Monday, May 30, 2011
"But then there’s this: There will be no WPA-type programs in our near future. There was no appetite for them in the Obama admin in the midst of the worst recession since the Great Depression and there’s a lot less now. The reasons for that are interesting and I’ll speak to them another day".
I would love to know what those 'interesting' reasons were during the midst of the crisis. Perhaps afraid of being labeled socialists? We all know how that worked out.
The coins are of a type known as antoniniani. The hoard is made up of issues of at least nine Roman emperors ranging from Gallus (251-3) to Victorinus (269-271). The latest coins in the hoard point to a date for its deposition in the early part of AD 271.This is very interesting how brainwashed what should be objective archeologists have become due to the propaganda put out by those who peddle the "hard money" theories and those who advocate the view that "money is a commodity". The historians actually use the word "debased", to describe these 2,000 year old coins used by the most powerful empire the world had ever seen to that point.
The antoninianus started life off as a silver coin issued in the early 3rd century but, by the time of the Hyderabad hoard, it had become very debased and ended up as a copper-alloy coin with a very thin silver coating.
Severe inflation reduced its monetary value which is why later antoniniani are common finds on archaeological sites of the third quarter of the 3rd century. The Hyderabad hoard belongs to this period.
Again more quantity theory of money dogma, the authors here are actually trying to pass off commentary on the inflationary environment in Brittania 2,000 years ago; were they there? How about sticking to the empirical facts folks and leave the dogma out of it. As centuries had gone by since the Romans first arrived in Britannia; a poll tax for provision purchases of the expanded legions, the use of these coins in commercial transactions and the local savings desires of the Roman currency had become more widespread, so of course we would find evidence of larger amounts of Roman coins in Britannia.
This was a turbulent time for the Roman Empire known as the Crisis of the Third Century. Twenty-five emperors reigned between 235 and 284 (Ed: Hel-lo!), and in 260, under pressure from barbarian invasions (Ed: do-what?!), the empire split into three (Ed: okay!) warring sections. The province of Britannia joined Gaul, Hispania and Germania to form the Gallic Empire under the control of the Batavian usurper Postumus. Postumus was himself usurped and was killed by his own troops (Ed: The Roman Doug Neidermeyer?) in 268. The Gallic Empire fell apart and a chain of would-be emperors followed for a few years until the Emperor Aurelian reclaimed the provinces after his victory in the Battle of Châlons in 274.
Sunday, May 29, 2011
Saturday, May 28, 2011
Below is some violent video of recent unrest in Spain, where we see countrymen pitted against countrymen in violent clashes. It looks mostly like employees of the state brutally trying to evict what looks like young peaceful protesters who just want to be employed. Young persons who want access to a means of subsistence for themselves and probably a naturally desired family or household.
It has been reported that 1 in 5 of Spanish citizens under 30 years old have yet to find their first job.
Friday, May 27, 2011
--"“Saving the euro” is a euphemism for governments saving the financial class – and with it a debt dynamic that is nearing its end regardless of what they do. The aim is for euro-debts to Germany, the Netherlands, France and financial institutions (now joined by vulture funds) are to preserve their value. (No haircuts for them). The price is to be paid by labor and industry".
--"There is, however, a solution to this problem, and it was discovered by Japan. The government can spend, not by issuing bonds at interest to the public, but simply by creating an overdraft at the central bank, as Ruml recommended".--
- To say the least, net worth really took a hit at the GFC, in fact this hit dwarfs even the dot-com crash of 2000 era.
- All the while net worth was increasing in the last decade, so was the obligation ratio. While increasing obligations is evidence of the success of the rent seekers, apparently the household sector was indirectly participating in this success probably due to increases in residential property values and household stock portfolios exposed to rent seeking.
- At this point, obligations as a percent of income is at a 15 year low. So somehow, the household sector has been able to shed obligations as a percent of incomes. This being perhaps more significant because incomes are down. Could also be evidence of cohabitation of would-be households.
- The drop in obligations shows no sign of bottoming, while net worth has stabilized. Evidence of wealth moving to the top, while J6P is still de-leveraging.
A bottom in the Obligations Ratio may be something to look for as evidence of the "recovery" finally starting to broaden.
