Oldag2020 said:

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BuddysBud said:

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Oldag2020 said:

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Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.

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This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.

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That is precisely where we are. I don't believe I could have said it any better!

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Oldag2020 said:

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UTExan said:

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Oldag2020 said:

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Win At Life said:

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Oldag2020 said:

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Win At Life said:

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You keeo saying inflation is transitory. If so, why does a 3B/2B house PERMANENTLY cost more than the $24 000 it did in the 70's. If inflation is only transitory, when will things ever return to what they cost in the 70's?

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Inflation is real. Current inflation levels are transitory.

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Yeah, well the +10% inflation levels of the 70's were transitory in that they came down a decade later. But by then everything cost twice as much. All economic numbers are trasitory. What's the point? The long term trend has been to devalue the currency through either higher inflation, or lower inflation by increasing the quantity of the money supply. So how does current increasing the money supply NOT lead to devaluating the currency through inflation?

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The economic backdrop of the 1970s inflation and the transitory inflation we are experiencing now is vastly different. It's like comparing apples to oranges.

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Only one thing really defeats inflation and that is an increase in the supply of goods and services. The problem is that many goods do not have elasticity of production: water, good soil availability, labor supply and transportation network all figure in to the supply chain of food products from field to market. In case you hadn't noticed, the western US, including parts of the Midwest, are being hit with drought, reducing available land for production of vegetables, grain and livestock . That's one factor.
The second factor is the transportation network, which will be hit with higher fuel prices for diesel and gasoline thanks to some stupid and ideological moves on the part of the Biden administration.
That's just the agriculture/food supply sector. I am certain people here who work in oil and gas and the energy production can probably give you a much more nuanced and informed view about how higher energy prices affect the economy from their perspectives.

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Higher energy prices are, in fact, better for the overall economy. Yes, maybe hurts direct consumers and certain corporations directly affected by oil and gas.as a whole, higher oil is a net positive to the US economy.

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Oldag2020 said:

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BuddysBud said:

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Oldag2020 said:

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BuddysBud said:

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Oldag2020 said:

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Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.

---

This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.

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That is precisely where we are. I don't believe I could have said it any better!

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Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.

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They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP

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halfastros81 said:

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I think there's a Goldilocks zone in the $ 70-90 per bbl range where the oilfield and the overall US economy both hum.

Oil & gas ain't going away anytime soon in spite of what the leftists want. They totally hate that independent businesses power the economy although that's still what would happen even with electric vehicles. I guess it would just be more people on their side winning.

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Helicopter Ben said:

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Oldag2020 said:

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I looked around, used deductive reasoning, researched the topic, listened to my employer(bulge bracket asset management in NYC) and came to my conclusion.

Also, I really hope you don't honestly believe we should have remained on the gold standard

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Well how about you deduct some logic on this. Which one of these would you have rather had your savings in for the last 100 years?



It's so obvious in this chart what has happened. The year 1913 was the true death knell for the dollar with the creation of the federal reserve. But at the time, they were promising everyone that they wouldn't devalue the currency and do exactly what they did in 1933. The government straight up stole 41% of people's purchasing power overnight. It only accelerated from there.

Let's say your great-grandmother on her death bed wanted to leave you a little something. She had a measly $100 in 1921. If she had stored that in gold, it would now have $8,605.75 worth of purchasing power in today's dollars. And this is ignoring the fact that those coins would fetch a hefty premium on top of the melt price. That is a whopping 98.8% loss in purchasing power. In less than 100 years!

It's a lot like purchasing ***** enlargement pills where the company just keeps increasing the length of an inch every time you measure your pecker. Yay, I'm making progress!

I don't care what the "price" of gold is. I care how much stuff it can buy. It's exactly the same with dollars. Nobody wants dollars. They want the goods and services dollars can buy. Remember those pesky coins we used to have? A penny, nickel, dime, or quarter used to actually buy things. To put it another way, I don't give a rats ass if my wage is $100 an hour or $1 an hour. As long as one hour's labor purchases the same amount, I'm in the same position. The money supply does not need to expand so long as it is divisible. There is no reason why we couldn't still be using even the smallest denomination coins.

Just like my ***** enlargement example, inflation just creates the illusion of growth when in reality, real wealth is destroyed. Money should be viewed as nothing more than a measuring stick. As we get more efficient, prices should fall. With a stable currency, changes in price are merely "measurements" of supply and demand. Think about how confusing it would be if other units of measure increased by some arbitrary percentage every year.

Real wealth grows when prices fall and cost of living is reduced. Ever since the gold standard was severed, that has declined rapidly. Gold isn't perfect, but it's better than nothing. Unless of course, you're the government or one of their cronies who gets the newly printed money first. Which is exactly what happens.

