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Thread: Loan Penetration by Banks destroys home ownership rates worldwide.

  1. #31
    Quote Originally Posted by Krugminator2 View Post
    Buying Treasuries does create demand and demand for a bond means a lower yield. So it is technically incorrect to say the Fed has no effect on interest rates but it is a very good approximation of reality. The effect is not as simple as more buying equals lower yield. More buying could = higher yields in some scenarios. If more buying is inflationary and raises nominal GDP then yields would rise.

    Nominal GDP growth is the most important part of interest rates. It is productivity growth + population growth +inflation. So when meathead above says interest rates should be 12% in a free market it makes no sense. Nominal GDP growth has been 4% with a super active pumping money in. Why would interest rates ever be 8% higher than nominal GDP growth?
    Also the Fed isn't just another buyer, they're a buyer who wants to overpay. And let's not forget all the other central banks buying us treasuries. Do you own any long term us treasuries? You simply can't use long term treasuries rates as a predictor of coming inflation.

    And if you want to use nominal gdp as a predictor I'd argue you need to use actual inflation (fed's balance sheet) not the CPI. Actual inflation increased by 100% over the last year.

    As I've said many times, if printing money did not cause a proportional increase in prices we could all stay home and let the govt send us checks.

    Which makes more sense?

    1. Printing money causes a proportional increase in prices, but there can potentially be a long delay.

    2. Printing money does not cause a proportional increase in prices, even over time.
    Last edited by Madison320; 06-22-2021 at 08:34 AM.



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  3. #32
    Quote Originally Posted by Warrior_of_Freedom View Post
    property tax almost $900 a month here, renting my own house
    It's not even your own house, in most of the country, you don't own alloidal deed.

    I realize this statement gets into the weeds of legality, and there's a big difference between owning a home
    in an Unincorporated "community" or a sovereign City/Town, however.. the Federal government surely does ACT like it owns us
    and all the land. That is, those who own the Federal Government direct it to act in said manner.

    Congressman James Traficant speech before Congress, 1993:

    https://duckduckgo.com/?q=James+Traf...&t=ffcm&ia=web



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  5. #33
    Quote Originally Posted by Madison320 View Post

    And if you want to use nominal gdp as a predictor I'd argue you need to use actual inflation (fed's balance sheet) not the CPI. Actual inflation increased by 100% over the last year.
    Money that doesn't get circulated isn't going to push prices up. The last 12 years have settled this. No 4 zillion percent inflation despite 4 zillion percent growth in monetary base.

    As I've said many times, if printing money did not cause a proportional increase in prices we could all stay home and let the govt send us checks.
    Writing checks puts money into circulation causing higher prices. Money sitting on the balance of a bank that doesn't get lent does not cause higher prices. If that money never gets lent, inflation never happens. The same Federal Reserve actions that caused increases in the money supply can be reversed.

    Which makes more sense?

    1. Printing money causes a proportional increase in prices, but there can potentially be a long delay.

    2. Printing money does not cause a proportional increase in prices, even over time.
    Neither makes sense. Increases in money in circulation adjusting for population and productivity growth will roughly match the inflation rate. Doesn't take 10 years for this happen.



    Quote Originally Posted by Madison320 View Post
    Do you really think in a free market private individuals would be loaning the US govt money for 10 years at 1.5%? It's not even remotely possible.
    The Interest Rate Fallacy

    Initially, higher monetary growth would reduce short-term interest rates even further. As the economy revives, however, interest rates would start to rise. That is the standard pattern and explains why it is so misleading to judge monetary policy by interest rates. Low interest rates are generally a sign that money has been tight, as in Japan; high interest rates, that money has been easy.

    Japan's recent experience of three years of near zero economic growth is an eerie, if less dramatic, replay of the great contraction in the United States. The Fed permitted the quantity of money to decline by one-third from 1929 to 1933, just as the Bank of Japan permitted monetary growth to be low or negative in recent years. The monetary collapse was far greater in the United States than in Japan, which is why the economic collapse was far more severe. The United States revived when monetary growth resumed, as Japan will.

