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Thread: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

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    Default (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    some 'global' perspective from Zeus at


    (snip)"Money from Nothing: A Primer On Fake Wealth Creation And Its Implications (Part 1)

    "Only God can create… value out of nothing"—Justice Martin V. Mahoney in First National Bank of Montgomery vs. Jerome Daly.

    "(I’m) doing God’s work." – Goldman Sachs CEO, Lloyd Blankfein


    Introduction:

    What is fraud except creating “value” from nothing and passing it off as something?

    Frauds interlink and grow upon each other. Our debt-based money system serves as the fraud foundation. In our debt-based money system, debt must grow in order to create money. Therefore, there is no way to pay off aggregate debt with available money. More money must be lent into the system to make the payments for old debts. This causes overall debt to expand as new money for actual people (vs. banks) always arrives at interest and compounds exponentially. This process is called financialization.

    Financialization: The process of making money from nothing in which debt (i.e. poverty, lack) is paradoxically considered an asset (i.e. wealth, gain). In current financialized economies “wealth expansion” comes from the parasitic taxation of productivity in the form of interest on fiat lending. This interest over time consumes a greater and greater share of resources, assets, labor, and livelihood until nothing is left.

    Only in a debt-based money system could debt be curiously cast as an asset. We’ve made “extend and pretend” a quaint phrase for a burgeoning market for financial lying and profiteering aimed toward preventing the collapse of a debt- (or lack-) based system that was already doomed by its initial design to collapse. This primer will detail the major components and basic evolution of fake wealth creation, accelerating debt expansion, hollowing out of the economy, and inevitable financial implosion.

    Stage one—Fiat money origination, multiplication, and distribution

    The U.S. Federal Reserve System (“The Fed”): A private, non-transparent entity, formed in 1913, representing and serving private, profit-driven banks that creates money from nothing (fiat) and to which the U.S. government has delegated and effectively ceded its constitutional power to coin money.

    The Fed essentially lends our “sovereign” public money to us at interest, paying for things like government debt with more debt, thus expanding debt. By contrast, the Fed currently gives away money to its constituent private banks at zero percent interest, allowing those banks to buy U.S. Treasury bonds, which yield a 2-3 percent interest mark-up to be paid by taxpayers, adding to citizen debt.

    Fractional reserve: Private fiat fabrication of exchangeable public “money” as a bookkeeping entry through “multiplication” of public fiat held in private bank reserves. Holding 100,000 dollars of depositors’ money may allow me, as a bank, to lend out 1,000,000 dollars. By what authority? None, really, just my say-so and my action.

    In the court case referenced in the heading quote, Justice Mahoney ruled against a bank acting in conjunction with the Federal Reserve Bank of Minneapolis in its efforts to foreclose upon and “buy” a U.S. citizen’s house by simply creating “the entire $14,000.00 foreclosure purchase in money or credit upon its own books by bookkeeping entry.” Further, “Mr. Morgan (the plaintiff/bank representative) admitted that no United States Law or Statute existed which gave him the right to do this.” (First National Bank of Montgomery vs. Jerome Daly)

    Stage two—Delusional, unregulated value assignment, manipulation, and expansion

    After money is created out of thin air, other market mechanisms have been propagated to magnify, funnel, and package value-from-nothing further still, creating financial vehicles that add more numbers without adding more value.

    Leverage: The practice of arbitrarily multiplying one’s alleged value in order to acquire controlling interest in another property. This mechanism is a favorite of now-discredited corporate raiders and leveraged buy-out firms that currently go under the euphemism “private equity firms”. This claimed private equity can be a fictitious multiplication of self-assessed asset value used to buy a controlling interest in a productive company.

    Typically the acquired company is put into debt, its real assets hollowed out and harvested, and then the acquired company is allowed to go bankrupt thus making a killing for the raiders while destroying the ability of displaced workers to make a living. (Unhinged: When Concrete Reality No Longer Matters to the Market (and What to Do About It)).

    Over the counter (OTC) derivatives: Purely unregulated, non-transparent, and malignant uncollateralized bets and hedges on market movements requiring no assets or stake in assets. Of the over 700 trillion dollars of “notional value” in disclosed OTC derivatives by International Bank of Settlements for 2011, the majority were supposedly “benign” interest rate and currency swaps, not the more toxic credit default swaps. However, it was a Goldman Sachs currency swap with “a fictitious exchange rate” that sunk Greece, nearly doubling its liability on just one deal from about 2.8 billion euros to over 5 billion euros. (How Goldman Sachs Helped Corrupt Politicians to Screw the Greek People) Also remember the undisclosed OTC derivatives market may easily be bigger than the disclosed market.

