gut;1503922 wrote:What happens when those bonds come due? In your world there are no repercussions from endlessly printing more money.

Just monetize the debt. Inflation is dead. La-la-lalala, free money. What a reckless and ignorant view.

BGFalcons82;1503920 wrote:He's in complete denial of the hideousness of ObamaKare. However, I'm certain there's a way to blame Bush for some, if not most, of the 23,000 pages of evolving horseshit.

Here's today's company delivering the news to their employees and it was one of Barry's shining examples of how great life was supposed to be as predicted in 2009 - http://fox8.com/2013/09/18/cleveland-clinic-employees-react-to-big-budget-cuts/

BoatShoes;1503923 wrote:You've got to understand what happens when the government spends. When the government spends it credits a member bank account and therefore adds excess reserves into the banking system. If the government didn't debit a member bank account as a payment of taxes or debit a member bank account when a tsy bond is issued the member banks with excess reserve balances would bid down the overnight lending rate to the interest rate paid on reserve balances (normally zero).

Hence, that is why the natural rate of interest is zero. However, the FED normally sets an interest rate target and has to be able to offer interest bearing securities or set an interest rate on reserve balances that it pays in order to hit that target and thereby intervene in what the otherwise natural rate would be.

BoatShoes;1503927 wrote:In the event that demand-pull inflation became an actual threat the FED has the authority under the Monetary Control Act of 1980 to levy tax like fees on the use of the payments system and could effectively delete money to control inflation expectations and this would be way more effective than raising the FED Funds rate Volcker style anyway.

gut;1503934 wrote:LOL, telling me I don't understand isn't going to give you a clue. You just explained how the Fed is intervening to LOWER the interest rate. It's bringing MASSIVE demand to treasury and MBS to push rates DOWN. It can't be stated any more clearly. Anyone with a clue in markets knows interest rates are being artificially suppressed - that's why treasuries drop like a rock at the slightest hint of an end to QE.

What you just proposed in the previous post is monetizing the debt, and you don't even realize it because you're just regurgitating talking points you don't understand.

gut;1503938 wrote:If they had to do that, then where does the money come from to roll over the huge notional amounts of treasuries coming due? Because in case you haven't figured it out, we are in for a world of hurt when rates rise.

And you continue to ignore inflation as expressed in asset bubbles. That's not part of CPI, but as I said asset bubbles were the trigger for the last two recessions.

gut;1503922 wrote:What happens when those bonds come due? In your world there are no repercussions from endlessly printing more money.

Just monetize the debt. Inflation is dead. La-la-lalala, free money. What a reckless and ignorant view.

BoatShoes;1503893 wrote:Interest rates are not artificially low. The Fed Funds Rate would go to zero if the FED didn't intervene to hit an interest rate target. So, if you want interest rates to be higher you're saying, necessarily, that you want Treasury to Issue Securities (Gasp gubmint debt) in order for the FED to intervene in the interbank lending market and drain reserve balances and hit its interest rate targets. The only way you get those higher interest rates you want is with Tsy securities and Central Bank intervention to prevent what would naturally happen.

BoatShoes;1503947 wrote:Or, when the bonds come do...you simply raise the interest rate on reserves. So it's like the money goes from being in a C.D. to a interest bearing checking account. No need to unwind, etc.

gut;1503952 wrote:WTF? I think you got very confused cutting and pasting there.

Where is the money coming from as the govt has to roll-over $17T+ in treasuries?!?

Growth is being crushed by a debt overhang, and your response is MORE DEBT!!!!

IggyPride00;1503949 wrote:Ted Cruz is looking like a huge con man right now.

He has been pounding on the House for weeks now about not retreating, and not blinking. Yet today he came out and said well of course we don't have the votes to defund Obamacare, and it will probably take another election or so to make it happen.

Why then when he knew it wouldn't happen did he back the House into the corner he did when he knew all along that defunding couldn't and wouldn't happen?

For someone who is already running for President he is not showing himself to be much of a strategic big picture thinker.

The House GOP was fed up with him yesterday, and it will probably be that much worse today with his knew revelation about getting everyone worked up for nothing.

QuakerOats;1503948 wrote:They are indeed artificially low,

QuakerOats;1503948 wrote:They are indeed artificially low, as they are historically 200-300 basis points above inflation, hence they are being held artificially low, as we all know, whether we care to admit it or not. Imagine the fiscal chaos with market rates x just obama's debt run up ---- ouch. More is not better when it comes to government; learned people should know this by now.

gut;1503955 wrote:Only relative to reality. A much more liberal view would suggest they are artificially high, according to the guy who believes it should be 0.

