The Trump Economy

[TPS]

It was effectively zero for the 7 years after Lehman collapsed and inflation remained below the Fed's target.  

Unless low (or zero or negative!) interest rates stimulate borrowing to purchase real things, the answer will be NO.  Hell, there are negative interest rates in more and more European countries now!

[keepthefaith]

1 hour ago, Deranged Rhino said:

 

 

 

 

Oh Donald

[TH3]

2 hours ago, Deranged Rhino said:

 

 

 

 

DT is an idiot....and choose who trust his business acumen are just as stupid... 

 

I look at proposed bank loans all day.....the interest rates now are so low that borrowing costs have very little effect on proformas....lowering them another 50 basis points will have no affect on proposed or active supply side business propositions....

Edited August 14, 2019 by TH3

[GG]

3 hours ago, TPS said:

Speaking of bull####, you stated in a previous post, "My entire point is that not all countries are the SAME."  

Yet, you now claim that a theory that says "the US and Argentina are NOT the same" is bull####.  Interesting....

 

Of course not all countries are the same, but you still failed to provide a coherent explanation of why the countries are not the same, other than a throwaway line about developed countries having sophisticated financial markets.  You have the cause and effect reversed, which is expected from a belief that government "deficit spending" creates vibrant economic growth. 

 

So we're treated to a dissertation of arcane Fed accounting as if it's the reason that US$ is the global reserve currency and the Treasury is the reference zero-risk investment.  In reality, it's the longstanding adherence to the rule of law, protection of private interests and freedom from government interferences that creates the foundation for those sophisticated financial markets to survive and continue to attract investors from around the world.  It's not an accident that all other countries that serve as currency benchmarks exhibit the same layers of investor protection.   

 

The only reason that MMT can work is under the assumption that the US$ will continue to be the dominant global economic leader and the explosion of US national debt will be sustainable because other currencies and national debts will always be an inferior investment.  That is a stupid basis for a monetary theory.  For the theory to be proven, it has to be replicable in other situations.  You can't cherry pick the results of the best economies and call it a theory.  If the theory doesn't work for other sovereigns that issue currency and debt, then there's a flaw in the theory, because you're only selecting the countries where MMT works.  In reality, it's not MMT that's working, but investors' appetite for those countries' debt and currency.

 

Just because Japan is getting away with insane debt/GDP ratios now doesn't mean it's sustainable over generations.  Somebody, at some point will have to pay the bill.  If China ever loses the Communist yoke, you can kiss Japan's days as the Asian bellwether goodbye.

 

Funny how the biggest MMT proponents on the campaign trail will be the first ones to strip away the foundations of the US private economy.

[row_33]

Oh no, it’s down to 25,500!!!!

 

whooooo, end of the world right here

 

 

[plenzmd1]

5 hours ago, TH3 said:

Hey - If the stock market reverts over the next 12 months....at least DT can run on his bank of promises and claims made and kept: Wall built and Mexico paid for it✔️, budget balanced✔️, national debt paid off✔️, ACA repealed and replaced with something better ✔️ and ✔️, illegal immigration under control✔️, Korean peninsula denuclearized ✔️, opiate problem solved✔️, trade balance with China down✔️, NAFTA renegotiated and enacted ✔️, new trade deal with China✔️.

 

All than and gerrymandering taken care of✔️ - Russians rebuked and tamped down when it comes to election middling ✔️...

 

I mean that pretty much will make his win loss record 13-1

it is quite funny we are not quite seeing the Trump is God support right now in this thread.

 

BTW, i was going to make a thread similar to the "what have the Dems done" with a "what has Trump Accomplished" thread..you nailed it above!

[OldTimeAFLGuy]

2 hours ago, row_33 said:

Oh no, it’s down to 25,500!!!!

 

whooooo, end of the world right here

 

 

 

...perhaps based on the financial outlook for "The Clinton Foundation"?............

[ALF]

China will wait until after the 2020 election to deal the tariffs. 

[DC Tom]

31 minutes ago, ALF said:

China will wait until after the 2020 election to deal the tariffs. 

