2012 Election Paul Ryan vs Obama Healthcare Policy

[deleted103644]

I understand what a log curve is, and the reason I wouldnt use it is because it hides the nature of the exponential increase and makes it look like everything is steady and stable, which is clearly not.

If you accept that the money supply should grow exponentially than why dont you just buy gold, since as shown from the graphs when you increase the money supply it devalues the dollar and causes the price of gold and other commodities to increase. Though I dont see how the two rounds of quantitiave easing by the federal reserve that injected more than $1 trillion dollars in such a short span (take a look at the bumb around 2008, u can actually see it in both graphs) accounts for population growth.


You claim my examples are fringe and anecdotal, though I showed you a website of someone recording their prices as the years have gone by. Many people I have talked to have noticed an increase when shopping for groceries. Though it would be hard to notice since the changes in cents is very little for example, can of beans going from 70 cents to 77 cents or milk going from 3.5 to 3.8. Do you truly believe that guy just made up those numbers on his blog and Im just lying to you about my own experiences?

You may continue to believe in this delusion that food prices are stable or going down, but most people know whats going on.

I didn't say food prices were stable, that's kind of the whole point in leaving it out of inflation measures (lots of fluctuations due to the cost of oil and crop yields).

Food prices are actually going down relative to a couple of years ago, and have been swinging wildly up and down over the last decade.

Your examples are still anecdotal (you and your acquaintances) and fringe (a random guy's blog - also sounds anecdotal).

And I don't buy gold because it is overvalued. There are better things to buy that keep pace with inflation (or generally do much better). (I do have some gold in my portfolio for diversification, but it's a very small percentage.)

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[0phthalmologist]

Oph. You just don't get it. Your blogs are ridiculous. They're akin to your patients who come in and say that going to the chiropractor to help with their eye problems because they read a blog where a lot of people experienced relief after beginning chiropractic therapy. It's the definition of anecdotal because of the small sample size and no control over confounding variables.

Gold is over priced right now. Why would you buy it?

I think you spend too much time on right-wing-hack-economists sites/radio. Apply the same rigor to your understanding of economics as you do medicine and you'll realize how ridiculous you're being - non-academic/non-professional web sties are not proof of USD inflation.

I've noticed that anytime you're challenged you apply a conspiracy argument rather than evidence to support for your argument. Why do you do that?

EDIT: Read more on QE. I think you're confusing it with direct stimulus. I'm basing this off your assumptions of QE on the money supply & inflation.

I have already shown plently of evidence through charts showing the increase in M2, the drop in the value of the dollar and the price of gold. Your example of a chiropractor and eye disease doesnt make sense, since no one has to have a degree to realize that prices in grocery stores are going up.

I am not confusing direct stimulus with QE. QE has increases the money supply, maybe you should read about it. http://en.wikipedia.org/wiki/Quantitative_easing

Everytime a round of QE has been announced the price of commodities like gold have skyrocketed. Right now most economists are sitting in anticipation of QE3 wondering when it will happen, the federal reserve is having its FOMC meeting mid september. If another around is announced the USD will fall and commodity prices will increase. This is because the QE is when the central bank buys treasuries and assests, and they can only do this with the creation of credit.

Here is how the fed balance sheet has been effected by QE. You can also take a look a the M2 supply at the same dates.

Luckily the reason inflation isnt as bad as it could be is because most of the money is still in the banks, but everytime the fed announces rounds of easing the market takes note and the USD looses value causing a rise in commodities.

You can choose to believe politicians and "academics", but common sense tells you that when your groceries and gas prices are inversely moving the value of the USD and the central bank is printing a lot of money you should realized the truth.

 

[0phthalmologist]

I didn't say food prices were stable, that's kind of the whole point in leaving it out of inflation measures (lots of fluctuations due to the cost of oil and crop yields).

Food prices are actually going down relative to a couple of years ago, and have been swinging wildly up and down over the last decade.

Your examples are still anecdotal (you and your acquaintances) and fringe (a random guy's blog - also sounds anecdotal).