    The Fed pointed to low interest rates as evidence that it was following an easy money policy and never mentioned the quantity of money. The governor of the Bank of Japan, in a speech on June 27, 1997, referred to the "drastic monetary measures" that the bank took in 1995 as evidence of "the easy stance of monetary policy." He too did not mention the quantity of money. Judged by the discount rate, which was reduced from 1.75 percent to 0.5 percent, the measures were drastic. Judged by monetary growth, they were too little too late, raising monetary growth from 1.5 percent a year in the prior three and a half years to only 3.25 percent in the next two and a half.

    After the U.S. experience during the Great Depression, and after inflation and rising interest rates in the 1970s and disinflation and falling interest rates in the 1980s, I thought the fallacy of identifying tight money with high interest rates and easy money with low interest rates was dead. Apparently, old fallacies never die.
    https://www.hoover.org/research/reviving-japan
    Last edited by Krugminator2; 06-22-2021 at 06:15 PM.

  6. #34
    Quote Originally Posted by Krugminator2 View Post
    Money that doesn't get circulated isn't going to push prices up. The last 12 years have settled this. No 4 zillion percent inflation despite 4 zillion percent growth in monetary base.

    Writing checks puts money into circulation causing higher prices. Money sitting on the balance of a bank that doesn't get lent does not cause higher prices. If that money never gets lent, inflation never happens. The same Federal Reserve actions that caused increases in the money supply can be reversed.



    Neither makes sense. Increases in money in circulation adjusting for population and productivity growth will roughly match the inflation rate. Doesn't take 10 years for this happen.

    https://www.hoover.org/research/reviving-japan
    Money sitting in a bank reserve WILL ALWAYS eventually get spent. No one hoards money if it can't be spent. Basically you are explaining the lag in prices. And don't forget that fact that stock prices have gone up 400+% since we started printing. You can't tell me those companies got 400% more productive.

    Yes, the Fed can contract the money supply, however if they do that the US will default on it's debt, and we'll have a depression far worse than the great depression.

    For every Japan I give you Zimbabwe, Argentina, Germany, Italy, Colombia, Venezuela, Chile and hundreds of other examples.

    The only thing I have no idea about is how long will the price increase lag will last, since we are the world's reserve currency it could take a long time. If it takes long enough then in practical terms I'd be wrong. But I'm still doing really well with my investments and I have the comfort of knowing I'll do even better if prices take off.

  7. #35
    Quote Originally Posted by Madison320 View Post
    Money sitting in a bank reserve WILL ALWAYS eventually get spent. No one hoards money if it can't be spent.
    The Fed has an ingenious solution to that: IOER.

    Eventually the money in reserve will be spent. But I think the banks know that if they touch even a dime of it, it's going to trigger the other banks to do the same. From a game theory perspective things have been in a Nash equilibrium for a while, with banks just taking advantage of the IOER and not touching their reserves.

    If interest rates continue to rise however, that equilibrium will break, and when it does, yup, that money's getting spent hard. Bring on the hyper inflation at that point.
    It's all about taking action and not being lazy. So you do the work, whether it's fitness or whatever. It's about getting up, motivating yourself and just doing it.
    - Kim Kardashian

    Donald Trump / Crenshaw 2024!!!!

    My pronouns are he/him/his

  8. #36
    Quote Originally Posted by TheTexan View Post
    The Fed has an ingenious solution to that: IOER.

    Eventually the money in reserve will be spent. But I think the banks know that if they touch even a dime of it, it's going to trigger the other banks to do the same. From a game theory perspective things have been in a Nash equilibrium for a while, with banks just taking advantage of the IOER and not touching their reserves.

    If interest rates continue to rise however, that equilibrium will break, and when it does, yup, that money's getting spent hard. Bring on the hyper inflation at that point.
    Doesn't the Fed only pay like .5% on those excess reserves? I can't figure out why the banks keep doing that.