 

They hope.  

 

It's what they're obviously holding out for, but they should ask Hillary about the certainty of elections first...

[3rdnlng]

27 minutes ago, ALF said:

China will wait until after the 2020 election to deal the tariffs. 

China is in a pretty dicey situation. They would rather deal with any of the democrats than Trump after 2020. We hold the upper hand at present, but if Trump wins it will be even more so. China will be watching polls and  whatever to try to guess how that election is going to go and if it looks like Trump will win they won't be able to make a deal fast enough.

[Tiberius]

38 minutes ago, ALF said:

China will wait until after the 2020 election to deal the tariffs. 

Smart move. What choice do they have, Trump is a disaster that no one can deal with. He makes deals then watches Fox news and changes his mind because of something some right wing idiot says.

 

There is also the possibility that Trump has no clue at all about why free trade is so much better than protectionism. His tweets about tariffs indicate a deeply ignorant person. So what choice do Chinese have?

[TPS]

5 hours ago, GG said:

 

Of course not all countries are the same, but you still failed to provide a coherent explanation of why the countries are not the same, other than a throwaway line about developed countries having sophisticated financial markets.  You have the cause and effect reversed, which is expected from a belief that government "deficit spending" creates vibrant economic growth. 

This is the basic premise of MMT: A country that issues debt in its own currency can always pay off its debt--there is no financing constraint.  The constraint on using fiscal policy in this way is inflation. The institutional differences (regarding capital and labor markets, financial structure, and exchange rate regime) in countries impact the ability to use fiscal policy "financed" using the relationship between its central bank and- private banks.  Since Argentina issues debt in USD, it faces a constraint from investors in the FX market.  This is at least the third time I've said this to you--all countries are not the same. 

I have never said that deficits create vibrant growth, but I have said all deficits are not the same.  Deficits created from lower tax revenues during a recession are not the same as deficits created from supply-side policies during expansions. In the latter case, assuming levels of private spending are constant, Larger deficits will promote faster growth, just as they did in 2018. It is really matter of basic math: if you inject more spending into an economy than you are taking out in taxes, then demand and growth tend to rise (again, assuming no change in private spending).  In addition, what you spend on or who gets the tax cuts matter on the impact.

 

5 hours ago, GG said:

 

So we're treated to a dissertation of arcane Fed accounting as if it's the reason that US$ is the global reserve currency and the Treasury is the reference zero-risk investment.  In reality, it's the longstanding adherence to the rule of law, protection of private interests and freedom from government interferences that creates the foundation for those sophisticated financial markets to survive and continue to attract investors from around the world.  It's not an accident that all other countries that serve as currency benchmarks exhibit the same layers of investor protection.   

Having the reserve currency doesn't hurt, but it's not a necessary requirement.  Again, The constraint on using fiscal policy is its impact on inflation. If you don't have both excess capital and labor, any attempt to raise demand via deficits (financed by the central bank) will raise inflation. Kind of like what is happening in ARgentina.

 

5 hours ago, GG said:

The only reason that MMT can work is under the assumption that the US$ will continue to be the dominant global economic leader and the explosion of US national debt will be sustainable because other currencies and national debts will always be an inferior investment.  That is a stupid basis for a monetary theory.  For the theory to be proven, it has to be replicable in other situations.  You can't cherry pick the results of the best economies and call it a theory.  If the theory doesn't work for other sovereigns that issue currency and debt, then there's a flaw in the theory, because you're only selecting the countries where MMT works.  In reality, it's not MMT that's working, but investors' appetite for those countries' debt and currency.

 

Just because Japan is getting away with insane debt/GDP ratios now doesn't mean it's sustainable over generations.  Somebody, at some point will have to pay the bill.  If China ever loses the Communist yoke, you can kiss Japan's days as the Asian bellwether goodbye.

So you say it has to be replicable, then you reference Japan and use the same critique that people have been saying about US debt--some day....some day..

You say it's investor appetite, but half of Japan's debt is held by the BoJ, which is the point of MMT.  If its central bank holds more debt than the size of the economy, why isn't there any inflation?   All you have to say is...."some day.....there will be a day of reckoning.... some day....." 

