AuthorTopic: Getting a conceptual and theoretical handle on bailouts  (Read 929 times)

Offline Surly1

  • Administrator
  • Master Chef
  • *****
  • Posts: 18536
    • View Profile
    • Doomstead Diner
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #15 on: April 21, 2020, 12:43:23 PM »
Some fraction of the population of any local place will make these choices to avoid the public because they can, and because no matter what the governor says (or whomever) they regard such places as vectors of contagion they'd rather voluntarily avoid.

This is me. I regard every sortie for groceries as a raid and every shopper in my path as a disease vector. And everyone there without a mask or gloves (and there are plenty--I regard as an assay.an t. And I am done being polite.

This is why I believe we're heading into a global Great Depression II. Toss in a little oil price deflation and away we go!

Eat the rich.

They taste like chicken.
"Do not be daunted by the enormity of the world's grief. Do justly now, love mercy now, walk humbly now. You are not obligated to complete the work, but neither are you free to abandon it."

Offline JRM

  • Sous Chef
  • ****
  • Posts: 4492
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #16 on: April 21, 2020, 12:54:57 PM »
Some fraction of the population of any local place will make these choices to avoid the public because they can, and because no matter what the governor says (or whomever) they regard such places as vectors of contagion they'd rather voluntarily avoid.

This is me. I regard every sortie for groceries as a raid and every shopper in my path as a disease vector. And everyone there without a mask or gloves (and there are plenty--I regard as an assay.an t. And I am done being polite.

This is why I believe we're heading into a global Great Depression II. Toss in a little oil price deflation and away we go!

Eat the rich.

They taste like chicken.

I doubt many will eat them. I do, however, believe that when enough of us are hungry and homeless -- and without medical care -- there will be some major political winds a'blowing.

<a href="http://www.youtube.com/v/90WD_ats6eE&fs=1" target="_blank" class="new_win">http://www.youtube.com/v/90WD_ats6eE&fs=1</a>
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19357
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #17 on: April 21, 2020, 12:58:53 PM »
There is talk, at least in the UK, that we can't return to the old normal anytime soon. The government here even admit as such believing the main tool that can get us back to normal is a vaccine. But for the outlets that do suggest an imminent return to normalcy I think there could be two things at work. One they are simply hopeful and do not want to be too gloomy (it should be noted in some areas there is a perception the media are getting too hysterical over coronavirus) or they wish to push for an economic opening as soon as possible.

In the end much will depend on the countries profile and the way in which the individual government handled the initial crisis. The ones that handled it better can return to something closer to normal sooner than the places where things were mismanaged. International travel will be a major question mark in the coming years so anyones guess in how that pans out. Overall it is still early days in this pandemic. This is not the beginning of the end; it is the end of the beginning. Like I said in another thread: this escape from full lockdown will send us to the next phase where the horrors of the economic damage start to materialise. These varying degrees of partial lockdowns will create further financial difficulties for people, businesses and governments and this will be a battle of attrition. In my opinion there is a high probablity that some country will mess up the opening up stage and will return to normal too quickly. This will lead to a second peak and further financial/political woes.

I agree with those points, and wish to add to these the point that government mandates, whether we call them "lockdowns" or "shelter-in-place" or "stay at home orders" are just one of two basic ways the virus response will likely unfold. There is also the fact of purely voluntary quasi-quarantining, in which people voluntarily avoid places of business -- movie theatres, restaurants, coffee shops, schools, shopping centers, etc.... Some fraction of the population of any local place will make these choices to avoid the public because they can, and because no matter what the governor says (or whomever) they regard such places as vectors of contagion they'd rather voluntarily avoid.

This will impact both the economy and the dynamic of the unfolding pandemic -- very significantly. No matter what. Until we have some breakthrough on the order of reliable proof of immunity (in the form of a card which proves it) or a vaccine which we know to work.  These two things appear to be at least months away, and likely longer.

Avoiding work-related risks of contagion is only partially voluntary -- when one has got to eat and pay rent / mortgage through money access, of course.  But economic activity will be slowed a lot by voluntary semi-quarantine -- and there will therefore be fewer places for work.

This is why I believe we're heading into a global Great Depression II. Toss in a little oil price deflation and away we go!

We certainly could be headed for a deflationary depression....but TPTB will do just about anything they can think of to push things in the other direction...but it is true that they don't have unlimited ability to avoid it. But the central banks have carte blanche to do just about anything....and politicians are not ever going to challenge them as long as they can maintain some semblance of control over money.