    I always go back to the simplest argument: If it's possible to print money and not cause a proportional increase in prices we can literally all stay home and let the govt send us a check.

  9. #37
    Quote Originally Posted by Madison320 View Post
    Doesn't the Fed only pay like .5% on those excess reserves? I can't figure out why the banks keep doing that.

    I always go back to the simplest argument: If it's possible to print money and not cause a proportional increase in prices we can literally all stay home and let the govt send us a check.

    I have given the same response about six times about why that isn't the case. But I will try a seventh time but use an economist who has gotten everything right the last 11 years. Writing people a check is permanent. Swapping a Treasury for cash is viewed as temporary.

    Consider:
    1. Interest rates are 7.8% on T-bills. The Fed suddenly doubles the monetary base, and simultaneously announces the money will be withdrawn from circulation two weeks later.

    2. Tomorrow Janet Yellen announces that the monetary base will be doubled, IOR will be eliminated, and the Fed will maintain the enlarged base even after it exits the liquidity trap in a few years.


    In case one the price level doesn’t change. In case two the price level doubles (or more if you include the QE already done.)

    It’s clear from these two examples that the real issue is not zero rates; it’s the difference between temporary and permanent currency injections.

    https://www.themoneyillusion.com/qe-...rks-in-theory/
    Last edited by Krugminator2; 07-03-2021 at 03:19 PM.

  10. #38
    Quote Originally Posted by Krugminator2 View Post
    I have given the same response about six times about why that isn't the case. But I will try a seventh time but use an economist who has gotten everything right the last 11 years. Writing people a check is permanent. Swapping a Treasury for cash is viewed as temporary.

    https://www.themoneyillusion.com/qe-...rks-in-theory/

    And for the 7th time, how can anyone possibly think that QE is temporary? The economy is addicted to QE and will collapse if the Fed tried to remove it. Didn't you learn this after QE1, 2 and 3? They were only able to get it down from 4.5 trillion to 3.9 trillion before everything started to fall apart. Now it's over 8 trillion.


    https://www.federalreserve.gov/monet...centtrends.htm

    Even if the Fed tried to sell all of its assets it wouldn't come close to getting rid of it's balance sheet since by definition it massively overpaid for the assets it bought.

    I'll make a bet with you. I'll bet the balance sheet hits 10 trillion before it hits 6 trillion.

  11. #39
    Quote Originally Posted by susano View Post
    If that happens it will drop prices somewhat but it won't change corporations buying up residential housing.
    Very few posters here understand how different financial realities are, operationally, and the changes that have occurred in the last decade, or so. This is one reason why they are still attached to antiquated and misapplied economic ideologies which work against themselves, against the 99%, and therefore, support and maintain the tyranny which they claim to abhor. It is complicated yet simple to understand how this all happened, and what makes it the new reality.

    The new reality is that AI and algos, along with ultra-high-speed (fractions of a second) monetary transactions are fully digitized, fully under the control and administration of the new elites, and unlimited in their applications. Virtually every stumbling block set up against them, legislative or administrative by the government, has been removed, whether by practice or protocol.

    This is how assets, after they are acquired en masse, are maintained. This is why there doesn't ever have to be another crash, or severe correction, because there is no longer real markets in the new financial world. It is a controlled, managed, and policy-driven exchange where parties participate according to price action which has literally nothing to do with their own transactions anymore. There is no price discovery. There is only price marking. This is done by the operatons of the Fed and its tentacle banks, and its daughter corporations, which exist also in private equity, family offices, and multinational institutions, foundations, and even in the black markets which are connected to cryptocurrency and organized crime.