    Rehypothecation: The process of recycling or using the same collateral with multiple deals and entities. Apparently England has no legal limit on how many times collateral can by rehypothecated (Shadow Rehypothecation, Infinite Leverage, And Why Breaking The Tyranny Of Ignorance Is The Only Solution):

    Simply said: when one truly digs in, MF Global exposes the 2011 equivalent of the 2008 AIG: virtually unlimited leverage via the shadow banking system, in which there are practically no hard assets backing the infinite layers of debt created above, and which when finally unwound, will create a cataclysmic collapse of all financial institutions, where every bank is daisy-chained to each other courtesy of multiple layers of "hypothecation, and re-hypothecation." (Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else)

    Note: For a concise explanation of the related mechanisms of collateralized debt obligations (CDO’s), synthetic CDO’s, credit default swaps (CDS’s), naked short selling, and high frequency trading (HFT), see When The Market Has Cancer.

    Stage three—Usurping democracies and cannibalizing functioning capitalism

    A cartel of international wealth counterfeiters have boldly made claims on Greece’s national wealth through super-national entities like the European Central Bank. These claims are not backed by clear legal authority or logic, but they are being enforced anyway, administered by unelected technocrats and “agreed to” by complicit politicians acting against the interests of actual citizens.

    Greece (with more countries to come) is being treated like a company town where “costs” (i.e. social services) are to be cut, productivity milked through greater taxation, and debt servitude reinforced. Corrupted capitalism continues thus to metastasize. Now that phantom paper profits are collapsing for the counterfeiters, real assets must be taken over to fill in the gaps.

    Greece’s national assets have been put up for sale endangering its national sovereignty and right to control its own property. Greek well-being is being diminished through austerity programs. This has only caused the economy to contract at an accelerating rate. Seizing control of productive assets, and cannibalizing real wealth to feed counterfeit demands seem to be the primary unstated goals of these strategies because the empirical results of these strategies clearly run counter to stated objectives.

    Disaster capitalism: (The Shock Doctrine) The intentional infliction of insecurity, suffering, and scarcity on a population to cause panic, compliance, and amenability to exploitation and extraction of wealth. It is a thoroughly vicious business model that operates in plain sight. When abuse no longer has to be organized and covered by conspiracy, one can confirm that capitalism’s illness is in advanced stages. It is amazing how easily assets can be acquired and individual rights denied (as with fraudclosure) when people are overwhelmed by corruption on all sides.

    Stage four—Implosion of the body politic or necessary transformation and redirection?

    This stage has yet to be fully entered, but the fraying of Greece’s current social and political order sends a strong signal for the future of the wider world: Passivity equates with more abuse and exploitation, more austerity, and greater hijacking of national and personal assets. Active, civil resistance is necessary to stop the loss of public sovereignty to private interests. Creative, viable alternatives to the currently corrupt and fraud-ridden global economic system are vital. These alternatives and the implications of our current counterfeit wealth trajectory will be explored tomorrow in Part 2 of this article."(snip)

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    ^^^Thanks for that Mel,

    On a positive note:

    "Is America in the middle of a manufacturing job revival? The latest numbers would make it seem so. The U.S. has added more net manufacturing jobs since the start of 2010 than the rest of the G7 nations put together, with only two other economies, Germany and Canada, increasing factory employment at all."
    http://business.time.com/2012/01/23/...g-really-back/

    "Chicago, IL - According to results from the winter 2012 McGladrey Manufacturing and Distribution Monitor - a survey of middle-market manufacturing and distribution executives, which provides a unique look into the state of manufacturing on "Main Street" - the number of executives who are optimistic about the U.S. economy is 146 percent greater now than it was a few short months ago in the fall of 2011."
    http://www.inddist.com/articles/2012...-about-economy

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    tell me again how we're in the midst of a manufacturing job revival ?



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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    tell me again how we're in the midst of a manufacturing job revival ?
    Sure, I'd be happy to but please put a link to the graph you posted, it gives almost no information or context.


    Here's some of that info. about the jobs revival:

    "As the FT recently reported, from 2002-10, U.S. manufacturing unit labor costs in dollar terms fell 11 percent, compared with rises of 3 percent rise in Japan and 41 percent in Germany. Companies that are now bringing jobs back home include some of America’s largest blue chip multinationals, like Ford, GE, and United Technologies."
    http://business.time.com/2012/01/23/...g-really-back/


    "The jobless rate held at a three-year low of 8.3 percent even as people flooded back into the labor force to hunt for work, and 61,000 more jobs were created in December and January than previously thought."

