There’s a big difference between investing in foreign currencies and foreign companies and merely hiding your money in offshore accounts implied in Baldwin’s post.
I’m heavily invested, through my 401k, in funds that concentrate on European and Asian corporate stock. Most of these do quite well.
Let’s see if I understand.
If I were to provide an example of a government trying to deal with its financial obligations by printing money, would that be enough to disprove the above statement?
V? If you mean “trickle down economics”, it doesn’t start with a “v”, and the concept was not invented by George Bush. It was made famous by a President from a different party.
Regards,
Shodan
He means the term “voodoo economics”, but of course he couldn’t just say that because then we wouldn’t have the chance to find out just how fucking clever he is.
Shodan, your link doesn’t work. Try this one.
That one there wuz a hangin’ offense, pardner.
I think you are missing the heart of it. It was called a TRUST for a reason.
1+1=2*
*except for lesser amounts of 1 (as amended by Congress)
BTW, within the month, I will be 61.7 exactly. Love the statistics in this thread.
Do you have any concept of a rational argument, you ignorant twit?
to paraphrase:
“Governments cannot back their bonds by printing money. Hence, it cannot be said that government bonds are backed by the ability to print money.”
A statement cannot be its own conclusion, dimwit. And, your statement is absurd to even the most casual observer.
If a treasury bill is not backed by the ability of the treasury to print money, do you suppose it is payable in pistachios?
A government bond is backed by (among other things I’ve previously discussed,) that government’s ability to print money prudently.
A failure, or an expectation of a failure to do so results in those bonds needing exhorbitant interest rates in order to float. In extreme cases confidence in prudent money supply management may be so low that a government has to issue it’s debt in a more prudently managed currency in order to float it, as in the case of certain Latin American countries which had to issue Yankee (dollar denominated) bonds.
An issue may be backed well, or poorly, by the currency it is denominated in and that government’s ability to print money prudently, dipshit.
Fuck you, you fucking liar. I’m avoiding nothing. Take your accusations and shove 'em up your ass you dishonest moron.
You really are stupid. Incredibly stupid. I say that a basic tenet of economic theory is to decrease taxes and increase spending to stimulate the economy.
You say I’m suckering Polycarp. Then, a post later, when asked what think we should have done, you reply…
Which is what I just said, you parrot.
Here’s a clue:
If you maintain that what I say is bad, or wrong, then you need to say something different when asked the same question, otherwise you prove yourself to be an idiot.
Which you do quite well.
Then why did he link to “trickle down”?
Oh that’s right, he’s stupid. I forgot.
Anyway, here’s the link.
Regards,
Shodan
A T-bill’s ability to be exchanged for other forms of money is one of the things that makes it a form of money. It’s quite silly to say that it’s “backed” by other forms of money. When a bank lends you money to buy a house, the cheque it gives you will be readily accepted as money by the vendor. Is the cheque backed by a pile of US banknotes or T-Bills or the bank’s ability to print money? No. A small part, the statutory reserve, is backed by a pile of US banknotes or T-notes. What’s backing the rest of it? Your ability to produce goods and services, which you exchange for money, and which you’ve promised to give to the bank. It’s also backed by a mortgage over your real property. Those are the things that back the money that the bank effectively created when it wrote you your cheque. (It’s a bit more complicated than that, but if you really, really need an Econ 101 refresher, I’m quite prepared to give it to you).
I’m not sure that you understand the concept of “security”. A security is a piece of paper, and its value depends on what it entitles the holder of the security to. A security that entitles its holder to, say, a gold bar, is worth exactly what the gold bar is worth. Most common stocks are securities that entitle their holders to a share in the profits (i.e., the net revenue) of a company, plus a share, if the company winds up, in its net tangible assets. A company’s bond is similar, except it promises a fixed payment from revenues, and a (preferential) share in assets if the company is wound up. Note that “value” and “backing” are different things. The value of the gold backed security depends on the value of the gold. The value of a stock or bond depend on how people value the things that back them, i.e. the companies ability to earn revenue, and the companies net tangible assets. In no case can the security be said to be “backed” by the ability to issue them in the first place. The value certainly is affected by peoples faith in the claims that the securities are backed by. E.g., if Scylla Inc issued bonds, people would value them on your likely capacity to earn enough revenue to repay them. They certainly wouldn’t say hey, Scylla’s bonds are backed by his ability to issue more of them, or a slightly different kind of them, or his ability to issue them prudently. That’s not really what backing means.
So what backs T-notes, T-bills and paper currency? Exactly the same things that back the other securities I talked about above. The government’s ability to earn revenue through taxation. A government may also have net tangible assets, like a reserve of gold, a bunch of buildings, land, etc. but holders of government securities don’t have usually have claims over those things.