    The encompassing plan is unfolding before our eyes. It is institutionalizing tyranny, politically, militarily, and financially; indeed, it IS finance and capitalism that has driven all the changes, because true capitalism is a game that has already ended. The game is over. You literally cannot play the game any longer. The only player is the bank. This bank distrubutes rewards according to its own interior preferences. It distributes capital to its own members exclusively. The members are all part of a secret group that is given monies from the bank in order to acquire other corporations and assets which are not yet owned by the bank. The bank has unlimited buying power, and its operations are independent of political control. What the bank does is strip political power away from the citizenry by use of the faulty and antiquated laws that are the foundations of Western societies, and the number one is representative government. By influencing representative government, a "capture" occurs, where the system itself is captured, and no longer do the people possess sovereignty.

    As the popular sovereignty evaporates, the capitalist cabal who are the very fount of capital itself (instead of labor) endlessly produce more capital through usury and automated currency depreciation, which does not hurt them, because their tap is endless, and cannot therefore depreciate as long as their capital is legal tender. In cases where it is not legal tender, such as in foreign countries, as long as there are global financial exchanges, the capital may be transformed into the legal tender required. This gives the bank a chameleon-like nature, which operates everywhere in the world, except for that small number of countries which actively and institutionally resist and criminalize the bank. Countries which do this are the targets of smear campaigns, coups, military occupations, assassinations, and culture wars, meant to whether by hard or soft power, ultimately assimiliate the country into the bank's partnership.

    Statistics prove that, as the bank expands, whether in name or by other countries aligning with cooperative structures that support and condone similar ideologies and financial markets where the bank's capital is not restricted by government, as government is the only power capable of retarding the bank's super-shadow government, what occurs is that the wealth disparity accelerates far beyond what is naturally possible. It becomes permanent, and without actual confiscation of accumulated, concentrated wealth, can never, ever be reduced. The democratic masses consent, cognizantly or not, to their own slavery. Giving up on actual participation in the capitalist system (a game that already ended), their only concern is to beg the bank for inclusion so that their needs may be met. This makes them chattel of the bank, and the bank appoints shepherds in the political realm which manage the dissemination of capital to them, so that opposition to the bank is thwarted.

    Loan capital destroys home ownership rates. Mortgages drive asset inflation, dependency on the bank and its markets, asset concentration, and, for the corrupted government officials, higher taxation and increased power, since these shepherds are in a position where the enslaved majority must beg them for subsistence rewards. Ultimately, the so-called middle-class, being priced out of any real competition long ago, drizzles down into the dependent class, with only, perhaps, a small number of them being elevated into the upper class, which is the sphere of control, about 2-3% of the population who, for their own selfish reasons, allow themselves and their institutions to become accomplices and proponents of the bank so that the true ownership, nature, goals, and identities of the bank's inner cicle remain unaccountable in the public discourse, and the paradigm accelerates via their passage and implementation of laws and overriding technological supremacies, which are not fully revealed until they are implemented in the control structure itself, which pervades into everyday infrastructures and every manifestation of society.
    Last edited by Snowball; 03-07-2024 at 10:48 AM.
    "When Sombart says: "Capitalism is born from the money-loan", I should like to add to this: Capitalism actually exists only in the money-loan;" - Theodor Fritsch

  12. #40
    Banks aren't doing any better -- except, of course, the half dozen or so who got in on the founding of the Fed.

    https://twitter.com/Cancelcloco/stat...75881988485585




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  14. #41
    Quote Originally Posted by Snowball View Post
    Very few posters here understand how different financial realities are, operationally, and the changes that have occurred in the last decade, or so. This is one reason why they are still attached to antiquated and misapplied economic ideologies which work against themselves, against the 99%, and therefore, support and maintain the tyranny which they claim to abhor. It is complicated yet simple to understand how this all happened, and what makes it the new reality.

    The new reality is that AI and algos, along with ultra-high-speed (fractions of a second) monetary transactions are fully digitized, fully under the control and administration of the new elites, and unlimited in their applications. Virtually every stumbling block set up against them, legislative or administrative by the government, has been removed, whether by practice or protocol.

