Milton Friedman: Why soaking the rich won't work.

[guitarjosh]

Look. I really don't care where products are made. Neither, in a free society, I have a right to dictate to a business where products should be made. They can make them wherever they see fit. As long as they SELL where they Make.

If they can make jeans paying 2 bucks a day - god bless them, but if they want to sell them in the US then difference in labor/production cost should be taxed away. Otherwise no one has a chance to produce domestically. Game is hopelessly unfair.

And guess what, as soon as field is leveled (as it's supposed to be in a true free market, aka capitalism), nobody wants to make jeans in Bangladesh anymore, unless it is for Bangladesh consumption, of course. Good luck making 1000% profit selling 50 dollar jeans to someone you pay 2 bucks a day to make them though.

This is very simple and devastating logic.
But, I have to repeat myself, the problem is, nobody ever talks to these greedy bastards like that.
Those who are in a position to do so simply don't dare. They need to get re elected and they need a lot of money to get re elected.
Guess, where money are coming from and under what conditions.

It's not devastating logic at all. Greed affects everyone. It's easy to point to the CEOs and call them greedy, but what about the average American that wants higher wages at the expense of poor people around the world? Those workers around the world will see their wages increase until they're on par with American wages.

Does anyone know the profit margin on jeans?

[BiffTFinancial]

Your employees, elected officials. They are supposed to do what the people who elected them want. Right? Lately they do what ever they want and if you don't like it, too fukking bad. They aren't afraid of you anymore. Do you think the tax system is fair now? This group pays this % and this pays % and with deductions they can pay % and this and that. Two-and-a-half million pages long tax code. Stop the insanity I say.

You make X amount a year, X 10% is __________ ! There is your tax form. Done. You are done in minutes and then you go on living your life. No need to go to accountants and wasting more of your time and money.

All year round when you buy a can of coke, get an oil change or go see a movie...you pay a goods and services tax of 3 to 5%. No one can "not contribute".

as someone who works with the tax code on a daily basis, i can assure you that it's not two-and-a-half-millions pages long. there, you can rest easy now. the internal revenue code is long and complex and most of it is beyond the comprehension of the average American, but then again, so are most things (e.g., PPACA). complexity does not necessarily equate to insanity. i also could care less about stupid people getting back to "living their lives." they are obligated to pay their taxes. if they don't want to invest money in an accountant or time to maximize their income by utilizing the internal revenue code, then they get exactly what they deserve - a bill for ignorance.

based upon your comments, i'm guessing that you also don't realize that, even when an individual is in a "higher" marginal tax bracket, that does not mean that all of his/her income is taxed at that "higher" rate. the income is taxed in tiers, not all at the same rate. so, for example, married individuals filing jointly pay 15% on the first $36,900 of taxable income, regardless of their total taxable income.

[hutennis]

It's not devastating logic at all. Greed affects everyone. It's easy to point to the CEOs and call them greedy, but what about the average American that wants higher wages at the expense of poor people around the world? Those workers around the world will see their wages increase until they're on par with American wages.

Does anyone know the profit margin on jeans?

You are missing the point.

I don't care whom and where greedy (or generous) CEOs employ. I don't care if they pay their workers with a wooden penny, if they can get away with it. Just don't bring your products here to sell it for a pure profit. Sell it to those who you employ for a wooden penny.

B/c when you bring it here to sell for what is virtually a pure profit you make it impossible for anybody else to compete with you.
You corner the market. Fair contract negotiations between domestic producer and average American can not even begin.
Who knows what a result of these negotiation would be?

After all, industries that can not be outsourced still exist, do they?
I'm sure CEOs of domestic companies would love to make 10 times more.
I'm also sure that average americans would love to make 10 times more.
Greed IS universal.
But that's where free and fair market forces come in and they do the job nicely every time.
Acceptable for both parties agreements are made and the ball gets rolling.

Keeping this balance is crucial for the health of the society and those who want to tilt it in their favor must find it to be very unprofitable to do.
Unfortunately, in a meantime, the opposite is true.

[guitarjosh]

You are missing the point.

