Are we headed for a crack-up boom?

[laughing dog]

If you want to dispute the numbers, provide some evidence.

Evidence of what? You made a claim with "math" but have yet to produce the math or even jot of evidence to support your claims. In fact, I showed your math was based on a confusion of real with nominal. Then you handwaved off that correction as if it is trivial when minimally doubled the revenues. Sorry, you have provided nothing to show that your fears are reality-based.

The claim that I have been predicting doom for years is a misrepresentation of what I have said. What I said before Obama was re-elected is that we would have another downturn that would be worse than 2008, and that it would occur during the next presidential term which now means Obama's second term. So I suppose you could say I've been predicting doom for years, but that was time frame in which my prediction was cast. So far I have not been proven wrong. We still have over a year and half to go. But if it should happen two years from now, I would still have to say that my prediction was pretty close.

No, you have been predicting doom before Obama was President. You have been predicting large inflation. And you have not come close at all in any of those predictions, mainly because you assume the worst case scenario regardless of its probability.

 

[boneyard bill]

Evidence of what? You made a claim with "math" but have yet to produce the math or even jot of evidence to support your claims. In fact, I showed your math was based on a confusion of real with nominal. Then you handwaved off that correction as if it is trivial when minimally doubled the revenues. Sorry, you have provided nothing to show that your fears are reality-based.

The claim that I have been predicting doom for years is a misrepresentation of what I have said. What I said before Obama was re-elected is that we would have another downturn that would be worse than 2008, and that it would occur during the next presidential term which now means Obama's second term. So I suppose you could say I've been predicting doom for years, but that was time frame in which my prediction was cast. So far I have not been proven wrong. We still have over a year and half to go. But if it should happen two years from now, I would still have to say that my prediction was pretty close.

No, you have been predicting doom before Obama was President. You have been predicting large inflation. And you have not come close at all in any of those predictions, mainly because you assume the worst case scenario regardless of its probability.

I have already responded to these points, most of them many times.

 

[laughing dog]

Evidence of what? You made a claim with "math" but have yet to produce the math or even jot of evidence to support your claims. In fact, I showed your math was based on a confusion of real with nominal. Then you handwaved off that correction as if it is trivial when minimally doubled the revenues. Sorry, you have provided nothing to show that your fears are reality-based.
No, you have been predicting doom before Obama was President. You have been predicting large inflation. And you have not come close at all in any of those predictions, mainly because you assume the worst case scenario regardless of its probability.

I have already responded to these points, most of them many times.

Like your responses here, they have been long on handwaved assertions and short of reality-based contents. For example, you have yet to show any "math" other than a number (which was wrong) in your "analysis. Your many economic predictions have failed to materialize in a timely manner. So, there really is no reason for anyone to take your claims seriously without either some actual "math" or accurate predictions.

 

[bilby]

If a nation state can afford to service its debts, then whether or not it will ever completely pay back its debts is completely irrelevant.

Nation states don't die of old age; they don't become unfit to work due to age; they don't get sick and die.

All of the reasons why it is vital for a person to pay back the capital on his debts, and not just the interest, simply do not apply to nation states.

The USA is at no risk whatsoever from a debt disaster. One might be engineered at some point in the future, by stupidity; but it won't arise spontaneously from the continuation of the status quo.

It is far more likely that gold will suffer a collapse of confidence, and become valueless than it is that the greenback will do the same; however neither is really likely, as both are self supporting - they have value because we all agree that they have value; and unilateral disagreement is expensive.

Who ever said we have to pay back our debts? The question is how long will the world agree that the dollar has value? Why are they no longer buying our debt. The last figure I heard was that the Fed was purchasing 70% of the new US debt. China is slowly selling off her US Treasuries. Does that suggest that she has confidence in the dollar? Does it really show that "we all agree" that the dollar has value? I don't think so.

China has also reached swap agreements with many other countries and so have other countries reached swap agreements with each other to avoid using the dollar in bi-lateral trade. China has also set up a CHIPS system for clearing currency to compete with the US SWIFT system. There are lots of things going on that are enabling many of our trading partners to conduct business without the dollar. Why are the doing this? Why are they doing it now? Why not 20 years ago? You don't suppose it could signal a loss of confidence in the dollar do you?

As usual, you have the cart before the horse.

One of the major policies right now is to try to get money flowing in the economy by making the return on US Treasury bonds (which are very safe) low, so that the returns on (relatively) more risky investment in the larger economy becomes attractive.

People not buying US Government bonds is a feature of the current policy, not a bug.