    "The workforce increased by 476,000 people, the largest gain since April 2010. A broad measure of unemployment, which includes people who want to work but have stopped looking and those working only part time but who want more work, dropped to a three-year low of 14.9 percent."

    "Manufacturing registered another sturdy job-creating performance after scoring its biggest job gains in a year in January."

    "Private companies again accounted for all the job gains in February, adding 233,000 positions. Government employment fell a modest 6,000, but it was the sixth straight monthly decline.

    Manufacturers hired 31,000 new workers, with all the gains coming from hiring at factories that produce long-lasting goods."

    http://www.reuters.com/article/2012/...7BM0AB20120309

    "A new report Tuesday from SimplyHired.com suggests that job openings have increased in 30 of the 50 top U.S. metro areas."

    “As we’ve noted before, the job market is becoming truly stable for the first time since the recession began in December 2007,”

    http://www.bizjournals.com/sanjose/n...us-cities.html

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Manufacturers hired 31,000 new workers, with all the gains coming from hiring at factories that produce long-lasting goods
    Nobody, including myself, is denying that the US private sector is adding jobs, and that the US manufacturing sector is adding more jobs than has recently been the case. But again you focus on the 'bark'. touch on the 'trees' but bypass the 'forest'. And the 'forest' level points are that recently added manufacturing jobs comprise a proverbial 'drop in the ocean' when compared to the manufacturing employment levels of 10 years ago. And that point doesn't even take into account the US population growth which has occurred during the past 10 years. Even 'middle of the road' economists concede that 200,000 jobs being added per month is a barely 'break even' situation given the fact that young workers are entering the US workforce and the fact that many older workers can't afford to leave the work force. Is 200,000 better than 150,000 - you bet it is ! But don't attempt to make the case that a major recovery is underway until you can show us 350k to 400k new jobs being created consistently for several months.


    (snip)"There's a somewhat entertaining subplot beneath the good news, which is that the ADP Report — viewed as something of a predictor of the official numbers because it arrives earlier — came in much lower than the BLS data for January. ADP said January saw only 170,000 jobs added. This was below even the so-called "consensus" — an unofficial survey of labor market experts and economists — of 185,000. ADP had been coming in above the ultimate BLS numbers, so a little game of trying to triangulate ADP, BLS, and various outside observers had taken shape. This time around, ADP looked to be playing it safe.

    The good BLS number is of course not good enough to signal truly sustained job creation at the level we need to get the national unemployment rate down and down in a hurry. For that, we need 350,000-400,000 new jobs per month. We're a good ways off from that rate.

    And in fact, we may not get there for a while. The current quickening pace of job creation — 203,000 in December, 243,000 in January — is consistent with the level of GDP growth we have right now. For much of last year, GDP growth was limping along below 2 percent. It's now moving up into 2-3 percent territory, which is both enough to keep the U.S. well clear of recession and at a decent level of job creation moving forward.

    But you'd prefer to see 4-5 growth coming out of a severe recession, at least for long enough to restore the unemployment rate to pre-recession levels"(snip) from

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    Nobody, including myself, is denying that the US private sector is adding jobs, and that the US manufacturing sector is adding more jobs than has recently been the case. But again you focus on the 'bark'. touch on the 'trees' but bypass the 'forest'. And the 'forest' level points are that recently added manufacturing jobs comprise a proverbial 'drop in the ocean' when compared to the manufacturing employment levels of 10 years ago. And that point doesn't even take into account the US population growth which has occurred during the past 10 years. Even 'middle of the road' economists concede that 200,000 jobs being added per month is a barely 'break even' situation given the fact that young workers are entering the US workforce and the fact that many older workers can't afford to leave the work force. Is 200,000 better than 150,000 - you bet it is ! But don't attempt to make the case that a major recovery is underway until you can show us 350k to 400k new jobs being created consistently for several months.
    I don't know about bark and forests or even why you insist on consistently using that metaphor, what I do know is that there are three possible scenarios on the job front- we could be losing jobs each month, we could be adding job growth each month or it could be stagnant. The fact that we are adding jobs each month is a fantastic thing- either one of those other two things could very easily be happening. So that is something to be happy about. In addition, it's not just 35,000 jobs a month we're adding like last year, it's a pretty substantial number. Why is it necessary to compare it to past data and then decide if it's good or bad? It is what it is, be grateful it's going up and not down. As more people work, more money gets spent, as consumer confidence and optimism builds (as it is doing) more people spend and that creates more jobs. You're not going to just snap your finger and get 400,000 jobs per month, it has to grow into that. The point is we are on the right track and the momentum is headed in the right direction.