I don't care whom and where greedy (or generous) CEOs employ. I don't care if they pay their workers with a wooden penny, if they can get away with it. Just don't bring your products here to sell it for a pure profit. Sell it to those who you employ for a wooden penny.

B/c when you bring it here to sell for what is virtually a pure profit you make it impossible for anybody else to compete with you.
You corner the market. Fair contract negotiations between domestic producer and average American can not even begin.
Who knows what a result of these negotiation would be?

After all, industries that can not be outsourced still exist, do they?
I'm sure CEOs of domestic companies would love to make 10 times more.
I'm also sure that average americans would love to make 10 times more.
Greed IS universal.
But that's where free and fair market forces come in and they do the job nicely every time.
Acceptable for both parties agreements are made and the ball gets rolling.

Keeping this balance is crucial for the health of the society and those who want to tilt it in their favor must find it to be very unprofitable to do.
Unfortunately, in a meantime, the opposite is true.

The other problem with what you're advocating that I didn't mention before is that it will kill the stock market. If you force companies to cut their profits by 80%, what will happen to stock prices? The other thing is that if you put huge tariffs on foreign products, many times those countries in which the companies reside will retaliate and you have a trade war.

[hutennis]

The other problem with what you're advocating that I didn't mention before is that it will kill the stock market. If you force companies to cut their profits by 80%, what will happen to stock prices?

Ha, that's funny.
Please, tell me how do we benefit from stock market now?
It is basically exactly when it was in the beginning of the century.
Trillions in profits were made.
In a fair market those profits must have been redistributed among shareholders (meaning stock prices must have been way higher) but instead, all those profits were expropriated by a handful of oligarchs and average investor got screwed violently.
Giving the fact that no rational person should participate in this cups and balls game and they actually don't (record of participation among average investors is at the historic low) what will happen to stock prices should not be your concern. Let speculators worry about that.

The other thing is that if you put huge tariffs on foreign products, many times those countries in which the companies reside will retaliate and you have a trade war.

I'm not talking about foreign products. I'm talking about products made by american companies abroad.

Right now they have about 2 trillion dollars in profit parked outside of the US that are subject to 35% repatriation tax
In 2004 they lobbied for one time repatriation tax holiday (5% instead of 35%) promising gigantic wave of job creation in return.
They got their money and we still waiting for that wave.

Last year they shamelessly asked for another one time tax holiday.
Thanks to a huge public outrage, this scam did not fly this time.

[guitarjosh]

Ha, that's funny.
Please, tell me how do we benefit from stock market now?
It is basically exactly when it was in the beginning of the century.
Trillions in profits were made.
In a fair market those profits must have been redistributed among shareholders (meaning stock prices must have been way higher) but instead, all those profits were expropriated by a handful of oligarchs and average investor got screwed violently.
Giving the fact that no rational person should participate in this cups and balls game and they actually don't (record of participation among average investors is at the historic low) what will happen to stock prices should not be your concern. Let speculators worry about that.

And who is in the workforce for only 10 years before they retire? People that are on the verge of retirement that entered the workforce around 1980 saw a 1,300% increase in the Dow. It worked well for them. You're acting like the market has only gone sideways, when in reality we've seen 2 booms and 2 crashes. If those were played properly, you could have made a fortune. I know people that work at Wal-Mart that have a 401k. Tens-of-millions of people own stock

I'm not talking about foreign products. I'm talking about products made by american companies abroad.

So if you got your way and all those American companies insource jobs, what happens when someone decides to use 3rd world labor to compete with those American companies that just left? They're making the 500% profits compared to 100% for American companies, and they decide to undercut American business, putting them out of business.

[hutennis]

And who is in the workforce for only 10 years before they retire? People that are on the verge of retirement that entered the workforce around 1980 saw a 1,300% increase in the Dow. It worked well for them.

Yeah, b/c it all worked a bit differently.
Bankers who wanted to game the system actually went to prison. By the thousands.
Incompetent CEOs running companies to the ground were retiring broke.
If long term "models" did not work resulting in huge market crashes, Main street would not pick up a tab.