BoatShoes;1503953 wrote:The United States Central Government and its Bank, the Federal Reserve are the progenitors of dollars. To ask "where's the money going to come from" is nonsensical. It's like saying..."Where are the Cleveland Browns going to get tickets for the stadium." They issue the tickets. And, like I said, you need not roll them over anyway. Credit their Reserve Accounts. Treasuries are just savings accounts/time deposits at the FED. Let the money go into a reserve account and pay interest on it or heck let's have the FED offer C.D.'s w/o auction and eliminate the debt demagoguery.

The U.S. government is not financially constrained. "Where is the scorekeeper at the Buckeye game going to get points!" It's nonsensical. The government is not like you and I...currency users. It is the sole monopoly currency issuer. The money to pay taxes or buy tsy securities must have first come from government spending.

The real constraints are the real capacity of the economy.

Growth is not being "crushed by a debt overhang." It's nonsensical. Tsy securities are risk free assets for the private sector. It's like saying an individual is being crushed and in capable of producing more real output because he has a lot of money in a savings account.

BoatShoes;1503957 wrote:Well, sure I think that's what it should be.

But, that is also what the Fed Funds Rate would be if the FED was laissez-faire and didn't attempt to hit an interest rate target.

BoatShoes;1503956 wrote:There's nothing "artificial" about it. The historical trend just describes to what level the FED intervened to prevent the Fed Funds Rate from being what it would naturally be if it was laissez-faire....0. But, I wouldn'[t call the historical trend "artificially high". It just is what it is. It's a policy choice.

gut;1503961 wrote:LMFAO.....I often read your posts first in reverse, and let the comedy cascade over me. "Risk-free"...truly a simpleton's view.

It's not sustainable. It doesn't take a rocket scientist to see that. But it's simply mind-boggling that you think the govt can print an endless amount of money with no damaging economic consequences. The govt had its fingerprints all over the housing bubble - and they weren't even printing money anywhere near like this! You have your head in the sand.

Try reading a little Bill Gross - but I warn you, you might hurt yourself. But this is fairly straightforward and layed out simply enough. Basically diminishing returns from credit expansion until something has to give.
http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx

"Where's the money going to come from?" is not nonsensical. You are showing a fundamental failure to grasp the issues. As interest rates move higher, and you have to print more money to roll-over debt...govt spending and deficits are going to expand. It's a problem that eventually spirals out of control (and with massive intervention to keep rates low, we are probably at a tipping point). You can't sustain a spending problem by printing more and more money. Ultimately you destroy your currency or your economy, and quite likely both.

gut;1503964 wrote:Wow. You're just so very wrong. You don't even know enough to be made to understand why.

If the Fed was laissez-faire and didn't want to distort or influence markets, it wouldn't target a rate and that rate would not be 0.

gut;1503966 wrote:sigh....We are talking about prevailing market interest rates. The Fed Funds Rate is not a market rate, it's a tool thru which the Fed uses to manipulate market rates. The Fed has used extraordinary intervention to arbitrarily lower market rates.

BoatShoes;1503953 wrote:The United States Central Government and its Bank, the Federal Reserve are the progenitors of dollars. To ask "where's the money going to come from" is nonsensical. It's like saying..."Where are the Cleveland Browns going to get tickets for the stadium." They issue the tickets. And, like I said, you need not roll them over anyway. Credit their Reserve Accounts. Treasuries are just savings accounts/time deposits at the FED. Let the money go into a reserve account and pay interest on it or heck let's have the FED offer C.D.'s w/o auction and eliminate the debt demagoguery.

The U.S. government is not financially constrained. "Where is the scorekeeper at the Buckeye game going to get points!" It's nonsensical. The government is not like you and I...currency users. It is the sole monopoly currency issuer. The money to pay taxes or buy tsy securities must have first come from government spending.

The real constraints are the real capacity of the economy.

Growth is not being "crushed by a debt overhang." It's nonsensical. Tsy securities are risk free assets for the private sector. It's like saying an individual is being crushed and in capable of producing more real output because he has a lot of money in a savings account.

IggyPride00;1504015 wrote:Tomorrow is the day that Obama launches his opening salvo in the war on coal.

I guess I shouldn't be surprised he would wait until Friday afternoon to make the announcement official.

The sad part is that he couldn't bring himself to bomb Syria, but the American energy industry is fair game for EPA carpet bombing.