Are you watching Greece implode?

[Jaskalas]

But, that is only my opinion, thankfully people that know far more than me are making decisions.

We could have survived the depression. We will not survive these bailouts. Short term they're great, long term its catastrophic.

 

[EightySix Four]

We could have survived the depression. We will not survive these bailouts. Short term they're great, long term its catastrophic.

Please explain this mathematically utilizing accepted economic models. Otherwise [citation needed]

 

[totalnoob]

Please explain this mathematically utilizing accepted economic models. Otherwise [citation needed]

You won't find any studies on this buddy. We are in uncharted territory.. Trillions in the supposedly "stable" world reserve currencies being printed year after year is unprecedented.

 

[EightySix Four]

You won't find any studies on this buddy. We are in uncharted territory.. Trillions in the supposedly "stable" world reserve currencies being printed year after year is unprecedented.

Then stop making assumptions as to what will happen if we simply do not know.

 

[totalnoob]

Then stop making assumptions as to what will happen if we simply do not know.

There's no reason we can't speculate.. We have a good history of countries trying to print their way out of a fiscal mess. The result is usually terrible inflation and social chaos.

 

[EightySix Four]

You won't find any studies on this buddy. We are in uncharted territory

There's no reason we can't speculate.. We have a good history of countries trying to print their way out of a fiscal mess. The result is usually terrible inflation and social chaos.

First you can't prove or back-up anything with studies, now you have a good history. Make up your mind and give me numbers, otherwise stop speculating about shit that "no one knows."

We could have survived the depression.

I want that quote proven as well.

 

[totalnoob]

First you can't prove or back-up anything with studies, now you have a good history. Make up your mind and give me numbers, otherwise stop speculating about shit that "no one knows."

Weimar bitch. That's one end of the spectrum. A fiscally sane government with balanced budgets and 1% inflation is on the other. The welfare states of the world who think they can print their way into prosperity are likely going to end up somewhere in the middle like Venezuela. - http://news.yahoo.com/s/ap/20100508...lYwN5bl90b3Bfc3RvcmllcwRzbGsDdmVuZXp1ZWxhYW5u

 

[EightySix Four]

world reserve currencies

Weimar bitch. That's one end of the spectrum. A fiscally sane government with balanced budgets and 1% inflation is on the other. We are likely to end up somewhere in the middle.

When did Weimar have a world reserve currency?

The welfare states of the world who think they can print their way into prosperity are likely going to end up somewhere in the middle like Venezuela. - http://news.yahoo.com/s/ap/20100508...lYwN5bl90b3Bfc3RvcmllcwRzbGsDdmVuZXp1ZWxhYW5u

Or Canada with all it's socialist programs and hippy healthcare. Scroll down and click "10 years" here


My problem with this discussion was that we simply do not know. We ARE in uncharted territory. Your hyper inflation examples and such are only vaguely related to the current state of the world economy as it is today. There are economic, political, and sociological differences which run so deep that they completely change our models of the economy and what we could possibly expect.

Speculation is fine, citing speculation as a fact is not. That was the only point I was trying to make when asking him to cite his sources.

 

[Dissipate]

Please explain this mathematically utilizing accepted economic models. Otherwise [citation needed]

The fiscal problems we face in the future have less to do with economics than they have to do with basic political science and fundamental accounting principles.

There are two basic facts:

1. The U.S. and many European countries have unsustainable welfare states, with future liabilities dwarfing potential future government tax revenue (short of an extremely unlikely huge increase in GDP in these countries).

2. The political class refuses to acknowledge the facts of part 1, causing them to do nothing about it. Why? Because of the way the political system is set up. Anyone who talks about either massive reductions in welfare benefits or massive tax increases faces political suicide.

Take 1 and 2, put them together and it is quite easy to predict that there are stormy waters ahead. Right now it is a game of Hot Potato. The politicians of the past made promises that the politicians of the future can't possibly keep. A good example was Bush's prescription drug bill, which was passed at a time when it was clear to anyone who cared to check that Social Security and Medicare were (and still are) in big trouble.

Fortunately for Bush, he is now out of office. Woe to any politician who tries to reverse the promise he made to the old folks. Hence, politicians just keep passing the buck along, hoping they can make political gains at the expense of future politicians who actually have to face the music.

 

[EightySix Four]

The fiscal problems we face in the future have less to do with economics than they have to do with basic political science and fundamental accounting principles.

There are two basic facts:

1. The U.S. and many European countries have unsustainable welfare states, with future liabilities dwarfing potential future government tax revenue (short of an extremely unlikely huge increase in GDP in these countries).

2. The political class refuses to acknowledge the facts of part 1, causing them to do nothing about it. Why? Because of the way the political system is set up. Anyone who talks about either massive reductions in welfare benefits or massive tax increases faces political suicide.

Take 1 and 2, put them together and it is quite easy to predict that there are stormy waters ahead. Right now it is a game of Hot Potato. The politicians of the past made promises that the politicians of the future can't possibly keep. A good example was Bush's prescription drug bill, which was passed at a time when it was clear to anyone who cared to check that Social Security and Medicare were (and still are) in big trouble.

