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(Politicker)   The U.S. has an infinite amount of money? So does Zimbabwe, you farking moron   (politicker.com) divider line 299
    More: Dumbass, United States, Zimbabwe, Michael Bloomberg  
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3069 clicks; posted to Politics » on 01 Mar 2013 at 3:48 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-01 01:34:34 PM
I'm no fan of Bloomberg, but what he said was that people seem to be willing to lend us an infinite amount of money.  Not that we HAVE an infinite amount of money.

/Quantitative Easing != Printing Money
 
2013-03-01 01:43:47 PM

vygramul: I'm no fan of Bloomberg, but what he said was that people seem to be willing to lend us an infinite amount of money.  Not that we HAVE an infinite amount of money.

/Quantitative Easing != Printing Money


That's actually what QE is.
 
2013-03-01 01:54:31 PM

DamnYankees: That's actually what QE is.


yep

Inflation is a hidden slow tax. 2% a year seems painless but = 20% in ten years. So, that $100 that you put in the bank at the current  1% interest rate is worth $90 ($100+$10-$20=$90) after 10 years. Doesn't do much to encourage savings. The Fed works hard to keep the rate steady between 1% to 3% so people don't biatch too hard.

I think it was in Argentina a few years back that employees were paid on a daily basis as waiting a week or two for your pay would cost you 10% due to their out of control inflation. I could easily happen here.
 
2013-03-01 01:56:40 PM

smells_like_meat: Inflation is a hidden slow tax. 2% a year seems painless but = 20% in ten years. So, that $100 that you put in the bank at the current  1% interest rate is worth $90 ($100+$10-$20=$90) after 10 years. Doesn't do much to encourage savings. The Fed works hard to keep the rate steady between 1% to 3% so people don't biatch too hard.


This is true, and partly a big reason why you see more progressive people thinking more inflation would be a great thing for the economy.
 
2013-03-01 02:06:52 PM

smells_like_meat: Inflation is a hidden slow tax. 2% a year seems painless but = 20% in ten years.


One, ten years of 2% inflation is not 20% net inflation.

Two, 2% long term inflation is pretty much ideal.
 
2013-03-01 02:08:13 PM

GAT_00: One, ten years of 2% inflation is not 20% net inflation.


Its %20 net dollars.

Inflation is a tax and is theft.
 
2013-03-01 02:09:20 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


This is stupid. I just figured I'd point that out..
 
2013-03-01 02:09:39 PM

DamnYankees: vygramul: I'm no fan of Bloomberg, but what he said was that people seem to be willing to lend us an infinite amount of money.  Not that we HAVE an infinite amount of money.

/Quantitative Easing != Printing Money

That's actually what QE is.


Nope.  It completely isn't.  The FED can't print money and hand it out.  It has to take something in.  The fact that it's taking something in is what makes it different than just printing money.  That's how John Cochrane, Austrian-School economist for the CATO Institute explains it.  That's certainly how a Keynesian would describe it.  The difference is that Austrian economists say it has zero effect, Keynesian economists say it affects the velocity of money.  Political pundits who have an axe to grind tell you otherwise.
 
2013-03-01 02:11:23 PM

GAT_00: smells_like_meat: Inflation is a hidden slow tax. 2% a year seems painless but = 20% in ten years.

One, ten years of 2% inflation is not 20% net inflation.

Two, 2% long term inflation is pretty much ideal.


It's not only ideal, it's HALF what the US has experienced in the last 50 years.  So, really, Obama is therefore god-like in his low tax compared to all the other before him.  People who believe what smells said should be lining up to slurp his dick.
 
2013-03-01 02:12:02 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


So is deflation like giving away free money?
 
2013-03-01 02:13:06 PM

cameroncrazy1984: smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.

This is stupid. I just figured I'd point that out..


Ah, modern education. Where we learn that losing money is good. George Orwell is laughing his ass off.
 
2013-03-01 02:16:03 PM

DamnYankees: smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.

So is deflation like giving away free money?


Ha!