    But don't attempt to make the case that a major recovery is underway until you can show us 350k to 400k new jobs being created consistently for several months.
    I never said in any way that a "major recovery" was underway, I said a jobs revival was underway and I don't know too many people that would dispute that.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    I have to say that at least in my industry we are in something of a manufacturing jobs revival. I have added one full time employee and I am running numbers on a second. Sales are up and costs are under control. (My company's biggest problem is cost control and I think I have a handle on that.) Exports, which were zero when I bought the place are in the positives. We will know in a year if this is a fluke or if we are onto something with exporting. The big problem for us remains debt financing. Right now, my partner and I have poured in equity capital. The company is earning profits. Still, we could expand more if we had access to debt financing. Small business lending is just not happening.

    Z

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    congrats Zofia ! I know all to well that your success was the direct result of both investing personal equity as well as your 'well above average' management skills !!! Unfortunately, many small business persons lack one or the other !


    there are three possible scenarios on the job front- we could be losing jobs each month, we could be adding job growth each month or it could be stagnant.
    And I'm making the point that, while official job reports are being spun to indicate job growth, in real world terms ( net of population growth etc. ) jobs are still more or less stagnant. I would also make the point that there is a difference between job quantity and job quality ... and too large a share of new jobs are of low quality. Recent jobs added in the manufacturing sector are of higher quality, but again this number is a very small percentage of total jobs.

    Circling back on topic, there is also an issue of 'fake' job creation. This is arguably the result of the gov't spending borrowed money to de-facto finance gov't contractor jobs and gov't subsidized industry jobs which are not self-sustaining. While these jobs do serve as a conduit for passing borrowed money into communities, they arguably create zero net 'value', zero net tax revenues etc.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    And I'm making the point that, while official job reports are being spun to indicate job growth, in real world terms ( net of population growth etc. ) jobs are still more or less stagnant. I would also make the point that there is a difference between job quantity and job quality ... and too large a share of new jobs are of low quality. Recent jobs added in the manufacturing sector are of higher quality, but again this number is a very small percentage of total jobs.
    First off, jobs are not stagnant. We have added around 2 million in over a year and a half. We could have lost 2 million or we could have added ZERO, but we added a pretty substantial number. If you cannot see something very positive in that, then you have issues. While many of the jobs offered lower pay and benefits then before, that is the new economic reality. There are also a lot of good paying jobs with good benefits, in fact there is a glut of them currently available- people just need to get some extra training. I'm honestly starting to understand that you will simply never be pleased, satisfied or positive in any way. For years you railed about how American workers were overpaid and received too many benefits to be competitive in the world market, when adjustments are made and they fix those problems and become successful and competitive, you don't say anything positive, you then complain about the quality of the jobs and the low pay and the benefits.

    Circling back on topic, there is also an issue of 'fake' job creation. This is arguably the result of the gov't spending borrowed money to de-facto finance gov't contractor jobs and gov't subsidized industry jobs which are not self-sustaining. While these jobs do serve as a conduit for passing borrowed money into communities, they arguably create zero net 'value', zero net tax revenues etc.
    You are incorrect. The stimulus has had it's desired effect and has stimulated the economy, as evidenced by the rash of hiring, expansion by tens of thousands of companies and increased economic activities. One great indicator of this is exports. Do exports not create net "value"?

    "WASHINGTON, March 9, 2012 /PRNewswire-USNewswire/ -- The United States exported $180.8 billion in goods and services in January 2012, an increase of more than $1 billion over December 2011, according to data released today by the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department."

    Exports of goods and services over the last twelve months totaled $2.118 trillion, which is more than 34 percent above the level of exports in 2009. Over the last twelve months, exports have been growing at an annualized rate of 15.3 percent when compared to 2009, a pace greater than the 15 percent required to double exports by the end of 2014.
    http://news.yahoo.com/u-exports-hit-...211112880.html

    "US Exports to China Boom
    China's economic growth over the last decades has increased its citizens' buying power and those citizens are increasingly buying American...
    Overall, U.S. exports to China are up nearly 50 percent in value since 2008."
    http://bigthink.com/ideas/us-exports-to-china-boom


    "Figures released Thursday by the Wine Institute in San Francisco show that exports set a new $1.4 billion record in revenues. That's up nearly 22 percent over 2010.

    Wine exports to China grew by 42 percent last year"

    http://www.goerie.com/article/20121202161298

    "THE US exported a total of 5.41 billion litres of ethanol in 2011, more than triple the 1.8 billion litres exported in 2010, according to the US-based Renewable Fuels Association (RFA)."

