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Rising bond yields threaten sharemarket's safest stocks
Topic Started: 19 Nov 2016, 09:07 PM (7,445 Views)
Sydneyite
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Jimbo
20 Nov 2016, 03:11 PM
It's a bullshit theory debunking tool I choose to use now and again.

Take their theory to the max and ask the question.

Like.

If money can be printed at will with no negative impact, why collect taxes?

If the RBA has complete control over Australian interest rates, what happens if the US Fed raises rates to 10% (or 5% or 2%)?
Some "technique"....

The first one is a COMPLETE bullshit straw man. No-body, anywhere, argues that you can print money at will with no negative impact. If you think that's what MMTers argue then you had better go back to square one on that one. :re:

The second question does nothing to debunk the fact that the RBA has *complete* control over local overnight interest rate settings. All you are showing is that external factors can and do have impacts on our economy that may cause the RBA to have to adjust interest rates in order to maintain their target inflation level, economic stability mandate etc. That does nothing to dis-prove the fact that it is the RBA that is setting the rate, completely. It merely shows that the RBA does not and cannot control all the factors that feed in to the decision of what rates should be set at. If that is your point then, duh! :dry:

PS - we have had the aussie dollar at 50c US in the past (early 00s) - the oz economy boomed during that period. So a devaluation to those levels due to higher US interest rates would not IMO necessarily see the RBA raise rates, until the inflationary pressures and other impacts became evident, then they would start to raise rates for those reasons.
Edited by Sydneyite, 20 Nov 2016, 03:33 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Jimbo
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Jon Snow
20 Nov 2016, 03:19 PM
I often wonder if we will evolve out of this before we blow each other up. Gene Roddenberry sure hoped so.
That is the real challenge of the next 20 or so years.

We will either evolve technologically or waste our planet. No middle ground because the current system is clearly unsustainable.

As an optimist, I reckon we are looking at free energy within 20 years and fully automated and distributed manufactured goods not long afterwards.

No need to work, no need to live centrally.

No need for profit, money or any of the other shackles which have held 98% of the worlds population in servitude since the dawn of time.

Radical thoughts, but totally possible.

Unlike the impossible "The RBA has complete control over interest rates" scenario.
Sydneyite
20 Nov 2016, 03:26 PM
The first one is a COMPLETE bullshit straw man. No-body, anywhere, argues that you can print money at will with no negative impact. If you think that's what MMTers argue then you had better go back to square one on that one.
So how much money can you print without having a negative impact on an economy?
Sydneyite
20 Nov 2016, 03:26 PM
The second question does nothing to debunk the fact that the RBA has *complete* control over local overnight interest rate settings.
At what level can the RBA not be influenced by rates set by the US Fed? 2%, 5%, 10%?
Edited by Jimbo, 20 Nov 2016, 03:34 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Sydneyite
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Jimbo
20 Nov 2016, 03:30 PM
So how much money can you print without having a negative impact on an economy?
As much as the economy needs to grow at a reasonable rate (generally seen as around 3%pa for oz rat this time) without inflationary pressures building that will push CPI outside the targeted 2-3%pa range. It's a dynamic figure.

In fact this is exactly how the RBA open market operations work - there is no target for the amount of expansion of the money supply. What is measured / managed / influenced is inflation, employment, GDP growth etc, via targeting of interest rates - which dampen or promote the aggregate demand for "new" money.
Edited by Sydneyite, 20 Nov 2016, 03:38 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Terry
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Sydneyite
20 Nov 2016, 03:26 PM
Some "technique"....