For you and Cam both.....Monsta knows more about money and economics than Mike Maloney....and I think it's okay for me to say here that he IS a banker...and an investor.

I don't trust most of the YT sources about money.....they all have some axe to grind......I have a long history of buying and selling precious metals...trust me when I tell you to trust no one......to tell you the whole story. Except present company.

What makes the desert beautiful is that somewhere it hides a well.

Offline Nearingsfault

  • Sous Chef
  • ****
  • Posts: 1343
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #18 on: April 21, 2020, 01:13:54 PM »
So far economically our government seems to be handling it well; balancing economic support for industry and employers while providing helicopter money to those stuck at home. To quantify they upped parent benefits if you have kids at home and delivered $500 per week of quarantine for self employed people. Those forced out of work got expedited employment insurance worth 55 percent of wages. Employers who kept people on the rolls got up to 75 percent of wages covered... bamks were given money to not call loans, some bailouts some politics but most parties and provincial governments seem to be playing nice for now. The cost will be huge but we are a small population sitting on a shit tonne of resources, pretty well educated and in good health. At some time the whole western world economy goes kaput but at least here we are used to being a small economy not calling the shots. We already weathered one economic cataclysm when the world economy switched from Britain to the us...
If its important then try something, fail, disect, learn from it, try again, and again and again until it kills you or you succeed.

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19357
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #19 on: April 21, 2020, 01:22:13 PM »
We are a small population sitting on a shit tonne of resources, pretty well educated and in good health.

None of this is lost on me...if I were younger I'd vote with my feet. Been saying that for ten years.....

Pretty good beer too. And you still have mahogany runabouts...at least a few......           :)


 
What makes the desert beautiful is that somewhere it hides a well.

Offline Nearingsfault

  • Sous Chef
  • ****
  • Posts: 1343
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #20 on: April 21, 2020, 01:27:22 PM »
We are a small population sitting on a shit tonne of resources, pretty well educated and in good health.

None of this is lost on me...if I were younger I'd vote with my feet. Been saying that for ten years.....

Pretty good beer too. And you still have mahogany runabouts...at least a few......           :)


that is because you can only have them in the water 6 months of the year...
If its important then try something, fail, disect, learn from it, try again, and again and again until it kills you or you succeed.

Offline Cam

  • Bussing Staff
  • **
  • Posts: 217
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #21 on: April 21, 2020, 02:35:55 PM »
There is talk, at least in the UK, that we can't return to the old normal anytime soon. The government here even admit as such believing the main tool that can get us back to normal is a vaccine. But for the outlets that do suggest an imminent return to normalcy I think there could be two things at work. One they are simply hopeful and do not want to be too gloomy (it should be noted in some areas there is a perception the media are getting too hysterical over coronavirus) or they wish to push for an economic opening as soon as possible.

In the end much will depend on the countries profile and the way in which the individual government handled the initial crisis. The ones that handled it better can return to something closer to normal sooner than the places where things were mismanaged. International travel will be a major question mark in the coming years so anyones guess in how that pans out. Overall it is still early days in this pandemic. This is not the beginning of the end; it is the end of the beginning. Like I said in another thread: this escape from full lockdown will send us to the next phase where the horrors of the economic damage start to materialise. These varying degrees of partial lockdowns will create further financial difficulties for people, businesses and governments and this will be a battle of attrition. In my opinion there is a high probablity that some country will mess up the opening up stage and will return to normal too quickly. This will lead to a second peak and further financial/political woes.

I agree with those points, and wish to add to these the point that government mandates, whether we call them "lockdowns" or "shelter-in-place" or "stay at home orders" are just one of two basic ways the virus response will likely unfold. There is also the fact of purely voluntary quasi-quarantining, in which people voluntarily avoid places of business -- movie theatres, restaurants, coffee shops, schools, shopping centers, etc.... Some fraction of the population of any local place will make these choices to avoid the public because they can, and because no matter what the governor says (or whomever) they regard such places as vectors of contagion they'd rather voluntarily avoid.

This will impact both the economy and the dynamic of the unfolding pandemic -- very significantly. No matter what. Until we have some breakthrough on the order of reliable proof of immunity (in the form of a card which proves it) or a vaccine which we know to work.  These two things appear to be at least months away, and likely longer.

Avoiding work-related risks of contagion is only partially voluntary -- when one has got to eat and pay rent / mortgage through money access, of course.  But economic activity will be slowed a lot by voluntary semi-quarantine -- and there will therefore be fewer places for work.

