Debt out of thin air not evil but necessary? Is it fair?

[Martinghoul]

Quote from toolazy:
You seem to know a lot... Do you mind answering this question

As all countries have net debt, who is the lender ?

I know some and I know what I don't know...

Your question isn't really formulated precisely enough. First of all, not ALL countries have net debt. There are countries out there that don't borrow. Secondly, when you talk about "net debt" you need to define the concept more precisely, e.g. "net public debt" or "net external debt" or something like that.

In general, possible answers to what you might be asking could be: 1) the country's citizens and corporations (that's predominantly the case, for example, in Japan); or 2) it could be a country's foreign trade partners (as is the case for the US, for example); or 3) it could be the future generations of the country's citizenry, through pension funds (as is the case, for example, in Norway or the Netherlands).

Basically, the answer is, as usual, it depends .

 

[zdreg]

Quote from Butterball:

Correlation does not imply causation. Unless of course you believe elephant herd travel patterns in the Sahel zone predict the direction of stock prices.

"Correlation does not imply causation"
statement doesn't apply in this situation.

why don't you disclose what has caused prices to rise 10x+ times in the US since the depression or 100% +at times in the history of germany,hungary, israel, argentina and brazil etc. ?

 

[Martinghoul]

Quote from zdreg:
"Correlation does not imply causation"
statement doesn't apply in this situation.

why don't you disclose what has caused prices to rise 10x+ times in the US since the depression or 100% +at times in the history of germany,hungary, israel, argentina and brazil etc. ?

Could I perhaps suggest a possible explanation?

If you observe that evolution of the big red segment, you might conclude that, over long periods of time, inflation tends to be low when the red segment gets smaller and high when it gets bigger.

 

[zdreg]

we don't live in the long run of your chart.

 

[Martinghoul]

Quote from zdreg:
we don't live in the long run of your chart.

Indeed, although didn't you use the comparison between the 19th and 20th centuries to make your point? I thought I'd use a somewhat similar, but longer, time frame.

 

[zdreg]

Quote from Martinghoul:

Indeed, although didn't you use the comparison between the 19th and 20th centuries to make your point? I thought I'd use a somewhat similar, but longer, time frame.

not quite.
mine was before and after creation of a Fed in the US but i did not say it.

 

[Martinghoul]

Quote from zdreg:
not quite.
mine was before and after creation of a Fed in the US but i did not say it.

I got your point...

Why don't we take my chart and just look at it starting in 1800, in order to confine ourselves to the 19s and 20th centuries. That should synchronize our time frames.

 

[zdreg]

Quote from Martinghoul:

I got your point...

Why don't we take my chart and just look at it starting in 1800, in order to confine ourselves to the 19s and 20th centuries. That should synchronize our time frames.

"Correlation does not imply causation. Unless of course you believe elephant herd travel patterns in the Sahel zone predict the direction of stock prices." <http://www.elitetrader.com/vb/showthread.php?s=&threadid=279337&perpage=10&pagenumber=4>

as to your chart,i will take the butterball approach without the elephant walk.
correlation +causation are not the same.

 

[zdreg]

Quote from MathAndLogic:

Please refer to this link:

http://www.pbs.org/newshour/businessdesk/2013/10/why-debt-and-money-created-out.html

Inflation keeps the economy from imploding. I understand that. If I can sell only at lower price as in deflation, I may sell at a loss; so, why should I produce?

Federal Reserve is supposed to be independent from politics and it is supposed to shield the economy from politics. Okay, I will give it a benefit of doubt.

Money is debt. Okay, I understand that, too.

My question is this: It is fair that a few people or a few entities have been granted the godly power to create money out of thin air with no effort, whereas the rest of society have to be slaves, have to labor, have to sweat and bleed to earn what these few "create" out of thin air? Or the economy is inherently made to favor a few at the expense of the rest? Are the rest 99% just so stupid to be sheep to be fleeced? If fairness is never in the economy or society, then is this a world we want to live in? WTF?

Would appreciate your thoughts. Thanks.

your understanding is incorrect. it is nonsense spread by the liberal media class who think they are helping the debtor class. "Inflation keeps the economy from imploding." no proof.
wrong. from the first supposition you have presented. therefore all conclusions derived are not correct. gigo.

having said the above, you are,however, correct that there is an elite which believes everybody else should be their slaves or near slaves. is the economy inherently made to favor a few. depends what you mean by inherently. the poor in america have never had it so good and are rich by world standards.

 

[jem]

interesting show on Stoessel last night.

he features this movie...

http://www.moneyfornothingthemovie.com/

and asked a lot of interesting questions to many different guests.


I will say Austin Goolsbee did a very good job defending the Fed.
He showed a really solid grasp of the subject matter.

I thought the guest who wrote a new thriller about the Fed had some interesting things to say.

I would like to see more of Rickards

Ron Paul seems to dance around too much . Inside his statemetns you can find the points but does not drive them home enough. Just like in the presidiential debates.

I will say this it seems unreal that the FED a private citizens can and does create money out of thin air. It created a trillion dollars during the financial crisis to bail out foreign banks. (through a notation in its ledgers.)

But, but I did not see any good alternatives on that show.

Let congress or the president just print money at will ... no that would be nuts.

The free bank idea... sounds terrible to me.

Gold and Silver as currency... I wonder if we are too late for that.


It seems to me we need a balanced budget and to take the money out of politics. I wish the fed would push a balanced budget. Til then they will seem a bit nefarious.