    "The US port of Los Angeles has reported a record year for exports, buoyed by an all-time monthly high for goods shipped overseas in November, the second consecutive month of record export volumes."
    http://export-hub.com/en/news-americ...at-los-angeles

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Point #1 - in terms of US dollar value, the two largest elements of exported products were energy ( exported oil and gas ) and heavy equipment ( Caterpillar, John Deere ). Energy exports were made possible by a DECLINE in US industrial activity consuming energy, in combination with a marginal decrease in individual energy consumption. Heavy Equipment exports were made possible by FED policy trashing the US dollar exchange rate, 'artificially' making US dollar priced products more competitive than Yen or Euro priced competing products when the buyer is paying in Rupees or Bhat.

    Point #2 - export statistics do NOT distinguish the amount of actual US content in an end product that is exported. How much of the content of an I-Pad exported to Japan is actually American made versus Chinese ? How much of the content of a Buick exported to China is actually American made versus Mexican / South American / Chinese ? This is 'fake wealth' creation via incorrectly attributing US export dollar values to 100% US value creation.

    And please don't even get me started about the export revenues generated by US gov't ( US taxpayer ) 'subsidized' products such as wind generators, ethanol etc. It's bad enough that all US taxpayers are forced to pony up to artificially stimulate US consumption. It's much worse when US taxpayers are forced to pony up for the benefit of foreign buyers.
    Last edited by Melonie; 03-13-2012 at 10:01 AM.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    Heavy Equipment exports were made possible by FED policy trashing the US dollar exchange rate, 'artificially' making US dollar priced products more competitive than Yen or Euro priced competing products when the buyer is paying in Rupees or Bhat.
    As usual your ideology forms your thinking and your responses conflict with reality and the facts. The dollar has actually been steadily increasing against the Yen:

    "Dollar Climbs to 9-month High Versus Yen"

    http://www.ibtimes.com/articles/3080...versus-yen.htm

    Point #2 - export statistics do NOT distinguish the amount of actual US content in an end product that is exported. How much of the content of an I-Pad exported to Japan is actually American made versus Chinese ? How much of the content of a Buick exported to China is actually American made versus Mexican / South American / Chinese ? This is 'fake wealth' creation via incorrectly attributing US export dollar values to 100% US value creation.
    They do not distinguish the US content , but in the current state of world commerce, that is the way it's going to be, there are also many US components in items that are manufactured and exported from other countries. In addition, the fact that they are assembled, transported, packaged etc. from here still generates large amounts of income and generates all kinds of sales taxes, payroll taxes, shipping and transport fees and provides $Billions of dollars to hundreds of thousands of various support firms. The question once again is, Would you rather have exports with some foreign made components in them, or no exports at all. Besides all of that, there are thousands and thousands of products that are having huge increases in exports that don't have any foreign components in them.

    It's become pretty apparent that you are absolutely determined to remain completely negative and to go to great effort to discredit any hint of positive improvements even in the face of overwhelming information to contrary. As I result, I will leave you to your Gloom and Doom on this topic and wish you well.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    The dollar has actually been steadily increasing against the Yen:
    If you say so ...



    Fact is that the US dollar has been rising against the Yen for about the past MONTH ! The arguable explanation is capital flight from the EuroZone to the US financial markets as a safety play.

    The exact opposite has been true for the vast majority of the past two years. And that falling US dollar is what 'artificially' goosed US export sales. And it's fairly easy to see what the cause of the falling US dollar was over that 2 year time period by matching up dates on the USD/YEN chart with this FED money supply growth rate chart ...





    PS I'm not addicted to Gloom and Doom. However, I do refuse to view Bright and Shiny recent data in a vacuum and out of context.
    Last edited by Melonie; 03-13-2012 at 02:44 PM.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    congrats Zofia ! I know all to well that your success was the direct result of both investing personal equity as well as your 'well above average' management skills !!! Unfortunately, many small business persons lack one or the other !
    Thanks!

    And I'm making the point that, while official job reports are being spun to indicate job growth, in real world terms ( net of population growth etc. ) jobs are still more or less stagnant.
    I agree, to a point. On this issue, I am more gloomy than you. I actually think we have been losing jobs even since the so called end of the recession. The actual jobs gained are reported without taking into account the people who are falling off the unemployment rolls, without taking into account the people who are retiring and without taking into account new college and high school graduates.

    Circling back on topic, there is also an issue of 'fake' job creation. This is arguably the result of the gov't spending borrowed money to de-facto finance gov't contractor jobs and gov't subsidized industry jobs which are not self-sustaining.
    Here, we must disagree. I see this as the opportune time to spend government money especially on infrastructure. The City Manager and I have gone to several business round tables where we both spoke about how we are experiencing historically low finance and construction costs. Now is the time to add capacity to our governmental infrastructure. Buy/build roads, bridges, airports, court houses, school building or sidewalks. Who cares if people won't use them when they are done. The capacity will never be cheaper. Interest rates on bonds will never be lower. As long as the government can sustain the payments without raising taxes buy it or better, build it!