You're acting like the market has only gone sideways, when in reality we've seen 2 booms and 2 crashes. If those were played properly, you could have made a fortune. I know people that work at Wal-Mart that have a 401k. Tens-of-millions of people own stock

Falling for good, old hindsight bias, are not you?
Could, would, should...
You are acting like you, or anyone else, would have any kind of chance to play it properly.
The fact is, outside of getting lucky, nobody ever can.

So if you got your way and all those American companies insource jobs, what happens when someone decides to use 3rd world labor to compete with those American companies that just left? They're making the 500% profits compared to 100% for American companies, and they decide to undercut American business, putting them out of business.

Let's worry about it THEN. We are far away from that eventuality yet.
BTW, chinese are not bashful about taxing american products 25% right now when getting taxed only 2.5% in return.
So 25/25 to start with should not be a problem at all.

[guitarjosh]

Yeah, b/c it all worked a bit differently.
Bankers who wanted to game the system actually went to prison. By the thousands.
Incompetent CEOs running companies to the ground were retiring broke.
If long term "models" did not work resulting in huge market crashes, Main street would not pick up a tab.

I agree we shouldn't be bailing out failing companies and letting criminals go free, but we have been doing that since the 1970s. Reagan bailed out Buick or Chrysler or one of the car companies.

Falling for good, old hindsight bias, are not you?
Could, would, should...
You are acting like you, or anyone else, would have any kind of chance to play it properly.
The fact is, outside of getting lucky, nobody ever can.

Not at all. All I'm doing is looking at history and stock charts. We will probably have another recession & stock market crash before 2016. Recessions are a great time to go short.

Let's worry about it THEN. We are far away from that eventuality yet.
BTW, chinese are not bashful about taxing american products 25% right now when getting taxed only 2.5% in return.
So 25/25 to start with should not be a problem at all.

If we worry about it then we will have a lot of failing business that need to be rebuilt. I have no problem with a 25/25 tax on China, although I would prefer free trade.

[hutennis]

We have way too many people and businesses that need a lot of help right now.
So worrying about something that may or may not happen in the future is not that practical.

Oh yeah. please stop analyzing charts. They doing the great job showing what happened in the past, but completely useless about predicting future. Always have been and always will be.

[guitarjosh]

We have way too many people and businesses that need a lot of help right now.
So worrying about something that may or may not happen in the future is not that practical.

Oh yeah. please stop analyzing charts. They doing the great job showing what happened in the past, but completely useless about predicting future. Always have been and always will be.

We have a lot of consumers that need help and your idea would hurt them, not to mention all the poor around the world that would lose their jobs.

Every person I know that makes good money in the stock market uses them. I'll keep it up.

[hutennis]

We have a lot of consumers that need help and your idea would hurt them, not to mention all the poor around the world that would lose their jobs.

My ideas are geared toward making it very unprofitable to take jobs from american people.
I do see how it can hurt people who want to suck our country dry, but still don't see any reasonable argument supporting an idea that
americans can get hurt.
All I've seen so far from you looks very much like typical "straw man" arguments, which, of course is a fallacy, and can not be taken seriously.

Every person I know that makes good money in the stock market uses them. I'll keep it up.

People can make money in stock market for variety of reasons. Nowadays, luck is probably the single most important one.
Using charts as part of their routine contributes 0 value to the final result. There is absolutely no cause and effect relationship here.

It's like people who pray for rain and then eventually rain comes. For millennia people were absolutely sure that their prayers were a major contributing factor for live giving water to start falling from the sky. We do know better now, I hope.

All you do with charts is looking at meaningless patterns and then assign arbitrary meanings to them.
There is nothing our brain loves doing more and it's deeply rooted in us by evolutionary process.
Very well established fact by now, just like nature of rain.

[guitarjosh]

My ideas are geared toward making it very unprofitable to take jobs from american people.
I do see how it can hurt people who want to suck our country dry, but still don't see any reasonable argument supporting an idea that
americans can get hurt.
All I've seen so far from you looks very much like typical "straw man" arguments, which, of course is a fallacy, and can not be taken seriously.