There are two critical differences. You omitted the word “temporary”, and you also said:
Your omission of any reference to “temporary”, and your claim that decreasing rates of taxation increases taxation revenue put you firmly in the “voodoo” camp, not the Keynesian camp. I readily await your next post. I’m guessing Laffer curve.
Yes there’s a difference between the two things that you and I think Baldwin may have been talking about. Can’t really resolve that without Baldwin’s input.
No, it’s not you dopey dipshit. I swear to God you to God you are the most ignorant, stupid motherfucker on the whole board.
Pistachios are exchangeable for money, asswipe. That doesn’t make pistachios money.
Wrong, Wrong, Wrong, Oh King of the retards. When you go to buy a house, you bring a special kind of check. Usually this check is called a “cashier’s check.” A cashier’s check is backed by money in the firmest sense. A cashier’s check means you have money in your account equal to the sum of the check, and that that has cleared your account and is available for withdrawal, and that that money has been specifically put aside for that specific check so that it cannot be withdrawn by any other instrument, and that the bank is prepared to make payment immediately.
It is a special kind of check.
The other kind of check is simply backed by the writer of the check. Typically these aren’t good enough to buy houses with.
Oh, that’s ok. I prefer stuff that’s not made up or vaguely and innacurately remembered from some class you took twenty years ago. The concept you are attempting to refer to hear is the “fiscal multiplier.”
That’s when I earn $50.00 and use it to have you wash my car. You take it to the bank. The bank lends it out to somebody else who does something else with it, etc etc, so that my $50.00 actually expands to some larger number. “Leakages,” prevent this number from being potentially infinite.
While I didn’t mention this issue, I dealt with it, as it part of the government’s managing of the money supply through monetary policy. For example , the Fed can change reserve rates. When it does so, there is commensurate change in the money supply. The ration between the intial change in the reserves and the resulting change in the money supply is then referred to as the “monetary multiplier.”
Usually the Fed doesn’t like to do this since it is financially disruptive and prefers to use what are called “open market operations” which involve sales and purchases of the Feds portgolio of government bonds to manage day to monetary policy changes. The Fed pays with drafts that increase bank reserves, and when the Fed sells reserves drop as the Fed must be paid with drafts.
Mathematically if the Fed makes an open market Purchase of P dollars, and the reserve requirement is r then the increase in the money supply is
P + P(1 - r) + P(1 - r)squared + P(1 - r)cubed +…
or
P(1/r)
or, if the reserve rate is 20% and the Fed makes a million dollar purchase, then the money supply increases by five million.
Similarly, the fed also uses the discount rate, federal funds rate, and moral suasion to influence money supply.
SOOOOOOOO, as I said, the government manages money supply. I did account for the creation of money through expansion, I simply did not explicate it, since it was only tangential to the discusion. It is contained within my statements about the government managing the money supply.
next stupidity.
So very very dumb. I would feel bad for you because of your stupidity were it not for the fact that you are such an asshole.
“Security” of course has several meanings. It can be that great feeling I have when I am safe in my house. It can be collateral for a loan, or it can be a financial instrument. I was using the term in its second sense, as anybody but a moron named Demostylus can clearly see from context.
BWAHAHAHAHAHAHAHHAHAHA!
You dipshit. I can’t beleive you are so fucking stupid you don’t even check before you make a boner like that.
In fact, common stock merely represents equity, or ownership interest, and does not necessarily entitle to a share in the profits (which by the way are not “net revenue” as they are still many slips twixt the cup of revenue and the lip of earnings (which are actually the profits.) Nor does it entitle you to a share of the company’s net tangible assets. In fact, it does not directly entitle you to jack shit, other than the par value of the stock (usually 2 cents.) The stock may have powers or rights granted by the prospectus, the board of directors, or what have you, but none of these are inherent to common stock.
No. No. No. Only “revenue bonds” are guarranteed by the revenues of a specific property and thes are usually issued by municipalities. Nor is your second sentence necessarily true, as debt may be Secured, Senior, Subordinated, or floated without any recourse or guarrantees. The details are listed in the “indenture agreement,” which would be your source of reference for any specific sexurity.
Wow! How did you figure that out. Did you sound them out, and decide they sounded different, and from the fact that they are made from different letters and form different words did you somehow guess that they were different?
Congratulations. That’s the highest level of cogitation I’ve seen you demonstrate.
You now graduate to “Tapeworm” on the intellectual scale.
“Value” of course means lots of different things. Let us be professional and specific. When speaking of a bond we say “par value” which specifically means the face amount at which the bond matures. “Backing” can mean lots of things but in reference to bonds usually means how the company is intending to make good on the par value, and it is described in the indenture agreement.
No. It certainly does not. The value of said security depends on what people are willing to pay for it. That’s it. This can be influenced by many factors, most notably, the value of gold. Many a fool in the future’s market has thought as you do.
