What will Kamalanomics look like?

[Gadianton]

As you know I was against these shutdown measures from the start...

And there it is. In your haste to bill "money printing" as the sole component of inflation, you completely forgot that you used to argue that shutdowns had something to do with it. As it turns out, when you chided me about believing in "supply chain issues", you had forgotten about the shutdowns, and so you were also chiding your former self who used to talk nonstop about lockdowns, which cause supply chain problems. Since you used to blame shutdowns entirely on the left (even though the facts don't support it) why would you suddenly dismiss your former talking point? what happened?

I have a theory. Feel free to chime in as it involves your own psychology.

You didn't realize it at the time, as you're not incredibly forward thinking and live in the moment, because if lockdowns ruined the economy, then you can blame democrats all you want for it, but it doesn't bode catastrophic for the future unless we have another pandemic. Subconsciously, your attention became drawn to theories of inflation that Harris can exploit independent of world events. You'd have a tough time selling Harris is going to create a fake pandemic just to initiate lockdowns to cause inflation because Democrats love economic mayhem for its own sake to anybody but 97% of registered Republican voters. It's much more realistic that she would simply print lots of money to fund new government programs to help the poor. And so with the discovery of the talking point by the leftist journalist, your tunnel vision ditched everything your former self ever believed except this one thing, because it's the most plausible scenario you can think of for Harris ruining the economy. In other words, because you need a reason to fear Harris' economic plan, you invented the most plausible scenario you could think for her to ruin everything, and then retrofitted that into the Biden administration as the cause for all of our present ills, so that you can then use it to predict the next four years under Harris. The circularity is astounding.

How did he burn a trillion dollars? Dumb it down for me a little. Who in the president's cabinet orders money to be printed? Is he actually printing cash on a printer or is it on some electronic file?

How did he "print" a trillion dollars? If you think Joe Biden or any democrat personally prints money, then why isn't it just as obvious that Joe and the democrats can burn money? Here's the thing, Ajax, no registered Republican who has ever visited this forum knows what they mean when they say that Democrats are "printing money". You've been told this by Fox news and complete idiots like that Prager guy, without having any understanding of what the words could possibly mean.

The best I can do to dumb it down since you are so committed to not learning things: I was looking at a graph of M2 over time. If M2 goes up, then in our simple world that must mean money was printed. What else would account for it in your world, Ajax? So what does it mean when M2 goes down? M2 went down under Biden. That must mean he either burned it or hid it or something. Right?

[Vēritās]

That black line is the growth rate of M2, and the red line is the inflation rate. So despite all the alleged "money printing" Biden has done in the last four years, the M2 growth rate as of July is --- wait for it --- zero percent. lol.

Ok let me try to be more respectful. Let me ask you this. In your opinion did we print $6 trillion or not?

And why does the steak I used to buy for $20 now cost $50 in your opinion?

Assuming you're telling the truth, this is price gouging at a restaurant sounds like it. But you're flat out lying if you're saying beef costs have jumped 150% across the board. I've been buying Ribeye steaks around $19 per pound for as long as I can remember and I think now they're around $23. Brazilian Picanha I bought yesterday at Costco for $7.49 per pound, which is up from the $6.99 pre-Pandemic.

https://www.in2013dollars.com/Beef-and- ... 4?amount=1

You and your MAGA cult just lives to lie about the dumbest crap huh?

[Vēritās]

, 99.96% of us weren't impacted by COVID.

That’s a great way to hide 1,170,000 dead people. Bravo.

All of us were impacted by COVID. It would be inhuman not to have been, but such is the nature of today's Neo-Nazi Republican fascist party. It blows my mind that there are still people out there stupid enough to believe COVID was just a minor thing that never required mitigation measures because it only affected people with preexisting issues. This is such a lie. People were dying from COVID left and right with no known preexisting issues. The virus was scary as hell because nobody could understand why it would kill this person but have no effect on the next person, or why some people would get it and show no symptoms and then spread it to someone else who would die from it.

[Vēritās]

In your opinion did we print $6 trillion or not?

Not. This is a common myth usually propagated by right wing morons, but only when they want to complain about government spending under Democrat administrations:

Myth #3: The Federal Reserve “prints money”.

The Fed really doesn’t “print money” in the way most people have come to think of it. Most of the money in our monetary system exists because banks created it through the loan creation process. The primary form of money the Fed creates is due to the process of notes, coin and reserve creation (which are distributed through the banking system in exchange for deposits/bonds and issued by the Fed and the Treasury). These forms of money, however, exist to facilitate the use of bank accounts. That is, they’re not issued directly to consumers, but rather are distributed through the banking system as bank customers need these forms of money usually by exchanging an existing asset for the new asset. For instance, when you take money out of the ATM you are swapping a bank deposit with a Federal Reserve Note. Similarly, when the Fed implements a policy like QE they are swapping reserves for T-bonds.

This myth is mostly due to misunderstandings of Federal Reserve policy and its relationship to Fiscal policy. In a technical sense, the Treasury prints money-like instruments when it runs a deficit. They expand private sector balance sheets by creating Treasury Bonds. They could, theoretically, fund their spending by printing physical cash. This would also be money printing. The Fed, however, is really just a big clearinghouse for banks. They create reserves, which are money for banks, and that money expansion doesn’t necessarily cause private sector financial asset quantities to increase. In other words, the Fed is mostly engaging in the process of changing the composition of the assets the Treasury creates (via policies like QE) while the Treasury is the actual asset printing entity in an aggregate sense.