Thursday, May 26, 2011
GDP in the first quarter of this year was reduced by more than a full percent due to a slowdown in government spending. And even with this evidence the Republicans and Obama want to reduce spending even more. That's their fantasy world of "cut and grow."
From today’s GDP report
Contributions to GDP
Personal Consumption +1.53%
Gross Private Domestic Investment +1.45%
Net Exports -0.06%
Government Spending -1.05%
More spending cuts are coming!
Wednesday, May 25, 2011
Oppenheimer's Fadel Gheit weighing in with some excellent comments on the current state of the oil markets.
Tuesday, May 24, 2011
---Vice President Biden and congressional leaders left a meeting on the debt limit saying they were on track to find $1 trillion in deficit cuts.
“We are confident that if we keep on this pace we can get to a relatively large number,” Biden told reporters as he exited the meeting in the Capitol that lasted more than two-and-a-half hours. “I think we are in a position where we are going to be able to get to where we can get to $1 trillion which will be a down-payment on the process.”---
Read the rest here.
Most of the media, dozens of Wall Street analysts, pundits of all sorts and ALL Republicans everywhere were telling us back in November that if the GOP took control of Congress or the House in large enough numbers, then private investment would boom and the economy would take off because of their "business friendly" policies.
We're still waiting.
I guess it's just an incovenient fact for most Republicans, but since the their party's landslide in last year's midterm elections, net private invesment has gone nowhere but down. In fact, the only upturn in net private investment that we have seen in the past five years occured from 2009 through the third quarter of 2010, thanks to the Obama stimulus package. That stimulus resulted in nearly a $400 bln increase in private investment. So the stimulus DID NOT CROWD OUT PRIVATE INVESTMENT!
Oh, but perhaps we mustn't blame Republicans completely. After all, they still have yet to enact their "cut and grow" policies. I can't wait to see how investment and the economy boom after that.
Monday, May 23, 2011
--"The cabinet decided to proceed immediately with the sale of stakes in OTE, the Postbank, the Athens and Thessaloniki ports and the Thessaloniki water company in order to front-load its ambitious privatisation programme," said Greek Finance Minister George Papaconstantinou.
"To accelerate the process, the creation of a sovereign wealth fund composed of privatisation and real-estate assets was also decided."--
Give an inch and the neoliberals will take a mile!
Saturday, May 21, 2011
Thursday, May 19, 2011
Can we send all the Libertarians here, please!
Wednesday, May 18, 2011
The debt ceiling constrains the ability of the Federal Government to pay its debts even though the Constitution mandates that it do so.
In addition, Section 4 of the 14th Amendment states:
"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
Treasury Secretary Geithner has already stopped paying gov’t pensions in direct violation of the 14th Amendment and he may soon be forced to stop paying Social Security. He should be sued along with members of Congress who are using this statute—the debt ceiling—to trump the Constitution. In the case of a statute versus the Constitution, the Constitution wins!
There is a strong legal case to be made here and the Supreme Court has already upheld Section 4 in a prior case.
Any lawyers willing to take this up on a "pro bono" basis?
Tuesday, May 17, 2011
As of today's Treasury Statement (May 16 statement date) here is the breakdown on the total debt limit and total debt outstanding.
As you can see, the total public debt outstanding is $14.345 trillion. That's approximately $52 bln over the limit.
This shows the debt ceiling is meaningless. It also shows that the government can keep on spending and issuing debt and if it does, the Republicans lose all the leverage that they think they have on spending cuts and debt reduction.
The question is, does Obama and Geithner know this?
Heard this idiotic, ignorant, misinformed, comment from CNBC anchor David Faber (a.k.a "The Brain") earlier today.
How is it possible for the public to have any chance at understanding our economic realities when we constantly are exposed to the endless barrage of misinformation and ignorance that comes out of the media?
Monday, May 16, 2011
Sunday, May 15, 2011
Right now, American manufacturing is struggling to fill 200,000 vacant positions. There are 450,000 openings in trades, transportation and utilities.The point that Rowe makes in regard to perhaps there are some job openings that are going unfilled in certain geographic areas of the US may be true but let's apply some perspective.
In general, we're surprised that high unemployment can exist at the same time as a skilled labor shortage. We shouldn't be. We've pretty much guaranteed it.
The skills gap is a reflection of what we value. To close the gap, we need to change the way the country feels about work.
