Futures and Oil prices

[Chilly]

I wonder if Sketch will still be posting this afternoon

[DC Tom]

the bolded part is junk.

 

although the fed might not be able to just hand out cash, but they can very much expand and contract the money supply via the banks. as this is done, the liquidity will leak out in the market. the thing is it doesn't spread evenly (which is why the cpi/ppi is a waste of time). when they inflated the money supply in the late 90s, the new cash went into tech (start ups, expansion, massive capacity upgrades, tech equities) in the last expansion of the money supply it got dumped into consumer lending (houses, credit cards, cdo's and cmo's, house builders, and lbo's a plenty). this is worse for the man in the street that bills form the sky, because they will be the last in and last out.

 

the real junk part of that comment is the value judgement you pretend to make on supply and demand.

 

you are essentialy saying that inflation is a problem with supply or demand (or perhaps both), something that you are ostensibly supporting the government or fed "fixing".

 

as AD pointed out, you are saying the market is wrong and the government will be able to correct the too high demand, or "supply side shock". if this were the case the government could just fix north korea and cuba, but they can't. they can't because the market creates wealth, nothing else.

 

this is a joke. the market sets prices (except for the price/supply of the dollar/interest rates which the fed just sets by fiat). its that simple. if you have more demand, you get a higher price. less supply, higher price. the thing is the market will respond with more supply, more alternatives or subsitites, and as a poster pointed out about demand for oil, if people can't pay the price they will just do without.

 

so to conclude: inflation is a decrease in the value of the currency, government fiat controlling supply and interest rates (the price of money) even if that supply increase is filtered through private institutions is the real cause of this. the market setting prices in a way that you don't agree with isn't inflation.

 

Please enlighten: what is the "value" of a currency?

[colin]

Please enlighten: what is the "value" of a currency?

 

it's economic scarcity.

 

were the market to set this value (completely as the credit market for different consumers gives us an idea of what prices

the market will bare) it would be interest rates. interest rates without a credit element would represent the intertemporal demand for money.

 

do you think inflation is too much demand?

[Sketch Soland]

I wonder if Sketch will still be posting this afternoon

 

You want to help me firebomb the Fed?

[TPS]

the real junk part of that comment is the value judgement you pretend to make on supply and demand.

 

you are essentialy saying that inflation is a problem with supply or demand (or perhaps both), something that you are ostensibly supporting the government or fed "fixing".

 

as AD pointed out, you are saying the market is wrong and the government will be able to correct the too high demand, or "supply side shock". if this were the case the government could just fix north korea and cuba, but they can't. they can't because the market creates wealth, nothing else.

 

this is a joke. the market sets prices (except for the price/supply of the dollar/interest rates which the fed just sets by fiat). its that simple. if you have more demand, you get a higher price. less supply, higher price. the thing is the market will respond with more supply, more alternatives or subsitites, and as a poster pointed out about demand for oil, if people can't pay the price they will just do without.

Huh?

 

The value judgement I made on S&D? I said the government can correct a supply side shock?

 

Where am I?

[Alaska Darin]

No, that was pretty much correct. The Fed doesn't print money, but they do make it easier or harder to borrow money, hence affecting working capital and thus consumption. Thus, lower interest rates makes it easier to borrow money to buy stuff, hence making stuff more in demand, hence raising the price...and voila, inflationary pressure.

I'm not disputing any of that. Of course, the FED isn't a government institution.

 

You can certainly recall me bashing VABills about the housing "bubble" 2 years before it burst, right? Pretty much based on the artificial lowering of interest rates...

It's obviously far more complex than that (for example: the credit market meltdown tightened the money supply in that it made it much harder to borrow). But TPS is generally accurate here.

If we're oversimplifying, sure. I'm solely taking issue with his "more government involvement = Good" stance. Big surprise there, huh?

 

Colin isn't incorrect either if we're using TPS as a measure.

[Alaska Darin]

Speaking of patterns, yours is always to insult without adding anything to the discussion. You used to try a little harder.

You get the effort from me you deserve.

 

Complimented? I was referring to your comment about me.

Gee, thanks for explaining it to me - except I wasn't referring to that one at all.

And thanks for the reminder I'm not part of the club. I'm so disappointed...boo hoo...

What club? Those who're able to separate the BS you try and pass off? Surely you know you're full of it.

[DC Tom]

Colin isn't incorrect either if we're using TPS as a measure.

 

He sure as hell isn't correct if we're using "correct" as a measure, though. Hell, dumbass just argued that the value of a currency is established outside any sort of market, and that supply and demand doesn't impact the money supply. How the !@#$ is he close to correct?

[TPS]

If we're oversimplifying, sure. I'm solely taking issue with his "more government involvement = Good" stance. Big surprise there, huh?