The problem is that your ideas making it unprofitable for Americans to take jobs from Americans makes it profitable for foreigners to take jobs from American people. Poor people overseas don't want to suck this country dry, they want a better life, and your ideas will deprive that from them. Name one straw man.

People can make money in stock market for variety of reasons. Nowadays, luck is probably the single most important one.
Using charts as part of their routine contributes 0 value to the final result. There is absolutely no cause and effect relationship here.

It's like people who pray for rain and then eventually rain comes. For millennia people were absolutely sure that their prayers were a major contributing factor for live giving water to start falling from the sky. We do know better now, I hope.

All you do with charts is looking at meaningless patterns and then assign arbitrary meanings to them.
There is nothing our brain loves doing more and it's deeply rooted in us by evolutionary process.
Very well established fact by now, just like nature of rain.

Now you're the one using straw men and conjecture. Head and shoulders patterns, both top and bottoms, have been documented in over 10k examples to be correct 90%+.

[hutennis]

The problem is that your ideas making it unprofitable for Americans to take jobs from Americans makes it profitable for foreigners to take jobs from American people. Poor people overseas don't want to suck this country dry, they want a better life, and your ideas will deprive that from them. Name one straw man.

This is one big straw man. And here is why.

Straw man fallacy by definition is attacking a distorted version of opponent's argument.
Here is a classic example:

"Senator Jones says that we should not fund the attack submarine program. I disagree entirely. I can't understand why he wants to leave us defenseless like that."

Not funding attack submarine program is not equal to becoming defenseless.
Making up possible consequences of opponent's argument and then attacking them IS an obvious distortion and an obvious straw man.

I never said anything about not allowing american company to produce goods wherever they see fit. In fact, an opposite is true.
You can check my posts.
They can obviously continue to make jeans in Bangladesh to sell them there or in Australia, or in France if they want.
Having jeans factories in Alabama has nothing to do with it.

Now you're the one using straw men and conjecture. Head and shoulders patterns, both top and bottoms, have been documented in over 10k examples to be correct 90%+.

Who conducted the study?
I'm very sceptical on a validity of it.

First, 90% inefficiency is such a monstrous number that it simply can not be present in something as huge and liquid as financial markets.
The one possible explanation is very short lived self fulfilling prophecy created by hordes of naive believers following this crap.
But even then it does not take into consideration a cost of execution vs risk/reward which would eat you alive, and, of course, it's full of hindsight bias, since in real time you will face and most likely will be killed by whipsaw action. That's not being considered either.

Don't forget, there is always a hungry shark nearby who knows everything there is to know about any chart pattern imaginable and can arbitrage horde mentality flawlessly. So hoping to be able to take advantage of something so well known and obvious is beyond naive.

Second. Given the fact so many branches of financial industry make fortunes by selling "products" based on technical analysis (psychic shit) to some not so bright among us, I would not be surprised if someone in Morgan Stanley or Goldman Sachs would come up with something so misleading.

[guitarjosh]

What i'm saying isn't distorting your opinion. Many companies outsource in order to keep up with foreign competitors that hire cheap labor. It's either outsource or go out of business. If you put a huge tariff on that, they will go out of business.

Thomas Bulkowski, for one. Quite a few people I know look at charts and make quite a bit of money. And I know they do because they usually tell me what they're getting into before it moves, and they tell me why.

[hutennis]

What i'm saying isn't distorting your opinion. Many companies outsource in order to keep up with foreign competitors that hire cheap labor. It's either outsource or go out of business. If you put a huge tariff on that, they will go out of business.

You are not listening. All they have to do to avoid tariffs is to produces in the US as so many other companies that don't outsource do.
They still gonna be competitive. It's just a profit margin will be more down the Earth.

Thomas Bulkowski, for one. Quite a few people I know look at charts and make quite a bit of money. And I know they do because they usually tell me what they're getting into before it moves, and they tell me why.

It looks like for some reason, Mr. Bullkowski finds it more profitable to sell books and maintain tiny, obscured poorly developed website instead of using his superior understanding of such a great money making concepts to make billions in a market.
I wonder why.
Wanted to find his trading record. Could not find anything of value.. Just bunch of empty, unsubstantiated claims.
Be careful. You sound very naive.