According to the Labor Department there are currently 13.7 million unemployed persons in the US, and another 8.6 million that are involuntary part-time workers. Last month, the US economy added 244,000 non-farm jobs so the 450,000 openings that Mike Rowe talks about in his testimony, seems like about 6 weeks of normal hiring in the current crappy US economy.
"Police say when they arrived at the hotel, Strauss-Kahn had already left for the airport, leaving behind his mobile phone and other personal items."
2006:What is Your Dangerous Idea? The Free Market.
Saturday, May 14, 2011
Friday, May 13, 2011
Blogger was down last night so I couldn't post this, however, here is the latest from Treasury:
And we didn't "run out of money" and the world didn't end.
However, what is important is the political response to this, which will be to bring it back down via spending cuts. That will hurt aggregate demand and the economy.
Thursday, May 12, 2011
Tuesday, May 10, 2011
I sent an email to Caroline Baum today. She's a columnist for Bloomberg.com. (Bloomberg is notorious for their terribly misinformed economic "columnists" and Baum is a good example.)
I was responding to an article she wrote entitled, "Rear-View Mirror Can’t Forecast 2011 Economy."
In the article she attempts to argue that the 1.8% Q1 GDP growth was an aberration. According to her, one of the reasons why we should be getting ready for boom times is because (sigh), finally that darned, growth killing fiscal stimulus will soon end.
This is her "logic"...
|"Finally there are the waning effects of “fiscal stimulus,” or government spending by another name. Since one dollar can’t be spent by two entities at the same time, government spending can only substitute for private spending. Any resulting increase in GDP is temporary."|
So, being the masochist that I am, I decided to send Ms. Baum an email and ask her to clarify.
Here's how it went:
Me: "How does the “non-government” get the dollars to satisfy their tax liabilities or, to “net save” in that unit of account?"
(Sorry for the formatting. Baum writes in all CAPS, like an angry pwerson, so that's why the formatting is like this)
C. Baum : "I DON'T UNDERSTAND THE QUESTION BUT I SUSPECT YOU ARE ONE OF THOSE MMTERS."
Me: LOL!!! YOU RESPOND TO MY QUESTION WITH A SNARKY REMARK. OKAY.
SO, THE QUESTION SEEMS TO BE PRETTY SIMPLE. HOW DOES THE NON SOVEREIGN, I.E., THE PRIVATE SECTOR GET THE DOLLARS TO SATISFY THEIR TAX LIABILITIES? WHERE DO THEY GET THOSE FROM? IT HAS TO COME FROM SOMEWHERE? YOU SAY THE GOVERNMENT AND THE PEOPLE CANNOT SPEND THE "SAME DOLLAR." WHAT IN THE WORLD DOES THAT MEAN? DOES THE GOV'T HAVE TO GET BACK THE DOLLARS IT ISSUES IN ORDER TO BE ABLE TO SPEND? IS THAT WHAT YOU ARE SAYING?
C. Baum: I'M TALKING ABOUT BASTIAT'S BROKEN WINDOW. ACTUALLY AFTER BEING ATTACKED BY MOSLER FOR A SPELL, I FINALLY UNDERSTAND AFTER READING ROBERT MURPHY ON MISES YESTERDAY WHAT MMT IS ALL ABOUT. NOW IT REALLY MAKES NO SENSE. I DON'T NEED THE GOVT TO SPEND SO I CAN SAVE. THAT'S LUDICROUS. I CAN'T IMAGINE ANY SMART PERSON CAN THINK THAT. MAYBE YOU CAN ANSWER A QUESTION: WHY IS IT CALLED MMT SINCE IT'S ABOUT FISCAL POLICY.
Me: MOSLER ATTACK?? HARDLY. HE'S THE MOST RESPECTFUL AND POLITE PERSON I HAVE EVER MET. THAT "ATTACK" WAS YOUR OWN COGNITIVE DISSONANCE. (CREATES STRESS, INTERNAL CONFLICT. MAY HAVE CAUSED YOU TO PERCEIVE IT AS AN ATTACK.)
MURPHY'S PIECE MAY WELL DESCRIBE AN ECONOMY OF PRIVATE ACTORS WHERE THERE IS NOT AN AUTHORITY THAT IMPOSES A TAX THAT CAN ONLY BE PAID IN UNITS OF ITS OWN CURRENCY. IF A WORLD LIKE THAT EXISTS, PLEASE LET EVERYONE KNOW IN A NEW COLUMN. I CERTAINLY AM NOT AWARE OF ONE.