Fortunately for Bush, he is now out of office. Woe to any politician who tries to reverse the promise he made to the old folks. Hence, politicians just keep passing the buck along, hoping they can make political gains at the expense of future politicians who actually have to face the music.

That wasn't the claim I asked him to verify was it? He directly stated we could have survived a depression, and that we can't survive the bail out. You have addressed neither of these.

As far as your response goes, I do agree with you. The majority of the budget deficit is due to tax cuts made in the Bush era , some of which haven't even come into effect yet. And you are correct that it would be political suicide for anyone to take them away. The only way that would happen is if someone decided to bite the bullet and do it with the expectation that as a politician they were screwed anyways.

But, we're way off topic. Greece is screwed and the people that live their are going to have to rapidly adjust to a dramatically different standard of living.

 

[Dissipate]

That wasn't the claim I asked him to verify was it? He directly stated we could have survived a depression, and that we can't survive the bail out. You have addressed neither of these.

Well, we might survive the bailout. If we can't, those who know we can't aren't going to tell us, and if we can then there will be a 'recovery' that will carry us through until the welfare state starts crumbling wholesale. The best route would be to declare bankruptcy now, dismantle the Fed and start over with a free market currency and non-fractional reserve banking. There is about 0 chance of this happening.

 

[EightySix Four]

lol

 

[SportSC4]

I'm a little late but just wanted to throw in my 2 drachmas 😉
The Greek government knew how much money they were taking in year after year in taxes. Those taxes are very high because they know that people will fudge on them. If a person is salary, the taxes are taken out from the company before the paycheck goes to the person. It's not like there was one year where the well dried up. Tax evasion isn't the problem - the government knows how much they have to work with.

This is a problem of the Greek government spending way too much money and not making the necessary actions before they got to this mess. Their government is horribly inefficient and very corrupt (speaking here from experiences). It's a little better now than it was 20 years ago but their are still issues.

 

[LegendKiller]

Well, we might survive the bailout. If we can't, those who know we can't aren't going to tell us, and if we can then there will be a 'recovery' that will carry us through until the welfare state starts crumbling wholesale. The best route would be to declare bankruptcy now, dismantle the Fed and start over with a free market currency and non-fractional reserve banking. There is about 0 chance of this happening.

Yeah, because allowing free manipulation of a currency has shown to be so correct historically. We had runs on the dollar in the 18th and 19th centuries by foreign creditors and dollar holders. I guess you forgot that.

Then, you go to FRB, which is another strawman. Removing FRB would not solve a damn thing, as most savings aren't put into deposit accounts anyway. Bank runs have nothing to do with deposits these days and only a fraction of bank funding comes from deposits.

If deposits and FRB were the cause of this crisis, how do you explain the near collapse of several non-deposit taking institutions and the utter collapse of two non-deposit taking institutions. Furthermore, how do you explain the fact that SIVs weren't funded with deposits, but were off-bs.

Using Weimar as an "example" of how this will lead is silly. Nobody had faith in Weimar's ability to do anything, as it also had reparations far in excess of it's GDP, especially with the removal of the Saar from its control. There simply was no economic viability behind the country and no military force. Thus, it had no legitimacy nor long-term viability.

 

[EightySix Four]

Yeah, because allowing free manipulation of a currency has shown to be so correct historically. We had runs on the dollar in the 18th and 19th centuries by foreign creditors and dollar holders. I guess you forgot that.

Then, you go to FRB, which is another strawman. Removing FRB would not solve a damn thing, as most savings aren't put into deposit accounts anyway. Bank runs have nothing to do with deposits these days and only a fraction of bank funding comes from deposits.

If deposits and FRB were the cause of this crisis, how do you explain the near collapse of several non-deposit taking institutions and the utter collapse of two non-deposit taking institutions. Furthermore, how do you explain the fact that SIVs weren't funded with deposits, but were off-bs.

Using Weimar as an "example" of how this will lead is silly. Nobody had faith in Weimar's ability to do anything, as it also had reparations far in excess of it's GDP, especially with the removal of the Saar from its control. There simply was no economic viability behind the country and no military force. Thus, it had no legitimacy nor long-term viability.

Yay, someone with some economic sense.

 

[Munky]

If the role of the FRB was to promote "economic stability" then it sure hasn't done its job. Unless by "stability" they mean "perpetual inflation."

Getting rid of the Fed is probably not a realistic solution (yet), but it should be audited. And reinstate Glass-Steagall. That little piece of legislation would have prevented the Wall St speculators from holding our economy hostage.

 

[EightySix Four]

If the role of the FRB was to promote "economic stability" then it sure hasn't done its job. Unless by "stability" they mean "perpetual inflation."

Getting rid of the Fed is probably not a realistic solution (yet), but it should be audited. And reinstate Glass-Steagall. That little piece of legislation would have prevented the Wall St speculators from holding our economy hostage.

Please show me how you know the economy would have been more stable without the fed.