Whether nations with currencies other then the US$ use dollars for trade or not is completely irrelevant to the value of, or confidence in, the US$. It is a technique for making the sums nice and easy; it is becoming less relevant as transfers become more automated. 20 years ago, physical payment had to travel from one country to another, with inevitable delays that could lead to problems for contracts denominated in multiple currencies; so the US$ was a convenient stable 'peg' to hang such trades upon. Electronic transfers happen fast enough for this to be irrelevant.

The changes don't signal a loss of confidence in the dollar; just a rise in confidence in modern electronic banking systems. They may seem 'old hat' to you, but to large swathes of the world, trusting computers rather than physical pieces of paper is a very new idea.

 

[boneyard bill]

Who ever said we have to pay back our debts? The question is how long will the world agree that the dollar has value? Why are they no longer buying our debt. The last figure I heard was that the Fed was purchasing 70% of the new US debt. China is slowly selling off her US Treasuries. Does that suggest that she has confidence in the dollar? Does it really show that "we all agree" that the dollar has value? I don't think so.

China has also reached swap agreements with many other countries and so have other countries reached swap agreements with each other to avoid using the dollar in bi-lateral trade. China has also set up a CHIPS system for clearing currency to compete with the US SWIFT system. There are lots of things going on that are enabling many of our trading partners to conduct business without the dollar. Why are the doing this? Why are they doing it now? Why not 20 years ago? You don't suppose it could signal a loss of confidence in the dollar do you?

As usual, you have the cart before the horse.

One of the major policies right now is to try to get money flowing in the economy by making the return on US Treasury bonds (which are very safe) low, so that the returns on (relatively) more risky investment in the larger economy becomes attractive.

People not buying US Government bonds is a feature of the current policy, not a bug.

Whether nations with currencies other then the US$ use dollars for trade or not is completely irrelevant to the value of, or confidence in, the US$. It is a technique for making the sums nice and easy; it is becoming less relevant as transfers become more automated. 20 years ago, physical payment had to travel from one country to another, with inevitable delays that could lead to problems for contracts denominated in multiple currencies; so the US$ was a convenient stable 'peg' to hang such trades upon. Electronic transfers happen fast enough for this to be irrelevant.

The changes don't signal a loss of confidence in the dollar; just a rise in confidence in modern electronic banking systems. They may seem 'old hat' to you, but to large swathes of the world, trusting computers rather than physical pieces of paper is a very new idea.

I can't make any sense out of the first half of your post. Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

 

[bilby]

As usual, you have the cart before the horse.

One of the major policies right now is to try to get money flowing in the economy by making the return on US Treasury bonds (which are very safe) low, so that the returns on (relatively) more risky investment in the larger economy becomes attractive.

People not buying US Government bonds is a feature of the current policy, not a bug.

Whether nations with currencies other then the US$ use dollars for trade or not is completely irrelevant to the value of, or confidence in, the US$. It is a technique for making the sums nice and easy; it is becoming less relevant as transfers become more automated. 20 years ago, physical payment had to travel from one country to another, with inevitable delays that could lead to problems for contracts denominated in multiple currencies; so the US$ was a convenient stable 'peg' to hang such trades upon. Electronic transfers happen fast enough for this to be irrelevant.

The changes don't signal a loss of confidence in the dollar; just a rise in confidence in modern electronic banking systems. They may seem 'old hat' to you, but to large swathes of the world, trusting computers rather than physical pieces of paper is a very new idea.

I can't make any sense out of the first half of your post.

That doesn't surprise me at all.

Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

But as your only 'evidence' that this is going to occur is a short term reduction in the holdings of Treasuries that happens to be coincident with a concerted effort to keep yields low, and thereby make such investments less attractive, you actually have no reason whatever to think this is a plausible scenario.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

Sure. As long as everyone involved has total trust in the banks, that could work.

If you can't see why that might not always be the case, then I can't help you.

 

[boneyard bill]

I can't make any sense out of the first half of your post.

That doesn't surprise me at all.

Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

But as your only 'evidence' that this is going to occur is a short term reduction in the holdings of Treasuries that happens to be coincident with a concerted effort to keep yields low, and thereby make such investments less attractive, you actually have no reason whatever to think this is a plausible scenario.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

Sure. As long as everyone involved has total trust in the banks, that could work.

If you can't see why that might not always be the case, then I can't help you.

Why don't you study a little economics before posting here.

The reduction in holdings isn't the important point. No is buying any. US citizens can't buy them because the savings rate is this country nearly zero. So foreigners have to buy then and they are not.

All currency transactions go through banks. Whether they are dollars or other currencies they still use banks. You can't avoid it. It's not about trusting the banks. There's no other option.

 

[bilby]

That doesn't surprise me at all.

Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

But as your only 'evidence' that this is going to occur is a short term reduction in the holdings of Treasuries that happens to be coincident with a concerted effort to keep yields low, and thereby make such investments less attractive, you actually have no reason whatever to think this is a plausible scenario.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

Sure. As long as everyone involved has total trust in the banks, that could work.

If you can't see why that might not always be the case, then I can't help you.

Why don't you study a little economics before posting here.

Why should I be the only one??

The reduction in holdings isn't the important point. No is buying any. US citizens can't buy them because the savings rate is this country nearly zero. So foreigners have to buy then and they are not.

All currency transactions go through banks. Whether they are dollars or other currencies they still use banks. You can't avoid it. It's not about trusting the banks. There's no other option.

Don't be silly. If I give you an Australian $20 bill, and you give me a US $20 in return, that's a currency transaction. I don't see a bank in that scenario; would you care to point it out?

 

[laughing dog]

Why don't you study a little economics before posting here.

Why should I be the only one??

I wonder why someone assumed that "study" = "learn". Did you?

 

[boneyard bill]

That doesn't surprise me at all.

Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

But as your only 'evidence' that this is going to occur is a short term reduction in the holdings of Treasuries that happens to be coincident with a concerted effort to keep yields low, and thereby make such investments less attractive, you actually have no reason whatever to think this is a plausible scenario.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

Sure. As long as everyone involved has total trust in the banks, that could work.

If you can't see why that might not always be the case, then I can't help you.

Why don't you study a little economics before posting here.

Why should I be the only one??

The reduction in holdings isn't the important point. No is buying any. US citizens can't buy them because the savings rate is this country nearly zero. So foreigners have to buy then and they are not.

All currency transactions go through banks. Whether they are dollars or other currencies they still use banks. You can't avoid it. It's not about trusting the banks. There's no other option.

Don't be silly. If I give you an Australian $20 bill, and you give me a US $20 in return, that's a currency transaction. I don't see a bank in that scenario; would you care to point it out?

You're probably not the only one who should study some economics. I just suggested that because of inaccurate statements that you made.

Of course, individuals can exchange currencies but the in larger scheme of things that is trivial and would be extremely inefficient. I suppose you want to quibble over the term "all." That's the kind of thing laughing dog does all the time.

 

[bilby]

That doesn't surprise me at all.

Regarding the second part, you seem to be unaware that approximately half of all dollars are held overseas. If people quit using them the dollar will fall precipitously relative to other currencies. Of course, those dollars are mostly kept in US Treasuries. So it make a really big difference if people decide not to hold treasuries.

But as your only 'evidence' that this is going to occur is a short term reduction in the holdings of Treasuries that happens to be coincident with a concerted effort to keep yields low, and thereby make such investments less attractive, you actually have no reason whatever to think this is a plausible scenario.

The new currency swap arrangements have nothing to do with electronic availability. All you have to do is designate certain banks with each country to handle the transactions. I could be done easily without electronic transfers and certainly could have been done 20 years ago.

Sure. As long as everyone involved has total trust in the banks, that could work.

If you can't see why that might not always be the case, then I can't help you.

Why don't you study a little economics before posting here.

Why should I be the only one??

The reduction in holdings isn't the important point. No is buying any. US citizens can't buy them because the savings rate is this country nearly zero. So foreigners have to buy then and they are not.

All currency transactions go through banks. Whether they are dollars or other currencies they still use banks. You can't avoid it. It's not about trusting the banks. There's no other option.

Don't be silly. If I give you an Australian $20 bill, and you give me a US $20 in return, that's a currency transaction. I don't see a bank in that scenario; would you care to point it out?

You're probably not the only one who should study some economics. I just suggested that because of inaccurate statements that you made.

Of course, individuals can exchange currencies but the in larger scheme of things that is trivial and would be extremely inefficient. I suppose you want to quibble over the term "all." That's the kind of thing laughing dog does all the time.

Banks can act as 'bureaux de change', but that's not their core business.

Any transaction can be expressed in $US, for convenience; but that's not important to the stability or value of the greenback. Most US dollars exist only as numbers in a computer, or on a piece of paper; storing bullion or paper banknotes is no longer a major function of a bank either.

Banks exist to consolidate short term loans, and convert them into long term loans. That's what they are for; that's the service for which we pay them. By doing this, they enable the generation of new money, and more importantly, they enable investment in real goods and services for real people.

Faith in a particular currency is irrelevant to the global business of doing business; There is no reason for the US$ to collapse, but if it did, people would switch to other fiat currencies, and life would go on.

 

[laughing dog]

You're probably not the only one who should study some economics. I just suggested that because of inaccurate statements that you made.

It is more preferable to learn some economics. Given the numerous inaccurate statements in this thread alone you have made, perhaps you should take your own advice.