I BELIEVE THE TERM MMT CAME ABOUT FROM A BLOG POST BY SOMEONE BACK IN THE 1990S AND IT WAS NOT AN MMTER. (DON'T QUOTE ME.) HOWEVER IT CAME ABOUT, THE NAME STUCK.
C. Baum: MOSLER USED TO SEND ME NOTES AND SEND TO HIS ENTIRE DISTRIBUTION, SO THEN I HEARD FROM THEM. WHAT IS HIS MOTTO? THERE IS NO PROBLEM THAT CAN'T BE FIXED BY MORE GOVERNMENT SPENDING? C'MON.
Me: NO, THAT IS CERTAINLY NOT HIS MOTTO. YOUR STATEMENT SHOWS THAT YOU HAVE NOT EVEN TAKEN THE TIME TO INVESTIGATE MMT. YOU CRITICIZE IT WITHOUT EVEN UNDERSTANDING IT.
C. Baum: B/C THERE IS NOTHING TO UNDERSTAND BUT SOME ACCOUNTING TAUTOLOGY. I DID LOOK AT IT AT THE TIME. SO PLEASE DON'T ACCUSE ME.
MOSLER'S LAW: THERE IS NO FINANCIAL CRISIS SO DEEP THAT A SUFFICIENTLY LARGE TAX CUT OR SPENDING INCREASE CANNOT DEAL WITH IT.
THE GIST IS THE SAME
Me: THAT'S RIGHT, READ WHAT YOU WROTE:
YOU SAID THAT MOSLER STATES, "THERE IS NO PROBLEM THAT CAN'T BE FIXED BY GOVERNMENT SPENDING."
YET WHAT HE SAID (FROM THE ACTUAL QUOTE FROM HIS WEBSITE, WHICH YOU INCLUDED IN YOUR EMAIL TO ME) IS, "THERE IS NO FINANCIAL CRISIS SO DEEP THAT A SUFFICIENTLY LARGE TAX CUT OR SPENDING INCREASE CANNOT DEAL WITH."
TWO DIFFERENT THINGS.
ANYWAY, NICE CHATTING WITH YOU. GOOD BYE.
You get the "gist" of it. ;)
Oh yes, the "elites" are getting nervous now. We have entered their domain and one by one they are getting picked off. They've already lost Goldman, Morgan Stanley and the other smart ones among their ranks will soon become converts, too! Baum will certainly be among the last to turn, if ever.
Monday, May 9, 2011
Saturday, May 7, 2011
Friday, May 6, 2011
"you can invest in electronic savings bonds (also referred to as book–entry savings bonds) each calendar year by purchasing as much as:They changed a law in 2008 that lowered the limit you can purchase of US Savings Bonds to just $5K PER YEAR? Huh? What is going on here?
$5,000 in Series EE Bonds (Ed.: Whaaaaaaat?), and
$5,000 in I Series Bonds."
Regular marketable US Treasury securities also have a limit, but it is $5M per auction. This is certainly a lot for an individual, but for a non-financial corporation that is sitting on 100s of millions if not $billions of retained earnings, this could create a problem.
"Why would someone want to steal 30 concrete parking stops that each weigh 250 pounds? The bizarre theft has a Kansas City, Kan., business manager and police confused."
The news anchor asks: "So much work for so little payoff?" No one here is probably confused by this phenomenon: Stealing concrete.
The current price ratio between labor and commodities is so perverted, that desperate contractors see a value proposition in stealing precast concrete items off of a parking lot. Back in 2008 here in Maryland, aluminum prices were so high due to the rampant out of control commodity speculation, that thieves were cutting down spun aluminum street-light poles and turning them in for scrap, falling them like trees and cutting them up into "logs"; they were also stealing the empty beer barrels from the rear of bars and restaurants. The state government of Maryland had to enact new legislation to regulate the activities of the scrap yards as a result.
If we had a government that was providing enough NFA to the non-government sector to satiate both domestic and external USD savings desires, and enough to also provide the correct amount of settlement balances to facilitate consumption desires, and throw in some appropriate level of commodity markets regulation, none of this would be happening.