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Post by glennkoks on May 5, 2023 2:44:42 GMT
We have a central bank that is effectively controlled by Europeans, multinational corporations, and other foreign banks, we already lost sovereignty long ago. Glenn, the "money shouldn't be free" statement is no small matter. What should determine the cost of borrowing money? The Fed? Supply and demand plus a risk premium? I am not claiming to know the answer. Right now it is obviously completely arbitrary since the Fed prints more on a whim anyway. If you are going to go off the gold standard, you'd better have wise and un-corrupted leaders running the show. Maybe we used to have that for the most part. "Who should determine the cost of borrowing money"? Good question, as a free market capitalist I believe supply and demand should determine that cost as banks should compete for our dollar. In the old days we put money in the bank, they paid depositors interest, loaned the money out and charged a "fair" price for that service. Nowadays, the best I can figure is the Fed prints money out of thin air. That money is then pretty much given to the banks free. They take that capital, leverage it to the hilt and put it to work for them in high risk investments like credit default swaps and in theory make much more with it than the old tried and true methods of banking. Old school 4 or 5 percent ROI for banks has been replaced by an expectation of twenty percent plus in more sexy investments. If it works they make billions, if it does not the banks are too big to fail and will get taxpayer aid. It seems like it worked great for about 13 years until a nasty old nemesis called inflation reared its ugly head. Now to kill the plague the Fed is forced to tighten and raise rates. No more "free" money and many of the regional banks are dropping like flies due to the new rates. Apparently it is easy to make profits with "free money". Much more difficult to make money with borrowed money at higher interest rates... |
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Post by glennkoks on May 5, 2023 2:53:07 GMT
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Post by walnut on May 5, 2023 3:00:59 GMT
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Post by walnut on May 5, 2023 3:06:54 GMT
Banks are puzzling to me anyway. They operate for years with generally no equity growth per share, and a 2% dividend yield. Then about every 20 years a few of them collapse. A masters degree in finance does not help me to get the point of it. In cases like this I sometimes suspect that clever accounting has skimmed excess profits off to insiders.
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Post by Sigurdur on May 6, 2023 15:15:57 GMT
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Post by missouriboy on May 6, 2023 23:14:22 GMT
Interesting set of ideas. Are we up to it? Just imagine a Federal Government 50% to 98% smaller.
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Post by glennkoks on May 7, 2023 19:34:00 GMT
Interesting set of ideas. Are we up to it? Just imagine a Federal Government 50% to 98% smaller.
I think it is a terrible idea. Faith is about the only thing propping up the dollar. If people are forced to take a haircut via a U.S. bankruptcy and lose confidence in the dollar they will find something else to believe in. Crypto, Euro, Yuan, Rupee or BRICS basket currency. With any fiat currency faith is the tie that binds. You break the faith you become Zimbabwe. I think the writing is on the wall as far as the math goes. It won't be too many more years and the cost of servicing the debt will be the straw that breaks the camels back. Then the only option will be a bankruptcy or Great Reset. I don't see that happening without some type of cataclysmic event like WWIII or Great Depression II. We did not become the worlds reserve currency by accident. We won WWII and were the only economy left standing. Call it the spoils of war and I don't see us peacefully giving up that "exorbitant privilege" peacefully. |
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Post by nonentropic on May 7, 2023 21:07:50 GMT
The world seems to have accepted inflation for a few years at a minimum, my pick is an aggregate halving of value of most currencies, as such given that most countries are happy with this and that it is driven by the CAGW religion so assailable in the west, the debt thing is much less of a problem.
Countries such as China hold a lot of US bonds etc so they will pay for their export subsidies of the past in the near future. (I think I saw a Chinese US holding of US$10T?) Or a lot.
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Post by walnut on May 7, 2023 21:22:26 GMT
The world seems to have accepted inflation for a few years at a minimum, my pick is an aggregate halving of value of most currencies, as such given that most countries are happy with this and that it is driven by the CAGW religion so assailable in the west, the debt thing is much less of a problem. Countries such as China hold a lot of US bonds etc so they will pay for their export subsidies of the past in the near future. (I think I saw a Chinese US holding of US$10T?) Or a lot. I'm guessing that we will never get to see the minutes of those meetings, where they decided to inflate away our debt over the next 7 or 8 years. And China is going to take the brunt of some of it, yes. |
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Post by missouriboy on May 7, 2023 21:22:57 GMT
Interesting set of ideas. Are we up to it? Just imagine a Federal Government 50% to 98% smaller.
