QE nightmare

Historically, it has usually worked that way.

That's macroeconomic thinking, the kind that economists and politicials like, because they gravitate towards big-power control games. The value of a dollar will self-adjust, and messing with it for political reasons probably destabilizes things.

What really matters is productivity, not all that macroeconomic money-supply nonsense. Economists and politicials avoid addressing productivity, microeconomics, because letting people and small businesses act more freely would dilute their power.

Rich people have excess to invest. Since it's profit derived from all of us, they are effectively investing on our behalf. That's good, because someone has to invest, and government sucks at doing that. If they put it into businesses and buildings and productive stuff, everybody wins. If they stash their cash in the stock-market-casino, or offshore accounts, we lose.

I'm "rich" in that I have a positive net worth, and I mostly invest in my business, hiring people and buying equipment and designing arguably useful stuff. We buy parts and put them on boards, and the result is more valuable to the world than the parts that went into it. That's functional microeconomics. QE, printing money to pump up Wall Street and big banks, is not. In the long run, it's dangerous.

I thought that was what he was saying. With negative or zero inflation, people tend to stash their cash in accounts. Some inflation is helpful in that it makes investment the best way to make money.

All other calibers have had no more than a 2x increase in price. I can still buy .45ACP for ~$40/box (9mm for $17, or so and I bought some .380 for $11 at a gun show). OTOH, .22LR has gone up six or seven times in as many years. It's unobtainium in the stores here. I know one guy I was talking to recently was "allowed" to buy a brick of

If investment actually helps businesses and creates jobs, great. IPOs can do that, although they often don't. Playing the market on existing shares makes the stocks mostly poker chips at the casino.

Stashing cash isn't evil; bank deposits could be used to make business and home loans to help real growth. Or they could be "invested" in stocks and derivatives, or used to manipulate currency exchange rates for profit. The current trillions of "stimulus" was supposed to make capital available to business, but it's mostly going into the bad stuff.

Mild inflation is probably good. Zero interest rates are bad.

Interesting times ahead!

he rich are doing badly, everyone has it bad (whether out of spite, or actual economic dependency). This is probably what was meant by "trickle-down eco nomics", not an actual cash flow.

But they don't invest it during recessions. And they haven't been investing much in US industry for years.

n our behalf. That's good, because someone has to invest, and government su cks at doing that. If they put it into businesses and buildings and product ive stuff, everybody wins. If they stash their cash in the stock-market-cas ino, or offshore accounts, we lose.

business, hiring people and buying equipment and designing arguably useful stuff. We buy parts and put them on boards, and the result is more valuabl e to the world than the parts that went into it. That's functional microeco nomics. QE, printing money to pump up Wall Street and big banks, is not.

Sure, but without QE you'd have fewer customers, and you'd be doing less of the making stuff that is more valuable to the world than the parts that we nt into it.

Not half as dangerous as not doing it. During the Great Depression, the US GDP shrank by 25%. During the Great Recession the GDP has increased - not b y much and all of that has gone into the pockets of the top 1% of the incom e distribution, who haven't invested it nearly as enthusiastically as they would have done if the economy wasn't in recession - which is a rather bett er result.

This is layering on too many abstractions and losing sight of the underlying physical realities.

Currency is a medium of exchange. If you have a pile of it, this is supposed to signify that somewhere, somehow, there's a pile of stuff you made, facilitated making, brought to market, or otherwise increased the value of.

Your pile of currency it also signifies that someone liked whatever you did enough to trade you currency for it--they bought it.

That's good. The material wealth of society has been increased--society has more machines, goods, or whatever.

So, that fact that you've got the currency indicates the goods are in circulation and benefiting society. You've done a good thing.

Ditto with currency. Even if it's just in the bank and you're not "using" it, the bank loans it out to someone who can. It doesn't lay fallow and useless somewhere doing nothing--that's not how it works.

Cheers, James Arthur

The Chinese hold a small portion of US debt, about 1.2 trillion. So they have a good say in how things are done, but they hold less than 10% of the total US debt, so we can still tell them to go pound sand.

-Bill

of us, they are effectively investing on our behalf. That's good, because someone has to invest, and government sucks at doing that. If they put it i nto businesses and buildings and productive stuff, everybody wins. If they stash their cash in the stock-market-casino, or offshore accounts, we lose.

people tend to stash their cash in accounts. Some inflation is helpful in that it makes investment the best way to make money.

ing physical realities.

osed to signify that somewhere, somehow, there's a pile of stuff you made, facilitated making, brought to market, or otherwise increased the value of.

id enough to trade you currency for it--they bought it.

has more machines, goods, or whatever.

culation and benefiting society. You've done a good thing.

" it, the bank loans it out to someone who can. It doesn't lay fallow and useless somewhere doing nothing--that's not how it works.

If it's in a bank, it isn't going to be lent to anybody who can't prove the y've got something equally valuable that the bank can sell if the borrower defaults on the loan.

Bankers aren't venture capitalists. They aren't in the business of investin g in extra production machinery either, particularly during a recession.

James Arthur has a peculiar faith in the positive virtues of bankers. In hi s mind they were the helpless victims of a Democrat conspiracy when they cr eated the sub-prime mortgage crisis, and they look equally Teflon-coated in all the other fairy-stories he posts here.

