an economist, of course. So I don't know exactly what's going on.

But let's use logic here. The national debt would not be going up if the Fed was creating money to purchase debt. The fact that the national debt keeps going higher means that the government is borrowing money, not creating it. So, I think what the Fed is doing here is buying T-bills and selling them again to other people. It's something that the Fed has to do.

If somebody has a better explanation, I would love to hear it.


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