Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

[Slimprofits]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

True, but it’s important to remember that our economic relationship with Japan has been difficult since at least the Kennedy administration.

EJ are you familiar with this piece from George Washington University's National Security Archive?

A SECONDARY AFFAIR: AMERICAN ECONOMIC FOREIGN POLICY AND JAPAN, 1952-1968, Working Paper No. 9, Michael A. Barnhart, SUNY-Stony Brook

http://www.gwu.edu/~nsarchiv/japan/barnhartwp.html

[Uncle Jack]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Hello. I haven't chimed in here in quite a long time, mostly lurking, but I read EJ's post and then today I saw this:

http://edsworld.wordpress.com/2009/0...-farm-storage/

Farmers are holding on to crops where possible awaiting the magic bus of inflation to show up. Not that I'm disputing what EJ has laid out here in this argument (fine job, too, by the way), but I have a distinct feeling that the "ka" phase is still ongoing and may be for some time.

Regards,
Uncle Jack

[c1ue]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

5) They print a lot of money and don't persuade anyone of anything but let the world come to them until they puke and then everyone loses, but the debts are wiped clean and we get a new multipolar currency regime that favors all of the big players, including China likely, and yet still sucks the blood out of third world countries. In the meantime all of the little people pray to god that no one does anything too stupid.

Wishful thinking doesn't make it so.

Certainly there is little evidence that the rest of the world is coming to the US to buy more crap dollar bonds... More like Central Bank of Zimbabwe style fiscal management.

http://online.wsj.com/article/SB1253...googlenews_wsj


Quote:

In the second quarter, the most recent for which data is available, the Fed bought $164 billion out of the $339 billion in net new Treasurys sold. In the mortgage-backed debt markets, the Fed has been buying upward of 80% of the bonds issued by agencies such as Freddie Mac and Fannie Mae. Net issuance of fixed-income securities in the U.S. after the Fed's purchases is likely to have fallen by 25% in 2009 from last year to $843 billion, according to Barclays Capital estimates.

[gugion]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

I really enjoy this interview-format and appreciate the more detailed answers and unique questions. In the standard format, I find myself coming up with questions I'd like to ask while reading, but may not be answered in the article. In this format, the "interviewer" has follow-up questions similar to those I come up with. Excellent article. Honestly, I would be lost without Itulip. Thank you for all you guys do.

[ST]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Take the commodity bull market in 2008, and especially oil. The weak dollar trend took oil from $16 to around $60. Wall Street then took it from $60 to $147. That game got cut off when capital inflows reversed. The liquidity drain crashed the securitized mortgage debt market in Q1 2007. The rest is history.

Surely, you must concede that soaring Asian demand between 2000 to present fueled by their own bubble economy, and as witnessed by low inventory levels across the board, did also account for some significant rise in energy, agriculture and base metals prices, also.

[necron99]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

My fear is that pressurising him in this way might push EJ into trying to work with someone that inadvertently imposes THEIR interpretation of events upon the text... He has created a World Standard venue for debate about economics and should be recognised for that, as an individual of great personality and standing..... warts and all.

Agreed! I wouldn't want someone else to impose a different viewpoint onto EJ's work, although I'm perfectly happy to read separate pieces from different viewpoint. But I realize that this imposition can happen inadvertently. So, hey, Mooncliff and Fred had some good tips.

[Jay]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

good read here "
The US Can't Unilaterally Inflate"

http://ndknotepad.blogspot.com/2009/...y-inflate.html

Oh, goodness, another deflationista article. Here's the punch line of the article:

The US must either:

1) Persuade China, Japan, and others to allow their currencies to appreciate dramatically so the US can abruptly default on some of its debt to them, and reduce their exports considerably;
2) Persuade China, Japan, and others to allow high domestic inflation. If the US wanted 12% inflation domestically, it might ask for 16% or 17% inflation in China, if not a bit more;
3) Do something crazy, like enact Smoot-Hawley Mark II and beat each other up at the WTO;

4) Suffer through deflation.


How about

5) They print a lot of money and don't persuade anyone of anything but let the world come to them until they puke and then everyone loses, but the debts are wiped clean and we get a new multipolar currency regime that favors all of the big players, including China likely, and yet still sucks the blood out of third world countries. In the meantime all of the little people pray to god that no one does anything too stupid.

[Chris Coles]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Absolutely fascinating comments on a very good post.

EJ asked about the format -- Like the others, I vote yes. I wouldn't want to see it dominate the site, but as an occasional tool for keeping things fresh, it's great. The interview format seems to encourage a slightly different viewpoint... perhaps, returning to the basics of the argument and/or taking into account the mixed degree of understanding of a broader spectrum of viewers... rather than the omniscient-narrator format. Works well, (but sometimes I also log on to iTulip to seek omniscience. )

The typos derail me for a few seconds, but they're not usually hard to figure out, nor are they usually so frequent as to be annoying. (Occasionally they are, but not usually.) A bit of editing might be an improvement, though. Perhaps Mooncliff's comments alone might do the trick!