 

[Munky]

Please show me how you know the economy would have been more stable without the fed.

Right after you show me how the Fed had anything to do with promoting economic stability.

 

[EightySix Four]

Right after you show me how the Fed had anything to do with promoting economic stability.

First, I never claimed they did. Second, what level of education have you had so I can make sure and tailor the math sections to you.

edit: I will write out the post later this evening, I have a final to deal with in an hour 😉

 

[Special K]

Then, you go to FRB, which is another strawman. Removing FRB would not solve a damn thing, as most savings aren't put into deposit accounts anyway. Bank runs have nothing to do with deposits these days and only a fraction of bank funding comes from deposits.

Can you elaborate on this section? Where are most savings put these days, if not deposit accounts? Tbills?

Why don't bank runs have anything to do with deposits? I thought the definition of a bank run was a mass withdrawal of deposits.

Finally, where does the majority of bank funding come from nowdays if not from deposits?

 

[EightySix Four]

Can you elaborate on this section? Where are most savings put these days, if not deposit accounts? Tbills?

Why don't bank runs have anything to do with deposits? I thought the definition of a bank run was a mass withdrawal of deposits.

Finally, where does the majority of bank funding come from nowdays if not from deposits?

Prior to the collapse, the marginal propensity to save was 0. Which meant that the average American was spending more than their entire income, thus there was no saving.

The majority of savings now are structured such as 401(k)'s, since most individuals just utilize what their company provides them. These aren't "deposits" in the way that you say it. The cost to withdraw from these savings makes it not worth it in most situations. Bank runs are based on deposits, but as was posted, very little of a banks income comes from these kinds of accounts anymore.

Banks are funded from a multitude of sources, but much of it is done from the bank's investment divisions.

This is shifting as the MPS is shifting back to a more sustainable level.

edit: on another note, has anyone actually tried to look through a major banks balance sheets? They're absolutely insane, keeping track of something that size is a massive undertaking.

 

[LegendKiller]

If the role of the FRB was to promote "economic stability" then it sure hasn't done its job. Unless by "stability" they mean "perpetual inflation."

Getting rid of the Fed is probably not a realistic solution (yet), but it should be audited. And reinstate Glass-Steagall. That little piece of legislation would have prevented the Wall St speculators from holding our economy hostage.

Inflation would exist without FRB.

How does FRB, on its own, cause inflation?

 

[EightySix Four]

Inflation would exist without FRB.

How does FRB, on its own, cause inflation?

Not only that, but a reasonable level of inflation is considered healthy in an economy. The inflation target is usually based more on politics than econ though.

 

[Dissipate]

Yeah, because allowing free manipulation of a currency has shown to be so correct historically. We had runs on the dollar in the 18th and 19th centuries by foreign creditors and dollar holders. I guess you forgot that.

So we would have the same problem as banks in the 18th century but Weimar Republic is a bad example of where we are going. Nice selective historical interpretation.

Then, you go to FRB, which is another strawman. Removing FRB would not solve a damn thing, as most savings aren't put into deposit accounts anyway. Bank runs have nothing to do with deposits these days and only a fraction of bank funding comes from deposits.

Good to know. I guess since they have nothing to do with the trillions in deposits we have nothing to worry about when they all collapse. It is effing hilarious that you are seriously trying to shovel this shit...

If deposits and FRB were the cause of this crisis, how do you explain the near collapse of several non-deposit taking institutions and the utter collapse of two non-deposit taking institutions. Furthermore, how do you explain the fact that SIVs weren't funded with deposits, but were off-bs.

How do you explain the fact that Alan Greenspan all but admitted that he caused the housing bubble by lowering interest rates after 9/11? How do you explain the bank failures that are happening week after week after week? How do you explain everyone going out of business all at once? Black Swan?

Furthermore, how do you explain the fact that Bernanke was wrong wrong wrong WRONG about the housing crisis all the way through, testifying that it wasn't a big problem? Your heroes are either idiots when it comes to the economy or they are lying.

Using Weimar as an "example" of how this will lead is silly. Nobody had faith in Weimar's ability to do anything, as it also had reparations far in excess of it's GDP, especially with the removal of the Saar from its control. There simply was no economic viability behind the country and no military force. Thus, it had no legitimacy nor long-term viability.

I didn't use Weimar as an example. But now that you bring it up...Weimar is basically what happens when governments can't pay what they owe because people are too stupid to figure out the source of hyperinflation. So please wax poetically again about how the U.S. doesn't really owe all that much.

 

[werepossum]

Using the same logic that you're using, then I suppose every member country of the IMF is bailing out Greece. That's just a flawed way of looking at things, but w/e, if you really think you're supporting Greece and you don't want to, then what are you going to do about it? No one is necessarily representing your interest at the IMF.

Yes, every member country of the IMF is bailing out Greece, just as every member of the Klan is funding hate speech and not just the guy that makes the web site.* There is no Magic Cupboard, and giving money to a third person does not absolve you of guilt nor rob you of credit.

*I am assuming here that the Klan has dues or something.