JoNova

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The Obama Money Plan — Oh dear, the secret is out!

Brilliant. The country-and-western economic thesis. It’ll catch on. So much for those Keynsian doctorates.

Ray Stevens, composer, comedian, singer. :-)

We’re printing money

Obama Money

Let’s do what the government does, it works for them, it might work for us,
so I forgot my ethics and morals and swallowed my pride
We took out every credit card we could get and took out the maximum debt
we borrowed from friends and family and even took out loans overseas
I borrowed at work and had credit at the store –
until folks just wouldn’t give us credit any more
I said Honey, the next step was clear to me.

We’re making money, Obama money
we’re printing it in the basement just as fast as we can
We’re living the Obama budget plan

We didn’t use the money to reduce the debt, there was a whole lot of things we still wanted to get…

Go buy his latest album: It’s called Spirit of ’76

The man deserves a reward.

h/t Matt Thompson.

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152 comments to The Obama Money Plan — Oh dear, the secret is out!

  • #

    I love the facial expressions as much as the words! This is classic!

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    Joe Lalonde

    Jo,

    This is why I love your blog!!!

    :-)

    I have 1/2 billion cyber dollar in slot winnings in current cyber bank…hmmmm

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    Rereke Whakaaro

    This only goes half way.

    What we need to do is introduce a counter currency based on the Rallod.

    A Rallod is defined as a negative dollar, so everybody starts out with a number of Rallods equal to all of the Dollars that they don’t have.

    The more Rallods you spend, the more Dollars you are forced to accept, so at some point your remaining Rallods get negated by all of those Dollars.

    Of course, you never get to this parlous position, because the Gv’mint keeps on printing more Dollars that you don’t have, thus giving you more Rallods.

    Does that sound like a good idea? Or does that sound stupid?

    Well folks, it is what deficit financing is all about.

    It sounds like a good idea to those with a short attention span (like, to the next election), but it also sounds like a really dumb idea to anybody with a longer attention span than a Mayfly.

    The only thing I left out is that, long after you have ceased playing these sorts of games, your children and grand-children and great-grand-children, and even your great-great-grand-children, will still be trying to figure out how to get rid of all those Rallods without printing more Dollars.

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    Kevin Moore

    Here’s one theory -

    US $ Self-destruction

    Amero in your face!“It’s worth even less than the paper it’s printed on”

    “The US dollar will be devalued by a self-destruct factor known as “debt” that was set in motion in 1913 when hoodwinked President Woodrow Wilson passed a law establishing the private Federal Reserve. A law which empowered elite private bankers to legally print counterfeit “Greenback” paper dollars that were not assured by anything.

    The US FEDERAL RESERVE, which is 100% privately owned by a secret cabal of international global elite known as the Bilderberg Group, printed free money and then loaned it, at interest, to The United States of America for its massive socalist and bailout programs, thus insuring endless debt, and leading to eventual self-destruction of the $ all together.

    The frogs, in typically French fashion, wanted to redeem their US dollars in tangible gold but the USA didn’t have the gold. So they created OPEC and changed US$ from the phony gold standard to the phony oil standard, and they called these “Petro-dollars.” But Saddam Hussain committed the mortal sin of selling his oil for Euros and other currencies, and we all know how he ended up.

    The long term plan is that by 2012, the gold-value will reach $100.00 = 30 gold atoms (only visible in electron microscope) as a hard asset. The plan is to make the world become dis-enchanted with the USA dollar so that the populations willingly embrace the new Amero system without questions or objections. According to ancient Mayan economists this will occur when gold hits US$2,000 per oz on Dec. 21, 2012. At that time it may be announced that gold sells for 9 Ameros per troy oz, and oil will be 1 Amero per barrel. The idea is that it’s a grand idea. At least that’s what the “man” wants us to think.”

    http://uncyclopedia.wikia.com/wiki/Amero#US_.24_Self-destruction

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    DougS

    Seems to catching on!

    The UK government is doing the same thing – can’t be using a common expression like ‘printing money’ though.