[hutennis]

Look, don't get me wrong. I'm not putting you down or anything, but think about this...


My arguments

First, 90% inefficiency is such a monstrous number that it simply can not be present in something as huge and liquid as financial markets.
The one possible explanation is very short lived self fulfilling prophecy created by hordes of naive believers following this crap.
But even then it does not take into consideration a cost of execution vs risk/reward which would eat you alive, and, of course, it's full of hindsight bias, since in real time you will face and most likely will be killed by whipsaw action. That's not being considered either.

Don't forget, there is always a hungry shark nearby who knows everything there is to know about any chart pattern imaginable and can arbitrage horde mentality flawlessly. So hoping to be able to take advantage of something so well known and obvious is beyond naive.

Your arguments

Quite a few people I know look at charts and make quite a bit of money. And I know they do because they usually tell me what they're getting into before it moves, and they tell me why.

Do you see what I mean? It's not even funny.

[guitarjosh]

You are not listening. All they have to do to avoid tariffs is to produces in the US as so many other companies that don't outsource do.
They still gonna be competitive. It's just a profit margin will be more down the Earth.



It looks like for some reason, Mr. Bullkowski finds it more profitable to sell books and maintain tiny, obscured poorly developed website instead of using his superior understanding of such a great money making concepts to make billions in a market.
I wonder why.
Wanted to find his trading record. Could not find anything of value.. Just bunch of empty, unsubstantiated claims.
Be careful. You sound very naive.

I understand that. You used the example of jeans. So if an American company uses foreign labor to produce jeans at $10 and sells it at $60, you would tax most of that profit away until they returned to America and made those jeans for $30. The problem is that some company can set up shop where the American company left, make the jeans for $10, and sell them for $25, putting the American company out of business.

As far as Mr. Bulkowski goes, how many books do you think he sold? He has 8 books you can buy on Amazon, and collectively they have less than 80 reviews. I doubt he has sold many copies. Thanks for the warning. I'll let my and my friends' trading history speak for itself.

Look, don't get me wrong. I'm not putting you down or anything, but think about this...


My arguments



Your arguments



Do you see what I mean? It's not even funny.

You're right. My argument is based on real world results that I've seen and experienced first hand. What is your's based off? Do you have extensive knowledge about the stock market? Can you tell me the difference between a falling flag and a falling wedge? Probably not. You already have your mind made up.

[hutennis]

As far as Mr. Bulkowski goes, how many books do you think he sold? He has 8 books you can buy on Amazon, and collectively they have less than 80 reviews. I doubt he has sold many copies. Thanks for the warning. I'll let my and my friends' trading history speak for itself.

You're right. My argument is based on real world results that I've seen and experienced first hand. What is your's based off? Do you have extensive knowledge about the stock market? Can you tell me the difference between a falling flag and a falling wedge? Probably not. You already have your mind made up.

You bet I'm right. And here is why.

""What can be asserted without proof can be dismissed without proof."

All your references to yours and your friend's supposedly successful use of charts in a market are just that - unsubstantiated empty claims that can and should be safely dismissed.
In fact, reasonable person would not even open his/her mouth to make those claims if he/she is not ready to post links to complete supporting data. Thats how it works in a real world (which is obviously very different from dick swinging, ego driven, empty claim producing world of public internet forums).

That aside, I still would not mind to continue this exchange if you would at least stick to a format, meaning, when you see the argument in front of you, you should address the argument and not try to avoid it.

Here are my arguments. They are very relevant, very real life and practical.

First, 90% inefficiency is such a monstrous number that it simply can not be present in something as huge and liquid as financial markets.
The one possible explanation is very short lived self fulfilling prophecy created by hordes of naive believers following this crap.
But even then it does not take into consideration a cost of execution vs risk/reward which would eat you alive, and, of course, it's full of hindsight bias, since in real time you will face and most likely will be killed by whipsaw action. That's not being considered either.

Don't forget, there is always a hungry shark nearby who knows everything there is to know about any chart pattern imaginable and can arbitrage horde mentality flawlessly. So hoping to be able to take advantage of something so well known and obvious is beyond naive.