Government, politicians, and their cronies spend the new currency at the current value. Then when it finally trickles through the economy, there are more dollars chasing the same (or fewer because they've purchased things with the new currency)amount of goods, thus prices in dollars inevitably have to rise. This is dishonest at best. More accurately in my opinion, it is outright theft.

I suppose you could call it a hidden tax, but why not just raise taxes to pay for these things? The answer to that is because people would be outraged if it were obvious just how much real wealth the government is taking from them.

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Ags4DaWin said:

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Oldag2020 said:

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Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves. I know people in manufacturing and supply chain management and not just on the final products end but people who manufacture the equipment used in factories that make ***** The amount of product on backorder is crazy high. Its gonna take well over a year to catch back up minimum. First the people who make things that factories use to make things must catch up...and i have seen some backorders and estimates of over a year for those pieces. Then the factories which it will take at least that long before they are operating at full capacity will have to start operating at full capacity and catch up on THEIR backlog of final products. What that does to the economy overall- generally will not be good

Once our supply chains are back up to full capacity, we are looking at a year the added demand created by the stimulus will not cause long lasting inflation. we are talking demand from people with more play money due to stimulus on top of demand due to backlogs and backordersfrom year long shut downs and supply chain disruptions on top of demand as people get back to life and want to do something special since they have not been able to do that stuff in a year. Those are alot of added pressures to pent up demand. You are grossly overestimating how ling it will take for supply to catch up and meet that demand

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancementsAdvancements mean jack **** if you cannot manufacture the parts to implement them. The people who make the parts to make the machines who have millions in backorders when they usually have a few thousand. I have seen the logs and it is staggering. The files containing the backorders are so big the normal method of sending them cannot handle the file sizes. and 2. Increase in labor force. How many open jobs were there compared to jobless claims recently? Stimulus and a year shut down has torn the labor force to shreds. Now we have a large segment of the population clamoring for another round of stimulus that they do not need and a federal government that does not have the balls to tell them no. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth. This is bull***** Time and time again studies have shown that for every dollar spent by the government 50 cents or less gets to the intended target and the rest is swallowed up by beaurocrats, regulatory agencies, and other factors that produce nothing. These pennies trickle away at levels that have very little positive impact on the economy because the government produces nothing of intrinsic value. GDP growth in the private sector is what grows the economy because that is where production happens.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5. Wrong. Your assumption depends on taxes on GDP growth are 100%. Which is awful. Awfully wrong. Theaximum capital gains rate i 20% and the top income tax rate is 37%. So at best the tax revenue increase for a GDP growth of $5 is $1.85 depending on where that growth is happening. And if its corporations, not workers seeing the majority of growth, its considerably less than that.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.

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In short Mr. Madison, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

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Ags4DaWin said:

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Grapes said:

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Also the fastest way for the US to eliminate its debt is hyper inflation. Yes! Germany did this to pay back its WW1 reparations. Worked great for people who had to wheel barrow cash to buy a loaf of bread. Also the societal consequences of the economic upheaval in no way contributed to the rise of the Nazi party and civil strife that ensued. LET'S DO THAT!

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!

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Oldag2020 said:

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mazag08 said:

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Oldag2020 said:

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Fore Left! said:

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Still waiting for the OP to tell us his major....

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Finance class of 2020. I did not learn Keynesian style only at TAMU. I learned both views. There was a very balanced view by a majority of my professors.

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That's interesting.. you don't espouse any combination of both views. You are fanatically supporting only one.

Even Milton Friedman, who was one of the biggest supporters of leaving the gold standard and the creation of FIAT, eventually came to the conclusion that he was likely wrong because governments can't be trusted to honestly manage the money supply.

And your #1 belief is that the FED is honest, all knowing, and well intentioned, despite history and current events proving its is none of those things.

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I looked around, used deductive reasoning, researched the topic, listened to my employer(bulge bracket asset management in NYC) and came to my conclusion.

Also, I really hope you don't honestly believe we should have remained on the gold standard

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Nitro Power said:

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You are still with this ***** First time it was humorous, now it's pathetic. Devaluation of money is not a good thing. Hope this helps.

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richardag said:

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Ags4DaWin said:

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Grapes said:

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Also the fastest way for the US to eliminate its debt is hyper inflation. Yes! Germany did this to pay back its WW1 reparations. Worked great for people who had to wheel barrow cash to buy a loaf of bread. Also the societal consequences of the economic upheaval in no way contributed to the rise of the Nazi party and civil strife that ensued. LET'S DO THAT!

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!

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The people espousing this fiscal nonsense either do not understand the ramifications for the people buying a loaf of bread with wheel barrows of cash or more insidiously they don't give a damn.