I think it is a terrible idea. Faith is about the only thing propping up the dollar. If people are forced to take a haircut via a U.S. bankruptcy and lose confidence in the dollar they will find something else to believe in. Crypto, Euro, Yuan, Rupee or BRICS basket currency. With any fiat currency faith is the tie that binds. You break the faith you become Zimbabwe. I think the writing is on the wall as far as the math goes. It won't be too many more years and the cost of servicing the debt will be the straw that breaks the camels back. Then the only option will be a bankruptcy or Great Reset. I don't see that happening without some type of cataclysmic event like WWIII or Great Depression II. We did not become the worlds reserve currency by accident. We won WWII and were the only economy left standing. Call it the spoils of war and I don't see us peacefully giving up that "exorbitant privilege" peacefully. After paragraph 3, things went along "fairly well" until we decided to solve all the World's problems ... and incrementally ... promise everybody of every party everything. Social Security, medicare, etc. Those that were set up to be self funded need to be made whole with NO additional promises. Everything else needs to be defunded until someone gets agreement on if we should or should not fund it and how to pay for it without debt. If it can't be paid for in the long term it needs to be dropped. Or turned over to the individual States to fund with their own money.
Everything that is not funded by law, needs to be eliminated. Any and all international assistance and funding that does not produce a quantifiable return on investment should be eliminated.
I am not sure there will be much faith left in the currency by the time of the 2024 elections. And, it's not really the currency. It's the abuses that have been heaped upon it. How much of our required imports can be paid for with our in-demand exports? I would guess, quite a lot. Anything that is a debt for "non-required" imports and programs for which we do not get a real return, may need to be terminated and defunded for ANY payment. In my opinion, 90% of Federal Government falls in that category. Maybe a bit less if you want a great military.
Imagine the disruption if we just DID what I said ... even without canceling the debt. Once most of the rest of the World went into a deep depression, we could look at the debt. Many might be sooo broke that they would settle for pennies on the dollar. Only our VERY BEST FRIENDS would get our help without a huge cost.
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Post by ratty on May 8, 2023 0:03:26 GMT
Note to self: Must stop reading this thread.  |
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Post by code on May 12, 2023 18:40:44 GMT
interesting interview with new head of Twitter
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Post by blueridgefarms on May 16, 2023 3:47:36 GMT
The world seems to have accepted inflation for a few years at a minimum, my pick is an aggregate halving of value of most currencies, as such given that most countries are happy with this and that it is driven by the CAGW religion so assailable in the west, the debt thing is much less of a problem. Countries such as China hold a lot of US bonds etc so they will pay for their export subsidies of the past in the near future. (I think I saw a Chinese US holding of US$10T?) Or a lot. China holds less than $1 trillion of US bonds, although they hold more dollars than that as part of their currency reserves. China hasn't been a net purchaser of Treasury bonds for about 10 years now. www.reuters.com/markets/asia/china-slips-away-treasuries-sticks-with-dollar-bonds-2023-02-22/ |
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Post by ratty on May 16, 2023 4:51:25 GMT
The world seems to have accepted inflation for a few years at a minimum, my pick is an aggregate halving of value of most currencies, as such given that most countries are happy with this and that it is driven by the CAGW religion so assailable in the west, the debt thing is much less of a problem. Countries such as China hold a lot of US bonds etc so they will pay for their export subsidies of the past in the near future. (I think I saw a Chinese US holding of US$10T?) Or a lot. China holds less than $1 trillion of US bonds, although they hold more dollars than that as part of their currency reserves. China hasn't been a net purchaser of Treasury bonds for about 10 years now. www.reuters.com/markets/asia/china-slips-away-treasuries-sticks-with-dollar-bonds-2023-02-22/These numbers are meaningless to the average JoeRat.  |
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Post by glennkoks on May 16, 2023 15:04:39 GMT
I am not a day trader. But you do not have to be Nostradamus to see this highly likely scenario play out:
Over the next few days/weeks the media is going to bombard us with economic doomsday scenarios about what will happen if Congress does not come to terms. The market will likely drop in the days leading up to this deadline on "fear". Wait until the news is the gloomiest and then buy!
Washington will be hailed as hero's, both sides claiming victory as they come to terms in the last seconds to avoid the economic apocalypse. The market will jump over the next few trading sessions. That's when you sell and take profits.
*Taking free advice from anyone on the internet is never a good idea. Especially me, my track record is sketchy at best.
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