Why do you continue to avoid discussing them? If you are right and I'm wrong then these arguments can be easily destroyed.
Please, destroyed them with an arguments of your own. So far your only argument is that you know somebody who makes money using charts. Sorry, but as far as arguments go, this one sucks balls.

[hockey216]

Ah, yes. Friedman is one of the great free-market thinkers.

(note to all the liberals) This guy is not a clueless drone. He is very smart. He won the Nobel prize in economics.

[rkelly110]

So did Bernake.

[guitarjosh]

You bet I'm right. And here is why.

""What can be asserted without proof can be dismissed without proof."

All your references to yours and your friend's supposedly successful use of charts in a market are just that - unsubstantiated empty claims that can and should be safely dismissed.
In fact, reasonable person would not even open his/her mouth to make those claims if he/she is not ready to post links to complete supporting data. Thats how it works in a real world (which is obviously very different from dick swinging, ego driven, empty claim producing world of public internet forums).

The problem is that I would have to post personal financial information from multiple people to show any evidence. And even then you would probably chalk it up to coincidence.

Here are my arguments. They are very relevant, very real life and practical.

First, 90% inefficiency is such a monstrous number that it simply can not be present in something as huge and liquid as financial markets.

That's your opinion, nothing more, and backed by nothing.

The one possible explanation is very short lived self fulfilling prophecy created by hordes of naive believers following this crap.

So now you have a built in excuse, and you're saying it could possibly be true.

But even then it does not take into consideration a cost of execution vs risk/reward which would eat you alive, and, of course, it's full of hindsight bias, since in real time you will face and most likely will be killed by whipsaw action. That's not being considered either.

Again, based on no evidence. I get charged $3 per round trip option contract. Do you know how easy it is to make more than $3 in an option trade?

Don't forget, there is always a hungry shark nearby who knows everything there is to know about any chart pattern imaginable and can arbitrage horde mentality flawlessly.

If you mean by "shark" a large buyer or a mutual/hedge fund, they can't go crazy on patterns. They're too big and will end up bidding against themselves.

So hoping to be able to take advantage of something so well known and obvious is beyond naive.

Really? How many people out there know anything about the stock market, let alone charts? Not to mention that there are thousands of stocks on the Dow & Nasdaq. No one can keep track of each one.

Since you want some proof, I'll give you a real world example of a head and shoulders pattern that I used to make a couple grand earlier this year. DECK was in a large H&S pattern. I bought $70 puts when it was trading around $75. I sold it about a week later when it was trading around $65.

[hutennis]

The problem is that I would have to post personal financial information from multiple people to show any evidence. And even then you would probably chalk it up to coincidence.

90% inefficiency is such a monstrous number that it simply can not be present in something as huge and liquid as financial markets.

That's your opinion, nothing more, and backed by nothing.

Well, we should stop right here.

If you think that physical impossibility of 90% inefficiencies in stock market is just my opinion and needs to be backed up
then you are simply intellectually not ready for serious conversation and I'm just wasting my time.
FYI, any mutual/hedge fund manager or serious trader would commit a capital crime to get 1% edge over the market never mind 90%, LOL.

I wish you good luck in your pursuit of untold riches in options. You need a lot of it.
By the time market will nail into your head at least some sort of understanding of what I'm talking about, you will have much more experience and much less money.

[guitarjosh]

Well, we should stop right here.

If you think that physical impossibility of 90% inefficiencies in stock market is just my opinion and needs to be backed up
then you are simply intellectually not ready for serious conversation and I'm just wasting my time.
FYI, any mutual/hedge fund manager or serious trader would commit a capital crime to get 1% edge over the market never mind 90%, LOL.

I wish you good luck in your pursuit of untold riches in options. You need a lot of it.
By the time market will nail into your head at least some sort of understanding of what I'm talking about, you will have much more experience and much less money.

Spoken like a true, no experience but know-it-all liberal

[hutennis]

I've been trading futures contracts since 1993. But that's not a point.

