Notes on life, art, photography and technology, by a Danish dropout bohemian.
When you drink the water, remember the river.
Thursday, April 23, 2009
Printing Money
Wow, I didn't realize the fed was that desperate and that irresponsible. This is short-term thinking at its worst. Danger, Will Robinson. (I don't know Glenn Beck. From his style I'd guess he is controversial. But the important bit is the graph.)
If you did know Glen Beck, you'd know to spend a goodly amount of time doing your own research. He is extremely wildly biased and will very very happily cherry pick data to suit his purposes. Or outright mislead you.
There is a real problem here in the US, though. This huge 2 trillion dollar bailout is being put on a credit card, with hopes China and Saudi Arabia will buy bonds. So yes, hyperinflation of dollars is right around the corner.
Making it worse, many people here in the US are refinancing their homes at the currently prevailing 5% interest rates. When hyperinflation hits, the banks will be getting paid back in dollars that will soon be worth half of what they were lent at, and garnering 5% interest for 30 years, while the future rate of interest will be 12%+. If you think there is a banking crisis now, just wait a year.
Unfortunately, there is no other currency that looks any better, whether is is pounds or euros. Owning property or something else of tangible value (or a dependable source of income, like DOMAI) is probably the only hedge available.
As a sidelight on economic conditions here, Sportsmen's Warehouse used to have over 100 handguns for sale on display a year ago. Yesterday, there were 3. Three. There was no ammunition for sale. No ammunition reloading components were unavailable.
I'm no economist, God knows, but I suggest you don't panic. Firstly, there's a lot of very crafty spin-doctors out there, trying very hard to swing public opinions in favour of or against someone's political agendas, and until you're fairly sure which way the wind is really blowing, I wouldn't do anything rash.
That said, I don't understand how a problem caused by mismanagement of the money supply and credit can be cured by throwing even more so-called 'good money' after bad.
When we had the gold standard, every dollar was backed up by a similarly-valuable and internationally recognized precious metal. Now, that's gone, and instead of have a relatively firm base upon which to value things, it's pretty-much down to supply and demand, and whatever the market will bear.
Printing more money without something of real value to back it up only increases inflation, because that money is relatively less valuable in relation to whatever we're trying to buy. So prices rise, and soon we need a wheelbarrow full of cash to buy something formerly costing pocket change. Where's the sense in that? There isn't any. And at this point in time, with all the tools at our disposal, we ought to be initiating smarter solutions than we are apparently coming up with.
First, I don't trust Fox News ... they have a clear agenda ... very obvious before and since the last election. That said, printing more money seems crazy.
But, is this just a US Dollar problem? I have not been following closely, but I am under the impression many other countries are more or less doing much the same.
Anyone who stands in front of a huge caption declaring 1941 as the start of WW2, and also unequivocally states that same year was the Great Depression, is off to a shaky start. I was grateful that the standard movie clip of money being printed (it must be nearly worn out by now--will they just print another?) was not shown.
What does "printing money" mean? As you might expect, it doesn't mean printing money. Still, when men with load voices yell that it's all the fault of "printing money" and Al Gore, we can reasonably hope that bands of angry Fox News viewers will not start roaming the streets in search of Jews. Al Gore may not be so lucky.
What the Greedy Ousted Politicians need is a popular leader from the fundamentalist Christian right who can fuse our economic fears with homophobia, xenophobia, racism, love of firearms, and hatred of Al Gore, into a force for change.
OK, so Glen might be an idiot, and I'm willing to believe that the last administration was worse. But I don't think he said that Printing Money was the cause of the Crisis. And there's no doubt that inflation is directly caused by printing too much money. (Including virtual money, however they keep track of those.)
Well, I know nothing about Economics, but I am fast learning about PEOPLE . . . particularly those involved in this mess. Several things are pretty crystal clear to me on that level. One is that we're flying blind now, and two is that we're in a desperation mode. The money being thrown so loosely around, whether printed or merely in computerized numbers is a desperate measure to stem the tide of collapse. But trying to stem that tide is about like trying to contain the flow of the Mississippi River: unless the effort was begun with time and FULL KNOWLEDGE on our side, it isn't going to happen. The flow that they are trying to contain is a complex, intricately balanced connectivity. The plunge of money alone will merely result in a series of unintended consequences.