    ‘Quantitative Easing’ – sounds better doesn’t it? A lovely euphemism for debasing your currency, causing inflation and generally just stealing from the man in the street.

    Governments have exclusive rights though, so don’t try it at home!

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    Joe Lalonde

    Jo,

    China is getting agitated with the U.S. for printing their way out of defaulting on loans. Since they hold 1/10 of the debt. They U.S. is still pushing China to change their structure so that the U.S. owes them less.
    The U.S. has no plans or policies to curb their debt which will eventually have to catch up with the world economy. Many other countries are in hard financial times due to the borrowing on the future which has caught up with them.
    So, what makes the U.S. different that they can just print their way out of trouble?
    Arrogance?(I am a world power and don’t have to pay my debts?)

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  • #

    Well I’m halfway there.
    Just like Ray Stevens I have a number of credit cards maxed out and am working my a$$ to the bone to pay them off.

    Ray says “once you renounce any sense of moral decency it gets easier and easier”.
    I can do that, I know I can do that.

    I RENOUNCE ANY SENSE OF MORAL DECENCY. F#@K YOOZE ALL

    All I need now is a printing press and some tips on printing.

    Anyone?

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    Fred Furkenburger

    One has to wonder really whether or not in the US, Australia, hopefully in the UK and elsewhere we are seeing the continuance of the death of communism, socialism and allied ideologies. If only from the point of view that they may finally be showing themselves in the true light for what they are and where they lead. Hopefully more and more people will finally wake up to the fact that these ideologies are a complete failure and can only lead to misery.

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    Alexander K

    I know I’m only a dumb Kiwi, but why is Mugabe’s tactic of printing money so stupid, when the UK and US gubmints are doing the exact same thing.
    Or have I missed some of the rhetoric?

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    Jo thankyou, you made my day,I couldn’t put the situation any better my self.

    Ray Stevens is a classic !!

    Say YES to an election now !!

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    Bernal

    Wait a minit now…you ain’t sayin’ us Southrons ain’t stoopid I hope. How will we ever git smart people to play poker with us agin.

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    Mervyn Sullivan

    As a professional accountant and auditor, I am simply stunned by the way politicians administer the public purse. The U.S., Britain, Ireland, Portugal, Greece, Japan… the list goes on and on. It is as almost as if the politicians think they are playing with monopoly money. It is as if debt means nothing to them. Who do they think is going to pay off all the govenrment debt… and with what, and how?

    It is clear that if corporations behaved the way these irresponsible governments behaved, they would be in deep s _ _ t! Now I’m not going to attribute this mess to the economists, but they have certainly had a big influence creating this mess… probably because economists like to think they have the solutions to problems with all their historic charts and theories. But I say that is exactly the problem… they advise governments based on theories… they live in cloud cuckoo land.

    It is time to fix this mess. It is time to bring in the accountants… the receiver/managers. We know how to go into sick corporations as administrators and bring the ‘dead’ back to life again. We don’t deal with hypotheses and theories… we deal with reality. We don’t solve financial problems by creating new ones. We deal with them by using practical and commonsense solutions. We solve problems… we do not create them.

    Think about it…

    When you are struggling financially, and you owe piles of money, does anyone seriously think the solution is to borrow even more money? That is insane! Truth is , nobody would lend you more money, in any case.

    When a corporations is in dire financial difficulty, does anyone seriously believe the solution is to borrow even more money? Again… truth is, nobody would lend it money, in any case.

    So why do governments do what they do, just because they can, with a “she’ll be ‘right, mate” attitude?

    Where the hell do politicians and their economic advisors get the idea that borrowing more money, or printing money, is a solution to the financial problems of countries like the U.S.?

    The U.S. government has recently raised its borrowing limit. There is no sign that the U.S. government is doing anything effective to fix the cause of its financial problems. It will get to the point where another rise in the debt limit will be necessary. The Obama administration is clueless… it looks like it is on a mission of economic destruction.