Did I say that? I said this,

I'm not justifying the current size and scope of government, but since WWII, as the size of government (relative to gdp) has increased, the severity of downturns has decreased. The downturns aren't severe because there is "more capital in private hands," they are less severe because government spending is a stable source of demand regardless of the "current state of risk" in the economy, and it also goes up when an economy slows down. Private capital, on the other hand, tends to "get liquid" when the "current state of risk" increases--that is, businesses are less willing to spend to expand, and finance is also less willing to lend. Much like the current state of affairs.

 

And I've stated enough times for even you to know that I believe the current level of government is too large. I agree with you guys on the need to reduce government and lower taxes. You are so blinded that you want to read into my comments what you want to believe.

 

It is a fact that a larger government sector and activist fiscal policies have reduced the severity of downturns. THAT DOES NOT MEAN THAT I BELIEVE GOVERNMENT CAN SOLVE EVERYTHING OR THAT WE NEED MORE GOVERMENT. THE SIZE OF GOVERNMENT HAS GONE PASSED WHAT'S NECESSARY TO BE A STABILIZING INFLUENCE.

 

When i argue about marginal tax cuts and revenues, I argue against the supply side belief that tax cuts increase revenues. THAT DOES NOT MEAN I AM AGAINST TAX CUTS. I AM FOR REDUCED GOVERNMENT AND TAX CUTS THAT HELP THE MAJORITY OF AMERICANS. REDUCE PROPERTY TAXES PLEASE.

 

I hope this is clear enough for you.

[Sketch Soland]

The Fed doesn't print money

 

No, but it tells the Treasury how much to print. Then the Fed "distributes" the money as "the banker's bank".

 

The Fed was supposedly created to address "banking panics" by "managing" the economy and "maintaining" steady growth, etc.

 

Or, in other words:

 

ERADICATING THE FREEDOM OF THE MARKET TO REGULATE ITSELF

 

The Fed is the enemy of the free market.

 

The Fed is a socialist institution.

 

That which controls the money controls the people.

 

And Roughing the Faking or Faking the Roughing thinks we live in a democracy!

 

I will firebomb the Fed

 

THE END

[DC Tom]

it's economic scarcity.

 

As compared to what? How is "economic scarcity" established?

 

were the market to set this value (completely as the credit market for different consumers gives us an idea of what prices

the market will bare) it would be interest rates. interest rates without a credit element would represent the intertemporal demand for money.

 

I'm going to do you a big favor and ignore that.

 

do you think inflation is too much demand?

 

As opposed to your proposition that it's too much supply irrespective of demand? Gee, ya think maybe you can't talk about one without the other?

[colin]

He sure as hell isn't correct if we're using "correct" as a measure, though. Hell, dumbass just argued that the value of a currency is established outside any sort of market, and that supply and demand doesn't impact the money supply. How the !@#$ is he close to correct?

 

i did no such thing you goof.

 

economic scarcity of money is a well established term, it essentially means the amount of money wrt the amount of real wealth in a given economy. it is absolutely a function of supply and demand, yet you've just accused me of saying it isn't.

 

and you called me a dumbass, even tho you didn't even understand my very simple post.

 

there have been dozens of economists, including nobel prize winners, using these terms for decades.

 

i think your TPS lust has made you mad.

[stuckincincy]

Recent Democratic track record and promises of action on energy policy...

 

http://republicanleader.house.gov/brokenpr...s/p_energy.html

 

[GG]

No, but it tells the Treasury how much to print. Then the Fed "distributes" the money as "the banker's bank".

 

The Fed was supposedly created to address "banking panics" by "managing" the economy and "maintaining" steady growth, etc.

 

Or, in other words:

 

ERADICATING THE FREEDOM OF THE MARKET TO REGULATE ITSELF

 

The Fed is the enemy of the free market.

 

The Fed is a socialist institution.

 

Correct in theory, grossly wrong in execution. Few people can successfully argue that the financial services industry should be free of all governmental regulations and controls.

[Sketch Soland]

Correct in theory, grossly wrong in execution. Few people can successfully argue that the financial services industry should be free of all governmental regulations and controls.

 

The bailout of Bear Stearns was not managing the economy?

 

Managing the economy is not socialist?

 

Managing the economy does not eradicate a free market?

 

Do you need a more concrete example of execution than that?

 

I would be careful using a phrase like "grossly wrong in execution".

[GG]

The bailout of Bear Stearns was not managing the economy?

 

Managing the economy is not socialist?

 

Do you need a more concrete example of execution than that?

 

I would be careful using a phrase like "grossly wrong in execution".

 

For the umpteenth time, it was not a Bear Stearns bailout, but of its creditors. If you can't get that distinction straight, perhaps you should go back to extolling poopy pants.

 

That's a mighty broad definition of what the Fed is doing and I suggest doing more research on its job. May as well throw every single government agency into the socialist camp if you're going to be using that barn sized definition. And we're not even arguing semantics. There's no such thing as a pure unregulated free market anywhere in any industry because the market swings would be too drastic. As soon as you introduce any form of regulation, you eliminate the "free" portion of your ideal. The question among reasonable people is what level of regulation is sufficient to keep markets functioning properly and provide constant growth without subjecting the economy to massive shocks from the ineviatble downturns.