That much is clear to me. Inflation will quite certainly be one result and it is already happening. (That's my one bit of Economic knowledge!) The second, which I'm nearly as sure of, is that China is not going to sit still indefinitely while the U.S. blandly takes their money . . . this is going to cost us SOMETHING that will not be taken lightly; I don't know what, but I'm sure that it will cause ultimate havoc.
The third thing fairly clear to me (from my knowledge of people) is that this country, America, cannot let go of its way of life. They SAY we have already been severely crimped, but you would hardly know it in going about one's daily affairs. So whatever the reality of such may be, it's still largely below the surface. Starbucks still fills with people and their laptops, traffic lanes are still packed with automobiles, buying still goes on at some pretty pricey places. Take it from someone who REMEMBERS the last Great Depression (and yes, it was still in place in 1941) and what daily life was like, then.
What I'm saying and guessing, then, is that we are presently hanging on the edge of a cliff, and do not seem to know it . . . judging from the daily pronouncements of "is it ending?" "will it be much longer" "...or much worse?" Fool's words from Fool's mouths, in even the highest, 'most knowledgeable' places. Repeat: we are flying blind.
I know nothing about EconomicsThis phrase I read/hear so often, even I didn't know anything about it, except how to keep a household journal (cash flow statement).
Then I read a few books for self study on the subject, and that's why it's now driving me mad when I see how stupidly "leaders" deal with the subject.
To start with, basic economics should be taught already in nursery school (the basic stuff)and then refined in higher grades. The subject is very complex, and I have the impression our leadership is all too glad that not too many people understand what's going on with our money (eg taxes), what money REALLY is!
On the date WWII started (aka dubya dubya two) from Wikipedia:
The start of the war is generally held to be September 1, 1939 with the German invasion of Poland. Other dates for the beginning of war include the Japanese invasion of Manchuria on September 13, 1931,[18][19] the start of the Second Sino-Japanese War on July 7, 1937,[20][21] or one of several other events. Other sources follow A. J. P. Taylor, who holds that there was a simultaneous Sino-Japanese War in East Asia, and a Second European War in Europe and her colonies, but they did not become a World War until they merged in 1941; at which point the war continued until 1945. This article uses the conventional dating.[22]
Eolake said: "But I don't think he said that Printing Money was the cause of the Crisis." You are literally correct, although I would like to think that your speciousness is unintentional: so, if that was not his message, can you enlighten me as to what you think his message was?
http://www.hurl.ws/29as
Fed Chairman Ben Bernanke:
"...we need to [be printing money] because our economy is very weak and inflation is very low. When the economy begins to recover, that'll be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."
If I was using YouTube as an educational resource to learn about economics I would rate Ben Bernanke higher than Glen Beck as an informative resource.
Irv Thomas said: "Take it from someone who REMEMBERS the last Great Depression (and yes, it was still in place in 1941)..."
I bow to your greater age and memory Irv, so enlighten me as to when the Great Depression actually ended. Encyclopaedia Britannica says 1929-39 and commonly the early 1940s (I guess using the 1941 late entry of the USA into the world war that started in 1939) is commonly used.
At the end of the last millennium, I lived in a place where it would be possible to argue that the Great Depression was still underway, but I never heard anyone seriously argue that case.
Anon (what's your name?), I'd love for you to be right. It just doesn't look like it to me. I think creating inflation does not help the economy, but only delays the inevitable problems. At best.
And it rewards those with debts and punishes those who've been acting responsibly, the savers.
Quoting Carl Barks now? That's a new low, even for you! ;-)
That guy din't only have scenaristic genius, he had raw smarts, period. And how interesting that, by inventing Uncle Scrooge, he made many stories about money and economy. Good stories.
17 comments:
If you did know Glen Beck, you'd know to spend a goodly amount of time doing your own research. He is extremely wildly biased and will very very happily cherry pick data to suit his purposes. Or outright mislead you.
