Milton Friedman: Explosion of monetary base NOT inflationary.

[goadam1]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

No?

I thought they'd try and try to reflate the FIRE economy as much as possible, mostly thanks to reading EJ. There is no US Empire without FIRE. It's not going away (or even just back into its corner) without a nasty fight.

I hoped for more.

[ThePythonicCow]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

of course, different people have different approach. but i hate to diversify for the sake of diversification.
...
i am totally CONVINCED that if one wants to gamble, this is truly the kind of "once a life time" moment to put down the chips!

Well, I no longer advocate Modern Portfolio Theory diversification either.

But I do recommend having some humility when it comes to predicting the future. Be prepared to survive, perhaps not elegantly but somehow, a very wide range of possible outcomes. Do so with minimum expenditure, so as to leave as much of ones energy, resources and focus available for whatever one can do that makes the greatest contribution. When times are peaceful and prosperous and ones resources (personal, family and community) are deep, one need spend little time on such preparedness. When times look to become more chaotic or dangerous, better to spend more time considering how one could prepare.

The goal cannot be to optimize the measurable profit from any one potential future, for two reasons: (1) measurable profit is not what is most important (unless you're one of those driven solely by accumulation of wealth -- I hope not), and (2) it's better to remain in the game (of life) than it is to risk getting wiped out (dead, or similar.)

[Starving Steve]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

Sound money has three functions: 1. medium of exchange. 2.unit of account. 3. store of wealth.

How does the US dollar fair?

Can it accurately price a product on the market? With a $US one could buy two rolls of toilet paper last year. Now it could purchase one roll of toilet paper. How many toilet paper it could buy next year? Are we producing better toilet paper every year, so it worths more every year? Or is the valuation function of the US dollar deterioating every year? How can the US dollar be an accurate accounting unit of products if its valuation fluctuate so widely(mainly going down)? I guess, it fails terribly in the function of being the unit of account.

How about the store of wealth? Do I need to elaborate the details about the US dollar losing 97% of its purchasing power in the last 30 years and the prospect of losing another 97% of the remainder in the next few years? Does anyone with a sane mind still consider US dollar as the prefer method of storing one's wealth?

It is clear to me the US dollar is only performing as the function of medium of exchange, in international trade and inside the US. Its "perceived value" is only retained because of its wide spread usage by people.

That is why I say $US has "zero value and some confidence".

Has everyone seen the Julian Robertson video, in which he says if any one of the three US biggest creditors(China, Japan, Saudi Arabia) stop buying (let alone selling) US bonds, intentionally or unintentionally, the bond market will collapse over night, and the US will go into bankcrupcy in an instant? In this scenario, your dollar and any other paper investment will become WORTHLESS over night. What is your risk/reward ratio by holding you $US denominated investments at this historical moment?

How about the change of heart of private investors in their confidence in the $US? Did I hear the approaching sound of "the stampede"?

TPC, I don't mind to give you all my "worthless" $US. But I will have to charge you for the usage of them, like the US government does.

Yes, we are at the very juncture of world financial history, an unprecedented economic environment: the quadrillion dollar paper derivatives hundreds of times the size of world GDP, the insolvence of the county with the biggest share of world economy, the unresponsible government issuing world reserve currency, the criminal financial oligarchs and the over-indulgent western consumer, the unpayable public and private debt, the trillions and trillions of paper money world wide central banks pumping into their economies, the world wide asset bubbles amid the worse recession or depression, and....

Past economic experience and theories are not applicable, and nothing left guiding the people in this chaotic time. On top of this, governments are changing the rules at will, which only means the few insiders will be the ones benefits from the outcome. The rest of us, the people will suffer immesely.

Are we approaching a reset? Yes. When will it happen? I don't know.
Hereby, I will make a financial and political statement here: I will buy gold - the only weapon for us the people to perserve our little wealth against the ever more powerful ruling elites.

Like Jim Rickards says:"When you own gold, you are fighting every central bank in the world", and you are shorting the quadrillions and quadrillions of paper market.

The best part is: unlike shorting stocks or treasuries that quite a few of your guys tempted to do, I will not face any substantial loss even I am wrong at the timing, the expected outcome, or whatever. But if you are right, then the reward is unimaginable...

Truly a sure bet in this world wide financial casino...;);)

Just watching Home and Gardens Television (HGTV), $300K to $400K in Atlanta buys you a McMansion beyond belief, beyond comprehension, beyond anything available for under $2million in the West Coast housing markets, including British Columbia.

I would say either the South is beyond comprehension because of its assinine rightwing politics, or the U.S. dollar still has some real value. And if the latter is the case, then gold is very over-priced right now in four-digits.

Gold is fun to own, but gold is a hedge against calamity and nothing more than that. Hopefully, this is not the end of the world now. (Abrochese los cinturones. Fasten your seat-belts.)

[skyson]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

As I said in the previous post, buying gold is not only a means of investment in this chaotic world, it is also a bold political statement.