This is why I believe we're heading into a global Great Depression II. Toss in a little oil price deflation and away we go!

We certainly could be headed for a deflationary depression....but TPTB will do just about anything they can think of to push things in the other direction...but it is true that they don't have unlimited ability to avoid it. But the central banks have carte blanche to do just about anything....and politicians are not ever going to challenge them as long as they can maintain some semblance of control over money.

For you and Cam both.....Monsta knows more about money and economics than Mike Maloney....and I think it's okay for me to say here that he IS a banker...and an investor.

I don't trust most of the YT sources about money.....they all have some axe to grind......I have a long history of buying and selling precious metals...trust me when I tell you to trust no one......to tell you the whole story. Except present company.

This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Offline JRM

  • Sous Chef
  • ****
  • Posts: 4492
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #22 on: April 21, 2020, 03:23:01 PM »
My observation is that informed, contextualized discussion of the economic impact of the pandemic is extraordinarily diverse both in diagnosis and prognosis terms.  Also, finance geekery is (to my eyes and ears) is a long way from easy to comprehend. Add to this list that a lot of the voices in this realm are somewhat indoctrinated in the "unsinkable" discourse of global finance, capitalism etc.  My analogy is to the infamous Titanic ship, which had too few lifeboats aboard on account of it being thought to be "unsinkable". 

I'm definitely in the sinkable camp.

A lot of the material on the web, in mainstream sources, seems to me to be in or near the unsinkable camp.  Few truly well informed folks are discussing the lifeboat problem.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

Offline monsta666

  • Global Moderator
  • Sous Chef
  • *****
  • Posts: 1535
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #23 on: April 21, 2020, 06:31:10 PM »
This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Books/videos that I would have as recommended reading would be Chris Martenson's crash course. The main takeaways from that book can also be viewed on youtube for free. Energy and the wealth of nations by Charles Hall is also a good read for a system level anaylsis of money and energy. In terms of the Diner I wrote a four part series called money and wealth:

Money & Wealth: Part I
Money & Wealth: Part II
Money & Wealth: Part III
Money &Wealth: Part IV

I also wrote articles on energy and system based analysis that could get people up to speed. Simply google "monsta666 doomstead diner" and you will see stuff I wrote on the diner. RE has also written articles that are insightful in this topic.  There is a two part series he wrote called Energy-Money equilibrium which is worth reading:

Energy-Money Equilibrium: The Value of Money in the Age of Oil

While it is good to have a knowledge of how the monetary works and the significance of exopential growth it is also useful to know how it fits into the greater energy and ecosystem. Unlike what is taught in conventional economics the world economy is merely a sub-system to our ecosystem so a grasp of system based thinking is needed. For systems based thinking limits to growth is a good book to get started with. Ultimately though, and this is something I cannot stress enough, is you need to develop a good sense of critical thinking. Don't assume anyone is right (including me). Challenge everything and learn to search and verify statements other people say. I would even go as far as to question your own basic assumptions because we can all be guilty of cognitive bias. Challenge yourself, read opinions that do not align with your beliefs and try and understand the logic of others even if it seems extreme. Remember when people were ridiculing the protestors that wanted to lift lockdown measures? Try and imagine a logical situation why people do such things and try and not dismiss out of hat.

Offline Eddie

  • Global Moderator
  • Master Chef
  • *****
  • Posts: 19357
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #24 on: April 21, 2020, 06:52:05 PM »
There is talk, at least in the UK, that we can't return to the old normal anytime soon. The government here even admit as such believing the main tool that can get us back to normal is a vaccine. But for the outlets that do suggest an imminent return to normalcy I think there could be two things at work. One they are simply hopeful and do not want to be too gloomy (it should be noted in some areas there is a perception the media are getting too hysterical over coronavirus) or they wish to push for an economic opening as soon as possible.

In the end much will depend on the countries profile and the way in which the individual government handled the initial crisis. The ones that handled it better can return to something closer to normal sooner than the places where things were mismanaged. International travel will be a major question mark in the coming years so anyones guess in how that pans out. Overall it is still early days in this pandemic. This is not the beginning of the end; it is the end of the beginning. Like I said in another thread: this escape from full lockdown will send us to the next phase where the horrors of the economic damage start to materialise. These varying degrees of partial lockdowns will create further financial difficulties for people, businesses and governments and this will be a battle of attrition. In my opinion there is a high probablity that some country will mess up the opening up stage and will return to normal too quickly. This will lead to a second peak and further financial/political woes.