And I don't buy gold because it is overvalued. There are better things to buy that keep pace with inflation (or generally do much better). (I do have some gold in my portfolio for diversification, but it's a very small percentage.)

Again the classic argument on why food and energy should be excluded from inflation calculations. Sure the prices fluctuate, but the over all trend is up. But ofcourse it is beneficial for those in control to omit what most people buy day to day to give the illusion that overall prices are stable. But those who are living on fixed incomes and notice these increases in groceries are suffering.

As an inflation hedge I honestly cant think of anything better than gold, it went from $300 an ounce to $1600 an ounce in the last decade. Its movement has been inverse to the increase in M2 and its spikes in prices have corresponded with the announcment of quantative easing rounds by our central bank.

 

[deleted103644]

Even if you believe what you are saying, gold is overpriced.

Here is a graph of gold/M2 showing gold clearly falling off a recent peak.

Here is the same for gold/M1 (since it goes further back):

EDIT: Here's both in one graph.

 

[0phthalmologist]

Even if you believe what you are saying, gold is overpriced.

Here is a graph of gold/M2 showing gold clearly falling off a recent peak.

Here is the same for gold/M1 (since it goes further back):

EDIT: Here's both in one graph.

And this is why someone could make the arguement that gold was in a bubble in the 1980s, or that people simply bought because of fear. But you need to take a closer look at what the prices were. Gold prices were $800 at around that peak in the 80s and now its over $1600. The rises in the price currently is due to easing policies by our central bank. How do I know this? Because every time the federal reserve has launched a round of quantitative easing the price of gold has skyrocketed. If you type in "qe3 gold" in google news there are tons of articles talking about whats going to happen if another round is announced in mid sept at the fomc meeting. This is because the creation of credit will lead to a weaker dollar and increase in commodities like food or gold. Here is a chart showing the history of gold in the last 50 years. Gold like all commodities is influenced by human emotion which can lead to sharp prices, but there is an underlying factor that effects it and other commodities and that is the strength of the curreny that they are denominated in, in this case the USD. This was agreed upon after WII when the price of gold was pegged to the dollar at $25/ ounce called the brenton woods agreement. Of course price fixing doesnt work and here we are at $1600 an ounce.

 

[yappy]

The last thing you said about QE was spot on. I will also add that inflation can be controlled by taking money out of the economy. There is means to do that too. QE is useful so we do not end up like japan during the 1990's.

You can choose to believe politicians and "academics", but common sense tells you that when your groceries and gas prices are inversely moving the value of the USD and the central bank is printing a lot of money you should realized the truth.

 

[DOC PENGUIN]

And this is why someone could make the arguement that gold was in a bubble in the 1980s, or that people simply bought because of fear. But you need to take a closer look at what the prices were. Gold prices were $800 at around that peak in the 80s and now its over $1600. The rises in the price currently is due to easing policies by our central bank. How do I know this? Because every time the federal reserve has launched a round of quantitative easing the price of gold has skyrocketed. If you type in "qe3 gold" in google news there are tons of articles talking about whats going to happen if another round is announced in mid sept at the fomc meeting. This is because the creation of credit will lead to a weaker dollar and increase in commodities like food or gold. Here is a chart showing the history of gold in the last 50 years. Gold like all commodities is influenced by human emotion which can lead to sharp prices, but there is an underlying factor that effects it and other commodities and that is the strength of the curreny that they are denominated in, in this case the USD. This was agreed upon after WII when the price of gold was pegged to the dollar at $25/ ounce called the brenton woods agreement. Of course price fixing doesnt work and here we are at $1600 an ounce.

Does it help that the reason why the USD is the world reserve currency was because of the 35-Gold Peg.

 

[deleted103644]

See, this is why you can't leave goldbugs alone in an abandoned thread. They reproduce.

Where's my shoe?

 

[DOC PENGUIN]

Oph. You just don't get it. Your blogs are ridiculous. They're akin to your patients who come in and say that going to the chiropractor to help with their eye problems because they read a blog where a lot of people experienced relief after beginning chiropractic therapy. It's the definition of anecdotal because of the small sample size and no control over confounding variables.