If I ever decide to go to grad school in economics, I'm going to study deflation.

Or, I could go the relatively sane route and try to learn all the mysteries of Cthulhu.
 
2013-03-01 02:16:27 PM

smells_like_meat: cameroncrazy1984: smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.

This is stupid. I just figured I'd point that out..

Ah, modern education. Where we learn that losing money is good. George Orwell is laughing his ass off.


wat
 
2013-03-01 02:20:17 PM
One of the reasons that Jimmy Carter was a one term president was that inflation was around 10% (IIRC) during his term. It wasn't his fault but being president you get blamed for a lot of stuff. People noticed and it pissed them off.

Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum  attacks? Sucking dick, etc, etc. Being crass doesn't make you appear hip or smart. Quite the opposite, it makes you appear like spoiled children.
 
2013-03-01 02:21:24 PM

smells_like_meat: One of the reasons that Jimmy Carter was a one term president was that inflation was around 10% (IIRC) during his term


Yes, and one of the reasons Herbert Hoover was a one term president was that inflation was way too low.

What's your point?
 
2013-03-01 02:28:04 PM
If there's one article of faith in Washington (and elsewhere), it's the idea that the United States might get into a debt crisis if it doesn't get its fiscal house in order.

This is not true.

The reason why it's not true is because we live in a fiat currency system, where the United States government can create an infinite number of dollars at no cost to meet its obligations. A Treasury bill is a promise that the government will give you US dollars-something that the United States government can produce infinitely and at no cost.

That's the reason why interest rates on United States debt have only gone down even as the debt has ballooned. That's the reason why Great Britain has very low rates on its debt despite having very high debt-to-GDP. That's the reason why Japan has an astounding debt-to-GDP ratio and still enjoys some of the lowest rates ever. Investors have bet for so long that there would be a run on Japanese debt and have ended up so ruined that in financial circles that trade is called "the Widowmaker".

Well, what about Argentina? Argentina had to default on its debt because it had pegged its currency to the US dollar. It wasn't sovereign with regard to its currency since it had to maintain its currency's peg. It wasn't Argentina's debt that caused it to default, it was its currency peg.

What about Greece? Same thing. Greece hasn't used its own currency for ten years. Of course it's going bankrupt.


....

You don't have to take my word for it. How about Alan Greenspan? He said (PDF): "[A] government cannot become insolvent with respect to obligations in its own currency. A fiat money system, like the ones we have today, can produce such claims without limit."

But waaaaaaait, you shout, what about inflation? If the government prints money like crazy, won't that create inflation?

Well, in theory, yes. But probably not. Why is that? Because the US has an even bigger advantage than just being sovereign in its own currency (hi Greece), it also holds the reserve currency. The US dollar is the main currency that is used in most international transactions, it is held by all of the world's central banks, and so forth.

Why is this important? Well, another way to define inflation is to say that the supply of a currency gets out of whack with its demand: too much currency chasing too few people who want to hold it, and so its value drops. Well, when you have the reserve currency, the demand for your currency is always going to be extremely strong. There's always going to be tons of people, all around the world, who want to use US dollars, because their transactions are conducted in US dollars. (And it's highly unlikely that this will change soon-being the reserve currency has a network effect, meaning everyone uses the dollar as the reserve currency because everyone else uses it, creating a self-reinforcing cycle that's extremely hard to break.)


...

In other words, while in theory printing tons of money could create inflation, in practice demand for the dollar is so high-and for structural reasons that have very little to do with how the US economy is doing at a particular point in time-that it's hard to imagine a circumstance under which the US government would have to print so much that it would cause significant inflation.

And even if it did-well, for all the bad memories we have about it, the Stagflation of the 1970s was many things, but it was not Greece. Life in the 1970s was still relatively okay, despite the stagflation. That is to say, even in the extremely unlikely event that the government had to print so much money to get out of its debt that it caused moderate inflation, it still would not be a debt crisis of the kind that Greece and Spain are under right now. (Hyperinflation, meanwhile, is even less of a danger, since in recorded history it only happens in cases of not just reckless money printing, but also extremely serious exogenous shocks such as war, regime change, etc.)


