TPS

If Trump reacts to anything, it's the stock markets. I'm sure he will hurl more disparaging tweets at Powell about lowering interest rates (and the Fed most likely will), but this is all on Trump. It will be interesting to see how he responds to today's "signal".....

Speaking of bull####, you stated in a previous post, "My entire point is that not all countries are the SAME." Yet, you now claim that a theory that says "the US and Argentina are NOT the same" is bull####. Interesting....

Says someone who probably hasn't bothered to read the theory...otherwise you would know what they say about different institutional structures related to monetary and fiscal policies, and exchange rate regimes.

When you read it, you'll see that much of my argument with GG is based on an understanding of MMT. There is no debate about the technical details of the argument, but there are disagreements about their policy suggestions, especially the job guarantee. I'll let you decide who the moron is....

No pleasure in that post, rather an expression of frustration (even depressed about this). I was hoping this case would help expose the beast. I hope to God I am wrong. (Sorry @TtownBillsFan, I did not read your post before posting this. I truly hope so too.)

It seems pretty clear, it's not going to see the light of day. As I told you @Deranged Rhino, the Deep State will win. Trump has acquiesced--he's no fool when it comes to protecting himself. In the end, I won't be surprised to find that Q is just a bull ***** con used to keep people holding on, not much different than Rachel stringing my wife along for 2+ years with Russia, russia, russia...

Vlad, it was only a matter of time...

Bills, in the hunt, win 4 out of last 5 to get in, starting with a big win on thanksgiving day.

Go back about 10 pages and start reading the posts related to your 2 cents.

What's astounding is you don't understand what causes inflation. About 75% of what the Fed bought was from banks and stayed on bank balance sheets as an interest earning asset--deposits held with a Fed bank. Bank managers decide this, not investors. So let's look at the amount bought from investors. The initial impact is a decrease in treasuries or mbs in their portfolios and an increase in demand deposits. When QE2 was announced in late 2010, many investors believed it would cause inflation and moved funds into gold and commodities (I made the argument here that a spike in oil prices was driven by investors piling into oil futures). This is also when many of the conservatives on PPP said it would cause hyperinflation. I said it would not. bill Gross famously stated he was dumping his fixed rate treasuries for the same reason. These action did have an initial impact on commodity prices (including gold) and the 10-year treasury yield. However, 6 months later the bubble burst, as oil future prices dropped the maximum allowable that May, and treasury yields fell back below 2%. QE did not lead to a significant increase in inflation because 1) most of the funds sat as dead assets on bank balance sheets; 2) investor decisions do not cause a rise in the general level of prices. Inflation is influenced by Generalized excess demand for products, factors that influence production costs, and the degree of market competition. Btw, since you brought up, care to comment on how Japan can get away with a public debt to GDP ratio of 240% with the BoJ holding half of that AND why there's no inflation?

If you consider the Bank of Japan an alien.... Japan's debt/gdp ratio is 240%, and the BoJ holds about half of that debt. To compare, if the FED held that much debt relative to the size of the US economy it would hold $26 trillion in treasuries....

Apparently you just aren't reading my posts very carefully, because I said it (all countries are NOT the same) long ago... The reserve accounting EXPLAINS WHY QE DID NOT LEAD TO INFLATION. A deficit occurs when spending exceeds tax revenue. Here's where we differ: I believe It's the size of the deficit that matters (and of course the state of the economy when they occur); you believe it's more important whether they are caused by spending increases or tax cuts. You believe that larger deficits caused by tax cuts lead to stronger growth than deficits caused by spending increases, but this supply side religion has never worked in practice--the evidence does not support it. Haha! Thanks for bringing Japan into this...who do you think holds the majority of their government's debt?

To answer you and Faith, there is no doubt that the supply chains of the US companies that are producing in China have been changing and will change even more because of this. The cost differences between manufacturing in China and the US aren't so great any more, and companies have gradually shifted. It is US Multinationals that caused most of the shift to China and other countries, so they do need a push by politicians. I doubt very much the next president will be as belligerent on this as Trump, which is why I predicted China would stall on this a couple months back. Maybe it started with Clinton, but US interests have pushed globalization and outsourcing for a long time. When companies move, it's Wall STreet and shareholders that win, and workers lose.

If you've read my recent stuff, then you know I don't disagree. I am in the business of predicting what I think will happen... The Chinese State can wait longer than Trump can, and it certainly seems in their best interest for Trump to lose 2020. As a prediction, I don't think this is controversial.