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ll of us, they are effectively investing on our behalf. That's good, becaus e someone has to invest, and government sucks at doing that. If they put it into businesses and buildings and productive stuff, everybody wins. If the y stash their cash in the stock-market-casino, or offshore accounts, we los e.

n, people tend to stash their cash in accounts. Some inflation is helpful i n that it makes investment the best way to make money.

ng physical realities.

pposed to signify that somewhere, somehow, there's a pile of stuff you made , facilitated making, brought to market, or otherwise increased the value o f.

d enough to trade you currency for it--they bought it.

y has more machines, goods, or whatever.

irculation and benefiting society. You've done a good thing.

ng" it, the bank loans it out to someone who can. It doesn't lay fallow an d useless somewhere doing nothing--that's not how it works.

hey've got something equally valuable that the bank can sell if the borrowe r defaults on the loan.

Right. Bankers are very careful not to lend money. That would be crazy.

Cheers, James Arthur

I'm not sure if you can watch YouTubes Bill, but this is a hilarious clip that makes your same point:

Canadian analyist explains how that SNL clip actually shows how frustrated and powerless China is

(The whole Saturday Night Live Obama/Hu Jintao skit is here:

ote:

all of us, they are effectively investing on our behalf. That's good, beca use someone has to invest, and government sucks at doing that. If they put it into businesses and buildings and productive stuff, everybody wins. If t hey stash their cash in the stock-market-casino, or offshore accounts, we l ose.

ion, people tend to stash their cash in accounts. Some inflation is helpful in that it makes investment the best way to make money.

ying physical realities.

supposed to signify that somewhere, somehow, there's a pile of stuff you ma de, facilitated making, brought to market, or otherwise increased the value of.

did enough to trade you currency for it--they bought it.

ety has more machines, goods, or whatever.

circulation and benefiting society. You've done a good thing.

sing" it, the bank loans it out to someone who can. It doesn't lay fallow and useless somewhere doing nothing--that's not how it works.

they've got something equally valuable that the bank can sell if the borro wer defaults on the loan.

As pointed out subsequently in the stuff that James Arthur snipped without marking the snip - a charming habit of his, which does highlight to his sho rtage of intellectual integrity - they aren't venture capitalists either (e xcept when they are being crazy, which happens a little too often, but rare ly funds productive investments).

Money in the bank tends not to fund economic expansion - bankers don't know enough about specific industries to be able to invest in the way that vent ure capitalists do.

You are talking simple conservation theory. Like, we only have as much as we create. Almost any serious macroeconomist would scoff at your simplicity, and go off and print a bunch of money. That's working well in Venezuala.

Even if you believe that, there is no reason to buy chips from the "bank" if the casino isn't open. The stock market provides the liquidity that allows investment in the first place.

As long as productivity > inflation, it's probably not that bad. Low inflation is better than any deflation but high inflation is probably the worst situation of all.

Hold on to your wallet!

There's not much point in reading Sloman's tedious rants. He's never run a business, hasn't done anything productive in decades, and doesn't design electronics. He should work with Phil, fixing broken hi-fi's.

I can't see that their holding some t-bonds gives them any say. Their only option is to not renew them as they come due. That could drive up the interest rate and depress the value of outstanding bonds, including theirs, so they can't afford to do that suddenly.

It's sad that the Chinese are buying US debt and property, when they should be investing in China, for the benefit of their own citizens. China is run by criminal thugs.

The stock market types love the concept up "liquidity", up to having such higher-order derivatives that nobody can trace the dependencies. But the liquidity is going mostly into speculation, not funding productivity.

Few startups depend on the stock market for initial funding. They are funded by founders or angels or VCs, and the successful ones grow on earnings. A lot of companies go public not because they need the cash to grow, but because going public nets the insiders billions of dollars taxed at the capital gains rate.

Then there are things like Dr Koop and Twitter that go public because they don't have a revenue model.

Irrelevant. Without liquidity, you have no investment.

Those who are providing the initial investment are counting on liquidity, later, to recover their investment. If the market weren't there, they wouldn't invest.

No one said all people are intelligent. See: dot-bomb.

And in the US at the moment. You've had the Great Recession, rather than the re-run of the Great Depression, which you'd earned, and you and James Arthur promoted at the (far) rigth way to cope with the consequences of your sub-prime mortgage crisis.

You aren't printing quite as much money as you should, but your economy is recovering, if more slowly than it might have, and soon you are going to be able to wean it off quantitative easing.

You and James Arthur have a fine set of ideological blinkers that blind you to any of this. Getting all your information from Fox News or some other branch of the Murdoch media empire may have this kind if effect.

They don't flatter John Larkin's fragile ego, so he finds them very tedious.

I've not worked for the last decade - not decades - and I do design electronics from time to time.

Both Phil and I know enough about electronics to be aware that you should have built your 107kHz tank circuit with an inductor wound on a heavily gapped pot core with a central hole into which you could screw a ferrite adjuster to trim the inductance.

Phil cited an example of their performance at 9kHz, I've posted part numbers and mentioned suppliers who keep keep them in stock.

You, on the other hand, are so busy running your business that you can't imagine winding your own +/-3% inductor and entertained yourself by imagining complicated trimming schemes to cope with the +/-20% parts you knew you could buy off the shelf.

Not exactly an example of sophisticated electronic design skills