Here in the UK it is usual for a senior exec to get themselves an Ace secretary; who in turn is worth their weight in pure Gold.. My fear is that pressurising him in this way might push EJ into trying to work with someone that inadvertently imposes THEIR interpretation of events upon the text. I remain convinced that we should recognise the slight imperfections as what they are; they personify EJ as an individual and the minor imperfections should be accepted for what they are, simply what he is. No different than whatever his facial features. He has created a World Standard venue for debate about economics and should be recognised for that, as an individual of great personality and standing..... warts and all.

[herbkarajan]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

good read here "
The US Can't Unilaterally Inflate"

http://ndknotepad.blogspot.com/2009/...y-inflate.html

[necron99]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Absolutely fascinating comments on a very good post.

EJ asked about the format -- Like the others, I vote yes. I wouldn't want to see it dominate the site, but as an occasional tool for keeping things fresh, it's great. The interview format seems to encourage a slightly different viewpoint... perhaps, returning to the basics of the argument and/or taking into account the mixed degree of understanding of a broader spectrum of viewers... rather than the omniscient-narrator format. Works well, (but sometimes I also log on to iTulip to seek omniscience. )

The typos derail me for a few seconds, but they're not usually hard to figure out, nor are they usually so frequent as to be annoying. (Occasionally they are, but not usually.) A bit of editing might be an improvement, though. Perhaps Mooncliff's comments alone might do the trick!

[ThePythonicCow]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Re: proofreading

Count every "F" in the following text:

FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF YEARS...

$ echo 'FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF YEARS...' | sed 's/./&\n/g' | grep -c F
6

[c1ue]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

They don't need to give the US an advantage, it already has it. All of its debt is denominated in its own currency and it controls the lever of the press. The US took the advantage long ago.

Again you fail to address the problem that the US needs $1B/day MORE debt to pay for its ongoing trade deficits, and $3B/day to $6B/day MORE debt to pay for US federal deficit spending.

In comparison existing debt service interest payments are only $1.5B/day or so.

Printed dollars WON'T work for these future payments unless the counterparties are willing to accept them.

I frankly cannot understand how this is an 'advantage'.

I never said this would happen. We are heading toward an era of protectionism that every country is going to have to crawl out on its own from. That being said, every big player wants stability, and since the US holds the keys to the world's currency, it will continue to suck blood from everyone else until the dénouement of this currency chapter. That chapter will likely be very bumpy and could end quickly or slowly depending on the compliance of all involved and as long a black swan doesn't stir the pot. But make no mistake that all want stability and stability equals dollar control, hence more blood sucking. The ships may all sink, maybe even soon, although I doubt it as I see this as a multiyear event, but controlling the dollar is an enormous advantage. I don't see the US ship sinking by itself, do you?

The other nations want stability but will not give up their own sovereignty in order to preserve it. For one thing, their own populations aren't going to accept that - or don't the events in Japan mean anything to you? The dismantling of a 53 year leadership?

As for the US sinking by itself - actually I DO see it happening. A mature and measured policy to handle the problems the US created for itself in the past decade or three would be one thing, but what we have seen and continue to see is anything but mature and measured.

Or will you argue that the TARP, the stimulus package (I), the big bankster bailout, the escalation of military activities in Afghanistan, and so forth are signs of a mature and measured US policy response?

[centsless]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

Re: proofreading

Count every "F" in the following text:

FINISHED FILES ARE THE RESULT OF YEARS OF SCIENTIFIC STUDY COMBINED WITH THE EXPERIENCE OF YEARS...

How many did you count? Enjoy

And thanx again for a wonderful discussion. I find the ideas here so engrossing that errors do not distract in the slightest.

[ThePythonicCow]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

EJ lives in an area that boasts some of the best learning institutions in the world. Find a journalism student, possibly one who also minors in Economics to proof, before publishing. There is no need for me to list the benefits, which I hope, should be obvious.

That would roughly match my experience. Editing is a talent, like many, possessed by few. Whenever I found a good one, I treated him or her kindly. No matter how closely I edited my work, a good editor easily found many "opportunities" for improving it.

[Jay]

Re: Mission Accomplished – Part I: Wrecking the Economy - Eric Janszen

What you still have yet to answer is why these other nations would give the US another 'advantage' when there is negative net benefit in doing so.

They don't need to give the US an advantage, it already has it. All of its debt is denominated in its own currency and it controls the lever of the press. The US took the advantage long ago.

And if you think other nations will just cough up their labor and materials under threat from the US military, well, you'd first have to show how the US gets out of Iraq and Afghanistan gracefully - i.e. not as an obvious loser.

I never said this would happen. We are heading toward an era of protectionism that every country is going to have to crawl out on its own from. That being said, every big player wants stability, and since the US holds the keys to the world's currency, it will continue to suck blood from everyone else until the dénouement of this currency chapter. That chapter will likely be very bumpy and could end quickly or slowly depending on the compliance of all involved and as long a black swan doesn't stir the pot. But make no mistake that all want stability and stability equals dollar control, hence more blood sucking. The ships may all sink, maybe even soon, although I doubt it as I see this as a multiyear event, but controlling the dollar is an enormous advantage. I don't see the US ship sinking by itself, do you?