Untrue, you fucking dipshit. Many securities are specifically and explicitly backed by the issuing party’s ability to issue such securities.
Terms of indenture on bonds may require the issuer to issue new bonds to repay the old ones, if needed and may stipulate and qualify the further issuance of subordinated debt to preserve this backing from denigration. It is a most common thing. Oftentimes bonds are prerefunded. The terms and conditions of future issuance of securities are one of the most important factors in evaluating an issue.
You are so fucking wrong, that your stupidity is inconceivable. You should be ashamed of yourself for flaunting such flagrant ignorance, ashamed of yourself for pretending to have a clue what you are talking about and ashamed of yourself for performing such a poor masquerade.
[quote]
The value certainly is affected by peoples faith in the claims that the securities are backed by. E.g., if Scylla Inc issued bonds, people would value them on your likely capacity to earn enough revenue to repay them. They certainly wouldn’t say hey, Scylla’s bonds are backed by his ability to issue more of them, or a slightly different kind of them, or his ability to issue them prudently. That’s not really what backing means.
[quote]
The latter clearly effects the former. My ability to issue future debt impacts my ability to pay back current debt, as should be intrinsically obvious.
The government is a special case since it prints the money and controls the money supply, as I described at length.
They’re called “Asset-backed” securities.
Oh fuck you, you mindless drone. “Temporary” is not a requirement of a tax-cut to stimulate the economy, as both “temporary” and “permanent” tax cuts will serve to stimulate an economy, if, in fact, there is such a thing as a “permanent” tax-cut, which I frankly doubt since taxation policies are infinitely malleable by the legislators.
I have to say, Demostylus. I truly wonder at your ignorance and your stupidity. They are different things. There is nothing wrong with being ignorant or not well-versed in a given subject. However, it takes a very very stupid individual to willfully disregard his own ignorance. Most of us are intelligent enough to know what we do not know.
It takes a very special kind of idiot to masquerade as an expert. Even those kind of idiots usually make a special kind of effort to hide their ignorance. You on the other hand take pains to prove that you’re full of shit.
When you say things to me like “Currency is irrelevant to security,” or “securities can’t be backed by the ability to issue securities” or “Common stock entitles you to a share of revenues,” or a host of any basic and patently false things that you have said, you are proving to me that you are both stupid and a liar.
You are doing the equivalent of walking up to a medical doctor and attempting to lecture him about the four bodily humors.
Now, I don’t like you. I know you don’t like me. I want you to know that you’ve brought a smile to my face though. I always thought that my dislike of you was founded not in our disagreements, but in your obnoxiousness and stubborn stupidity.
I cannot tell you how pleased I am that you have chosen to walk directly into my one narrow area of professional expertise and demonstrate conclusively and indisputably just how incredibly stupid you really are.
See you around.
Wanna rethink this answer? Do I really have to explain the concept of a bank loan? That when the bank lends you money, it usually because you don’t have “money in your account equal to the sum of the check, and that that has cleared your account and is available for withdrawal”?
It is a special kind of check.
The other kind of check is simply backed by the writer of the check. Typically these aren’t good enough to buy houses with.
Oh, that’s ok. I prefer stuff that’s not made up or vaguely and innacurately remembered from some class you took twenty years ago. The concept you are attempting to refer to hear is the “fiscal multiplier.”
That’s when I earn $50.00 and use it to have you wash my car. You take it to the bank. The bank lends it out to somebody else who does something else with it, etc etc, so that my $50.00 actually expands to some larger number. “Leakages,” prevent this number from being potentially infinite.
While I didn’t mention this issue, I dealt with it, as it part of the government’s managing of the money supply through monetary policy. For example , the Fed can change reserve rates. When it does so, there is commensurate change in the money supply. The ration between the intial change in the reserves and the resulting change in the money supply is then referred to as the “monetary multiplier.”
Usually the Fed doesn’t like to do this since it is financially disruptive and prefers to use what are called “open market operations” which involve sales and purchases of the Feds portgolio of government bonds to manage day to monetary policy changes. The Fed pays with drafts that increase bank reserves, and when the Fed sells reserves drop as the Fed must be paid with drafts.
Mathematically if the Fed makes an open market Purchase of P dollars, and the reserve requirement is r then the increase in the money supply is
P + P(1 - r) + P(1 - r)squared + P(1 - r)cubed +…
or
P(1/r)
or, if the reserve rate is 20% and the Fed makes a million dollar purchase, then the money supply increases by five million.
Similarly, the fed also uses the discount rate, federal funds rate, and moral suasion to influence money supply.
SOOOOOOOO, as I said, the government manages money supply. I did account for the creation of money through expansion, I simply did not explicate it, since it was only tangential to the discusion. It is contained within my statements about the government managing the money supply.
next stupidity.