Fox News is pretty devalued itself. Assholes.
There is a real problem here in the US, though. This huge 2 trillion dollar bailout is being put on a credit card, with hopes China and Saudi Arabia will buy bonds. So yes, hyperinflation of dollars is right around the corner.
Making it worse, many people here in the US are refinancing their homes at the currently prevailing 5% interest rates. When hyperinflation hits, the banks will be getting paid back in dollars that will soon be worth half of what they were lent at, and garnering 5% interest for 30 years, while the future rate of interest will be 12%+. If you think there is a banking crisis now, just wait a year.
Unfortunately, there is no other currency that looks any better, whether is is pounds or euros. Owning property or something else of tangible value (or a dependable source of income, like DOMAI) is probably the only hedge available.
As a sidelight on economic conditions here, Sportsmen's Warehouse used to have over 100 handguns for sale on display a year ago. Yesterday, there were 3. Three. There was no ammunition for sale. No ammunition reloading components were unavailable.
This is not a pretty scenario.
I'm no economist, God knows, but I suggest you don't panic. Firstly, there's a lot of very crafty spin-doctors out there, trying very hard to swing public opinions in favour of or against someone's political agendas, and until you're fairly sure which way the wind is really blowing, I wouldn't do anything rash.
That said, I don't understand how a problem caused by mismanagement of the money supply and credit can be cured by throwing even more so-called 'good money' after bad.
When we had the gold standard, every dollar was backed up by a similarly-valuable and internationally recognized precious metal. Now, that's gone,
and instead of have a relatively firm base upon which to value things, it's pretty-much down to supply and demand, and whatever the market will bear.
Printing more money without something of real value to back it up only increases inflation, because that money is relatively less valuable in relation to whatever we're trying to buy. So prices rise, and soon we need a wheelbarrow full of cash to buy something formerly costing pocket change. Where's the sense in that?
There isn't any. And at this point in time, with all the tools at our disposal, we ought to be initiating smarter solutions than we are apparently coming up with.
First, I don't trust Fox News ... they have a clear agenda ... very obvious before and since the last election. That said, printing more money seems crazy.
But, is this just a US Dollar problem? I have not been following closely, but I am under the impression many other countries are more or less doing much the same.
Yes, the insanity is global.
Anyone who stands in front of a huge caption declaring 1941 as the start of WW2, and also unequivocally states that same year was the Great Depression, is off to a shaky start. I was grateful that the standard movie clip of money being printed (it must be nearly worn out by now--will they just print another?) was not shown.
What does "printing money" mean? As you might expect, it doesn't mean printing money. Still, when men with load voices yell that it's all the fault of "printing money" and Al Gore, we can reasonably hope that bands of angry Fox News viewers will not start roaming the streets in search of Jews. Al Gore may not be so lucky.
What the Greedy Ousted Politicians need is a popular leader from the fundamentalist Christian right who can fuse our economic fears with homophobia, xenophobia, racism, love of firearms, and hatred of Al Gore, into a force for change.
Was Glen Beck's "hokey shit" a Freudian slip?
OK, so Glen might be an idiot, and I'm willing to believe that the last administration was worse.
But I don't think he said that Printing Money was the cause of the Crisis. And there's no doubt that inflation is directly caused by printing too much money. (Including virtual money, however they keep track of those.)
Well, I know nothing about Economics, but I am fast learning about PEOPLE . . . particularly those involved in this mess. Several things are pretty crystal clear to me on that level. One is that we're flying blind now, and two is that we're in a desperation mode. The money being thrown so loosely around, whether printed or merely in computerized numbers is a desperate measure to stem the tide of collapse. But trying to stem that tide is about like trying to contain the flow of the Mississippi River: unless the effort was begun with time and FULL KNOWLEDGE on our side, it isn't going to happen. The flow that they are trying to contain is a complex, intricately balanced connectivity. The plunge of money alone will merely result in a series of unintended consequences.
That much is clear to me. Inflation will quite certainly be one result and it is already happening. (That's my one bit of Economic knowledge!) The second, which I'm nearly as sure of, is that China is not going to sit still indefinitely while the U.S. blandly takes their money . . . this is going to cost us SOMETHING that will not be taken lightly; I don't know what, but I'm sure that it will cause ultimate havoc.