    So I have one serious suggestion to all these countries that have got enormous financial problems. Kick out the economic advisors just for a while. They do not have a clue how to solve a government’s financial problems. They are just guessing. Bring in the corporate doctors… the accountants. Professional administrators know what to do, and we know what it takes to fix the mess. We know what we are doing. And yes, we really know there is no gain without pain. And right now, whether the Americans like it or not, unless they are prepared to go through pain, it will be same as it ever was… actually, it will just get worse.

    Why do I care? Actually, we all need to care because, right now, our superannuation is like money on the roulette table in a casino … it’s just that none of us are sitting at the table playing… yet we are losing billions because of incorrect U.S. political decisions that influence our stock market… diluting our hard earned savings in our super funds. And the international accounting standards mean adjustments must be made for the losses to the capital value of our shares, even though the losses are only unrealized losses. It’s incredible! We are getting poorer by an insane situation that is robbing us of our retirement savings.

    It is now time for the U.S. government to get serious… to call in the professional accountants… the professional administrators … the financial doctors who really do have the solutions to fixing financial problems to get the U.S. Treasury back into shape again. If not, it is not just the yanks that will lose out… we will all lose out, and Australia’s superannuation system will go down in history as the biggest financial disaster Australia has ever suffered.

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  • #

    Alan Bond once put it very succinctly.

    Owe the bank a million you can’t pay, and you’re in trouble.

    Owe the bank a hundred million you can’t pay, and the bank’s in trouble.

    Tony.

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    Reed Coray

    President Obama is going to snow us with a teleprompter reading of why printing more dollars is the right thing to do. Doesn’t this make him the Obamanable Snowman?

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    NicG

    So…

    Guv’ment (UK/US/AUS pick any one) needs to raise some cash to cover all these debts.
    Where’s that going to come from?
    Well, who’s got some cash? Joe Public, that’s who!
    How are the Guv’ment going to get their mitts on this cash? Tax Joe Public!
    What should this tax be based on? Any takers…?

    Cheers
    NicG.

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    Rereke Whakaaro

    NicG: #16

    What should this tax be based on? Any takers…?

    Um … let me see … er … it would have to be fair … and it would have to be something that everybody uses … water? Nah, some folks live in a desert. Fire? Nope, too hard to measure. I know, what about air? Geeze, we have lots of that, and there is loads to go around, why not tax that?

    Or better still, why not tax political bullshit, there is even more of that!

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    Rereke Whakaaro

    Actually, why I want to know is … If we are going to be taxed for the carbon in the atmosphere, what happens when the wind blows?

    What we get is somebody else’s carbon, ours gets blown away. Why should I pay for somebody else’s carbon? That’s not fair.

    These are serious questions, and our Joolyor aught to be made to answer. I don’t want other people getting the carbon that we have paid for. It should be kept in Auztrailier.

    (Perhaps I should leave the humour to Speedy)

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    Kevin Moore

    Australian PM Kevin Rudd Calls For Asian Union

    “A UNIM and Conspiracy MythBusters special report into the Asian Union. During a meeting with Asian leaders the Australian Prime Minister Kevin Rudd announced this month (June 2008) plans for a proposed Asian Union or “Community” similar to the European Union and feared North American Union. Mr Rudd referred to the “Corporation of Australia” and need to strengthen ties with Asian neighbors for future security in the Asian/Pacific region.

    Like the Euro and Amero the Asian Union would also evolve it’s own currency, the “Asio” as a working title. And as shown in the One World Government section of Zeitgeist the central and reserve banks and elitist money men are behind the move towards corporate globalization. The plot thickens, as do the wallets of the filthy rich.

    China and other APEC countries gave support to Mr Rudd’s vision of an Asian community by 2020. But growing crisis’ in the world with the war-on-terror, wars-over-resources, peak-oil, climate change, debt and fascism disguised as democracy may trigger events happening sooner than forecast.”

    http://www.disinfo.com/2008/06/australian-pm-kevin-rudd-calls-for-asian-union/

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    Madjak

    I’m waiting to see the greenback with a best before date.

    The zim dollars did have this. It’s a novel idea I thought.

    Maybe the cash splash handouts should have had a best bfore date also?

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    Mark D.

    Funny? you call this FUNNY?!!!!!

