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Bulls gone AWOL, a sign the game is up? They've seen the writing on the wall?
Topic Started: 7 May 2014, 11:25 AM (19,778 Views)
Elastic
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Ongoing large structural deficits are a failure of taxation policy and are completely unnecessary.
Only a rat can win a rat race.

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Ned Flanders
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miw
14 Oct 2014, 10:53 PM
The crucial point about Zimbabwe is that there was no production, nor did producing more ZWD cause any increase in production. So of course if you have more ZWD chasing the same production, the value of the ZWD wrt real goods will fall.


Printing more money NEVER CREATES MORE PRODUCTION. Period. Only PRODUCING MORE creates more production.

When someone says 'a goverment that prints it's own money cannot run out of money', like they have discovered some kind of profound truth, I know they are truly an idiot. Here is some Ned Flanders money
1,000,000

Oh, you want some more?
1,000,000,000

There you go. Production hasn't increased yet, well, here is some more.
1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

Still not producing more goods after my incredible generosity? OK.
1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000

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MMT, while it has some circularities in it, fully recognises it. In fact one of its strengths is that it stresses the fact that the only wealth is in production of real goods and services.

Which makes the initial statement about running out of money an irrelevant self-evident truth.
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Of course Argentina could not print its way out of its debt obligations, simply because they were denominated in USD. I thought any idiot could have understood that point.

Well done, you called me an idiot while demonstrating what an idiot you are. Argentina has a liquid floating currency and real resources that earn hard currency as exports. Of course they could print their way out their debt obligations, they just needed to devalue their currency some 150-500%. But they decided to be idiots, so the market devalued their currency for them. Free markets will always punish idiocy, which is why the governments of the world are doing everything in their power to destroy free markets.
Edited by Ned Flanders, 15 Oct 2014, 09:30 PM.
------------------------------
" ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility."
- Alan Glynn
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peter fraser
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zaph
15 Oct 2014, 12:32 PM
That's fantastic. I'll PM you my address and you can deliver an infinite amount of money. As long as I can afford it, I'll send you a box of chocs as thanks.
The limitation is sanity.

What flavour?
Ned Flanders
15 Oct 2014, 09:29 PM
Printing more money NEVER CREATES MORE PRODUCTION.

You are the only person I have ever heard suggest that anyone would believe that it does. This is just a whopping strawman.

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When someone says 'a goverment that prints it's own money cannot run out of money', like they have discovered some kind of profound truth, I know they are truly an idiot.

Well why do so many not understand that.

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Well done, you called me an idiot while demonstrating what an idiot you are. Argentina has a liquid floating currency and real resources that earn hard currency as exports.

Argentina's debts were in $USD, and they can't print $USD. There was a period when the Peso was fixed to the $USD.
Before you call others idiots you should check your facts.
Edited by peter fraser, 15 Oct 2014, 10:41 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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Veritas
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peter fraser
15 Oct 2014, 10:32 PM
The limitation is sanity.

What flavour?

You are the only person I have ever heard suggest that anyone would believe that it does. This is just a whopping strawman.



Well why do so many not understand that.



Argentina's debts were in $USD, and they can't print $USD. There was a period when the Peso was fixed to the $USD.
Before you call others idiots you should check your facts.
You are all over the place on this subject Peter.

Please answer the questions I have posed or accept that you have been taken in by a load of mumbo jumbo.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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miw
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zaph
15 Oct 2014, 12:18 PM
Is there a limit to printing, or bond selling under MMT? What is it?
I'd say there is a limit.

If your country's economy can only produce the amount it is producing now and no more, what happens when you issue bonds and then spend the money as a government?

1. You suck cash out of the economy and replace it with assets. However, these same assets can be used as collateral for borrowing which creates money so it doesn't necessarily cause the money supply to decrease in lockstep.

2. You spend that cash you got, but there is only so much production to go around, so the end effect is that all you do is put mney back into circulation competing for the same amount of production. Result: Inflation, and since production is the same, nobody is any richer. What's more, the government eats an ever-increasing share of the output of the economy - essentially wasting much of it.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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Sydneyite
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Veritas
15 Oct 2014, 11:55 PM
peter fraser
15 Oct 2014, 10:32 PM
The limitation is sanity.

What flavour?

You are the only person I have ever heard suggest that anyone would believe that it does. This is just a whopping strawman.



Well why do so many not understand that.



Argentina's debts were in $USD, and they can't print $USD. There was a period when the Peso was fixed to the $USD.
Before you call others idiots you should check your facts.
You are all over the place on this subject Peter.

Please answer the questions I have posed or accept that you have been taken in by a load of mumbo jumbo.
On your questions, I just found these statements in a paper by Philip Soos and Paul Egan of all people (they should be hero's of yours???): See http://www.prosper.org.au/2014/10/15/australias-addiction-to-private-debt/

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Another widespread economic fallacy is that government should manage debt as if it were a household or firm. This is a false analogy as the latter cannot print money and/or increase income at will. Governments that issue their own currency with a central bank do not need to operate as if they are constrained like a household or firm. Under this arrangement, a government can almost indefinitely fund deficits without fear of bankruptcy – though whether it should is another matter.

....

More realistic and dynamic models of the banking and financial system suggest that a government dedicated to persistent surpluses will eventually cause a breakdown in the economy. The reason for this is as follows. There are three ways for income or demand to increase in a capitalist economy: a current account surplus, a budget deficit and/or increased private sector indebtedness. If government runs persistent surpluses in the face of CADs, then the only way for an economy to grow is via increased private sector indebtedness.
So it seems even hard core housing bear economists agree with the underlying principles of monetary mechanics as outlined by MMT. Of course, they then go on to get all sorts of conclusions wrong, which is a shame, but that's another discussion.
Edited by Sydneyite, 17 Oct 2014, 02:56 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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peter fraser
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Sydneyite
17 Oct 2014, 02:52 PM
So it seems even hard core housing bear economists agree with the underlying principles of monetary mechanics as outlined by MMT. Of course, they then go on to get all sorts of conclusions wrong, which is a shame, but that's another discussion.
It's like a player not knowing the rules of the game and then saying that the game is rigged.

Good players on the other hand know the rules and use them to their advantage.

Any expressed market opinion is my own and is not to be taken as financial advice
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ThePauk
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peter fraser
18 Oct 2014, 09:22 AM
It's like a player not knowing the rules of the game and then saying that the game is rigged.

Good players on the other hand know the rules and use them to their advantage.
With a blanket statement like that, I suppose no one every loses on houses, or do they?
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doubleview
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peter fraser
18 Oct 2014, 09:22 AM
It's like a player not knowing the rules of the game and then saying that the game is rigged.

Good players on the other hand know the rules and use them to their advantage.
A good read 4 you.

re: your philosphy!

http://www.dailymail.co.uk/news/article-2323122/Phil-Ivey-Gambler-won-7-8m-reading-cards.html
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peter fraser
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doubleview
18 Oct 2014, 09:56 AM
No that's not correct, my philosophy is that any player who doesn't acquaint him/her self with the rules is a fool, I'm not talking about taking advantage of a chance error but something that applies to and should be known to us all.

Learn the rules, every good coach would demand that of every player, otherwise you're a deadweight for your team.
Any expressed market opinion is my own and is not to be taken as financial advice
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