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MuchosPollos said:

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richardag said:

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Ags4DaWin said:

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Grapes said:

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Also the fastest way for the US to eliminate its debt is hyper inflation. Yes! Germany did this to pay back its WW1 reparations. Worked great for people who had to wheel barrow cash to buy a loaf of bread. Also the societal consequences of the economic upheaval in no way contributed to the rise of the Nazi party and civil strife that ensued. LET'S DO THAT!

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!

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The people espousing this fiscal nonsense either do not understand the ramifications for the people buying a loaf of bread with wheel barrows of cash or more insidiously they don't give a damn.

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We will never get to the wheelbarrow full of cash phase. Idiots riot for the slightest reason these days. Imagine what happens when they legitimately can't afford to feed themselves. If the price of bread hits $25 a loaf, cities will burn. But don't worry, we will have "temporary/emergency" price controls WAY before that happens.

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FEDERAL RESERVE KAPLAN: CAN’T ASSUME USD WILL STAY WORLD’S RESERVE INDEFINITELY

In other words... they know what is happening.

— Gold Telegraph ⚡ (@GoldTelegraph_) June 21, 2021

oldcrow91 said:

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Oldag2020 said:

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BuddysBud said:

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Oldag2020 said:

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BuddysBud said:

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Oldag2020 said:

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Demand is temporarily outpacing our production(supply). Due to covid shut downs and supply chain disruptions. Ex. Lumber prices were inflated, now they are correcting themselves.

Once our supply chains are back up to full capacity, the added demand created by the stimulus will not cause long lasting inflation.

Our productive capacity is so high, in fact, I believe our biggest fear should be deflation, not inflation. Our productivity growth is not disappearing any time soon. The inputs to production are 1. Technological advancements and 2. Increase in labor force. Our computing power doubles every 18 months. Clearly this growth will not disappear.

It's no accident that we have continued to spend more and more throughout the last several decades with little to zero long term negative consequences.

In fact, the fed has struggled the last decade to maintain their inflation level goal of 2%. This even Despite massive spending in 2008 and artificially low interest rates.


Another reason we should not be concerned by the massive spending is that $1 in government spending = greater than $1 in gdp growth.
Gdp growth = 1/ the propensity to save
The propensity to save is currently ~ 20%
Therefore every dollar spent today grows our gdp tomorrow by $5

This $5 of gdp growth then increases tax revenue by $5.
This increase in tax revenue is used to service the debt.

Basically, we can spend as much as we want with little to zero negative consequences. Long term inflation is not on the way.

Be sure to allocate portfolios accordingly.

---

This reads like a perpetual motion machine.
Put a big fan in front of a windmill to blow on the blades to generate electricity that powers the fan. The fan blowing the windmill will never stop because the windmill keeps turning by the fan blowing on it. Easy.

Look, and endless supply of energy.

---

That is precisely where we are. I don't believe I could have said it any better!

---

Since perpetual motion machines are impossible, your post was sarcasm.

You fooled many of us. Good job.

---

They are in fact, not impossible.

Imagine if you drilled to the earths core, shot water into that hole, and used the steam generated by the earth as a source of power. That is limitless power that theoretically can never run out. The power created by the steam could be used to perpetually power itself, making a perpetual power machine.

This in fact is currently being developed by a team of billionaire investors through one of their family offices.

I am not sarcastic. I fully believe my OP

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So geothermal energy? Sounds more invasive than fracking that the greens hate so much.

Good luck. Hydroelectric uses rain water and evaporation and actually works but libs won't allow us to build lakes that would provide electricity and drinking water and recreational opportunities

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Quote:

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Wondering how a dam could possibly have an impact on the Earth's rotation? Here's a wonderful source that breaks it down further:

Quote:

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Three Gorges Dam crosses the Yangtze River in Hubei province, China. It is the world's largest hydroelectric power station by total capacity, which will be 22,500 MW when completed. When the water level is at maximum.it will flood a total area of 632 km2 of land. The reservoir will contain about 39.3 cubic km (9.43 cubic miles) of water. That water will weigh more than 39 trillion kilograms (42 billion tons).
A shift in a mass of that size will impact the rotation of the Earth due to a phenomena known as "the moment of inertia", which is the inertia of a rigid rotating body with respect to its rotation. The moment of inertia of an object about a given axis describes how difficult it is to change its angular motion about that axis. The longer the distance of a mass to its axis of rotation, the slower it will spin. You may not know it, but you see examples of this in everyday life. For example, a figure skater attempting to spin faster will draw her arms tight to her body, and thereby reduce her moment of inertia. Similarly, a diver attempting to somersault faster will bring his body into a tucked position.
Raising 39 trillion kilograms of water 175 meters above sea level will increase the Earth's moment of inertia, and thus slow its rotation. However, the impact will be extremely small. NASA scientists calculated the shift of such a mass will increase the length of day by only 0.06 microseconds, and make the Earth only very slightly more round in the middle and more flat on the top. It will also shift the pole position by about two centimeters (0.8 inch). Note that a shift in any object's mass on the Earth relative to its axis of rotation will change its moment of inertia, although most shifts are too small to be measured (but they can be calculated).