    Z

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    PS I'm not addicted to Gloom and Doom.
    And yet 100% of your posts in Dollar Den are negative, how is that possible?

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Now is the time to add capacity to our governmental infrastructure. Buy/build roads, bridges, airports, court houses, school building or sidewalks. Who cares if people won't use them when they are done. The capacity will never be cheaper. Interest rates on bonds will never be lower
    I actually agree with infrastructure spending ... to a point. Unfortunately, not very much of this type of spending is happening. Instead, the feds, the states, and also cities are 'spending' large amounts of money in the form of tax abatements, tax credits, specific infrastructure etc. in an attempt to 'jump start' green energy and other businesses with 'questionable' self-sustaining business models. Directly handing workers in said subsidized industries a check for doing nothing would actually save the gov't money ... since there wouldn't be any huge salary and bonus payments to upper management, and there wouldn't be any green energy tax credits for rich investors.


    And yet 100% of your posts in Dollar Den are negative, how is that possible?
    A - I question official 'factoids'

    B - I look at the 'big picture' to put apparently rosy but limited specifics into their true context

    C - My personal economic viewpoint is from the position of an income tax PAYER as opposed to a tax revenue CONSUMER ( = gov't beneficiary )

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    I actually agree with infrastructure spending ... to a point. Unfortunately, not very much of this type of spending is happening.
    Exactly. This has been the problem with the so called Obama economic stimulus package from the beginning. Far too little on infrastructure. Thus, not very much bang for all the bucks spent. Tim Geithner and Larry Summers were supposed to be smarter than that. It turned out they were not. Anyone who believed that a failed lawyer, non-tenure track (after a decade of teaching) law professor and part-time state legislator was smarter than Geithner and Summers was just deluding themselves.

    Z

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Zofia View Post
    Exactly. This has been the problem with the so called Obama economic stimulus package from the beginning. Far too little on infrastructure. Thus, not very much bang for all the bucks spent. Tim Geithner and Larry Summers were supposed to be smarter than that. It turned out they were not. Anyone who believed that a failed lawyer, non-tenure track (after a decade of teaching) law professor and part-time state legislator was smarter than Geithner and Summers was just deluding themselves.

    Z
    With all due respect..... They are smarter..... Just look at their life histories..... They KNEW exactly who was going to benefit..... and who was not.

    Foil hat firmly in place..... Where you see ignorance.... I see those pilars of society.... Those Masters of the Universe..... Saving their kind, and to hell with everyone else.
    The country has been looted.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post
    PS I'm not addicted to Gloom and Doom. However, I do refuse to view Bright and Shiny recent data in a vacuum and out of context.
    You refuse to acknowledge anything positive, in any way, shape or form; even though things have dramatically improved over the past three years. Nobody is saying everything is "Bright and Shiny". We still have a long way to go, but things have gotten much better.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Melonie View Post

    A - I question official 'factoids'
    No, you try to put a negative spin on everything.

    Quote Originally Posted by Melonie View Post
    B - I look at the 'big picture' to put apparently rosy but limited specifics into their true context

    C - My personal economic viewpoint is from the position of an income tax PAYER as opposed to a tax revenue CONSUMER ( = gov't beneficiary )
    And things are much better now than they were three years ago for most income tax PAYERS.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by eagle2 View Post
    No, you try to put a negative spin on everything.



    And things are much better now than they were three years ago for most income tax PAYERS.
    One person's "negativity" is another's REALISM.


    They are ? Better as compared to what. "Much better" ? For MOST income tax payers ? That means not just the top 1%.
    Prices UP. Real incomes DOWN or holding steady, at best. Deficit and debt UP. Economic growth ANEMIC ; the lowest post-recession rate of growth in our history.
    At the risk of personalizing, most people do not live in "Eagleland" where gas sells for what , $2.50 a gallon ? and food prices never go up. Where state and local taxes do not increase. The CPI went up .5% last month; an annual rate of 6 %.

    Yes, unemployment has gone down a bit and GM looks like it might make it after all. Other than that, things are not only not so great but the problems looming in the future are gigantic.

