Hayek and the Keynesian's 3 Big Mistakes

Discussion in 'Politics & Religion' started by Tsing Tao, Nov 30, 2012.

  1. Tsing Tao

    Tsing Tao

    12 pages, pretty good read. I don't know that I agree with everything in there, but I agree with a lot of it.

    <a title="View IceCap Asset Management Limited Global Markets November 2012 on Scribd" href="http://www.scribd.com/doc/114942493" style="margin: 12px auto 6px auto; font-family: Helvetica,Arial,Sans-serif; font-style: normal; font-variant: normal; font-weight: normal; font-size: 14px; line-height: normal; font-size-adjust: none; font-stretch: normal; -x-system-font: none; display: block; text-decoration: underline;">IceCap Asset Management Limited Global Markets November 2012</a><iframe class="scribd_iframe_embed" src="http://www.scribd.com/embeds/114942493/content?start_page=1&view_mode=scroll" data-auto-height="true" data-aspect-ratio="" scrolling="no" id="doc_31042" width="100%" height="600" frameborder="0"></iframe>
  2. In a balance recession, whereby the private sector is saving, the public sector must spend as this is a basic accounting identity.

    No money printing.

    Lastly, shit floats.
  3. Tsing Tao

    Tsing Tao

    Interesting, cryptic commentary. Your first sentence I agree with (somewhat), other than the fact that you omit debt from the discussion and the natural economic cycle. Debt plays a real part in spending, which is something Keynesians like to ignore.

    "No money printing". Are you saying we should not print money or we do not print money?

    As for shit floats, apart from the actual physical reference, I don't follow you regarding the discussion.
  4. "short time frame, expect equity markets to decline significantly and if you can believe it, the US Dollar to actually
    . Yes, as bad as the US will look, it will continue to look better than its Keynesian cousins in Japan and Europe"

    Winner winner chicken dinner!
  5. Ricter


    Our debt we mostly owe to ourselves, much the same way your bank "owes" you the money you've deposited there. As long as you keep making deposits the bank is happy, and as long as you get your interest and withdrawals you are happy.

    Most money "printing" done in this era is by private finance via "collateral chains".

    I also don't understand, "shit floats". Too much fiber?
  6. Tsing Tao

    Tsing Tao

    The money printed goes towards buying the debt. The Fed buys short/long dated treasuries (depending on what they're trying to do at the moment) and gives that cash to primary dealers. The result is a much lower interest rate that the US enjoys on it's debt than if it had to go to the open market to find a buyer.

    Your bank analogy ignores that pesky aspect of rates. It also ignores the devaluation of printing more money and what that does to the currency, and therefore inflation. This has been the problem with your arguments since you and I began discussing this however long ago.

    Without the Fed in the bond market, rates would be much higher as investors would demand more interest to compensate for higher risk. This is the fundamental aspect to credit and debt, but you ignore it.

    So if the Fed stops, rates shoot up and interest becomes unbearable. If the Fed continues, it devalues the currency further, promoting inflation and loss of purchasing power. And before you try to tell me there's no inflation, I'll go get my charts of the last 5 years of commodities and staples ready.

    I don't know. Perhaps Convertibility needs more fiber in his diet.
  7. Tsing?

    Remember what I said about if everyone goes down then we still have parity?

    Remember that?
  8. Well that does explain the success of leftist's ,democrats and affirmative action.

    Democrats are like a septic tank : the really big chunks rise to the top.
  9. Tsing Tao

    Tsing Tao

    Yeah, and it's just as incorrect now as it was then. So what?
  10. Mav88


    yeah and parity at poverty, wow that's genius
    #10     Nov 30, 2012