Dumb money should go to Zero - ie: inflation is necessary.

[rnjboy]

Re: Dumb money should go to Zero - ie: inflation is necessary.

I suppose someday using this logic that non-consumption or even reluctance to consume will be considered treason.

[LargoWinch]

Re: Dumb money should go to Zero - ie: inflation is necessary.

I suppose someday using this logic that non-consumption or even reluctance to consume will be considered treason.

That has been tried before without great success: its called communism.

[vinoveri]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Due to negative real interest rates, lets assume that all participants decide to "invest" in crude oil (not energy stocks but the commodity itself), therefore pushing its price up.

How would this be good for the rest of us? Could this possibly squeeze margins of households and businesses alike? Perhaps this could also decrease the standards of living?

You don't even need negative interest rates (although it sure helps).

Look at the past few years and the run up in commodities which translated into food and energy inflation for all us. Anyone who says it's all supply and demand is mistaken unless they include demand from speculators which is significant. And where do these speculators get their money - they borrow it on the cheap, first yen at 0.5% and now it seems it will be the $ at 0.5%. This is Kenseyian monetary policy, and the results of the imbalances and pain it causes to the average folk is now self-evident. who gets the money at 0.5%, not me and you, but banks and security dealers, and we've seen what they've done. Forgot to mention the housing bubble and asset inflation as being caused by this system. this maybe great for those who may a killing on housing, but where's that bill to pay for all that transferred fictitious wealth, you got it - 'the public'.

One is either for the fiat money system with central planners trying to "arouse animal spirits" or one is against it.
Absolute power corrupts absolutely and right now the CBs appear to have absolute corruptive power.

[Charles Mackay]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Gold only mobilizes when it's priced properly, otherwise it's hoarded. When houses sell for 100 oz of gold then gold will come out of hiding.

[LargoWinch]

Re: Dumb money should go to Zero - ie: inflation is necessary.

You don't even need negative interest rates (although it sure helps).

Look at the past few years and the run up in commodities which translated into food and energy inflation for all us. Anyone who says it's all supply and demand is mistaken unless they include demand from speculators which is significant. And where do these speculators get their money - they borrow it on the cheap, first yen at 0.5% and now it seems it will be the $ at 0.5%. This is Kenseyian monetary policy, and the results of the imbalances and pain it causes to the average folk is now self-evident. who gets the money at 0.5%, not me and you, but banks and security dealers, and we've seen what they've done. Forgot to mention the housing bubble and asset inflation as being caused by this system. this maybe great for those who may a killing on housing, but where's that bill to pay for all that transferred fictitious wealth, you got it - 'the public'.

One is either for the fiat money system with central planners trying to "arouse animal spirits" or one is against it.
Absolute power corrupts absolutely and right now the CBs appear to have absolute corruptive power.

vinoveri, let me tell you: I feel really proud when I buy "grains" ETFs with 2x leverage in order to protect my wealth, while people on this planet eat cookies made of dirt due to the cost of food being too high.

[vinoveri]

Re: Dumb money should go to Zero - ie: inflation is necessary.

vinoveri, let me tell you: I feel really proud when I buy "grains" ETFs with 2x leverage in order to protect my wealth, while people on this planet eat cookies made of dirt due to the cost of food being too high.

OK. Not sure what you're trying to tell me LargoWinch.

You protecting your wealth to prevent yourself from having to eat dirt cookies is as understandable as my holding gold for the same reason.

[LargoWinch]

Re: Dumb money should go to Zero - ie: inflation is necessary.

OK. Not sure what you're trying to tell me LargoWinch.

You protecting your wealth to prevent yourself from having to eat dirt cookies is as understandable as my holding gold for the same reason.

Sorry vinoveri for my less than clear response.

I simply meant that I feel forced to buy commodities such as "agriculture ETF" or "Grains ETFs".

In doing so, I protect my wealth in the event of inflation, but I also make it more difficult for poor people on this planet - who are eating dirt cookies due to a lack of ressources - to buy food.

That, does not make me feel proud.

[Guest]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Too bad there aren't remedial courses in "common sense" at the universities educating some of our economic and financial "experts" who are able to spout off impressive jargon and financial theory.

If so they might realize that "savings" is what is used by banks to lend to those who do invest and to businesses wishing to expand, as well as others. And forcing people to assume risks they don't wish to is inherently evil.

One definition of BS is taking something simple and finding a way to write 10,000 words about it.

[Uno]

Re: Dumb money should go to Zero - ie: inflation is necessary.

I enjoy reading iTulip and this is my first post. This idea that risk taking is equivalent to investing is absolutly absurd. I do agree that this type of scary thinking is exactly the problem!

