Best Thread Keynes Vs. Hayek

[Martinghoul]

Martinghoul also thinks that a Central Bank having control of the money supply is a massive advantage...just look how things are turning out.

Well, we have had this discussion on another thread, if memory serves. I did ask you a specific question to which you haven't responded. I don't think there's any point in discussing anything further until you offer a coherent response.

 

[new_trader]

The problem is Government not Capitalism...This is Fascism.

CBS: Insider trading OK for Congress - UPI.com


WASHINGTON, Nov. 14 (UPI) -- House Speaker John Boehner and House Minority Leader Nancy Pelosi engaged in insider trading that's legal for U.S. members of Congress, CBS News reported.

 

[new_trader]

More Government insanity...

U.S. Congress Votes to Raise FHA Mortgage Limits to $729,750 - Businessweek

“This is an irresponsible action by the folks that should be the fiduciary for the American taxpayer”

-Representative Patrick McHenry

 

[scose-no-doubt]

They haven't actually paid anything have they? It's just guarantees that will raise confidence, which lowers the default risk and reduces the likelihood of actually having to shell out, no?
What's your alternative to that specific problem?

 

[new_trader]

They haven't actually paid anything have they? It's just guarantees that will raise confidence, which lowers the default risk and reduces the likelihood of actually having to shell out, no?
What's your alternative to that specific problem?

Although I don't agree with any Government guaranteed loans there can be a very weak argument made that it assists struggling first time buyers who otherwise could not get a loan. The average price of a US home is around $200-280K (http://www.census.gov/const/uspriceann.pdf). So the question is, why should taxpayers be forced to guarantee a mortgage that is roughly 3 times the price of the average house? If someone wants to buy an expensive waterfront house then surely they can afford to do it on their own, why should taxpayers subsidise those who want to splash out on a house that is way above average? What about very low income earners who a renting because they can't afford to buy even an average house or who choose to rent for other reasons, like their job? Why should renters be forced to subsidise homeowners?

This has nothing to do with confidence and everything to do with Governments propping up house prices to bail out banks that gave out huge mortgages they shouldn't have.

 

[scose-no-doubt]

But since house prices have replaced savings as a store of wealth for most people, collapse will likely lead to a massive drop in consumption leading to a drop in GDP and recession. Isn't that the main issue? Obviously the Government Sachs et al lot have got their face in the trough but do you not think that's a side effect?

 

[darktone]

Martinghoul also thinks that a Central Bank having control of the money supply is a massive advantage...just look how things are turning out.

I dont think central banks have as much control over the money supply as most think. Private commercial banks create most of it and as i understand it the regulation on them doing so is slack to say the least.

 

[scose-no-doubt]

I dont think central banks have as much control over the money supply as most think. Private commercial banks create most of it and as i understand it the regulation on them doing so is slack to say the least.

I though that commercial banks only move the most volume through leverage.

 

[new_trader]

I agree that a collapse would occur but I have been basically saying almost from the start that this is a collapse that the USA and U.K (and most Western Economies) have to have if it is to move their economies away from relying on debt and consumption to ones of real production and real savings.

 

[darktone]

I though that commercial banks only move the most volume through leverage.

Sorry, how you mean?

 

[scose-no-doubt]

I agree that a collapse would occur but I have been basically saying almost from the start that this is a collapse that the USA and U.K (and most Western Economies) have to have if it is to move their economies away from relying on debt and consumption to ones of real production and real savings.

What are they going to produce lol.
I don't see any alternative to debt fuelled growth. I think a collapse would lead to a massive and inescapable fiscal black hole, defaults and social chaos that would set everything back decades, stagnate growth and innovation and that the west would lose it's competitive position as huge portion of skilled workers throw in the towel and emigrate.
What's your view on the hypothetical post-collapse western world?

 

[darktone]

I though that commercial banks only move the most volume through leverage.

If you mean they can lever their reserves then yes. You can take your pick on the ratio though 10/1 50/1 100/1, its a joke. Bearing in mind this is the money that us joe bloggers uses to run our lives with and created as interest bearing debt.
Not good imo.

All About the Money DVD - 3 Minute Taster (No Music) - YouTube

 

[new_trader]

What are they going to produce lol.
I don't see any alternative to debt fuelled growth. I think a collapse would lead to a massive and inescapable fiscal black hole, defaults and social chaos that would set everything back decades, stagnate growth and innovation and that the west would lose it's competitive position as huge portion of skilled workers throw in the towel and emigrate.
What's your view on the hypothetical post-collapse western world?

If the Government didn't squander taxpayer money in non-productive areas, like homeowners, then it would have money to build factories.

After you've watched the link darktone provided, watch this, it is interesting.

BBC iPlayer - Your Money and How They Spend It: Episode 1

 

[scose-no-doubt]

To build what though? They can't compete with EM margins with the kind of wage pressure prevalent in these societies.

 

[YouAreNotFree]

Why do some people think it's ok to kick the can down the road in the hope THEY will not have to deal with the problem. It's the morality issue yet again. Specifically a lack of it.

There is no such thing as a free lunch, no such thing as an easy way out.

Take the surgery and pain now, you survive. Delay it for a few shots of morphine to mask your condition short term and eventually you will be finished.

 

[scose-no-doubt]

B: you die on the operating table
C: you never recover from the surgery and pop you cloggs.

 

[YouAreNotFree]

B: you die on the operating table
C: you never recover from the surgery and pop you cloggs.

So you say screw it I'll just die because there is a chance the other option won't work?

I don't know about you, but that certianly isn't my style.

 

[scose-no-doubt]

Depends whether we're talking cancer or facelift.

 

[new_trader]

To build what though? They can't compete with EM margins with the kind of wage pressure prevalent in these societies.

You have to ask, how is it that a company can manufacture a product in China, put it on a ship, move it half-way across the world, take it off a ship, put it on a truck or train, transport it to a distribution centre and still be able to sell it to the public at a price that is less than it would cost to manufacture locally. You think it is all down to the wages paid in China?

The average household savings rate in China is around 40% whereas the average savings rate in Europe is around 10% and in the US it is a miserable 4%. So, how do Chinese save so much if they are being paid so poorly?

Chinese aren’t addicted to debt (and all its consequences) in the same way that people in the West are.

 

[YouAreNotFree]

Germany, a rich, high wage Western country with a population of 80 million exports roughly as much as low wage China. Population 1,300 million.

If that doesn't squash this 'you can only produce when you have low wages' myth I don't know what will.

I've said it before, but for a large part of the 20th century the USA had the highest wages, highest standard of living, some of the lowest taxes, the highest savings rate, was the largest creditor nation, produced the highest quality goods and was the largest exporter.

All at the same time.