The first one is a COMPLETE bullshit straw man. No-body, anywhere, argues that you can print money at will with no negative impact. If you think that's what MMTers argue then you had better go back to square one on that one. :re:

The second question does nothing to debunk the fact that the RBA has *complete* control over local overnight interest rate settings. All you are showing is that external factors can and do have impacts on our economy that may cause the RBA to have to adjust interest rates in order to maintain their target inflation level, economic stability mandate etc. That does nothing to dis-prove the fact that it is the RBA that is setting the rate, completely. It merely shows that the RBA does not and cannot control all the factors that feed in to the decision of what rates should be set at. If that is your point then, duh! :dry:

PS - we have had the aussie dollar at 50c US in the past (early 00s) - the oz economy boomed during that period. So a devaluation to those levels due to higher US interest rates would not IMO necessarily see the RBA raise rates, until the inflationary pressures and other impacts became evident, then they would start to raise rates for those reasons.
Sounds like a well trained suburbanite reading from official media releases. The reason why AUD fell to the equivalent of USD. 0.5 had very little to do with central bank actions and more to do with the carry trade.
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Trollie
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Terry
20 Nov 2016, 03:40 PM
Sounds like a well trained suburbanite reading from official media releases. The reason why AUD fell to the equivalent of USD. 0.5 had very little to do with central bank actions and more to do with the carry trade.
Do you have a point roddy, or is waffling the point?
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Sydneyite
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Terry
20 Nov 2016, 03:40 PM
Sounds like a well trained suburbanite reading from official media releases. The reason why AUD fell to the equivalent of USD. 0.5 had very little to do with central bank actions and more to do with the carry trade.
Well duh! What causes carry trade? Oh yea it's INTEREST RATE DIFFERENTIAL!!! And yet the RBA didn't adjust our rates to reduce the differential, reduce the amount of carry trade, and raise the value of the $ etc.... weird hey??? Maybe the RBA sets our rates and not the US? :re: Thanks for proving the exact point I was making.
Edited by Sydneyite, 20 Nov 2016, 03:44 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Jimbo
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Sydneyite
20 Nov 2016, 03:37 PM
As much as the economy needs to grow at a reasonable rate (generally seen as around 3%pa for oz rat this time) without inflationary pressures building that will push CPI outside the targeted 2-3%pa range. It's a dynamic figure.

In fact this is exactly how the RBA open market operations work - there is no target for the amount of expansion of the money supply. What is measured / managed / influenced is inflation, employment, GDP growth etc, via targeting of interest rates - which dampen or promote the aggregate demand for "new" money.
I'm not talking physical cash here. I'm talking QE as per the USA, UK and ECB.

If (as you and Rufus assert), sovereign nations can never go bankrupt, why not simply give up on collecting taxes and just print the money needed for road building and hospitals?

Why bother to issue bonds when all you have to do is print some money?

It simply doesn't add up mate.

And you know it.
Edited by Jimbo, 20 Nov 2016, 03:46 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Trollie
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Jimbo
20 Nov 2016, 03:44 PM
I'm not talking physical cash here. I'm talking QE as per the USA, UK and ECB.

If (as you and Rufus assert), sovereign nations can never go bankrupt, why not simply give up on collecting taxes and just print the money they need for road building and hospitals?

Why bother to issue bonds when all you have to do is print some money?

It simply doesn't add up mate.

And you know it.
This very issue was answered by b_b not long ago.

Honestly you really are a piece of work. You get told repeatedly, but because you don't like the answer you keep coming back for more.
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Jimbo
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Trollie
20 Nov 2016, 03:46 PM
This very issue was answered by b_b not long ago.

Honestly you really are a piece of work. You get told repeatedly, but because you don't like the answer you keep coming back for more.
If BB told me that the tooth fairy came into my room at 2am and put a dollar under my pillow. I wouldn't believe him.

Because it isn't true (unless you are a small child or a simpleton).

BB saying the same thing 100 times with links to websites doesn't make it true either.

Because it isn't true.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Jon Snow
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Terry
20 Nov 2016, 03:40 PM
Sounds like a well trained suburbanite reading from official media releases.
Like a Chimpanzee using sign language.
Speak when you are angry and you will make the best speech you will ever regret.
Ambrose Bierce
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