Gold is over priced right now. Why would you buy it?

I think you spend too much time on right-wing-hack-economists sites/radio. Apply the same rigor to your understanding of economics as you do medicine and you'll realize how ridiculous you're being - non-academic/non-professional web sties are not proof of USD inflation.

I've noticed that anytime you're challenged you apply a conspiracy argument rather than evidence to support for your argument. Why do you do that?

EDIT: Read more on QE. I think you're confusing it with direct stimulus. I'm basing this off your assumptions of QE on the money supply & inflation.

Why are the hacks always right-wing and why do you think Krugman is a good economist(i assume, he is but not as good as people might think he is)? Do you remember him saying 9/11 would be good for the economy? And if ww2 brought us out of the depression, Should not the afghanistan and iraq war bring us out? This stems from Bastiat's (a liberal) broken window fallacy where a boy is stimulating the economy by breaking the baker's window. The baker has to then pay for that window when he could have bought a new suit. Never mind about that, Ron Paul is also a kook despite having the same foreign policy views as most liberals. I agree, most austrian economists SOUND superficial, brosciency and hack. But most of them are from sensible mainstream universities. Ron Paul is a OBGYN from Duke (1961) Tom Woods is a History Ph.D from Columbia (2002) and Robert P Murphy (a more sensible and mainstream person is from NYU)

 

[DOC PENGUIN]

See, this is why you can't leave goldbugs alone in an abandoned thread. They reproduce.

Where's my shoe?

I am not a goldbug. I am a silver guy.

I have a simple question: What will happen when the USD is no longer the world reserve currency?

 

[deleted103644]

I am not a goldbug. I am a silver guy.

I have a simple question: What will happen when the USD is no longer the world reserve currency?

Haha, well that's at least a bit saner. Silver is overpriced too I believe, but not as insanely. Still, don't buy bullion unless you're a Saudi prince.

What are they going to replace it with, cheese?

The euro was a contender for a bit, but that's done.

What else is there? Japan, China, and Russia aren't going to do it either.

 

[DOC PENGUIN]

Haha, well that's at least a bit saner. Silver is overpriced too I believe, but not as insanely. Still, don't buy bullion unless you're a Saudi prince.

What are they going to replace it with, cheese?

The euro was a contender for a bit, but that's done.

What else is there? Japan, China, and Russia aren't going to do it either.

China is definitely going to do the **** outta it. In fact, they are doing it. Why not, they are the fastest growing economy, underground free market if you align with the state. Japan is dead. Russia is growing and is becoming a superpower. America ain't what it used to be.

Yes, the Euro is the textbook example of government failure.

 

[deleted103644]

China is definitely going to do the **** outta it. In fact, they are doing it. Why not, they are the fastest growing economy, underground free market if you align with the state. Japan is dead. Russia is growing and is becoming a superpower. America ain't what it used to be.

Yes, the Euro is the textbook example of government failure.

China is slowing down rather dramatically and is probably in a recession or depression right now (although they'd never admit it). You also really shouldn't trust their official numbers - not only do the leaders lie to the world about their economy, but the local guys lie to the leaders. They go as far as turning on the electricity in empty factories to fool people looking at energy consumption as a sign of economic activity.

Not to mention the disastrous effects of the one child policy on China's demographics - they are not a serious threat in the near or long term.

 

[DOC PENGUIN]

China is slowing down rather dramatically and is probably in a recession or depression right now (although they'd never admit it). You also really shouldn't trust their official numbers - not only do the leaders lie to the world about their economy, but the local guys lie to the leaders. They go as far as turning on the electricity in empty factories to fool people looking at energy consumption as a sign of economic activity.

Not to mention the disastrous effects of the one child policy on China's demographics - they are not a serious threat in the near or long term.

Agreed, slightly. Like how cubans lie about infant mortality rates or how infant mortality is different everywhere. Or how we use all available technology to save something thats gonna die. Like I said, The American dollar is not as strong or as popular as we think it is. Before the whole Euro Crises, People were thinking of replacing it with a basket of currencies.