Point is that I'm saying things that should, at very least, get anyone with a slightest sense of self preservation thinking. Thinking very hard.
And yet again, typical mix of a lot of arrogance and very little competence will spell the doom yet for another naive kid.
Well, that's the fact of life. Huge dinosaur called zero sum game needs a lot of food.

[SharpBoxing]

Monetary policies don't work? I don't know what you're talking about.

Basically... Monetary policy is simply when the Fed buys t-bonds back to release more currency, thus interest rates are supposed to decrease and investments are supposed to grow. Monetary policies may involve the Fed lowering the interest rate to stimulate borrowing by companies that then invest the money in capital equipment, and buying government bonds to add more money into the overall system.


Fiscal policies include lowering taxes and providing subsidies in the form of tax breaks, such as deductions for hiring the unemployed, or tax rebates for investing in equipment.



But, to make monetary policy work as it should..... it should be linked to sound Fiscal policy. We don't have sound a sound fiscal policy..just tax, tax, tax. spend, spend, spend..and it doesn't work because the bottom line is that we don't have enough DEMAND!

Without demand, of course, jobs will not be created.

No thats all bullshit. Monetary policy is the fed printing money and giving it to goverment so the goverment can spend more money.
Thats all it is. Eventually its the citizens that will pay the price when (hyper)inflation starts to kick in.

There are 2 ways the government can steal from you. Taxes and money printing.

[SharpBoxing]

Money printing doesn't lead to economic growth. It leads to inflation.

If you want economic growth you need to lower taxes, abolish unions, abolish the minimum wage, loosen up the labor laws, ...

Pretty much all you need is capitalism.

[TheRifleman]

No thats all bullshit. Monetary policy is the fed printing money and giving it to goverment so the goverment can spend more money.
Thats all it is. Eventually its the citizens that will pay the price when (hyper)inflation starts to kick in.

There are 2 ways the government can steal from you. Taxes and money printing.

Yeah, you're wrong....

The Federal Reserve has three main mechanisms for manipulating the money supply. It can buy or sell treasury securities. Selling securities has the effect of reducing the monetary base (because it accepts money in return for purchase of securities), taking that money out of circulation. Purchasing treasury securities increases the monetary base (because it pays out hard currency in exchange for accepting securities). Secondly, the discount rate can be changed. And finally, the Federal Reserve can adjust the reserve requirement, which can affect the money multiplier; the reserve requirement is adjusted only infrequently, and was last adjusted in 1992.^[17]

In practice, the Federal Reserve uses open market operations to influence short term interest rates, which is the primary tool of monetary policy. The federal funds rate, for which the Federal Open Market Committee announces a target on a regular basis, reflects one of the key rates for interbank lending. Open market operations change the supply of reserve balances, and the federal funds rate is sensitive to these operations.^[18]
In theory, the Federal Reserve has unlimited capacity to influence this rate, and although the federal funds rate is set by banks borrowing and lending funds to each other, the federal funds rate generally stays within a limited range above and below the target (as participants are aware of the Fed's power to influence this rate).
Assuming a closed economy, where foreign capital or trade does not affect the money supply, when money supply increases, interest rates go down. Businesses and consumers have a lower cost of capital and can increase spending and capital improvement projects. This encourages short-term growth. Conversely, when the money supply falls, interest rates go up, increasing the cost of capital and leading to more conservative spending and investment. The Federal reserve increases interest rates to combat Inflation.

[TheRifleman]

any you're wrong again....

Every business day, the Federal Reserve System engages in Open market operations.^[27] If the Federal Reserve wants to increase the money supply, it will buy securities (such as U.S. Treasury Bonds) anonymously from banks in exchange for dollars. If the Federal Reserve wants to decrease the money supply, it will sell securities to the banks in exchange for dollars, taking those dollars out of circulation.^[28][29] When the Federal Reserve makes a purchase, it credits the seller's reserve account (with the Federal Reserve). The money that it deposits into the seller's account is not transferred from any existing funds, therefore it is at this point that the Federal Reserve has created High-powered money.

[SharpBoxing]

I know what the Fed does. And as I explained printing money doesn't lead to economic growth. All it does is make prices go up.