    Some of us question how all this debt is going to be paid off.
    Or whether it is healthy for barely 50% of American taxpayers to pay Federal INCOME taxes ? Yes, yes, I know that many do pay payroll taxes.
    We still have the Baby-Boomer Retiree Problem vis a vis Social Security and Medicare which only a few Republicans have come up with a plan to deal with. ( Sorry for the mild "Political" reference.)
    We are just as aware as anyone else of our crumbling infrastructure and question why the Porkulus Program was not really geared toward addressing it.
    Almost ALL of us have shown that Government stats are often only skin deep and sometimes the REAL picture can be quite different indeed.
    Best of all ( Worst of all ? ) , Melonie and I ( and some of our simpaticos ) would LOVE to be wrong. The bottom line is that we just do not see enough improvement. Certainly not the serious and substantial improvement that we think is really necessary.
    Last edited by Eric Stoner; 03-16-2012 at 11:06 AM.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Eric Stoner View Post
    • At the risk of personalizing, most people do not live in "Eagleland" where gas sells for what , $2.50 a gallon ?
    • Some of us question how all this debt is going to be paid off.
    • Or whether it is healthy for barely 50% of American taxpayers to pay Federal INCOME taxes ? Yes, yes, I know that many do pay payroll taxes.


    One Republican candidate says he can do that for us. I think he is the current owner of the Brooklyn Bridge, trying to sell it.

    US Debt will never be entirely paid off for the same reason that the NY Stock Exchange will never have the real amount of cash it is evaluated at or a bank will never make customer withdrawals to the total of its assets. It is assumed that not everyone will make that demand at the same coordinated time.

    If one does not pay taxes, is one a taxpayer? If more people were working, say as in the nineties, that number would be up. Those who cannot find work for a long time may well end up on welfare rolls. Outside of that situation, I doubt that there are many more 'welfare queens' than there were a few years ago. As population increases the problem of finding work for those additional people compounds, and that is a problem independent of financial meltdowns and recessions. Final comment: there are some few people who have incomes and who pay no taxes in spite of having substantial incomes -- tax avoidance schemes or all-cash businesses.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by threlayer View Post
    US Debt will never be entirely paid off for the same reason that the NY Stock Exchange will never have the real amount of cash it is evaluated at or a bank will never make customer withdrawals to the total of its assets. It is assumed that not everyone will make that demand at the same coordinated time.
    A couple of points, the U.S. does not issue demand debts, but timed ones. That is when we take on debt, we do so with bonds that say in a certain number of years, we will pay you the face amount of the bond and along the way we will pay you some nominal interest. Thus it is a straw man argument to look at simultaneous demand for payments.

    Second, the U.S. debt, unlike is argued by some here, does get paid off in full regularly. As a matter of fact many trillions of dollars of debt have been paid off on schedule. New debts are taken on sometimes. And lately we have been taking on new debts to pay off old ones.

    Finally, that does not mean the federal debt is meaningless. Studies have shown that whenever a nation incurs debts greater than 80% of its gross domestic product, standards of living start to fall. There is a causal connection between those two. Once the debt grows that large, it begins to consume too much of the treasury's ability to service it. Thus the tax bite has to increase which in turn lowers disposable incomes. That lowering of income rotates through the economy causing a lowering of economic activity and so on. Thus, we deficit hawks while we do not worry about paying off any individual bond holder, we do worry that if the aggregate federal debt rises too much that we will reduce our standard of living.

    HTH
    Z

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Studies have shown that whenever a nation incurs debts greater than 80% of its gross domestic product, standards of living start to fall. There is a causal connection between those two. Once the debt grows that large, it begins to consume too much of the treasury's ability to service it. Thus the tax bite has to increase which in turn lowers disposable incomes. That lowering of income rotates through the economy causing a lowering of economic activity and so on
    Or, in the alternative, the FED can simply print new money out of thin air with which to repay, as opposed to a direct tax increase. However, the end result is worse since it devalues the 'purchasing power' of US dollars held by rich and poor Americans alike.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by Eric Stoner View Post
    One person's "negativity" is another's REALISM.
    No, it's another's ideology. For conservative ideologues, if the Fed and the government don't follow conservative ideology, they're always going to have a negative outlook.

    Quote Originally Posted by Eric Stoner View Post
    They are ? Better as compared to what. "Much better" ? For MOST income tax payers ? That means not just the top 1%.
    Prices UP. Real incomes DOWN or holding steady, at best. Deficit and debt UP. Economic growth ANEMIC ; the lowest post-recession rate of growth in our history.
    Incomes are up. In 2010, personal income rose 2.9%, compared to falling 1.9% in 2009.

    http://cincinnati.com/blogs/economic...lling-in-2009/

    From this past September through January, income rose 4 out of 5 months

    http://www.bea.gov/newsreleases/nati...ewsrelease.htm

    The stock market has almost doubled since it's low in 2009. Taxes are down. Interest rates are down. In early 2009, we were losing 700,000 jobs a months. We're now adding 200,000 jobs a month. The total number of millionaires in this country is up more than 15% since 2008.

    http://money.cnn.com/2011/05/05/pf/m...rise/index.htm

    For anyone looking to buy a home, houses are more affordable than ever, especially with the low interest rates.

