deflation; where did the money go?

Why???

  1. The total amount of fiat money (this includes government bonds and T- bills that draw interest) is the difference between money that has been "appropriated" and spent into the world by the elected government, and the amount of money taken back from the world by taxation.

  1. The total amount of money in the active money pool M3, is the amount of money "appropriated" and spent into the world by the government (includes the Fed and the elected government), and the money removed from the active money pool by taxation or by the sale of government backed binds and T-bills.

Reply to
Michael Coburn
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Then why is there a national debt of $10 trillion? HMMMMMMMM????

Reply to
Michael Coburn

You really don't understand how things work do you? You read the thread in your house, or in an internet cafe or wherever - you don't read it in sci.econ.

Yes they were. People of my Grandparents generation (born 1910) were terrified of debt. My parents bought their house for cash in 1961. They didn't know a single one of their friends who had a mortgage.

Many people were also renting. The growth in owner occupation only really started in the 1950's

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Of course it is relevant. It is relevant to the levels of indebtedness. We don't need to just discuss how widely credit was available, but also how wisely it was used to understand the recent bubble.

So this is what y'all get up to in a science group is it? You lose on the facts and immediately resort to personal abuse?

Why do you refuse to answer when you regard the great depression to have been? You keep telling me everything from the 50's to the 90's is nothing like 60 years after the great depression- which is difficult to refute because you wont tell me what you regard as being the key period.

We have gone from a situation where my grandparents were terrified of debt (Neither a borrower nor a lender be) to one where my parents were very careful with it, to one where my generation have embraced it wholeheartedly. It didn't just happen overnight, it gradually built up over a long period of time. I can remember listening to a radio programme in the late 80's discussing 100% mortgages that had just arrived. People were predicting terrible things as a result of them. However they arrive, nothing bad happens, the next group of people regard them as uncontroversial and they invent something even riskier - like the 125% mortgage. Debt grew - slowly and unspectacularly - often based around houses- through the 70's and 80's. It really took off in the 90's and exploded in the 2000's- again largely because of house prices.

Here you go. This done in 2006 should be clear enough to let even you see what we are talking about:-

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This is an extract of a research document about how the younger generation are losing faith in financial services.

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Neb

Reply to
nebulous

But *NO* credit bubble until the mid-80's.

Well OK, if it'll make you feel better: yes, there were in fact some people who took out credit before the credit bubble got started. Gee, we'll all have to revise our idea that economic theories always apply to everyone everywhere at exactly the appropriate second.

FoFP

Reply to
M Holmes

In fact the technical term is "Statistically insignificant sample".

Ah, your own sample has one person in it. See above.

FoFP

Reply to
M Holmes

nebulous wrote

uk group.

Wrong, as always.

don't read it in sci.econ.

Never ever could bullshit its way out of a wet paper bag.

are posting in both sci.econ (that has to

claim about 60 years.

island in the 50s anyway.

source of credit at all in the 50's.

about credit in general, not

claim even with that soggy little island.

claim anyway.

No they werent. Its completely trivial to check what was used to buy houses in the 50s in that soggy little island.

Pig ignorant lie. Plenty werent, including my parents that were born then.

The technical term for that is 'pathetically inadequate sample'

The technical term for that is 'pathetically inadequate sample'

started in the 1950's

Still blows a great hole in his 60 year claim.

Nope.

Its still debt that he claimed wasnt seen with that generation.

wisely it was used to understand the

What we were discussing was his claim that those of that generation didnt have any debt.

That is just plain wrong.

here, showing growth in credit card

depression has in fact happened well

that isn't 60 years after the great

credit available in the 50s and that that

depression, so the claim we happened to be

little island.

You're lying.

Corse you never ever do anything like that yourself, eh ?

Because it doesnt matter. Clearly the 50s are nothing like more than 60 years after it.

You're lying, again.

the key period.

The 50s are nothing even remotely resembling anything like 60 years after the great depression, whenever its considered to have been. Neither are the 60s.

it really took off.

(Neither a borrower nor a lender be)

The technical term for that is 'pathetically inadequate sample'

The technical term for that is 'pathetically inadequate sample'

I'm the same age as your parents and have never been.

Neither were my parents who lived thru the great depression themselves.

a long period of time.

Irrelevant to whether his 60 year claim is clearly just plain wrong.

mortgages that had just arrived. People

nothing bad happens, the next group of

like the 125% mortgage.

Irrelevant to whether his 60 year claim is clearly just plain wrong.

I never ever disputed that the use of debt has increased over time, I JUST comment on his 60 years claim which is just plain wrong.

the 70's and 80's.

Hordes borrowed for a hell of a lot more than just houses, including me.

I even borrowed to speculate on the stock market in the 60s and made a lot of money doing that.

because of house prices.

Irrelevant to whether his 60 year claim is clearly just plain wrong.

we are talking about:-

Irrelevant to whether his 60 year claim is clearly just plain wrong.

losing faith in financial services.

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Irrelevant to whether his 60 year claim is clearly just plain wrong.