....

A lot of people still think that the US is under some risk of one day becoming like Greece, and it's distorting our public debate.

It's especially distorting it on the Right, where hysteria about deficits, and debt, and becoming like Greece has reached a fever pitch. Paul Ryan, especially, has framed his entire message on entitlement-cutting on the flawed premise that the US needs to cut its entitlement or it will suffer a debt crisis. This message, in turn, has infected broad swathes of the conservative movement (including very smart people in it), a movement that I consider myself a member of and want to see in strong intellectual health. But very few liberals-certainly no Democratic elected officials that I'm aware of, certainly not the President and the Vice President-are disputing the premise that the US is in any danger of a debt crisis.


Link
 
2013-03-01 02:33:40 PM

smells_like_meat: One of the reasons that Jimmy Carter was a one term president was that inflation was around 10% (IIRC) during his term.



Yeah, I kind of figured you'd turn out to be someone stuck in the '70s mindset of OMFG INFLATION DOOM!  2% is nothing to worry about.  3-4% is average, and has been for a long time.

The quickest way to find out if someone is completely full of sh*t about the economy is if they complain about inflation.
 
vpb [TotalFark]
2013-03-01 02:38:01 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


Someone got an F in economics I see.
 
2013-03-01 02:39:04 PM
smells_like_meat:

Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum  attacks? Sucking dick, etc, etc. Being crass doesn't make you appear hip or smart. Quite the opposite, it makes you appear like spoiled children.

No.  This is the fark politics tab.  If you disagree with the opinions of people here you will be attacked.
 
vpb [TotalFark]
2013-03-01 02:41:29 PM
smells_like_meat:

Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum  attacks? Sucking dick, etc, etc. Being crass doesn't make you appear hip or smart. Quite the opposite, it makes you appear like spoiled children.

There isn't much point when someone starts off with something as dumb as "inflation is a tax and is theft".

I don't think failing to take tea party economics seriously makes you look dumb.
 
2013-03-01 02:45:48 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


Comments like this aren't worthy of anything other than ad hominem attacks. Because they are farking stupid.

You don't get to shiat on the dinner table and then complain about the smell.
 
2013-03-01 02:55:32 PM

Tigger: smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.

Comments like this aren't worthy of anything other than ad hominem attacks. Because they are farking stupid.

You don't get to shiat on the dinner table and then complain about the smell.


No, no.  Any attempt at commentary, no matter how wrong, should be politely applauded and approved of.  Perhaps a small participation trophy should be rewarded.
 
2013-03-01 02:57:32 PM
The US has an infinite amount of money when there is a Republican in the White House.
 
2013-03-01 03:08:31 PM
does the rest of the world see zimbabwe's currency as a safe haven?

so it's not quite the same thing, is it.
 
2013-03-01 03:34:27 PM

FlashHarry: does the rest of the world see zimbabwe's currency as a safe haven?

so it's not quite the same thing, is it.


Let's not confuse the issues with the facts.
 
2013-03-01 03:34:41 PM
Is this the part where somebody is supposed to come in and go "C'mon guuuuuys, where's the snaaaaaark?"

Okay. In seriousness though, could some good, kind, mathematically competent Farker explain to me how cumulative percentages work? If 10 years of 2% isn't 20%, it has to be something, and I've never been good at doing that kind of math.

Why yes, I DO suck at investing. Thanks for asking.
 
2013-03-01 03:35:24 PM
Our debt is so big and so many people own it that it's preposterous to think that they would stop selling us more. It's the old story: If you owe the bank $50,000, you got a problem. If you owe the bank $50 million, they got a problem. And that's a problem for the lenders. They can't stop lending us more money.

USA! USA!
 
2013-03-01 03:38:29 PM

vygramul: Let's not confuse the issues with the facts.


