ghostdog

My theory, and I have no more information than just an above average drunk in a bar. With a BG. Hopefully way more above average than I am drunk, but I am pretty drunk. The business community is not freaking. Wall Street hasn't been freaking. Your stocks did good this week, right? What that tells you is that the fix is in. The pols are playing their games. There will be something at the last minute. Coming from the Senate. That gives the tea-baggers in the House a butt-covering face saver. The deal will kick the can down the road till after 2012. If and when Wall Street starts to freak, the Repugs will fold like an accordion. But they are betting that Oprah will fold first. Or it could go bad. Then, the only hope is that Oprah could go 14th amendment on their ass, but he doesn't have the balls. Then we are all fucked.

It is hard to predict about the debt ceiling. The Republicans seemed to have forgotten who they work for. These people so far have been mum. But maybe they know the fix is in, and that is why they are mum. You know, people sitting on piles of cash can wait for interest rates to go to the moon. Then they can buy bonds real cheap. If and when the dust settles, they will make buttloads of money. Or... I saw a blogger liken this to game of chicken, like in the movie Rebel Without a Cause. The guy in the driver's seat, House Speaker John Boner, knows the game and also knows the other guys riding in the car don't have their facts right. But the guy riding shot-gun in the GOP car, - the one who believes the car can fly — is trying to put his foot on top of Boner’s on the gas pedal.

if you are looking for stocks, be careful, I just saw this: http://www.bloomberg.com/news/2011-07-05/underwater-rare-earths-mining-economically-unviable-cfr-says.html?cmpid=yhoo

Yes, CS, on the stimulus part, I agree 100%.

I can find no source stating ARRA had anything to do with Bush. TARP was signed by Bush. Obama, Bidden, and McCain voted for it in the Senate. TARP and ARRA are not the same thing.

On ARRA: There were spending, tax cuts (about 1/3 of it) and money transfered to the states which they normally would have spent anyway if they would have had the own money. The tax cuts were largely saved, convincingly exposing the saw "tax cuts = new jobs" as a lie. Consumers didn't spend their tax cuts because they had to repair their balance sheets. With resulting lack of demand, businesses just put theirs in the bank. Look at the data. These are facts. Obama's policies of cutting taxes did not work. Based on the gap between the economic capacity and actual GDP, the stimulus should have been twice as large and it should not have been wasted on tax cuts.

Cavanami, you are really bad at math. BKKtraveller, not sure your point. Of course the price of gold has to be fixed by the government; otherwise it wouldn't be a gold standard. But there still are supply/demand pressures that are set by the market. The government also would have to have someone defend that exchange rate too. Even If you had currency made of gold, it could just evaporate if gold was suddenly in demand. You know how those boner pills warn against having a boner longer than 4 hours. Suppose they could make a boner pill that made it ok for your boner to last 4 hours, and you could also come every 20 minutes. But the manufacturing process required 1 ounce of gold per pill, and to recover the spent gold (from the patient’s urine), it would cost $20,000 an ounce, (a give new meaning to the word golden shower). All of a sudden, the demand for gold would go up, and the only way for whatever government agency is replacing the fed to defend the dollar is to steeply raise interest rates, making the dollar more valuable for investors to hold. Of course, to pay their lenders this high interest rate, they have to charge higher interest rates to the borrowers. The economy will tank. I hope this example demonstrates the point.

No, I have not answered that because I haven’t tried to. I have been stating why Ron Paul is a bad idea, and presented facts to support that. In the broader picture, there is no guarantee that having a president that meets your ideal of NOT being beholden to special interests would come up with a good policy. Or even if they did, be able to get it passed. However, I don’t think that your number one problem is anything new. I think when one reads US history in any detail, this is the way it has always been, starting with the Washington administration. I don’t think all problems stem from that one, nor is it my number one concern. This problem pales in the problems future generations are going to have to face regarding energy sources, increased population, and climate change. For these days, it has been said elsewhere by others, but I cannot improve on it: Cut corporate welfare. Cut the defense budget. Taxes go back to Clinton levels. Support the strong unions that created a middle class in the first place. Build infrastructure. Take the profit out of health care.