The intrest rate is the price of money. Just like the price of bread, the price of clothes, ... the price of money should be set at the market. Not by government. its not up to goverment do decide how low intrest rates should be.

Money printing and artificial low intrest rates cause bubbles, it casued the dot com bubble and it caused the housing bubble.

[hutennis]

No thats all bullshit. Monetary policy is the fed printing money and giving it to goverment so the goverment can spend more money.
Thats all it is. Eventually its the citizens that will pay the price when (hyper)inflation starts to kick in.

There are 2 ways the government can steal from you. Taxes and money printing.

The classic definition of inflation is "too much money chasing too little goods"
Since no one distributes printed money among US general population (all of it goes toward servicing dept, baling out failing oligarchs so they continue to chase goods around the world in their privet jets, war games and, least of all, essential social programs) where do you see hyper inflation would come from when real wages are at mid 1980s level, people have trouble paying their bills and income inequality is on all time high?

[SharpBoxing]

The classic definition of inflation is "too much money chasing too little goods"
Since no one distributes printed money among US general population (all of it goes toward servicing dept, baling out failing oligarchs so they continue to chase goods around the world in their privet jets, war games and, least of all, essential social programs) where do you see hyper inflation would come from when real wages are at mid 1980s level, people have trouble paying their bills and income inequality is on all time high?

All those dollars that are abroad will come back to the States. Right now central banks all over the world are storing their dollars or they are borrowing it back to the United States government.

But once the dollar stops being the worlds exchange currency, all those dollars will be used to buy stuff produced in the USA. Since the US hardly produces anything the value of the dollar will collapse and cause a hyperinflation.

[hutennis]

All those dollars that are abroad will come back to the States. Right now central banks all over the world are storing their dollars or they are borrowing it back to the United States government.

But once the dollar stops being the worlds exchange currency, all those dollars will be used to buy stuff produced in the USA. Since the US hardly produces anything the value of the dollar will collapse and cause a hyperinflation.

Stops being exchange currency... What does that mean? Are you talking about dollar stops being world's reserve currency?

[SharpBoxing]

Stops being exchange currency... What does that mean? Are you talking about dollar stops being world's reserve currency?

yeah thats what I ment. And that day will come. The world wont trade dollar bills for their products for ever.

Right now countries all over the world produce goods and send it to the USA in exchange for dollar bills. Once they stop doing that the US dollar together with the US economy will collapse

[hutennis]

yeah thats what I ment. And that day will come. The world wont trade dollar bills for their products for ever.

Right now countries all over the world produce goods and send it to the USA in exchange for dollar bills. Once they stop doing that the US dollar together with the US economy will collapse

Yeah, this type of primitive nonsense is very popular among doomsday prepares and in gold selling adds designed to
scared living shit out of low information voters (morons) to scam them out of money with overpriced gold.

As a world's reserve currency USD is a country mile ahead of anything else.
If you look at the currency composition of official foreign exchange reserves, you'll see that the dollars are 60% of global official reserves.
Next is Euro - 26%. None of the rest even makes it into double figures.

Given the fact that market is a discounting mechanism, current situation reflects very well educated long term prognoses.
So there are basically two possibilities for a source of your predictions:

1. You know something no one else in a world does.
2. You watch too much bad TV.

The simpler assumption is always a correct one, so the case is clear here.

[SharpBoxing]

Yeah, this type of primitive nonsense is very popular among doomsday prepares and in gold selling adds designed to
scared living shit out of low information voters (morons) to scam them out of money with overpriced gold.

As a world's reserve currency USD is a country mile ahead of anything else.
If you look at the currency composition of official foreign exchange reserves, you'll see that the dollars are 60% of global official reserves.
Next is Euro - 26%. None of the rest even makes it into double figures.

Given the fact that market is a discounting mechanism, current situation reflects very well educated long term prognoses.
So there are basically two possibilities for a source of your predictions:

1. You know something no one else in a world does.
2. You watch too much bad TV.

The simpler assumption is always a correct one, so the case is clear here.

What would happen if all those dollars are sent back to the United States. Dont you think there will be an hyperinflation?