This confusion has created an entire generation of "Blaze" poker player types (speculators, risk takers) vs. Warren Buffet bridge players (investors, savers), let me attempt to explain :eek:

Why do people think "risk" taking is required to add value? Risk taking is NOT required to add value and make profits. Great investors eliminate risk taking.

Warren Buffet does not take risks. He saves his money and then buys something that will generate $10 in the future for $1 and makes sure that at the very least he gets his $1 back. This is called investing. There is ZERO risk and ZERO speculation.

Bill Gates does not take risks. Bill Gates works like crazy to eliminate risks and then invests and creates value. Note how this is exactly the opposite of the type of Blaze for glory risk taking is good thinking. The pop culture idea that people like Bill Gates take "risks" to get rich is absurd.

and this comparison of poker to "investing" is even more absurd. Strikes right to the core of the ignorance in America today. Poker is pure speculation. Warren Buffet and Bill Gates play Bridge, not poker.

In Bridge you negotiate the play and then you know exactly how many tricks you should win before a single card is played. If you play the card progressions properly (execute) then the outcome is exactly as planned. This is "investing" - it requires ZERO risk taking and ZERO speculation. A great bridge partner executes his/her cards flawlessly and takes no stupid risks.

Given an entire generation of poker players, these losers actually think that poker takes some kind of "skill" and it seems like our entire culture now equates risk taking and specultion with investing.

One idea on how to learn about investing is to stop player poker (the game of chance) and learn how to play bridge (how to spot a sure thing and then execute flawlessly).

[c1ue]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Uno,

I am an admirer of Sir Warren, but you might consider this:

Sir Warren is the ultimate FIRE player. As the reinsurance backstop via super cats, he gets a gigantic amount of cash which he then (intelligently) invests. But this is not risk free in the sense you mean - it is usury via insurance float plus reinvestment of resulting massive gains as opposed to productivity increases.

BRK itself does absolutely nothing for the production/consumption sector except provide money. And how is this different than a bank?

As for Bill: MSFT is a tax on almost all computer use in the world. It is exactly the same as if someone had patented electrical meters and charged a tax for every time anyone used electricity.

His 'investment acuity' has failed to extend absolutely anywhere other than where the OS (and 'free bundling') dominates.

High time this OS business was either de-monopolized or turned into a utility.

[LargoWinch]

Re: Dumb money should go to Zero - ie: inflation is necessary.

As for Bill: MSFT is a tax on almost all computer use in the world. It is exactly the same as if someone had patented electrical meters and charged a tax for every time anyone used electricity.

His 'investment acuity' has failed to extend absolutely anywhere other than where the OS (and 'free bundling') dominates.

High time this OS business was either de-monopolized or turned into a utility.

So true. I hope Google comes out with an OS in the next decade.

[BrianL]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Eh? What would it provide that Linux or the current Apple OS doesn't?

After past lawsuits, most major venders offered computers without a MS OS on them. The demand wasn't there, so some stopped (or didn't bother publicizing it as much).

[LargoWinch]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Eh? What would it provide that Linux or the current Apple OS doesn't?

After past lawsuits, most major venders offered computers without a MS OS on them. The demand wasn't there, so some stopped (or didn't bother publicizing it as much).

BrianL: G-A-M-E-S my friend. period. oh and maybe ease of use, compatibility etc. etc.

[BrianL]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Thats just a chick and egg problem. Linux or Leopard could easily be major gaming platform if publishers felt the market was large enough to justify the porting/tech support/etc costs. Linux has an upward battle due to the driver support issues and elevated user expectations that software should be free. Apple has a better chance at becoming a major game platform if the hardware penetration keeps going up. Sadly, the PC itself is in trouble these days as more PC gamers switch to consoles.

As for ease of use, Apple is there already. Software compatibility with Windows probably won't happen due to technical difficulty or performance (Wine being the best chance at compatibility for the moment) - that could be a deal breaker for a long time.

[Munger]

Re: Dumb money should go to Zero - ie: inflation is necessary.

Too bad there aren't remedial courses in "common sense" at the universities educating some of our economic and financial "experts" who are able to spout off impressive jargon and financial theory.

If so they might realize that "savings" is what is used by banks to lend to those who do invest and to businesses wishing to expand, as well as others. And forcing people to assume risks they don't wish to is inherently evil.

One definition of BS is taking something simple and finding a way to write 10,000 words about it.

Lol. Yes - prominent "economists" need "to" learn the "role" that "banks" play in the "economy" - and they need you to explain it to them in one sentence!