I agree with those points, and wish to add to these the point that government mandates, whether we call them "lockdowns" or "shelter-in-place" or "stay at home orders" are just one of two basic ways the virus response will likely unfold. There is also the fact of purely voluntary quasi-quarantining, in which people voluntarily avoid places of business -- movie theatres, restaurants, coffee shops, schools, shopping centers, etc.... Some fraction of the population of any local place will make these choices to avoid the public because they can, and because no matter what the governor says (or whomever) they regard such places as vectors of contagion they'd rather voluntarily avoid.

This will impact both the economy and the dynamic of the unfolding pandemic -- very significantly. No matter what. Until we have some breakthrough on the order of reliable proof of immunity (in the form of a card which proves it) or a vaccine which we know to work.  These two things appear to be at least months away, and likely longer.

Avoiding work-related risks of contagion is only partially voluntary -- when one has got to eat and pay rent / mortgage through money access, of course.  But economic activity will be slowed a lot by voluntary semi-quarantine -- and there will therefore be fewer places for work.

This is why I believe we're heading into a global Great Depression II. Toss in a little oil price deflation and away we go!

We certainly could be headed for a deflationary depression....but TPTB will do just about anything they can think of to push things in the other direction...but it is true that they don't have unlimited ability to avoid it. But the central banks have carte blanche to do just about anything....and politicians are not ever going to challenge them as long as they can maintain some semblance of control over money.

For you and Cam both.....Monsta knows more about money and economics than Mike Maloney....and I think it's okay for me to say here that he IS a banker...and an investor.

I don't trust most of the YT sources about money.....they all have some axe to grind......I have a long history of buying and selling precious metals...trust me when I tell you to trust no one......to tell you the whole story. Except present company.

This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Best book on money I've read is Niall Ferguson's The Ascent of Money......which is a history of money. it explains the bond market.....which is at the root of most of the world's money problems.

They subsequently  did a four hour documentary with him on  TV....it's on YT, but I have not seen it. I expect it's good though.

All the goldbugs believe in Austrian Economics......this is Ron Paul's belief system too. They do a pretty good job of pointing out the flaws in the Fed...but they have their own blind spots. Mike Maloney is an Austrian guy. So is Peter Schiff. So is Jim Rickards. I used to read all those guys...

The Fed is run by Keynesian economists...but they took Keynes' methods, which had merit, and used them to justify generations of inflationary policies that led to the current asset bubbles......which we all agree can't be inflated forever.

The important thing to remember is that the US government and the Federal Reserve bank are co-conspirators in a system that has run amok over time.

The banks have provided the legislative branch with a bottomless checkbook that never has to be balanced.....and the government has in turn left it almost 100% to tthe banks to decide how much money gets printed, and who gets credit....and at what rates.

The Federal Reserve is supposed to have two missions...originally their mission was maintaining stable prices and " moderate" long-term interest rates. Later it was added that they should maintain full employment.

In my adult life interest rates have been all over the map.....and the employment rate numbers have had to be  seriously massaged by changing the criteria to make things always look better than they are.......yet the Fed still has complete control over money.  It's because they allow the government to spend money we don't have.

Inflation is a hidden tax on people who have no wealth assets...it turns out to be convenient for the government and the banks. But inflation cannot continue in a finite world with depleted real assets and limits to growth.

That's the whole enchilada. All you need to know.


« Last Edit: April 21, 2020, 06:54:03 PM by Eddie »
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41326
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #25 on: April 21, 2020, 06:58:07 PM »
This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Books/videos that I would have as recommended reading would be Chris Martenson's crash course. The main takeaways from that book can also be viewed on youtube for free. Energy and the wealth of nations by Charles Hall is also a good read for a system level anaylsis of money and energy. In terms of the Diner I wrote a four part series called money and wealth:

Money & Wealth: Part I
Money & Wealth: Part II
Money & Wealth: Part III
Money &Wealth: Part IV

I also wrote articles on energy and system based analysis that could get people up to speed. Simply google "monsta666 doomstead diner" and you will see stuff I wrote on the diner. RE has also written articles that are insightful in this topic.  There is a two part series he wrote called Energy-Money equilibrium which is worth reading:

Energy-Money Equilibrium: The Value of Money in the Age of Oil

While it is good to have a knowledge of how the monetary works and the significance of exopential growth it is also useful to know how it fits into the greater energy and ecosystem. Unlike what is taught in conventional economics the world economy is merely a sub-system to our ecosystem so a grasp of system based thinking is needed. For systems based thinking limits to growth is a good book to get started with. Ultimately though, and this is something I cannot stress enough, is you need to develop a good sense of critical thinking. Don't assume anyone is right (including me). Challenge everything and learn to search and verify statements other people say. I would even go as far as to question your own basic assumptions because we can all be guilty of cognitive bias. Challenge yourself, read opinions that do not align with your beliefs and try and understand the logic of others even if it seems extreme. Remember when people were ridiculing the protestors that wanted to lift lockdown measures? Try and imagine a logical situation why people do such things and try and not dismiss out of hat.