Reply to
Rod Speed

M Holmes wrote

Use of credit isnt the same thing as a credit bubble. There was plenty of use of credit in the 60s and that is nothing even remotely resembling anything like 60 years after the great depression.

There was a hell of a lot of use of credit in the 60s, nothing even remotely resembling anything like 60 years after the great depression.

And the reason for that is that the interest rates were quite low, so it was sensible to use credit in plenty of situations.

I in fact physically built my own house entirely on credit at that time, didnt use a cent of my own money, because I was earning a lot more on my money in the stock market than I was paying in interest on the credit.

And in fact I borrowed some money and used it to speculate on the stock market in the 60s too.

Never ever could bullshit its way out of a wet paper bag.

The extensive use of credit in the 60s was nothing even remotely resembling anything like 60 years after the great depression.

Reply to
Rod Speed

M Holmes wrote

crads in the 1960's.

That was a joke, Joyce.

I wasnt the one claiming that it says anything about how society operated at that time.

Hardly anyone did anything like that then or now.

Reply to
Rod Speed

Plenty may not have been but most were.

Like your sample of one - who built a house on debt?

I didn't see him say debt wasn't available then - anyway your fixation is showing again- this started with your entirely false statements about credit cards in the 50's

Very rarely. I'm a long way off it here - yet it seems your stock-in-trade. I usually enjoy it when people start the invective because it shows they have nothing else left.

Either are the late 80's according to you.

Actually its not - as has already been pointed out to you.

Nice way of showing the explosion in house prices that the bubble brought though.

Neb

Reply to
nebulous

the treasury cannot instruct the fed to do anything. nor can the president. alan greenspan put it this way

'there is no other agency of government which can over-rule the actions that we take.'

7.40 on this video.
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they go on to discuss president bush (41) blaming the fed's policys for him not being re-elected.

maybe they can, but they don't. the federal reserve note is backed by 'the full faith and credit of the united states', which means t-bills.

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the fed is priavtely owned, so the fed's budget is not allocated by the congress. instead it comes

'primarily from interest earned on U.S. government securities that the Federal Reserve has acquired through open market operations.'

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they spend as much as they like on private jets, champaign, huge salaries and such then return whatever remains to the treasury. the real profits could come from investments made with knowledge of future fed decisions. not that i'm suggesting that a bank employee that is a member of the fed board would divulge this infomarion to his bank merely to make billions upon billions of dollars. they are much too honest.

===============>

Reply to
orangatang1

nebulous wrote

your use of the words 'a couple of

quite hard to swallow.

generations.

think the credit cycles repeat through the

a uk group.

don't read it in sci.econ.

are posting in both sci.econ (that has

his claim about 60 years.

island in the 50s anyway.

source of credit at all in the 50's.

was about credit in general, not just

claim anyway.

in the 50s in that soggy little island.

Another pig ignorant lie. Hardly any were.

I wasnt the one making stupid claims about what most were doing.

started in the 1950's

He did make a stupid claim about 60 years which has blown up in his face and covered him in black stuff.

statements about credit cards in the

It isnt false. And what as being discussed was the stupid 60 year claim, and even someone as stupid as you should have noticed that there was lots of use of credit cards even in that soggy little island of yours, LONG before 60 years after the great depression. AND that credit cards werent the only credit available in that soggy little island in the 50s eitheer.

wisely it was used to understand the

have any debt.

on here, showing growth in credit card

Everyone can see you doing it in this thread.

Everyone can see you are lying.

invective because it shows they have

Yep, you're clearly bereft.

after it.

You're lying, again.

being the key period.

it really took off.

about 60 years.

(Neither a borrower nor a lender be)

Actually that was a joke, as I said.

over a long period of time.

bad happens, the next group of people

the 125% mortgage.

the 70's and 80's.

money doing that.

because of house prices.

Irrelevant to whether his 60 year claim is clearly just plain wrong.

Reply to
Rod Speed

You're still not getting it are you?

There weren't any credit cards available in the 50's!

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>

Where am I? The lack of civility has all been yours.

Try this message news: snipped-for-privacy@mid.individual.net...

your closing line says:-

"And even your 80s blows a damned great hole in his claim about 60 years anyway."

If you are going to insist people are lying you really need to remember what you said!

A joke that was so amusing you had to repeat it six times?

More cut and paste?

Neb

Reply to
nebulous

nebulous wrote

quite hard to swallow.

generations.

the grandchildren.

debt for life. They raise their kds to do

depression.

to a uk group.

you don't read it in sci.econ.

you are posting in both sci.econ (that has

his claim about 60 years.

island in the 50s anyway.

year claim anyway.

started in the 1950's

Nothing to 'get'

Pig ignorant lie.

formatting link
And even someone as stupid as you should have noticed that there were other sources of credit available in the 50s in that soggy little island, even if that was before you were even born.

have any debt.

11 on here, showing growth in credit card

formatting link

In this thread.

Everyone can see you are lying.

years after it.

Doesnt say anything like that, liar.

Still does, liar.