The third thing fairly clear to me (from my knowledge of people) is that this country, America, cannot let go of its way of life. They SAY we have already been severely crimped, but you would hardly know it in going about one's daily affairs. So whatever the reality of such may be, it's still largely below the surface. Starbucks still fills with people and their laptops, traffic lanes are still packed with automobiles, buying still goes on at some pretty pricey places. Take it from someone who REMEMBERS the last Great Depression (and yes, it was still in place in 1941) and what daily life was like, then.
What I'm saying and guessing, then, is that we are presently hanging on the edge of a cliff, and do not seem to know it . . . judging from the daily pronouncements of "is it ending?" "will it be much longer" "...or much worse?" Fool's words from Fool's mouths, in even the highest, 'most knowledgeable' places. Repeat: we are flying blind.
I know nothing about EconomicsThis phrase I read/hear so often, even I didn't know anything about it, except how to keep a household journal (cash flow statement).
Then I read a few books for self study on the subject, and that's why it's now driving me mad when I see how stupidly "leaders" deal with the subject.
To start with, basic economics should be taught already in nursery school (the basic stuff)and then refined in higher grades.
The subject is very complex, and I have the impression our leadership is all too glad that not too many people understand what's going on with our money (eg taxes), what money REALLY is!
On the date WWII started (aka dubya dubya two) from Wikipedia:
The start of the war is generally held to be September 1, 1939 with the German invasion of Poland. Other dates for the beginning of war include the Japanese invasion of Manchuria on September 13, 1931,[18][19] the start of the Second Sino-Japanese War on July 7, 1937,[20][21] or one of several other events. Other sources follow A. J. P. Taylor, who holds that there was a simultaneous Sino-Japanese War in East Asia, and a Second European War in Europe and her colonies, but they did not become a World War until they merged in 1941; at which point the war continued until 1945. This article uses the conventional dating.[22]
Personally I don't need a leader at all. I'm a Free Responsible Adult who only needs an ORGANIZER.
No palm-top jokes please.
Eolake said: "But I don't think he said that Printing Money was the cause of the Crisis." You are literally correct, although I would like to think that your speciousness is unintentional: so, if that was not his message, can you enlighten me as to what you think his message was?
http://www.hurl.ws/29as
Fed Chairman Ben Bernanke:
"...we need to [be printing money] because our economy is very weak and inflation is very low. When the economy begins to recover, that'll be the time that we need to unwind those programs, raise interest rates, reduce the money supply, and make sure that we have a recovery that does not involve inflation."
If I was using YouTube as an educational resource to learn about economics I would rate Ben Bernanke higher than Glen Beck as an informative resource.
Irv Thomas said: "Take it from someone who REMEMBERS the last Great Depression (and yes, it was still in place in 1941)..."
I bow to your greater age and memory Irv, so enlighten me as to when the Great Depression actually ended. Encyclopaedia Britannica says 1929-39 and commonly the early 1940s (I guess using the 1941 late entry of the USA into the world war that started in 1939) is commonly used.
At the end of the last millennium, I lived in a place where it would be possible to argue that the Great Depression was still underway, but I never heard anyone seriously argue that case.
I think his message was that explosive acceleration of money printing is a really bad idea.
Inflation should be zero, not the common 3%.
And even that number is deceptive, as argued in the book Crash Proof.
Anon (what's your name?), I'd love for you to be right. It just doesn't look like it to me. I think creating inflation does not help the economy, but only delays the inevitable problems. At best.
And it rewards those with debts and punishes those who've been acting responsibly, the savers.
Quoting Carl Barks now?
That's a new low, even for you! ;-)
That guy din't only have scenaristic genius, he had raw smarts, period.
And how interesting that, by inventing Uncle Scrooge, he made many stories about money and economy. Good stories.
Ah, I was not aware he had invented Scrooge. That makes sense.
I blame my fascination with gold on depictions of treasure in Donald Duck comics. :-)
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