Of course, the price of gold, it can only go up! So why did the fed let the money supply decline? Wikipedia (so it must be true) has the answer One reason why the Federal Reserve did not act to limit the decline of the money supply was regulation. At that time, the amount of credit the Federal Reserve could issue was limited by the Federal Reserve Act, which required 40% gold backing of Federal Reserve Notes issued. By the late 1920s, the Federal Reserve had almost hit the limit of allowable credit that could be backed by the gold in its possession. This credit was in the form of Federal Reserve demand notes. A "promise of gold" is not as good as "gold in the hand", particularly when they only had enough gold to cover 40% of the Federal Reserve Notes outstanding. During the bank panics a portion of those demand notes were redeemed for Federal Reserve gold. Since the Federal Reserve had hit its limit on allowable credit, any reduction in gold in its vaults had to be accompanied by a greater reduction in credit. On April 5, 1933, President Roosevelt signed Executive Order 6102 making the private ownership of gold certificates, coins and bullion illegal, reducing the pressure on Federal Reserve gold

Nor did I say it did. What I said was that in the Great Depression, the gold standard made it worse because it limited what could be done to expand the monetary base, and also that countries that went off it did better sooner than those that didn’t. OTOH, the 1987 crash turned out to be a minor blip (on the broader scale of the economy) because the Fed was free to pump liquidity as it saw fit. I saw an analysis written in the mid 90s that noted at that time, gold had a 1000% increase in price since it was let to float in 1971; whereas the DOW goes up 700% and consumer prices 250%. Do the math on the deflation that would have to occur if you had to keep the price of gold from rising. Ron Paul appears to think deflation is good. You might think deflation is good if you are sitting on piles of cash, but if you run a business where you have to borrow to replenish your inventory, when you sell it, you are getting back less than you put in. So it is contractionary. There are other scenarios: suppose you are on the gold standard and another country with a big economy such as China or Germany goes on it (or off it). More pressures on the supply/demand of gold that your economy has nothing to do with. BTW, Germany did that with silver and that is considered to be a cause of the Panic of 1878, which was very severe. I remember seeing Paul respond to a question on corporate fraud, but his answer dodged the question. His response might have had true statements, but they had little to do with the question. In other words, he is a typical politician. Plus his ideology brings the worst of the 19th century. Remember how companies would not pay their workers in money, but in company script. Would this be an outcome from Paul’s ideas on competition of currency? As I understand this and other statements he has made, it would sanction this. Maybe he is just dumb and hasn’t thought it out?

Jaegermeister? That is worse than the LM laws in LOS!

I always found Mark Halperin to be a dick. That does it, I will have to be off the board indefinitely.....

But the fact that Paul considers it a good thing is telling. He is not to be taken seriously. It also is wrong to say it is WORSE since we left it. History says otherwise. So when we had the gold standard (or silver backed currency) do you mean to say we had no recessions, panics, or depressions? There were bad ones. The Great Depression happened on the gold standard's watch. Hoover had to raise interest rates and taxes to cover the gold standard, which was the last thing that was needed in a deflationary economy. The quicker the countries got off the gold standard, the better they fared. The fact is, gold is just a commodity, its price is subject to many pressures not related to a nation's economy. It can put deflationary pressures on an economy that would shut it down.

Then make Paul head of homeland security. As for the Gold Standard, so because you perceive montary policy as sucking, you will turn to something which already has been shown by historical precedent to really fuck things up. Gold is a commodity. Like every other commodity, its price goes up and down for a wide variety of reasons.

No, the Gold Standard is absolutely retarded, as medieval as leeches and blood letting. Look at the history of the early parts of the Great Depression. One of the best arguments against it is here, from a Republican: http://www.cnn.com/2010/OPINION/02/22/frum.ron.paul.gold/ But what you said about the Gold Standard points to what both Obama and Romney can do better than Paul, and I am sure the same with Booker: Get things passed in Congress. I think if you are a Senator or Congressman and you want to stop the agenda of the POTUS, the best thing you want is a true believer. The ACA is not what I wanted to see, but it probably is the best that can be done with the reality on the ground. It at least moves the bar.