[Physics Guy]

Most of the money in our monetary system exists because banks created it through the loan creation process.

I didn't understand this until the first time I borrowed money from a bank, to buy a car.

I went to a bank officer and asked for a loan. The guy approved me and my checking account at the bank suddenly went up by $5000. I wrote a check and bought a good used car. But it dawned on me: there hadn't been time for that loan officer to go around to the bank's other depositors and collect a hundred bucks from fifty of them, or whatever, in order to make up my five grand.

That new $5K in my account wasn't taken from anyone else's deposits. It didn't come from any big pile of gold in the vaults. It simply and literally came out of nowhere. The bank just made it up.

It balanced because at the same time that my checking balance went up, I acquired a second account, for my loan, which was negative. This was all just numbers on the books in the bank, though. In fact by then it was all just electrons. No fresh gold had been mined. No new notes had been printed. But there were five thousand new dollars out there circulating around in the economy, used by the guy who sold me my car to buy groceries and whatever, and then used by the merchants who sold stuff to him to buy stock and pay staff, who then bought more stuff with their pay, and so on.

I had to repay the loan (and I did). That was all in the future at that point, however. The bank created five thousand new dollars from nothing, by loaning that money to me.

This was no scandal. It wasn't a perverse exception. It's the cornerstone of any modern economy. Money is not a fixed amount of gold coins that can only be transferred. It gets created by banks, all the time. That's really how the world works.

[Gadianton]

That new $5K in my account wasn't taken from anyone else's deposits. It didn't come from any big pile of gold in the vaults. It simply and literally came out of nowhere. The bank just made it up.

You may appreciate this more than Ajax, but the amount of money that can be invented is a function of the required reserve ratio: 1/r.

If banks are required to hold 10% in reserves, then that means a 100$ loan over some amount of time can and might create up to 1000$, which is added to the money supply. So the most powerful tool in existence to control the money supply, which I don't believe is used very often (money creation has gone through some overhauls since I was in school), is the required reserve ratio.

That 100$ is lent to somebody who buys something and then the seller puts that 100$ in the bank. The bank can lend 90$ of that to the next person, and 90$ eventually comes back as a deposit.

If Ajax really, really wants to know how money is burned, well, one way to burn money is to pay back a loan. Think of the example where person A borrows, buys from person B who deposits, and then person C borrows against the fresh reserve. Suppose it creates the theoretical 1000$. Suppose persons A-Z all performed this activity by noon on the same day. Suppose they all have second thoughts that day and pay back their loans in full by closing time.

So when M2 shrunk under Biden, it could be due to loan repayments of some kind. It would be interesting to see what economists propose as the reasons for that shrinkage -- I have no guess, to be honest. But how funny it would be if savers were outpacing spenders. During the pandemic I saw a lot of brand-new jacked up trucks with flags and F-biden stickers; they've got to go for between 70k and 100k. I know during that time I split any extra money I had between paying off my mortgage and investing.

[ajax18]

If Ajax really, really wants to know how money is burned, well, one way to burn money is to pay back a loan. Think of the example where person A borrows, buys from person B who deposits, and then person C borrows against the fresh reserve. Suppose it creates the theoretical 1000$. Suppose persons A-Z all performed this activity by noon on the same day. Suppose they all have second thoughts that day and pay back their loans in full by closing time.

Thank you for explaining this. I honestly didn't know the details.

[ajax18]

I had to repay the loan (and I did).

First thanks for your explanation. It was enlightening.

Is there a critical point where enough people file for bankruptcy that will capsize the system? Is there a limit to the number of bankruptcy cases judges are allowed to approve? It seemed during the 90s that a lot of people were filing for bankruptcy. One family did it three times in a 10 year period. They never had to give anything back but they did get their name in the newspaper. In your opinion is it a lot harder to file for bankruptcy and walk away from your debts now?

Were people who got PPI loans during COVID all paying them back? What is money really worth if it's just a electrons in a computer with no real goods or labor attached to it? One OD left wing friend I have in Los Angeles got a $500k PPI loan during the scamdemic since he didn't work and didn't earn much and sales were way down. I'm not sure how he even paid his rent or even property taxes in an area like that.

[Gadianton]

Thank you for explaining this. I honestly didn't know the details.

If you learned at least something, then you can return the favor by recommending a dry-eye medication (or other fix). Not for me, but someone I'm responsible for. Steroids work wonders and then its good for quite a while. The longer-term less risky treatment stop working altogether and seem to make the problem worse. Obviously, every situation is different, but if you've heard of something that in general works better for people than other things, it's worth looking into.

Perhaps it will be something tried or something that will not work, but I'm just interested in further options to read about, and you never know. Yes, doctors have been consulted and prescriptions filled, but you know how it is, by the numbers, and without much else to go by.

[Gadianton]

No fresh gold had been mined

Suppose an asteroid appeared within reach and it was filled with rare metals, including gold. If what I read a while back was right, a total of about 4 Olympic swimming pools have ever been mined on earth. An asteroid could hold quite a lot. What would happen to the world economy? Is gold a good or a bad?