In Austrian teaching, money originates in the market: …all money has originated, and must originate, in a useful commodity chosen by the free market as a medium of exchange. The unit of money is basically just a unit of weight of the monetary commodity – usually a metal, such as gold or silver. Government has no role in the definition or selection of money, let alone its creation, price or quantity. That is the market’s function.

In Keynesian theory, by contrast, money originates in the state. Government has a total monopoly on money, starting with its very definition. It is not chosen in free exchange, it is imposed by force.

See "Recent Speech by Bob Landis" at http://www.goldensextant.com/

The act of buying gold, is the abandonment of government enforced fiat currency, in favor of personal financial freedom.

It is a outright defiance against the financial ruling power, a conscious choice of escaping the wealth confiscation by inflation.

Who says the little people are powerless? If every one withdraws his/her money from the bank and buy one ounce of gold, the criminal banks will be bankrupted, their seemingly death grip at the government power structure will be cut short, and their paper wealth pyramid will crumble into pieces and gone with their mighty influence that comes with it.

Yes the tide is coming, and when it comes, the ones in boats will be lifted up, and those not will be drowned...

[Starving Steve]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

As I said in the previous post, buying gold is not only a means of investment in this chaotic world, it is also a bold political statement.

See "Recent Speech by Bob Landis" at http://www.goldensextant.com/

The act of buying gold, is the abandonment of government enforced fiat currency, in favor of personal financial freedom.

It is a outright defiance against the financial ruling power, a conscious choice of escaping the wealth confiscation by inflation.

Who says the little people are powerless? If every one withdraws his/her money from the bank and buy one ounce of gold, the criminal banks will be bankrupted, their seemingly death grip at the government power structure will be cut short, and their paper wealth pyramid will crumble into pieces and gone with their mighty influence that comes with it.

Yes the tide is coming, and when it comes, the ones in boats will be lifted up, and those not will be drowned...

$300K to $400K in Atlanta means a McMansion, 5 or 6000 sq. ft. of living area, massive stone fireplace, marble trim and marble in the bathrooms, granite counters in kitchen and bathrooms, wood floors, solid wood cupboards, new appliances, vaulted-ceilings, wood moldings, bay windows, bronze and cut-glass hanging chandaliers, central air conditioning, top-grade insulation, new condition, an acreage and landscaping, mature trees, plus a quiet executive neighbourhood with no Detroit gang-bangers around.

An Atlanta McMansion could make for a fine lifeboat in this coming economic calamity, and maybe even a better lifeboat than gold. And as far as making a statement, well you decide: a 6000 sq. ft. McMansion or gold, which is louder?

[skyson]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

$300K to $400K in Atlanta means a McMansion, 5 or 6000 sq. ft. of living area, massive stone fireplace, marble trim and marble in the bathrooms, granite counters in kitchen and bathrooms, wood floors, solid wood cupboards, new appliances, vaulted-ceilings, wood moldings, bay windows, bronze and cut-glass hanging chandaliers, central air conditioning, top-grade insulation, new condition, an acreage and landscaping, mature trees, plus a quiet executive neighbourhood with no Detroit gang-bangers around.

An Atlanta McMansion could make for a fine lifeboat in this coming economic calamity, and maybe even a better lifeboat than gold. And as far as making a statement, well you decide: a 6000 sq. ft. McMansion or gold, which is louder?

not sure what you are trying to say.

just one point: did i see you in another thread laughing at the decaying Detroit rail stations? have you look at the decaying Mansions in Detroit? can you guarantee the Atlanta McMansion would not go into the same direction?

in EJ's Road to Ruins, i see that ruined or ruining McMansions everywhere. it is a iconic/ironic symbol of the deteriorating economy, the remains of an American dream.

RE is local. gold is welcome everywhere. who has a louder voice?

[Jay]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

not sure what you are trying to say.

just one point: did i see you in another thread laughing at the decaying Detroit rail stations? have you look at the decaying Mansions in Detroit? can you guarantee the Atlanta McMansion would not go into the same direction?

in EJ's Road to Ruins, i see that ruined or ruining McMansions everywhere. it is a iconic/ironic symbol of the deteriorating economy, the remains of an American dream.

RE is local. gold is welcome everywhere. who has a louder voice?

You never have to re-roof a Maple.

[santafe2]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

PS[/B]. I thought I was on your Ignore list. :confused:

For a long time but while we almost never agree, I've learned to be more civil and you've learned to keep your hammer in it's holster. Others here could learn to enhance civility from this exchange...maybe.

[Raz]

Re: Milton Friedman: Explosion of monetary base NOT inflationary.

For a long time but while we almost never agree, I've learned to be more civil and you've learned to keep your hammer in it's holster. Others here could learn to enhance civility from this exchange...maybe.

Putting me on your ignore list only cheated you, not me. I could care less.

After your totally uncalled for insulting tirade I considered putting you on my ignore list. I didn't because you often have specific insights and ideas that might be helpful to my net worth - and I use all the knowledge I can get.

I put rude and insulting nitwits on my ignore list - Mulaman, for example - but you're definitely not a nitwit.
Just an overly proud man who doesn't seem to be able to admit it when he's acted out of line.