There are quite a few countries that issue debt in the currency they control and maintain a floating exchange rate; all of these have the ability to "use MMT" like the US and Japan currently do.  However, the extent that they can "finance deficits" via their central banks is constrained by inflation. And, since ALL countries ARE different, their fiscal policy inflation constraints will be different.  

 

5 hours ago, GG said:

 

Funny how the biggest MMT proponents on the campaign trail will be the first ones to strip away the foundations of the US private economy.

Yes, we should all be very afraid of socialists who push policies that support the working class....We really should remain the only advanced country without universal healthcare because we are unique...

 

[row_33]

2 hours ago, OldTimeAFLGuy said:

 

...perhaps based on the financial outlook for "The Clinton Foundation"?............

 

Great day to buy tomorrow 

[row_33]

Still a 10 percent gain for the year to date

[SlimShady'sSpaceForce]

Doe down another 200 yesterday 

 

In the last month  -  25,479.42 ▼ 800.49 (3.05%)

 

Anyone else see a worrying trend?  

 

Stock market sinks on growing recession fears - CBS News

https://www.cbsnews.com/news/stock-market-today-drops-on-recession-fears-yield-curve...

21 hours ago · Stock market sinks on growing recession fears. Updated on: August 14, 2019 / 1:21 PM / CBS/AP Stocks drop over recession concerns . U.S. stocks …

Bank stocks take a beating as inverted yield curve fuels ...

https://www.marketwatch.com/story/bank-stocks-take-a-beating-as-inverted-yield-curve...

Aug 14, 2019 · Bank stocks take a beating as inverted yield curve fuels recession fears By Tomi Kilgore. ... as Citigroup’s stock led the banks lower. ... triggering bond-market recession indicator.

[SlimShady'sSpaceForce]

 

 

Trump just acknowledged that tariffs are paid by Americans, footwear trade group CEO says                         

 

https://www.yahoo.com/finance/news/footwear-distributors-retailers-america-trump-delay-tariffs-211032604.html

 

 

Well,  that is what the headline reads 

[SoCal Deek]

22 minutes ago, ShadyBillsFan said:

 

 

Trump just acknowledged that tariffs are paid by Americans, footwear trade group CEO says                         

 

https://www.yahoo.com/finance/news/footwear-distributors-retailers-america-trump-delay-tariffs-211032604.html

 

 

Well,  that is what the headline reads 

The concept is a simple one. If you want to buy stuff cheap you have to buy stuff from people who make stuff with cheap labor. Unfortunately that means you can’t make stuff in America. So you either lower your standard of living or pay more for some stuff. There’s no magic wand! Got it?

[Buffalo_Gal]

I'm not certain why people need a 15th TV set. It isn't as if Nikes are cheaper being made with sweatshop labor rather than New England union labor. And some of this stuff should be tariffed out the wazoo even if it makes things more expensive simply so the USA has more plants producing (steel, a rare earth plant, etc) for national security reasons.

I don't mind the tariffs with China. At all. I'd rather pay more to keep an American job in place than more in taxes for the government to pay people not to work because their jobs got shipped overseas . But hey, to each his own.
 

Edited August 15, 2019 by Buffalo_Gal

[GG]

I'll stick to using football analogies

 

11 hours ago, TPS said:

This is the basic premise of MMT: A country that issues debt in its own currency can always pay off its debt--there is no financing constraint.  The constraint on using fiscal policy in this way is inflation. The institutional differences (regarding capital and labor markets, financial structure, and exchange rate regime) in countries impact the ability to use fiscal policy "financed" using the relationship between its central bank and- private banks.  Since Argentina issues debt in USD, it faces a constraint from investors in the FX market.  This is at least the third time I've said this to you--all countries are not the same. 

 

It's like saying I'll take any quarterback for my team, as long as his name is Tom Brady, Aaron Rodgers or Drew Brees.