 

You can debate the merits of a true free market, but paint it against a 30-yr cycle of massive depressions.

[TPS]

For the umpteenth time, it was not a Bear Stearns bailout, but of its creditors. If you can't get that distinction straight, perhaps you should go back to extolling poopy pants.

 

That's a mighty broad definition of what the Fed is doing and I suggest doing more research on its job. May as well throw every single government agency into the socialist camp if you're going to be using that barn sized definition. And we're not even arguing semantics. There's no such thing as a pure unregulated free market anywhere in any industry because the market swings would be too drastic. As soon as you introduce any form of regulation, you eliminate the "free" portion of your ideal. The question among reasonable people is what level of regulation is sufficient to keep markets functioning properly and provide constant growth without subjecting the economy to massive shocks from the ineviatble downturns.

 

You can debate the merits of a true free market, but paint it against a 30-yr cycle of massive depressions.

Another area of agreement. Strange days indeed...

 

Seems to me there is a serious misunderstanding around here of how "money" is created.

[Sketch Soland]

For the umpteenth time, it was not a Bear Stearns bailout, but of its creditors. If you can't get that distinction straight, perhaps you should go back to extolling poopy pants.

 

And you draw a distinction to deflect the point that I made.

 

So what, now, about this act we are both referring to, is NOT an EXECUTION of managing the economy?

 

That's a mighty broad definition of what the Fed is doing and I suggest doing more research on its job.

 

I would suggest dropping your condescension, as that certainly does not reflect an intelligent human being (which you seem to be to me), nor will it lend to an intelligent debate.

 

May as well throw every single government agency into the socialist camp if you're going to be using that barn sized definition.

 

I throw every federal gov't agency not explictly allocated for in the Constitution of the United States into the socialist camp. My preference is to adhere to the document that is the foundation of our country, a document which does not allow for the centralization of power in such manners.

 

And we're not even arguing semantics.

 

You are. "Bear Stearns" vs. "Creditors". An economic bailout from a centralized managing authority was still authored. You deny this?

 

There's no such thing as a pure unregulated free market anywhere in any industry because the market swings would be too drastic.

 

O RLY? A lot of Austrians would absolutely laugh at this statement.

 

There's no such thing as a free market in industry today because those who have money/power like to keep money/power and get more of it.

 

Hence, the Federal Reserve and other centralized banks.

 

As soon as you introduce any form of regulation, you eliminate the "free" portion of your ideal.

 

So let's coin and regulate currency based on something like gold. I'm game.

 

The question among reasonable people is what level of regulation is sufficient to keep markets functioning properly and provide constant growth without subjecting the economy to massive shocks from the ineviatble downturns.

 

Your definition of "reasonable people" reveals your bias. There are plenty of reasonable people who argue that such managing of the economy is what results in "booms" and "busts".

 

You can debate the merits of a true free market, but paint it against a 30-yr cycle of massive depressions.

 

Again, you say this like it's stone cold fact, when it is merely dogmatic recitation of an economic schema/philosophy.

[GG]

Another area of agreement. Strange days indeed...

 

Seems to me there is a serious misunderstanding around here of how "money" is created.

 

Think of it as the 100-yr flood. Which is easy when the 100-yr old theories on the socialist Fed are resurrected. If Fed was socialist it would certainly be a lot more proactive in stopping perceived bubbles and slowing run-away growth instead of acting as Mr. Wolf to Vincent & Jules.

[Steely Dan]

No, but it tells the Treasury how much to print. Then the Fed "distributes" the money as "the banker's bank".

 

The Fed was supposedly created to address "banking panics" by "managing" the economy and "maintaining" steady growth, etc.

 

Or, in other words:

 

ERADICATING THE FREEDOM OF THE MARKET TO REGULATE ITSELF

 

The Fed is the enemy of the free market.

 

The Fed is a socialist institution.

 

That which controls the money controls the people.

 

And Roughing the Faking or Faking the Roughing thinks we live in a democracy!

 

I will firebomb the Fed

 

THE END

 

 

For the umpteenth time, it was not a Bear Stearns bailout, but of its creditors. If you can't get that distinction straight, perhaps you should go back to extolling poopy pants.

 

That's a mighty broad definition of what the Fed is doing and I suggest doing more research on its job. May as well throw every single government agency into the socialist camp if you're going to be using that barn sized definition. And we're not even arguing semantics. There's no such thing as a pure unregulated free market anywhere in any industry because the market swings would be too drastic. As soon as you introduce any form of regulation, you eliminate the "free" portion of your ideal. The question among reasonable people is what level of regulation is sufficient to keep markets functioning properly and provide constant growth without subjecting the economy to massive shocks from the ineviatble downturns.

 

You can debate the merits of a true free market, but paint it against a 30-yr cycle of massive depressions.

 

 

Well stated GG.