The facts are the world is moving away from the dollar. Some are moving to gold some are moving to oil and others are moving to a "basket" of currencies.


img15.imageshack.us

Putin likes gooooooold
 
2013-03-01 03:39:28 PM

tenpoundsofcheese: smells_like_meat:

Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum  attacks? Sucking dick, etc, etc. Being crass doesn't make you appear hip or smart. Quite the opposite, it makes you appear like spoiled children.

No.  This is the fark politics tab.  If you disagree with the opinions of people here you will be attacked.


No, if you disagree with established fact you will be attacked. There's a difference. You can have your own opinion, just don't claim that the sky is green when it clearly is blue.
 
2013-03-01 03:39:50 PM

Duke Phillips' Singing Bears: Is this the part where somebody is supposed to come in and go "C'mon guuuuuys, where's the snaaaaaark?"

Okay. In seriousness though, could some good, kind, mathematically competent Farker explain to me how cumulative percentages work? If 10 years of 2% isn't 20%, it has to be something, and I've never been good at doing that kind of math.

Why yes, I DO suck at investing. Thanks for asking.


The interest piles upon itself - it's called compound interest. So on day 1 you have $100. After one year you have $102. But after 2 years, you need to then add on 2% of that new amount, not the old amount, which is $104.04, not just $104. After 10 years it ads up.

Year 0: $100.00
Year 1: $102.00
Year 2: $104.04
Year 3: $106.12
Year 4 :$108.24
Year 5: $110.41
Year 6: $112.62
Year 7: $114.87
Year 8: $117.17
Year 9: $119.51
Year 10: $121.90

So a 2% compound return over 10 years actually nets you a 21.9% total return.
 
2013-03-01 03:41:20 PM

DamnYankees: So a 2% compound return over 10 years actually nets you a 21.9% total return.


This is why vampires are always rich.


/sorry had to.
 
2013-03-01 03:50:44 PM
Difference being, no one is running to Zimbabwe with cash in hand saying "Take my money please, you'll keep it safe"
 
2013-03-01 03:51:50 PM
You know guys I tried it a bunch of times but oranges make shiatty apple pies so fark oranges
 
2013-03-01 03:51:55 PM
I was waiting for someone to make the derpy comparision between us and Zimbabwe.

I knew I could count on Fark!
 
2013-03-01 03:52:02 PM
Captain Banit to the rescue.
 
2013-03-01 03:55:14 PM
None of this money will ever get into the functional economy.
The banks will absorb it into their black hole balance sheets like Depends on your mom.
 
2013-03-01 03:59:23 PM

smells_like_meat: One of the reasons that Jimmy Carter was a one term president was that inflation was around 10% (IIRC) during his term. It wasn't his fault but being president you get blamed for a lot of stuff. People noticed and it pissed them off.

Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum  attacks? Sucking dick, etc, etc. Being crass doesn't make you appear hip or smart. Quite the opposite, it makes you appear like spoiled children.


Umm...Paul Vockler, a Carter appointee and head of the Federal Reserve, deliberately ran up inflation in order to force the President and Congress to balance the budget and create stability in prices. Then when it had the desired effect he forced interest rates lower, created a growing economy, which is the reason people think that Ronald Reagan was an economic god.

Much like all Republicans Ronald Reagan took credit for the hard work of a Democrat and then proceeded to ruin it. Reagan is not an economic genius he was a farking idiot.
 
2013-03-01 04:00:04 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


Moore's law is hidden tax and theft.

Double the transistors every 18 month may sound like a good deal, but that means your computer loses half its value.

Every time Intel manufactures a new computer chip, they are stealing money directly from your pocket.
 
2013-03-01 04:01:45 PM

Slaves2Darkness: Umm...Paul Vockler, a Carter appointee and head of the Federal Reserve, deliberately ran up inflation in order to force the President and Congress to balance the budget and create stability in prices. Then when it had the desired effect he forced interest rates lower, created a growing economy, which is the reason people think that Ronald Reagan was an economic god.

Much like all Republicans Ronald Reagan took credit for the hard work of a Democrat and then proceeded to ruin it. Reagan is not an economic genius he was a farking idiot.


Endangering the economy to score political points and push an ideological deficit hawk agenda? That sounds so familiar.
 