 

You haven't addressed the fundamental reason WHY countries are different and why the markets use different standards for the countries.  The entire point of countries' inability to issue debt in its currency is the lack of investor acceptance of its paper.  That's why MMT is a cockamaimie theory, because it self-selects countries that are the reference currencies.  MMT doesn't address the situation if those currencies fall out of investors' favor.   

 

It's like designing mortgage backed securities with the assumption that real estate values across the entire US would not fall more than 10%.  Just because it's rarely happened before, doesn't mean the probability is zero. 

 

MMT simply ignores that inconvenience.  If MMT was true, Argentina would simply issue more pesos, just like Mexico had to issue more pesos and devalued its currency in the '90s.  Do MMT proponents put George Soros's gambit against BOE into the deep memory banks?  How could one investment fund bring a developed country's central bank to its knees?  

 

Quote

I have never said that deficits create vibrant growth, but I have said all deficits are not the same.  Deficits created from lower tax revenues during a recession are not the same as deficits created from supply-side policies during expansions. In the latter case, assuming levels of private spending are constant, Larger deficits will promote faster growth, just as they did in 2018. It is really matter of basic math: if you inject more spending into an economy than you are taking out in taxes, then demand and growth tend to rise (again, assuming no change in private spending).  In addition, what you spend on or who gets the tax cuts matter on the impact.

 

Again with the supposition that deficits promote faster growth.  Yeah, it's not the private sector left to its own devices, but government running a deficit that's responsible.

 

It's like saying that the Bills defense promotes other teams to score points.

 

Quote

Having the reserve currency doesn't hurt, but it's not a necessary requirement.  Again, The constraint on using fiscal policy is its impact on inflation. If you don't have both excess capital and labor, any attempt to raise demand via deficits (financed by the central bank) will raise inflation. Kind of like what is happening in ARgentina.

 

So you say it has to be replicable, then you reference Japan and use the same critique that people have been saying about US debt--some day....some day..

You say it's investor appetite, but half of Japan's debt is held by the BoJ, which is the point of MMT.  If its central bank holds more debt than the size of the economy, why isn't there any inflation?   All you have to say is...."some day.....there will be a day of reckoning.... some day....." 

There are quite a few countries that issue debt in the currency they control and maintain a floating exchange rate; all of these have the ability to "use MMT" like the US and Japan currently do.  However, the extent that they can "finance deficits" via their central banks is constrained by inflation. And, since ALL countries ARE different, their fiscal policy inflation constraints will be different.  

 

And you still haven't explained (or admitted) the root cause of why second & third world countries lack access to capital.  Hint, what's consistent across the reference currency countries?  Why is Yen free floating, but Yuan is pegged, despite having a larger economy?

 

As always, you have cause and effect reversed.

 

Yes, some day!!  You cannot outrun fundamentals.  Japan's finances will be in deep ***** if China takes a more capitalist turn.

 

That's why conservatives are arguing the technical merits of loose policy and leftists are pointing to past history as if it's destined to continue indefinitely.   

 

At some point even Tom Brady will get old.

 

Quote

Yes, we should all be very afraid of socialists who push policies that support the working class....We really should remain the only advanced country without universal healthcare because we are unique...

 

What can possibly go wrong when you nationalize private enterprises worth trillions?  Let's try an experiment of forcing a national economic plan from a central government.  And because short-term thinking of corporate boards is bad for the workers, let's put in rolling 5-year plans!!   Forward!

[3rdnlng]

Just now, Buffalo_Gal said:

I'm not certain why people need a 15th TV set. It isn't as if Nikes are cheaper being made with sweatshop labor rather than New England union labor. And some of this stuff should be tarrifed out the wazoo even if it makes things more expensive simply so the USA has more plants producing (steel, a rare earth plant, etc) for national security concerns.

I don't mind the tariffs with China. At all. I'd rather pay more to keep an American job in place than more in taxes for the government to pay people not to work because their jobs got shipped overseas . But hey, to each his own.

China gets tariffs thrown at them so they devalue their currency to make their product more competitive. Then they cut off purchasing our agricultural products in return. So, we sell our soybeans to Canada and they resell them to China.