 

[deleted103644]

Agreed, slightly. Like how cubans lie about infant mortality rates or how infant mortality is different everywhere. Or how we use all available technology to save something thats gonna die. Like I said, The American dollar is not as strong or as popular as we think it is. Before the whole Euro Crises, People were thinking of replacing it with a basket of currencies.

Haha, they were thinking of replacing it with the Euro. That's still going to happen.

The dollar is fine, there are actually benefits to a weakening dollar, eg it makes our labor and manufacturing more competitive.

 

[NickNaylor]

What are they going to replace it with, cheese?

I think this is pretty much the point. The US is the financial "safe haven" that it is despite many, many things pointing to the contrary only because there are no other alternatives and there MUST be a safe haven SOMEWHERE (right?!). That sounds like a pretty dangerous and unsustainable situation to me. The dollar isn't going to collapse anytime soon, but I think people will jump ship as soon as there's another viable option barring SIGNIFICANT reform in the US government's fiscal situation. Fortunately it looks like the Eurozone took itself out of contention, but there are certainly plenty of other up-and-coming options.

Investors aren't stupid. They see the writing on the wall in the US - political paralysis, a financial cluster****, and a populace that has absolutely no interest in reforming the situation (similar to Greece with respect to cultural attitudes at least). It's only a matter of time.

 

[deleted103644]

Except for one problem with your analysis - we can sell treasury bonds for almost no interest.

If investors were worried about our ability to pay our debts, this would not be the case (see Greece, Spain, France, even Germany).

 

[DOC PENGUIN]

Except for one problem with your analysis - we can sell treasury bonds for almost no interest.

If investors were worried about our ability to pay our debts, this would not be the case (see Greece, Spain, France, even Germany).

How is that a good solution/situation.

 

[MOHS_01]

Wheres MOHS when you need him.

Not wasting his time in the Allopathic forum, fo' sho'....

 

[cbrons]

Why do most people think of them as brosciency *******es. I mean the modern ones are (unless it is Ron Paul, Robert P Murphy and Tom Woods.) In olden days, it was the accepted fact (Menger's time.) A lot of Austrian Economist helped with Rebuilding West Germany. Hayek and Mises were world renown and Mises taught in progressive NYU! Hayek was a lover of Psychology and wrote philosophy. Hayek is also a british figure. Today's austrians aren't as world renown or loved. The closest one is Milton Friedman.

Milton Friedman? He was not an Austrian. Modern-day Austrians are people like Dr. Walter Block, Dr. Thomas DiLorenzo, Dr. Bob Murphy... even Ron Paul. Probably the most well-known Austrian is Peter Schiff, famous for this video predicting the housing bubble (watch as he is laughed at by Reagan's former secretary of the treasury, Art Laffer):

[youtube]2I0QN-FYkpw[/youtube]

(Come to think of it, I'm sure Dr. johnnydrama wouldn't mind Art Laffer being embarrassed in the above video, so that's a recommendation to you as well sir).

Except for one problem with your analysis - we can sell treasury bonds for almost no interest.

If investors were worried about our ability to pay our debts, this would not be the case (see Greece, Spain, France, even Germany).

Except what happens when the federal reserve raises interest rates? Do you think a near 0 federal funds rate coupled with round after round of quantitative easing is sustainable for the indefinite future? (a 3rd round "just initiated" in September - of course this was predicted by austrian economists since the first round, namely that the Fed would not stop at round 1, 2, or 3, since all would produce temporary, lackluster results).

The fact of the matter is, our creditors should be very concerned about our ability repay them. And unlike the Japanese, who have survived over a decade of low interest rates, we Americans don't even own our own debt, nor do we produce anything of value to the world economy (in contrast, the Japanese hold their own debt and are one of the world largest exporter nations). We are the basketcase, the caboose, the horses ass of the world economy.

