Baby Boom To Baby Bust - Martin Armstrong Exposes The Crisis In Socialism

[Sig]

Taking at face value your assertion that mild inflation is desirable

Calling that "my assertion" to be taken "at face value" would be like saying "taking your assertion that plate tectonics are real". It's the dominant view of anyone who has taken a basic macro course or even thought about macro, not "my assertion" for you to dismiss as such!

I've been hearing about "the challenges of Japan's demography" for two decades, and economists have been chirping about the country's supposed stagnation and endless depression for years before that. So when is the reckoning finally going to arrive? Where are the old people dying in the streets, where's the debt implosion

Hint: Having the number 1 debt to GDP ratio in the world! isn't a positive in economics, especially when you're not the worlds reserve currency.

, where are the falling living standards and spiraling economic collapse from falling demand or lack of workers or whatever else?

On the labor front, I was in Japan just last year and saw the same old over-employment as always. I recall the comical scene of three prime-working-age crossing guards posted at a small, lightly-trafficked intersection where some road work was underway - or would've been underway, except it was nine in the evening. This is the great world-ending labor shortage? It's all just ideologically driven nonsense.

Again, one of the great things separating modern society from caveman society is that we don't have to wait until old people are dying in streets to realize that something is awry. Nor does your observation of 3 workers in a country not your own during a short visit make for a rigorous result to base any conclusions on. If those are your alternately absurd levels of making a determination on macro economics....

Listen, I'm an electrical engineer by undergrad training. Assuming you are not, would you jump into the middle of a conversation about tunneling electrons and tell me that "my assertion" that such things exist is absurd (it's a counter intuitive concept) and proceed to tell me that since you've never seen a tunneling electron it must not be a thing? Hopefully you have the good sense not to, at least most moderately intelligent folks would realize they would be talking out their ass about something they don't have any background in at all. Why in the world would you think it's any different with the field of economics? That somehow your uniformed opinion is anything but babbling given your complete and utter lack of experience and understanding of the field? As Twain aphoristically said "Better to remain silent and be thought a fool than to speak and to remove all doubt."

 

[Sig]

Your myopic view is exactly that... one dimensional.

The money supply is a (very)small fraction of the the actual money supply which is created through LENDING/CREDIT! NOT THROUGH SPENDING! And don't forget when Aldi comes in and buys an asset, like real estate for instance, the seller now has money that did not previously exist in the money supply. Does that mean you have to include interest rates, and international capital flows, and credit, and central banks, and consumers, and for that matter, what money is? Well, yes, yes it does mean that.

First off you might want to check a dictionary on "myopic" and "one dimensional", your sentence doesn't really make any sense.

But let's talk "myopic". Are you saying that a deflationary environment is fine because, lending? Do you even realize how self contradicting that statement is? Why in the world would anyone lend money in an environment where you give someone a dollar today and they give you back $.90 a year from now? That's the whole fricking point of why deflation destroys economies, it destroys the incentive to lend money! And if lending stops economies stop, given the importance of lending that you so aptly pointed out.

 

[zdreg]

somehow your uniformed opinion

that is nothing but your opinion without an iota of proof. spectrex, don't take his critique being worth more than a grain of sand.

 

[tiddlywinks]

First off you might want to check a dictionary on "myopic" and "one dimensional", your sentence doesn't really make any sense.

lacking in foresight or discernment : narrow in perspective and without concern for broader implications

short-sighted, narrow, unimaginative, narrow-minded, small-minded, unadventurous, near-sighted

 

[Sig]

lacking in foresight or discernment : narrow in perspective and without concern for broader implications

short-sighted, narrow, unimaginative, narrow-minded, small-minded, unadventurous, near-sighted

But apparently not lacking basic logic about how lenders don't lend in deflationary environments?

 

[tiddlywinks]

But let's talk "myopic". Are you saying that a deflationary environment is fine because, lending? Do you even realize how self contradicting that statement is? Why in the world would anyone lend money in an environment where you give someone a dollar today and they give you back $.90 a year from now? That's the whole fricking point of why deflation destroys economies, it destroys the incentive to lend money! And if lending stops economies stop, given the importance of lending that you so aptly pointed out.

With that ridiculous explanation/comment it's clear you know little. Keeping it local, you dispelled YOUR ideology. The USD has lost 90plus percent of its purchasing power since day one... but no lending happens, now or in past, because that would be stoopid! Congratulations... you've identified for yourself, dozens out of the last 2 major deflationary periods in US history! You lead a hard life.

Lending creates money supply you twit. That is not the same as transferring a dollar bill from one person or business to another person or business, which has ZERO affect on the money supply! When debt is repaid it extinguishes THAT debt and again, has no affect on the money supply. Does that mean you have to include interest rates including usary, and international capital flows, and credit, and central banks, and consumers, and taxes, and for that matter, what money is? Well, yes, yes it does mean that.