2013-03-01 04:04:59 PM

odinsposse: Slaves2Darkness: Umm...Paul Vockler, a Carter appointee and head of the Federal Reserve, deliberately ran up inflation in order to force the President and Congress to balance the budget and create stability in prices. Then when it had the desired effect he forced interest rates lower, created a growing economy, which is the reason people think that Ronald Reagan was an economic god.

Much like all Republicans Ronald Reagan took credit for the hard work of a Democrat and then proceeded to ruin it. Reagan is not an economic genius he was a farking idiot.

Endangering the economy to score political points and push an ideological deficit hawk agenda? That sounds so familiar.


clane:
it's always the other guys fault isn't it you idiot!
images.sodahead.com
 
2013-03-01 04:05:04 PM
Mayor Bloomberg

Well, I'm done with this one. Anyone else feel like contonuing on? It's obviously Big Soda's®  fault anyway....
 
2013-03-01 04:05:18 PM

The Stealth Hippopotamus: DamnYankees: So a 2% compound return over 10 years actually nets you a 21.9% total return.

This is why vampires are always rich.


/sorry had to.


And Connor Macleod  of the clan Macleod.
 
2013-03-01 04:05:56 PM
Has anyone even been to Zimbabwe? They use the US dollar (although change/fractional amounts are typically paid in South African Rand), and have ever since they dumped their own worthless currency. So, yeah, since we use the same money, I guess we both have an infinite amount.
 
2013-03-01 04:06:28 PM
Inflation is only theft if you stuff money under your mattress or into crappy .01% savings accounts at citibank
 
2013-03-01 04:06:47 PM

smells_like_meat: Is it possible for you youngsters to have a civil discussion about something that you disagree with without immediately going to ad hominum attacks?


If you notice that your ideas frequently get you insulted, consider that your ideas may be faulty.

For example, calling taxes and inflation theft. I'm not going to argue with that because I've argued with it before. Attempting to argue it will just lead to you calling me a statist. We've all done this before and don't want to do it again, so we just insult you.
 
2013-03-01 04:06:48 PM

smells_like_meat: GAT_00: One, ten years of 2% inflation is not 20% net inflation.

Its %20 net dollars.

Inflation is a tax and is theft.


Someone has never learned how interest calculations work, I see.  Other than that, you're not even wrong.
 
2013-03-01 04:07:10 PM
Comparing the US economy to Zimbabwe is like comparing a Ferrari to a golf cart.  Yeah, they do the same thing, but come on.
 
2013-03-01 04:07:34 PM
I know this isn't at all what TFA is about, but:

Actually, since they just gave up on their own currency and started using other nation's currencies for day to day transactions the physical lack of money has been a kind of major problem. All of the bills they get over there tend to be beat up before they enter the local economies in rural Africa and just continue to deteriorate from there. Combine that with a serious lack of foreign coins (think about how much money it would take to ship an actual boatload of quarters and dimes to Africa and then to truck them in from S.Africa). Zimbabwe has a very finite amount of money in other national denominations, and it's falling apart, and that's a problem (for Zimbabwe).
 
2013-03-01 04:07:38 PM
There is nothing mysterious about QE.

"What QE comes down to, really, is a substitution of reserve deposits at the Fed in place of Treasuries and MBSs on the asset side of banks."
- L. Randall Wray

But I do want to bring something up when it comes to inflation and the commodity markets.

The causal link between money printing and commodity price increases is a heck of alot harder to show than you would think.
Its true that the commodity markets react to money printing.
But they also react to speculation and investors who hold large amounts of futures contracts.
There is literally an army of investors moving the costs of commodities up and down on any given day.
Its just not as simple as "The FED printed via QE and the price of X commodity went up."
 
2013-03-01 04:07:50 PM
$100 at a 1% interest rate compounded annually would be roughly $109.36 after ten years.

With a 2% annual inflation rate, $109.36 in the 10th year would have the buying power of roughly $91.18 from the first year. This is why a savings account isn't an investment utility.
 
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