I spend a little too much time on SDN sociopolitical posts lately, so I better get back to my books. I'll just leave an Austrian commenting on the Fed going all-in with the newest round of quantitative easing (pretty hilarious if you ask me):

[youtube]LS879r7xeLc[/youtube]

 

[deleted103644]

Milton Friedman? He was not an Austrian. Modern-day Austrians are people like Dr. Walter Block, Dr. Thomas DiLorenzo, Dr. Bob Murphy... even Ron Paul. Probably the most well-known Austrian is Peter Schiff, famous for this video predicting the housing bubble (watch as he is laughed at by Reagan's former secretary of the treasury, Art Laffer):

[youtube]2I0QN-FYkpw[/youtube]

(Come to think of it, I'm sure Dr. johnnydrama wouldn't mind Art Laffer being embarrassed in the above video, so that's a recommendation to you as well sir).

Speaking of being embarrassed... I'm glad you picked Schiff as the prime example of an Austrian, Nutmeg dismissed him when I gave an example of how badly his "model" has failed: http://krugman.blogs.nytimes.com/2011/12/15/inflation-predictions/

Glenn Beck, 2009:

PAYNE: So, where are you then, Peter, with respect to inflation? Do you think this is going to be the big story of 2010?

SCHIFF: You know, look, I know inflation is going to get worse in 2010. Whether it's going to run out of control or it's going to take until 2011 or 2012, but I know we're going to have a major currency crisis coming soon. It's going to dwarf the financial crisis and it's going to send consumer prices absolutely ballistic, as well as interest rates and unemployment.

PAYNE: And what does that mean? For people watching this show, what does that mean for the average American?

SCHIFF: It means their life is going to get a lot more difficult. It means things that they need to buy, things like food and energy, are going to be much more expensive. Ultimately, interest rates are going to rise and their entire standard of living is going to plunge.

And I'm hoping the government doesn't respond to this inflation with price controls because that's going to make it even worse. Now, you're going to be waiting in long lines to get basic food items or to get energy because there's going to be shortages. People might be going to the black market.

PAYNE: You're talking you're talking Zimbabwe, Weimar, Germany — I mean, you're really talking about something like that actually happening in this country.

SCHIFF: It will happen if we don't change policies. There is still time to change.

PAYNE: Right.

SCHIFF: I mean, I'm running for the United States Senate, so I can try to change that myself. But if we don't reverse course, if we continue to stimulate, then we will end up with hyperinflation and it will be like Zimbabwe.

Except what happens when the federal reserve raises interest rates? Do you think a near 0 federal funds rate coupled with round after round of quantitative easing is sustainable for the indefinite future? (a 3rd round "just initiated" in September - of course this was predicted by austrian economists since the first round, namely that the Fed would not stop at round 1, 2, or 3, since all would produce temporary, lackluster results).

The fact of the matter is, our creditors should be very concerned about our ability repay them. And unlike the Japanese, who have survived over a decade of low interest rates, we Americans don't even own our own debt, nor do we produce anything of value to the world economy (in contrast, the Japanese hold their own debt and are one of the world largest exporter nations). We are the basketcase, the caboose, the horses ass of the world economy.

I spend a little too much time on SDN sociopolitical posts lately, so I better get back to my books. I'll just leave an Austrian commenting on the Fed going all-in with the newest round of quantitative easing (pretty hilarious if you ask me):

[youtube]LS879r7xeLc[/youtube]

We do actually own most of our own debt (majority of it is held domestically), and the only clear measurement of the market's opinion of our debt is the price of short and long term treasuries. Right now, we can still give those away with almost no expected yield - this would not happen if people expected us to default anytime soon.

We can't keep rates at zero forever, but we need to keep them low until the economy recovers. QE is a way of pushing long term rates lower since short term rates are already about as low as they can go.

Direct stimulus would be better, but is politically impossible. No one is predicting QE will be massively effective, but clearly those predicting hyperinflation post-QE are massively wrong.

Admittedly Schiff still has 2.5 months for us to turn into the Weimar Republic, but we're obviously not there yet.

And no, inflation of 4-5% would not be bad in our current environment.