Letters to the Editor
aveutter
Published Letters: 436 Editor's Choice: 48
-
Real Money for Faux Debts
[Read the article: What to expect when you're expecting inflation]
[Read more letters about this article: Here]Point one is the current Fed Chief believes in 'inflation targets'. He has never backed down from this position on this, and some analysts suggest you can monitor the AMB at the Fed's website to follow this trend. Most of the GDP figures in the last twenty years are the result of growth in the money supply. It now takes five dollars of money created to get one dollar of economic growth, four dollars is considered excessive by historical standards.
According to Bob Prechter, Conquer the Crash, printing money is actually a bit less inflationary than simply expanding credit, because that inflation takes longer to work its way through the system. Credit expansion is a much more efficent way of controlling the money supply, both expanding and contracting, as we have already seen. WHen the credit markets sieze up, money vanishes.
Money can disappear, just as easily as it was created in the first place. Doug Noland was the first to suggest that the Fed's practise of monetizing the debt, which creates money, has been supplanted by credit expansion in the private financial sector, and that Fed is essentially out of loop, when it comes to mopping up liquidity.
The real argument I think is the what is the exact nature of this 'liquidity', does it flow like electricty, (Greenspan thinks so, therefore stopping the excess flow solves the problem) or does it lie around in pools, like water (Prechter and others think so), they also see every debt obligation as something that must be repaid (not refinanced, and extended indefinitely into the future).
And if its true that this money really exists, a true metaphysical question, are the unfunded government obligations less of a concern, SSN, Medicare, etc?? BY accrual methods the total debt is much much larger than what your government is saying, accrual meaning that when an obligation is created, the money is added to the debit side of current account ledger, and not delayed to the date of payment.
Final point being that Bernanke's money machine may actually be less inflationary than the excess credit being generated by private financial engineering. How it helps is a mystery, like another gallon of water over Niagara falls, but its real money, to pay on faux debt.
Seems we would be a lot better off to reduce those debt levels, but of course such action risks a quicker and more violent reaction, so Bernanke is obligated to make inflation a smaller, more manageable problem.
-
Government cutbacks will add even more pain
[Read the article: Summer jobs go missing]
[Read more letters about this article: Here]An article suggests Citibank and others are cutting back on student loans to Community Colleges, and smaller four years schools as well. Many of these colleges are in small towns which cannot afford this kind of pain, places where there is no job flexibility. While cities face bankruptcy you can be certain there will be more cutbacks, and efforts to privatize public services, which always result in fewer benefits being paid, less personal income.
The pertinent questions is where are these jobs being lost, what is the political fallout, if the jobs are government jobs, or government contractor jobs, and is there some political relief to be gained. (stop spending money in Iraq, and spend it in small town America)
-
Candidate for San Diego Mayor wants the City to Go Green
[Read the article: Global warming versus a bad economy]
[Read more letters about this article: Here]San Diego has recently pulled back from bankruptcy when S&P upgraded their bond rating. The problems aren't over, and one mayoral candidate wants to turn the city into a Green Zone; Solar on every rooftop, and he insists that doing this will actually benefit the local economy. His proposal flies in the face of reason, we all understand that going Green costs money.. He hasn't had a chance to explain how long the plan would take, or how it would make money for the city, and he probably won't get the chance, as the front running super-egos slug it out.
I would like to hear more about his proposal, and others like it, because Green is just to expensive, (unless of course you float new bonds, borrow money and project your savings out into the future, while you enjoy the benefit of a public works program right now?)
-
Crude Limit Up (maybe)
[Read the article: Global warming versus a bad economy]
[Read more letters about this article: Here]Andrew needs to segueway into the stock market (crashing)/oilmarket (limit up), and the (BS) news that triggered that move (some hawkish remarks by the Israel Def Minister, who is running against Olmert, but doesn't really have a chance) or the REAL news out of Turkey and Iran that they have been launching coordinated attacks on the Kurds in IRaq, (who sit on the provisional government of Maliki?) and are deemed enemies, enemies, enemies by our Secretary of State. Iraq is getting complicated, heh?
So Iran is shelling parts of Iraq, and the idiot in chief has declared some citizens of Iraq terrorists, but other terrorists in Iran are fighting them. Maybe McCain can explain it.