Hey!  I wrote that series!

RE
Save As Many As You Can

Offline monsta666

  • Global Moderator
  • Sous Chef
  • *****
  • Posts: 1535
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #26 on: April 21, 2020, 07:10:16 PM »
Hey!  I wrote that series!

You said you got a PhD in Doom. Wouldn't go amiss to post what your PhD was about to people who ask questions about doom. Better yet you can add to your PhD. ;)

Offline RE

  • Administrator
  • Chief Cook & Bottlewasher
  • *****
  • Posts: 41326
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #27 on: April 21, 2020, 07:28:06 PM »
Hey!  I wrote that series!

You said you got a PhD in Doom. Wouldn't go amiss to post what your PhD was about to people who ask questions about doom. Better yet you can add to your PhD. ;)

As long as it's credited to my Byline, my Ph.D. Thesis is up there on the Diner Blog for anyone to read.  It's WAAAAYYYY longer, more detailed and of higher quality than about any Econ thesis done at the London School of Economics or Harvard Biz Skule.

Fr as DDKU is concerned, all our Classes are Online Video now, and attendance keeps growing.  :icon_sunny: :icon_sunny: :icon_sunny:

RE
Save As Many As You Can

Offline Cam

  • Bussing Staff
  • **
  • Posts: 217
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #28 on: April 21, 2020, 07:41:26 PM »
This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Books/videos that I would have as recommended reading would be Chris Martenson's crash course. The main takeaways from that book can also be viewed on youtube for free. Energy and the wealth of nations by Charles Hall is also a good read for a system level anaylsis of money and energy. In terms of the Diner I wrote a four part series called money and wealth:

Money & Wealth: Part I
Money & Wealth: Part II
Money & Wealth: Part III
Money &Wealth: Part IV

I also wrote articles on energy and system based analysis that could get people up to speed. Simply google "monsta666 doomstead diner" and you will see stuff I wrote on the diner. RE has also written articles that are insightful in this topic.  There is a two part series he wrote called Energy-Money equilibrium which is worth reading:

Energy-Money Equilibrium: The Value of Money in the Age of Oil

While it is good to have a knowledge of how the monetary works and the significance of exponential growth it is also useful to know how it fits into the greater energy and ecosystem. Unlike what is taught in conventional economics the world economy is merely a sub-system to our ecosystem so a grasp of system based thinking is needed. For systems based thinking limits to growth is a good book to get started with. Ultimately though, and this is something I cannot stress enough, is you need to develop a good sense of critical thinking. Don't assume anyone is right (including me). Challenge everything and learn to search and verify statements other people say. I would even go as far as to question your own basic assumptions because we can all be guilty of cognitive bias. Challenge yourself, read opinions that do not align with your beliefs and try and understand the logic of others even if it seems extreme. Remember when people were ridiculing the protestors that wanted to lift lockdown measures? Try and imagine a logical situation why people do such things and try and not dismiss out of hat.

I knew there'd be some neat stuff on the diner I just didn't know where to search for it. Thank you!

Critical thinking is something that has been heavily stressed by my teachers and profs in both high school and university, but as far as I know most people (including me!) do not use it nearly enough. It certainly is a skill that needs working on like any other, and learning about collapse has demolished so many of my old assumptions that I am getting better at questioning things. A big part of it is trusting my own judgment and relying on data to come to conclusions rather than relying on others' expertise. It is so much easier to just see what the 'experts' say and go with that, but that clearly leads to some issues.

As for systems thinking I've read Limits to Growth and Thinking in Systems by Donella Meadows so I am getting the basics of thinking in a non-linear way.

Finally yes I think our own biases are the hardest to see. I saw nothing wrong with bashing those protestors until you made me think about how desperate they are with the US's not so nice welfare. Still no masks/distancing is crazy but the desperation makes sense. Thanks Monsta I've got a lot to learn from you.