    Well It might be if it weren’t so damn serious……

    Oh I get it it’s dark humor.

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  • #

    New solar flare videos and emission lines of heavy elements (Fe, Mg, etc) in the extreme ultraviolet (EUV) spectrum:

    http://www.physorg.com/news/2011-09-sun-spacecraft-characteristics-solar-flares.html

    Falsify both basic assumptions of:

    a.) The AGW model of Earth’s changing climate, and

    b.) The SSM model of the Sun’s constant heat.

    Other PhysOrg news stories and comments today on the AGW scare, smiling politicians spreading propaganda, and seriously crippled modern science:

    1. Switching from coal to natural gas

    http://www.physorg.com/news/2011-09-coal-natural-gas-global-climate.html

    2. Smiling politicians campaigning for AGW (more dark humor)

    http://www.physorg.com/news/2011-09-chief-urgent-action-climate.html

    3. Black holes (more and even darker humor)?

    http://www.physorg.com/news/2011-09-team-elusive-black-hole-radio.html

    Confirm the oldest scriptures again:
    “Truth is victorious; Never untruth!”

    With kind regards,
    Oliver K. Manuel

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    Bulldust

    Well it seems the SMH has more info on Mr Thompson:

    http://www.smh.com.au/national/thomson-new-credit-card-claims-20110908-1jzz2.html

    Though most of the article seems more directed at Mr Williamson. You get the feeling they have more in reserve and are “doing him slowly” as Keating would say.

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    Nick

    The wealth created from $1 of debt in 1960 was circa 90c to $1. That $1 dollar of debt now errodes wealth. Their productivity has drop to the point that if they try to produce something it actually doesn’t contribute to the economy.

    The USA owes $6 for every $1 coming in.

    Joe @ 6, I think the Chinese hold more like %20 of the Debt, Down from %25 a few years ago. They are reducing their exposure.

    The Swiss frank had gone through the roof and they’ve had fixed it’s value because it was hurting them too much. That means there’s a lot of demand for a secure and secret haven.

    If a container ship, heading to the USA, holds 1,000 containers 988 are full. On the way out 520 are full at a cheaper freight rate than those containers coming in. Massive inbalance there.

    Gold has pushed through $1,800 and looks headed for $2,000/oz. That’s a lot of money headed for safety.

    This means reduced investment in productive, employment producing assets. There’s no money left, it’s hiding.

    Warren Buffet has moved his operations out of the USA.

    There are a lot of judgements being made by people that rarely get it wrong or get it right in a big way often enough to fix the bad decisions when it comes to money and the economy.

    All these signals surely can only mean one thing… They’re gone, I’m affraid.

    The mood may have reached self fulfilling prophecy stage. There may be no turning back from here.

    Your grandkids may need to learn Chinese or Hindi. The Chinese and/or Indians, as the USA did, will have a massive influence on world affairs in the coming generations.

    Meanwhile the the west is building power generating Wind Farms, Chasing productivity sapping Solar Power generation, Bio Fules and Chasing Co2 Credits fraudsters who invested money on a fraudulent idea.

    Most of this is observation. Which means those that ignore it are actually ignoring reality. This is a receipe for disaster.

    Yeh, beaudy, lookin’ forward to this. What a shambles.

    Time to dig an extension to that hole I was planning on hiding in to make room for the extended family who think I’m mad of course :-)

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  • #

    Where’s RJ to tell us debt doesn’t matter? Damn trolls just have no stickablity.

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    Bulldust

    Don’t worry Mike… there’s always a fresh supply of trolls. The internet is full of them.

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    Bulldust

    Henry Ergas gives some interesting stats on the state of unions in this country, and the moves Gillard is making to increase their unrepresentative power by orders of magnitude:

    http://www.theaustralian.com.au/national-affairs/opinion/union-control-of-super-funds-a-magnet-for-sleaze/story-e6frgd0x-1226132599077

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    Winston

    Nick @ 24

    Most of this is observation. Which means those that ignore it are actually ignoring reality. This is a receipe for disaster.