    Anyone who looks at things objectively, instead of solely based on ideology, can see things have gotten better.

    Prices are not up for most products. You just have a mad obsession with a few products that are very volatile in price.

    Quote Originally Posted by Eric Stoner View Post
    At the risk of personalizing, most people do not live in "Eagleland" where gas sells for what , $2.50 a gallon ? and food prices never go up. Where state and local taxes do not increase. The CPI went up .5% last month; an annual rate of 6 %.
    I don't think I've ever come across anyone as obnoxious, arrogant, and condescending as you. If you keep it up, I will just put you on ignore.

    The CPI went up .4% last month, and for the last year, was up 2.9%.

    http://www.bls.gov/news.release/cpi.nr0.htm

    Only in "Stonerland" is 2.9% inflation considered a problem so serious that we should throw the economy back in to recession to lower it.

    Quote Originally Posted by Eric Stoner View Post
    Yes, unemployment has gone down a bit and GM looks like it might make it after all. Other than that, things are not only not so great but the problems looming in the future are gigantic.
    I just mentioned a number of obvious ways the economy is much better now, but you're not going to acknowledge things have gotten better without following your ideology.

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    Default Re: (late) weekend commentary - Money from Nothing - A Primer on Fake Wealth Creation

    Quote Originally Posted by eagle2 View Post
    No, it's another's ideology. For conservative ideologues, if the Fed and the government don't follow conservative ideology, they're always going to have a negative outlook.


    Incomes are up. In 2010, personal income rose 2.9%, compared to falling 1.9% in 2009.

    http://cincinnati.com/blogs/economic...lling-in-2009/

    From this past September through January, income rose 4 out of 5 months

    http://www.bea.gov/newsreleases/nati...ewsrelease.htm

    The stock market has almost doubled since it's low in 2009. Taxes are down. Interest rates are down. In early 2009, we were losing 700,000 jobs a months. We're now adding 200,000 jobs a month. The total number of millionaires in this country is up more than 15% since 2008.

    http://money.cnn.com/2011/05/05/pf/m...rise/index.htm

    For anyone looking to buy a home, houses are more affordable than ever, especially with the low interest rates.

    Anyone who looks at things objectively, instead of solely based on ideology, can see things have gotten better.

    Prices are not up for most products. You just have a mad obsession with a few products that are very volatile in price.



    I don't think I've ever come across anyone as obnoxious, arrogant, and condescending as you. If you keep it up, I will just put you on ignore.

    The CPI went up .4% last month, and for the last year, was up 2.9%.

    http://www.bls.gov/news.release/cpi.nr0.htm

    Only in "Stonerland" is 2.9% inflation considered a problem so serious that we should throw the economy back in to recession to lower it.


    I just mentioned a number of obvious ways the economy is much better now, but you're not going to acknowledge things have gotten better without following your ideology.
    Excuse me ! YOU are the one whose posts often defy reality. All one has to do is READ how many times YOU claimed that where YOU live , prices are NOT going up. Yes, I was being a little sarcastic in response to SOME of what you have posted. You are not one to talk about personalizing or being obnoxious. Nobody has violated the "Politics Ban" more than YOU. In every other post you try to inject politics into economic and financial discussion.

    You always do this and frankly it is getting a little tiresome. You post something, often leaving out an important fact, and then someone else fills in the blank. Then you get all in a huff accusing the poster ( in this case me ) of being obnoxious or more often being driven by "ideology" as though your postings are alabaster pure without a hint of bias. I don't even want to go into the times that SOME of your links said the virtual opposite of what you claimed.

    I HAVE acknowledged that by SOME measures and in SOME ways the economy is doing better compared to where we were in 2008 and 2009. The numbers are what they are. I have also noted that historically, this is one of the weakest recoveries on record and pointed to a host of other facts and indicators that do not bode well for the future. I HOPE I AM WRONG. I am NOT one of these nuts who wants the economy to tank or gas prices to soar to $6 a gallon just so we can get rid of Obama.
    I've made no secret of my preference for free markets and limited constitutional government. I want a responsible Fed and strong dollar. I don't want bailouts or crony capitalism. If you want to invest in GM or the next Solyndra, please be my guest. I wish you the best of luck.
    Last edited by Eric Stoner; 03-20-2012 at 07:31 AM.

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