Best book on money I've read is Niall Ferguson's The Ascent of Money......which is a history of money. it explains the bond market.....which is at the root of most of the world's money problems.

They subsequently  did a four hour documentary with him on  TV....it's on YT, but I have not seen it. I expect it's good though.

All the goldbugs believe in Austrian Economics......this is Ron Paul's belief system too. They do a pretty good job of pointing out the flaws in the Fed...but they have their own blind spots. Mike Maloney is an Austrian guy. So is Peter Schiff. So is Jim Rickards. I used to read all those guys...

The Fed is run by Keynesian economists...but they took Keynes' methods, which had merit, and used them to justify generations of inflationary policies that led to the current asset bubbles......which we all agree can't be inflated forever.

The important thing to remember is that the US government and the Federal Reserve bank are co-conspirators in a system that has run amok over time.

The banks have provided the legislative branch with a bottomless checkbook that never has to be balanced.....and the government has in turn left it almost 100% to tthe banks to decide how much money gets printed, and who gets credit....and at what rates.

The Federal Reserve is supposed to have two missions...originally their mission was maintaining stable prices and " moderate" long-term interest rates. Later it was added that they should maintain full employment.

In my adult life interest rates have been all over the map.....and the employment rate numbers have had to be  seriously massaged by changing the criteria to make things always look better than they are.......yet the Fed still has complete control over money.  It's because they allow the government to spend money we don't have.

Inflation is a hidden tax on people who have no wealth assets...it turns out to be convenient for the government and the banks. But inflation cannot continue in a finite world with depleted real assets and limits to growth.

That's the whole enchilada. All you need to know.


I will put the Ascent of Money on my reading list. Or maybe watch the documentary, while this lockdown is still on and the library is closed. Thanks Eddie! And thank you for the speed summary  :emthup:

Offline JRM

  • Sous Chef
  • ****
  • Posts: 4492
    • View Profile
Re: Getting a conceptual and theoretical handle on bailouts
« Reply #29 on: April 21, 2020, 08:11:35 PM »
This is good stuff for me too absolutely. Do either of you know any good sources to learn more about how the financial system works? Books, videos, courses? All I've got really is Mr Maloney and he has an axe to grind as you said.

Books/videos that I would have as recommended reading would be Chris Martenson's crash course. The main takeaways from that book can also be viewed on youtube for free. Energy and the wealth of nations by Charles Hall is also a good read for a system level anaylsis of money and energy. In terms of the Diner I wrote a four part series called money and wealth:

Money & Wealth: Part I
Money & Wealth: Part II
Money & Wealth: Part III
Money &Wealth: Part IV

I also wrote articles on energy and system based analysis that could get people up to speed. Simply google "monsta666 doomstead diner" and you will see stuff I wrote on the diner. RE has also written articles that are insightful in this topic.  There is a two part series he wrote called Energy-Money equilibrium which is worth reading:

Energy-Money Equilibrium: The Value of Money in the Age of Oil

While it is good to have a knowledge of how the monetary works and the significance of exopential growth it is also useful to know how it fits into the greater energy and ecosystem. Unlike what is taught in conventional economics the world economy is merely a sub-system to our ecosystem so a grasp of system based thinking is needed. For systems based thinking limits to growth is a good book to get started with. Ultimately though, and this is something I cannot stress enough, is you need to develop a good sense of critical thinking. Don't assume anyone is right (including me). Challenge everything and learn to search and verify statements other people say. I would even go as far as to question your own basic assumptions because we can all be guilty of cognitive bias. Challenge yourself, read opinions that do not align with your beliefs and try and understand the logic of others even if it seems extreme. Remember when people were ridiculing the protestors that wanted to lift lockdown measures? Try and imagine a logical situation why people do such things and try and not dismiss out of hat.

Good stuff here! Thanks Mosta-Man!  Uncertainty is the word of the day.  There is rarely a substitute for learning the whole field of inquiry.  Which is -- let's face it -- a major undertaking.
My "avatar" graphic is Japanese calligraphy (shodō) forming the word shoshin, meaning "beginner's mind". --  http://en.wikipedia.org/wiki/Shoshin -- It is with shoshin that I am now and always "meeting my breath" for the first time. Try it!

 

Related Topics

  Subject / Started by Replies Last post
6 Replies
2053 Views
Last post February 02, 2014, 09:08:42 PM
by Eddie
2 Replies
493 Views
Last post March 17, 2016, 10:20:10 AM
by MKing
63 Replies
10359 Views
Last post February 11, 2017, 03:12:29 PM
by John of Wallan