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richardag said:

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Ags4DaWin said:

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Grapes said:

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Also the fastest way for the US to eliminate its debt is hyper inflation. Yes! Germany did this to pay back its WW1 reparations. Worked great for people who had to wheel barrow cash to buy a loaf of bread. Also the societal consequences of the economic upheaval in no way contributed to the rise of the Nazi party and civil strife that ensued. LET'S DO THAT!

Problem solved, debt crisis averted. Also reparations crisis resolved. Inequality issue resolved. Income inequality issue reset.

Everyone back to zero!

---

---

The people espousing this fiscal nonsense either do not understand the ramifications for the people buying a loaf of bread with wheel barrows of cash or more insidiously they don't give a damn.

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Oldag2020 said:

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No kidding. Inflation is real. A dollar 100 years ago would buy a lot more than a dollar would buy today. I'm not arguing this in the slightest.

That doesn't mean there aren't certain benefits to inflation at or around the feds 2% inflation target. In this thread I am simply claiming that inflation will not get to the levels of the 1970s. Not even close. The rapid appreciation in prices we have experienced the last several months is transitory - and will return to long run base level of 2%

At the same time, claiming we should have remained on the gold standard is absolute absurdity.

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Helicopter Ben said:

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Oldag2020 said:

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No kidding. Inflation is real. A dollar 100 years ago would buy a lot more than a dollar would buy today. I'm not arguing this in the slightest.

That doesn't mean there aren't certain benefits to inflation at or around the feds 2% inflation target. In this thread I am simply claiming that inflation will not get to the levels of the 1970s. Not even close. The rapid appreciation in prices we have experienced the last several months is transitory - and will return to long run base level of 2%

At the same time, claiming we should have remained on the gold standard is absolute absurdity.

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The chart I posted proves that inflation is NOT transitory, but inevitable. The policies being proposed and implemented over the last few years are the most inflationary since the removal of the gold standard itself. In that regard, maybe you are technically correct that it's transitory. Inflation is transitioning MUCH HIGHER.

The removal of the gold standard was like letting the fox in the henhouse. If the gov't is the fox, the gold standard was the protective fence around it. Removing that fence sealed the dollar's fate to approach zero, which it has done. A fact that has been proven by the 99% loss in purchasing power since it was removed less than 100 years ago.

Nobody is arguing a gold standard is perfect. It just recognizes the corruptibility of human beings with unchecked power. Maybe this is what you cannot understand, but gold cannot be duplicated easily. In contrast to money printing, which isn't even an accurate term anymore, they just have to type in a few keystrokes to create an infinite quantity of dollars. The power to print money without producing anything of value is unfathomable power. If politicians, banksters, or human beings in general, were trustworthy of such power, there would be no need for a gold standard.

Currency debasement is not a new idea. Look up the history of Rome and the currency debasement they did. Every single fiat currency has gone to zero for the same reasons. We have done and are doing the EXACT SAME THINGS. The parallels are so strong that it's asinine to think we're immune to the same fate. Weimar Germany, Zimbabwe, and Venezuela are just recent examples. And before you say we're the reserve currency and nobody will abandon the dollar:



So then, why 2% target and not zero? If not zero, why not 3, 5, or 10 percent? What is the "logic" behind the magical 2%?

If you believe in equality of opportunity or even the idiotic idea of equity, then inflation is disastrous to 99.9% of the population. Who benefits from inflationary policies? Gov't bureaucrats and their cronies. The military industrial compex, big pharma, the big banks, and the global elite who get first access to the cash.

All of us peasants working for and holding dollars get to enjoy the slow but steady loss of wealth. And soon it will be rapid loss of wealth. We are seeing the beginnings.

And your point about currency debasement making exports cheaper is just wrong again. We all want to charge as much as possible for the things we create. If some other country wants to debase and make their exports cheap, I say let them! Let them subsidize our consumption at their population's expense. That is what is happening now, but it won't last forever. When they realize they'd be better off consuming their own production, this game is over.

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Quote:

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We have to debase or we lose global competitiveness.

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Oak Tree said:

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Conservative posters are in total agreement that unlimited spending and printing money causes inflation or worse. When will conservatives make DC Republicans represent their beliefs?

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Oldag2020 said:

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This increase in tax revenue is used to service the debt.

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