    Observations? You heretic, they burn you at the stake for that, you know. But what do the models say? Lol

    Theoreticians/Economists 1 Pragmatists/Realists 0 being the unfortunate scoreline, and the full time whistle has sounded. The good guys lost! And it was an own goal too. The defender was pushed into the path of the ball by some illegal play from their opponent, only to see the ball “unluckily” deflected into the net. Were the linesman and the referee blind! No, someone slipped them a fiver before the game to look the other way.

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    Alan D McIntire

    This has happened before. In 1971, when I was in my early 20s and just starting out, President Nixon stopped exchanging gold for dollars.
    This had the effect of debasing our dollars, and we went through years of high inflation and high unemployment. As prices shot up, the ones blamed for high inflation were the evil “middlemen”. Look for the evil middleman to come back into common political jargon during the next few years.

    http://www.bos.frb.org/economic/conf/conf19/conf19b.pdf

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    Bruce of Newcastle

    Sounds like Mr Obama has been learning. No mention so far of green jobs in the news reports of his speech. $447B…ouch!

    Meanwhile California confronts the humble Chinese airconditioner and loses:

    Major power outage in California leaves 1.4m in the dark

    Amazing how reality mugs wind turbine proponents like the Golden State.

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    Mervyn Sullivan

    The following statement is so very true…

    “How has it been possible for Keynesianism to have held sway if it does not correspond with the way the world works? The simple answer goes back to the fact that people have no natural economic understanding, and are inclined to subscribe to theories of powerful personal or institutional agency: Obama/the EU/the IMF/the G20/central bankers will save us. All it requires is leadership, “bold” action, and political will.” – Peter Foster – Financial Post (7/9/11)

    President Obama’s address today, to the joint sitting of Congress, sounds much of the same rhetoric Americans have heard before. It demonstrates what Peter Foster statement is about. Obama’s address was appealing… but strip away the gloss, and it is just another costly stimulus that does nothing to address the underlying problems in the U.S.

    If Obama wishes to understand the underlying problems, he can start by first answering one simple question. Why did America’s second largest corporation, APPLE, move its manufacturing base to China? When Obama finds the answer to this simple question, he may be well on the way to understanding how to resolve sick America.

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    Crakar24

    I heard some of Bwak’s speech this morning it appears as though Bwak Obama has replaced “Can we do it, yes we can” with “pass this bill”. He made a number of promises, some of which were that veterans should not sleep in the streets anymore, he will rebuild the crumbling infrastructure which i find rather amusing when you consider American tax dollars pay for new road construction in Israeli occupied territories, build new schools so all those “out a work” teachers can have a job he did not stipulate whether the teachers will still need to buy chalk/pens and paper etc out of their own pockets.

    All in all it seemed to me he was going to spend a lot of money (from which printing press he did not say) to revive the economy. Looks like Bwak has finally understood the concept “there is no such thing as a jobless recovery” but when you give companies like Apple incentive to go off shore and with it the high paying jobs you cannot get them back.

    Good luck to all Americans……………you need it a little bit more than us.

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    AbysmalSpectator

    There’d be riots in the streets if the government stole 7% out of everyone’s bank account, yet they get away with precisely that via inflation year in, year out and people just accept it as the natural way of things.

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    Mark D.

    My hope has changed.

    On the other hand I didn’t vote for him. My “Hope” was that he wouldn’t be elected. Now I hope he’s “changed”.

    Sorry that was just for fun.

    My hope today is for a one term Bwak. May he go down in history as the second Jimmy Carter.

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    Mark D.

    Crackar24 @ 32:

    Good luck to all Americans……………you need it a little bit more than us

    Thanks mate, I can’t be sure if your carbon tax will make you more needy than us but either way I appreciate the good luck message.

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    John Brookes

    The problem with government debt is elections. One of the easiest ways to get elected is to promise to increase spending and reduce taxes. People vote for this, and the end result is government debt.

    The argument for tax reduction is that if we don’t reduce our taxes, then our best and brightest, and our businesses, will move to somewhere which has reduced its taxes. Its difficult for a government to stick to its principles when faced with that argument. So countries like Ireland offered a favourable tax environment, but now they are broke. I think governments should be prepared to wave goodbye to some people/businesses, and keep their taxes at sustainable levels.