Everyone can see for themselves that you are lying.

being the key period.

when it really took off.

about 60 years.

history with the building society

You're lying, as always.

over a long period of time.

through the 70's and 80's.

of money doing that.

because of house prices.

what we are talking about:-

You dont qualify for anything more than that.

Reply to
Rod Speed

A lot of the money was never there, people were expecting the price of houses to climb always and they made a mistake and purchased with money they never had, so things go back to their natural price. Now if you talk about the recent tendency (2 months or so) where the Fed is printing huge amounts of money at a fast pace, it is kept by banks. There was a very good article on the Daily Reckoning website recently, they named several US banks and quoted declarations from their chairmans regarding aquisitions. Basically banks receive money from the tax payers and they use 90% or so to acquire other, smaller banks. This will push up the fees that you pay because there is now less competition whis all those acquisition and the disparition of smaller banks. Also they change the law so that if you purchase a smaller bank you can also pay less or no tax on your profits since you can count their bad loans (the smaller bank) and claim that your net profits for the year are smaller than expected. The funny thing is that you can do this operation with the tax payer's money.

Reply to
jean-francois

On Nov 30, 12:23 pm, Michael Coburn wrote:

Or let describe an hypothetical situation which is not so different...

(Sorry for the syntax, French is my native tongue.) Money is just a social contract between some individuals or groups of individuals to exchange some hours of works against other hours of work. Like the plumber/teacher who are promissing to offer X hours of their work to a third party if some construction workers accept to offer X hundreds of work right now and to build them a house. Let say that I'm a plumber and that some farmer needs me to do a job of 6 hours; he offers me a note (a contract) which says that I can collect 40 dozens of eggs and 100 pints of milk in the comming years for my work. But he doesn't need more than 6 hours of job from me. Now I want a new car and the car maker does not want to exchange my note because it's not enough. I will falsify the note and add a few zeros so that I can offer 4000 dozens of eggs and 10000 pints of milks that all the people involved in the process of car making can collect latter on. I'm acting like a sperculator who cheat and falsely promiss a reward to some pigeons who join a pyramide scheme, or someone who claim that he can purchase debts because the people who have the debt have a triple A rating and will pay me/them interest. The present economic crisis stems from a growing number of lies that were introduced in the system, false promises of a reward later on, people who suddenly felt rich (artificial home prices or stock) and who borrowed to purchase expensive goods that they didn't need so much.

So the people involved in the process of making a car feel rich, they accept to do overtime, cancel a weekend that they planned to take, and if many people falsify their own notes, the car maker can borrow to expand his business and hire people and lure them with higher salaries ( workers who used to do computers, truck drivers who used to deliver beer, farmers, former electricians) because making cars is suddenly more lucrative than doing these other jobs. The car makers will even create jobs because he needs to purchase equipment to build his cars. Students who planned to become accountants will even change their mind and borrow to become specialised workers in the car industry. Everybody feel richer and the economy is booming until the farmer reject the note and claims that he never promised 10000 pints of milk to anyone. Is it a solution to print extra notes and promiss the farmer a yatch or 5 new tractors if he accept the falsidied note? Money is just a medium, it has to be based on something. It must represent what people are ready to give (hours of work) in exchange of goods and services. If many people lied in the chain and a large number exhanged in good faith a false promise that someone gave to them there wil be several loosers, wether you like it or not. And refusing to accept the truth and introducing an extra distorsion in the system with extra notes won't cure the problem because money has to represent something that exists, true promises based on something else than thin air. The problem is not one of money shortage, it is misallocation of money, false promises, lies who introduced a distorsion and pushed people to become skeptical regarding notes (loans, stoks, expected profits). Such a distorsion needs to purge itself when people accept that they lost something. Some people won, more people lost because the capital/time was wasted. You cannot rebuild the transparency that needs to back those billions of social contracts/notes with further notes, or you can just postpone the resolution of the problem and make it bigger.

Reply to
jean-francois

e bank or other borrower may fail) and/or think they have to

Why doing things halfly? Do an offer to this guy:

formatting link
iki/Gideon_Gono he will be a good adviser for Obama and tell him what to do to avoid deflation.

Reply to
jean-francois

There is a protection: The guys who told you 4 year's ago that there were no housing bubble, or 2 year's ago that a recession was unlikelly, or 6 months ago that a small recession wouldn't last more than 2 quarters, those who are constantly wrong when they predict jobless claims, in short those who created those bubbles garantee you that they will prevent such a scenario.

Reply to
jean-francois

Liquidity traps and martians are the two most tangible things that exist in the world. And Elvis is alive. Unfortunatelly Keynes seems to do well these days too.

Reply to
jean-francois

Give me a single example in history where running the printing press wildly did not create inflation. There is a delay of a few months of course, this money will start to circulate at some point. But true that if I'm leveraging in the financial sector and need to cover a margin call after a catastroph I'll have to liquidate assets and convert into dollars if my debt was in USD, i.e. USD will climb temporarelly.

Reply to
jean-francois

Strangelly enough, when you bring those 3 solutions to the situation of a household, the only solution is obvious, but when it comes to a state lots of people want to believe that things can be soooooo different.

Reply to
jean-francois

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