Once again, the statement made was "countries that issue debt in their own currency can never default." If you issue debt in another currency, then you are subject to constraints in the FX market. For example, If the US issued debt in yuan, I certainly would not make the same claim, nor would anyone else. Any country can certainly try and purchase those hard currencies with the currency they control, but you DO face a constraint on the other side of that exchange. You're being disingenuous and creating a straw man argument trying to treat all countries the same. Why do you think Argentina HAS TO issue bonds in USD in the first place? As I posted for you a second time, not all countries are alike, and the ultimate constraint they face in using "deficit spending" is inflation. Advanced countries with excess labor and capital, and developed financial markets, have much more flexibility than others. I don't disagree, but it takes time to develop new supply chains. Trump has until next year--the election. Hell, the markets are yelling at him now to stop this shiz. Soybeans grow in Brazil too....

Argentina is subject to the market for USD to pay its bonds that are issued in USD. The US issues its bonds in USD and pays in USD. You can't see the difference? On inflation, you don't seem to understand what bank reserves are. Solely done for your benefit....? By injecting more spending than it takes out in taxes, government spurs greater wealth creation by the private sector--every debt is someone else's asset.... Longer than Trump can wait.

China can play the long game, Trump can't. It will be interesting to see how the ego will back down without looking like he lost....

I agree with you here. There are no perfect measures of employment or unemployment, and the nature of the economy is always changing. One way to help those at the bottom is to push the economy faster via stimulus and, at the same time, berate the Fed so they don't put an end to it with higher rates. Trump has done both.

My point: focusing on jobs, saying we're at a new record, does not carry a lot of weight in an economy where the population is growing over time, hence my age comment. Let me also say once again, I am glad Trump used "deficit spending" (widening the gap between government expenditures and revenues) to stimulate the economy when unemployment was approaching what many economists thought was full employment--he helped blow a hole in the traditional view. However, since most of the tax cuts go to the top payers, the impact is weaker since they spend less of any additional income. Corporate tax cuts have also mainly been used to fund stock buybacks, though the 100% expensing of equipment gave a brief jolt. As those stimulants have worn off, we're back to an economy not much different than what was going on the previous 4 years--my point. I believe I posted this graph at some point in this thread for the same reason: To answer your question: the previous peak was Jan 2008 which was surpassed in May 2014. Since then, there hasn't been much of a difference in the growth of employment. As I argue, Trump's second year was good because most of his stimulus was done then. Trump is also right to castigate the FED for raising rates, as that is what has caused most of the recessions since 1960. Growth should continue as long as the FED let's it, but Trump's tariffs are also having a negative effect. Unfortunately, he's playing a long game, but he's running out of time--the 2020 election. The Chinese can wait him out. I have also given him credit here. Changes in global production take time, so any positive gains from producers "insourcing" will be gradual. However, most of the manufacturing that comes back will be capital intensive, requiring even less labor than in the past (this has always been the case for much of manufacturing). Any amount is good in my view. The best thing for trump is if wages continue to rise faster, as wages and consumption by the middle class is the most important factor that will drive economic growth in the US.

This is an interesting tweet by Trump, but I don't think he's talking about tariffs here. What he really should say is they are selling US lots of stuff, then using the dollars they get from their trade surplus to buy treasuries to keep the USD from depreciating against the yuan. We get stuff, they get US paper.

2012 181 2013 192 2014 251 2015 227 2016 193 2017 179 2018 223 2019 to-date = 165 These are the monthly averages (in 1000s) by year since 2012. The past 2.5 years has been nothing special. 2018 was boosted by Trump's "deficit spending." The current trend is not so hot... As I mentioned, he will have to buckle before the Chinese do.

The average employment gain per month under Trump is 195,000. The average over Obama's second term was 212,000. Touting "a new record" for total employment is like me saying I set a new record for my age today....

I know...it’s a disease...

They don't have to wait long. The US economy is feeling the effects, and it will be political suicide for Trump if he lets this go into 2020.

It's pretty simple. Given the bonds are issued in USD, the attempt to exchange pesos for USD would lead to a depreciation of the peso, increasing the price of imported goods. The extent of the depreciation would depend on how many holders of USD would be willing to exchange them for Argentine pesos. It takes two to tango. Advanced countries that issue debt denominated in their own currency do not face this constraint. Ok, now how about you provide a concrete answer for why QE did not lead to inflation? Explain the details, not some nebulous notion of the dollar's special status. Give me the accounting and money trail....