So very very dumb. I would feel bad for you because of your stupidity were it not for the fact that you are such an asshole.
“Security” of course has several meanings. It can be that great feeling I have when I am safe in my house. It can be collateral for a loan, or it can be a financial instrument. I was using the term in its second sense, as anybody but a moron named Demostylus can clearly see from context.
BWAHAHAHAHAHAHAHHAHAHA!
You dipshit. I can’t beleive you are so fucking stupid you don’t even check before you make a boner like that.
In fact, common stock merely represents equity, or ownership interest, and does not necessarily entitle to a share in the profits (which by the way are not “net revenue” as they are still many slips twixt the cup of revenue and the lip of earnings (which are actually the profits.) Nor does it entitle you to a share of the company’s net tangible assets. In fact, it does not directly entitle you to jack shit, other than the par value of the stock (usually 2 cents.) The stock may have powers or rights granted by the prospectus, the board of directors, or what have you, but none of these are inherent to common stock.
No. No. No. Only “revenue bonds” are guarranteed by the revenues of a specific property and thes are usually issued by municipalities. Nor is your second sentence necessarily true, as debt may be Secured, Senior, Subordinated, or floated without any recourse or guarrantees. The details are listed in the “indenture agreement,” which would be your source of reference for any specific sexurity.
Wow! How did you figure that out. Did you sound them out, and decide they sounded different, and from the fact that they are made from different letters and form different words did you somehow guess that they were different?
Congratulations. That’s the highest level of cogitation I’ve seen you demonstrate.
You now graduate to “Tapeworm” on the intellectual scale.
“Value” of course means lots of different things. Let us be professional and specific. When speaking of a bond we say “par value” which specifically means the face amount at which the bond matures. “Backing” can mean lots of things but in reference to bonds usually means how the company is intending to make good on the par value, and it is described in the indenture agreement.
No. It certainly does not. The value of said security depends on what people are willing to pay for it. That’s it. This can be influenced by many factors, most notably, the value of gold. Many a fool in the future’s market has thought as you do.
Untrue, you fucking dipshit. Many securities are specifically and explicitly backed by the issuing party’s ability to issue such securities.
Terms of indenture on bonds may require the issuer to issue new bonds to repay the old ones, if needed and may stipulate and qualify the further issuance of subordinated debt to preserve this backing from denigration. It is a most common thing. Oftentimes bonds are prerefunded. The terms and conditions of future issuance of securities are one of the most important factors in evaluating an issue.
You are so fucking wrong, that your stupidity is inconceivable. You should be ashamed of yourself for flaunting such flagrant ignorance, ashamed of yourself for pretending to have a clue what you are talking about and ashamed of yourself for performing such a poor masquerade.
[quote]
The value certainly is affected by peoples faith in the claims that the securities are backed by. E.g., if Scylla Inc issued bonds, people would value them on your likely capacity to earn enough revenue to repay them. They certainly wouldn’t say hey, Scylla’s bonds are backed by his ability to issue more of them, or a slightly different kind of them, or his ability to issue them prudently. That’s not really what backing means.
Goddam “quick reply”. I’ll fix it up.
What are the things that the US government recognises as money, and actually counts in its various definitions of “money supply”? What do the terms M1, M2, etc. mean, for instance? Pistachios aren’t in there. Deposits at banks are. The US government regards both as money. It doesn’t follow that just because you can readily exchange one of the things that is regarded as “money” for another of the things regarded as “money”, that one of those forms of money is in any meaningful way "backed " by the other. I still don’t think that you understand what money is.
Wanna rethink this answer? Do I really have to explain the concept of a bank loan? That when the bank lends you money, it usually because you don’t have “money in your account equal to the sum of the check, and that that has cleared your account and is available for withdrawal”?
The rest of your refutation is of equal value. That is, quite worthless.
Translation: watch me run away, real quick.
Bad wording there.
The US government regards both (money it created, and money the banks created) as money.
Wow, and I apologized for my personal attacks. You almost make me regret that, Scylla. Thanks for the hand-waving. You get any better and you might be able to make some bucks running three-card monte games downtown. Ultimately, you haven’t been very convincing that the trust fund go poof.
No. It translates to going on vacation.
M1 - cash on hand plus cash in demand deposits. M2 -M1 + savings accounts and money markets (which may include tbills held in money markets as these have a maturity of typically less than 90 days and are laddered in maturity so that they may be treated pari passeu as cash.) M3 - M2 + some large CDs and MM accounts sold to institutions.
I’m prettys sure the Fed doesn’t count pistachios as money, dopey.
Your personal stupidity is not an argument and my understanding is not predicated on your beleif, dipshit.
No. It’s correct.
That’s why you don’t get the check until they agree to lend you the money. How they secure they mortgage is between you and the bank.
Horses and water.