 

[Sig]

With that ridiculous explanation/comment it's clear you know little. Keeping it local, you dispelled YOUR ideology. The USD has lost 90plus percent of its purchasing power since day one... but no lending happens, now or in past, because that would be stoopid! Congratulations... you've identified for yourself, dozens out of the last 2 major deflationary periods in US history! You lead a hard life.

Lending creates money supply you twit. That is not the same as transferring a dollar bill from one person or business to another person or business, which has ZERO affect on the money supply! When debt is repaid it extinguishes THAT debt and again, has no affect on the money supply. Does that mean you have to include interest rates including usary, and international capital flows, and credit, and central banks, and consumers, and taxes, and for that matter, what money is? Well, yes, yes it does mean that.

It's really unclear what you're trying to say. Let's just have you provide yes or no answers to two simple questions.
1. Does anyone have an incentive to lend when they get less money back than they lent out? We call this deflation, by the way.
2. If no-one lends, can significant money supply be created by lending?

If your answers to that are anything but no and no then you're probably living in some alternate economic universe. And if your answer to those are correctly no and no, then you're by your own definition saying deflation is disastrous to economies and the only other option besides the impossibility of riding the knife edge of zero inflation or deflation is to allow for moderate inflation. What exactly is it your advocating here again that's different from this well established tenet of economics?

 

[zdreg]

1. Does anyone have an incentive to lend when they get less money back than they lent out? We call this deflation, by the way.

this statement exposes the nonsensical remarks by Sig.
this remark by sig is dribble. even in a deflationary environment loans are made. first of all interest is earned. secondly the money paid back buys more goods and services than the original amount loaned out.
it is an inflationary environment where you don't want to make a loan. suppose I lent you !00 at 5% interest. suppose inflation is 25%. at the end I receive$105 but I can only buy .75 x 105 =$78 worth of merchandise or goods and services.
Sig needs a lesson in economics 101. he just received one.

ps did the Mob stop lending money during the deflationary era of the Depression?

 

[tiddlywinks]

It's really unclear what you're trying to say. Let's just have you provide yes or no answers to two simple questions.
1. Does anyone have an incentive to lend when they get less money back than they lent out? We call this deflation, by the way.
2. If no-one lends, can significant money supply be created by lending?

If your answers to that are anything but no and no then you're probably living in some alternate economic universe. And if your answer to those are correctly no and no, then you're by your own definition saying deflation is disastrous to economies and the only other option besides the impossibility of riding the knife edge of zero inflation or deflation is to allow for moderate inflation. What exactly is it your advocating here again that's different from this well established tenet of economics?

1) yes. Ask JP Morgan, Warren Buffet, and few others who have participated in saving the USA.
2) yes. International money flows and asset purchases by foreigners to name a couple.

And so now, this convo comes ends because *I* live in an alternate economic universe.
Cool... more time to spend with the shaman on my mountain, thanks! I got email from the non-gendered being that there is new incense fragrance. It was purchased with USD converted to INR in the currency black market of India.


BTW: Im not advocating anything. My original post in this thread was to point out the ridiculousness of the forced consumption (in addition to taxation) that someone else proposed and you are a proponent of.

 

[Specterx]

Listen, I'm an electrical engineer by undergrad training...

Bully for you. You remind me of the guys who spent the last decade shorting the S&P and calling for the USA to go bankrupt. Or for that matter, the guys who've been shorting JGBs for the last twenty-five-plus years. In these matters it pays to have open eyes, a flexible mind, and a dose of common sense.

Now, to address your point regarding government debt. The standard of living (i.e. ability to consume) of a country consists of everything that country produces in a year, plus that which is imported. If you don't need to import anything, it doesn't matter a damn whether government debt is negative, zero, low or high, or whatever other accounting artifices and financial arrangements you layer on top, because the physical and human capital is there and fully capable of producing regardless of what some bean-counter in the finance ministry says.

As it happens, Japan has few natural resources and so does need to import many critical items, and these imports must be paid for. So, what do we find when we examine Japan's present and near-future ability to pay for imports?

Well, Japan is by far the world's largest creditor nation with a net international investment position of USD 2.8 trillion. The country is also a net goods exporter, with many world-class companies which are major players in their respective industries. So, not only do they have plenty of savings in the bank, but the supply of labor is at present fully adequate to produce everything the country consumes plus extra to sell to foreigners. Clearly, to claim (as you seem to be) that Japan is in any near-term danger of economic collapse, experiencing a severe decline in living standards, or having difficulty paying for imports, is just idiotic.

I'll concede it's possible that many years down the road, a general labor shortage might impair Japan's ability to produce sufficiently to cover its import bill, and/or meaningfully impair its ability to deliver an adequate first-world level of social services. There's precisely zero evidence that this is happening, whether you look at the financial metrics I've discussed above, GDP per capita, or indicators of human well-being (e.g. HDI, HLI), life expectancy, etc. If and when such an inflection point arrives, we'll finally have one empirical case study to justify the decades of crowing from your expert economists about the doomsday brought on by an aging and shrinking population. Until then, it's just a load of crap.