    This is how assets, after they are acquired en masse, are maintained. This is why there doesn't ever have to be another crash, or severe correction, because there is no longer real markets in the new financial world. It is a controlled, managed, and policy-driven exchange where parties participate according to price action which has literally nothing to do with their own transactions anymore. There is no price discovery. There is only price marking. This is done by the operatons of the Fed and its tentacle banks, and its daughter corporations, which exist also in private equity, family offices, and multinational institutions, foundations, and even in the black markets which are connected to cryptocurrency and organized crime.

    The encompassing plan is unfolding before our eyes. It is institutionalizing tyranny, politically, militarily, and financially; indeed, it IS finance and capitalism that has driven all the changes, because true capitalism is a game that has already ended. The game is over. You literally cannot play the game any longer. The only player is the bank. This bank distrubutes rewards according to its own interior preferences. It distributes capital to its own members exclusively. The members are all part of a secret group that is given monies from the bank in order to acquire other corporations and assets which are not yet owned by the bank. The bank has unlimited buying power, and its operations are independent of political control. What the bank does is strip political power away from the citizenry by use of the faulty and antiquated laws that are the foundations of Western societies, and the number one is representative government. By influencing representative government, a "capture" occurs, where the system itself is captured, and no longer do the people possess sovereignty.

    As the popular sovereignty evaporates, the capitalist cabal who are the very fount of capital itself (instead of labor) endlessly produce more capital through usury and automated currency depreciation, which does not hurt them, because their tap is endless, and cannot therefore depreciate as long as their capital is legal tender. In cases where it is not legal tender, such as in foreign countries, as long as there are global financial exchanges, the capital may be transformed into the legal tender required. This gives the bank a chameleon-like nature, which operates everywhere in the world, except for that small number of countries which actively and institutionally resist and criminalize the bank. Countries which do this are the targets of smear campaigns, coups, military occupations, assassinations, and culture wars, meant to whether by hard or soft power, ultimately assimiliate the country into the bank's partnership.

    Statistics prove that, as the bank expands, whether in name or by other countries aligning with cooperative structures that support and condone similar ideologies and financial markets where the bank's capital is not restricted by government, as government is the only power capable of retarding the bank's super-shadow government, what occurs is that the wealth disparity accelerates far beyond what is naturally possible. It becomes permanent, and without actual confiscation of accumulated, concentrated wealth, can never, ever be reduced. The democratic masses consent, cognizantly or not, to their own slavery. Giving up on actual participation in the capitalist system (a game that already ended), their only concern is to beg the bank for inclusion so that their needs may be met. This makes them chattel of the bank, and the bank appoints shepherds in the political realm which manage the dissemination of capital to them, so that opposition to the bank is thwarted.

    Loan capital destroys home ownership rates. Mortgages drive asset inflation, dependency on the bank and its markets, asset concentration, and, for the corrupted government officials, higher taxation and increased power, since these shepherds are in a position where the enslaved majority must beg them for subsistence rewards. Ultimately, the so-called middle-class, being priced out of any real competition long ago, drizzles down into the dependent class, with only, perhaps, a small number of them being elevated into the upper class, which is the sphere of control, about 2-3% of the population who, for their own selfish reasons, allow themselves and their institutions to become accomplices and proponents of the bank so that the true ownership, nature, goals, and identities of the bank's inner cicle remain unaccountable in the public discourse, and the paradigm accelerates via their passage and implementation of laws and overriding technological supremacies, which are not fully revealed until they are implemented in the control structure itself, which pervades into everyday infrastructures and every manifestation of society.
    Very true. It's amazing how many problems are caused by the Fed and how many would be instantly resolved if it was terminated and currency was issued by the Treasury backed by gold and silver in the vaults.

    I also wish that I understood that you can't be a saver in this fiat inflationary world. You can be for the gold standard but have to live realistically in debt based fiat world.
    Last edited by Matt4Liberty; 03-08-2024 at 11:44 AM.

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