    At the same time, a country should regularly review its economy, to see if laws and policies are impinging too much on efficiency.

    An interesting modern phenomena is massive multiplayer online games. These are in many respects, actual economies – even to the extent where the online currency is exchangeable for “real” money. This should create the opportunity to study the effects of various economic policies without risking too much in the real world.

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    PaulM

    I know I’m only a dumb Kiwi, but why is Mugabe’s tactic of printing money so stupid, when the UK and US gubmints are doing the exact same thing.

    Because the UK and US have a functioning (no matter how poorly at the moment) economic base behind it, and when international conditions improve the ability of the US and UK to produce surplus budgets will improve and they will be able to attract foreign investment. Then there is the fact that printing money by the US (backed by massive gold reserves)hasn’t gone hand in hand with devaluing the currency as it has in Zimbabwe. You should really take the time to research the differences between the economies you wish to comment on.

    No you haven’t missed any of the rhetoric, reality of the situation, history behind the actions and principles of economic theory…. very much so.

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    Crakar24

    JB in 36,

    I think we first need to understand why we got in this mess to begin with before we start looking at ways to fix it.

    We got in this mess because of the money junkies we have a banking system that runs on debt, that is the only way we can grow our economies is to create more debt. In other words the debt that we create cannot be paid back as the debt is always more than the money we have in the system.

    When things go sour like they have now we cannot repay what is owed so the money junkies IMF come to the rescue by offering us even more debt and we repay this debt by handing over sovereign wealth as a method of repayment.

    So in the end what began as a debt created in the bowels of a computer (imaginary debt)now becomes material debt and this is how the money junkies central banks make their money.

    The reason why they invented free trade and european unions is so that the money junkies central banks could make money even quicker this was akin to removing the fire doors of a building so instead of one compartment burning whilst the rest remained safe now when a fire starts in one compartment it quickly spreads to all.

    So before we begin to look to the future and better ways to run governments we first need to go back to the gold standard, give money some intrinsic value rather than fiat. This will limit borrowings and accumulated debt.

    Here is a hint on how we shoud go forward, does anybody here remember Iceland? Yes you all remember them they were the first country to fall but strangely you dont here anything about Iceland anymore………….ever wonder why?

    http://www.bloomberg.com/news/2011-02-01/iceland-proves-ireland-did-wrong-things-saving-banks-instead-of-taxpayer.html

    My favorite bit is this:

    “Iceland did the right thing by making sure its payment systems continued to function while creditors, not the taxpayers, shouldered the losses of banks,” says Nobel laureate Joseph Stiglitz, an economics professor at Columbia University in New York. “Ireland’s done all the wrong things, on the other hand. That’s probably the worst model.”

    So whilst the rest of the world has chosen to protect the money junkies and F*&%K over its people by dropping the bill on them Iceland chose to F*&^%K its money junkies and they are now doing very well thankyou.

    So JB you see we need to figure out how to change the scam sorry system before we can talk about how to govern correctly.

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    janama

    OT – Catalyst does an attack job on climate change deniers yet again. Disgraceful!!

    http://www.abc.net.au/catalyst/stories/3313559.htm

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    Kevin Moore

    From : The Story of the Commonwealth Bank

    http://www.alor.org/Library/Commonwealthbank.htm

    “Much more is known today about the long-term strategy of those international forces which created the International Monetary Fund and The World Bank. For example, with the emerging programme to establish a New International Economic Order, it has been revealed that the British economist, John Maynard Keynes, who played a major role in preparing the Bretton Woods Agreement, had in 1942 drafted a memorandum –

    ‘The International Control of Raw Materials’.

    This memorandum, listing those commodities which Keynes felt should be under international control, remained unpublished until 1974, the year when the United Nations made its Declaration for a New International Economic Order. Another influential architect of the Bretton Woods Agreement was Harry Dexter White of the American Treasury. White was subsequently appointed as an American Director of The International Monetary Fund. White allegedly committed suicide when he was exposed as a top Soviet agent.

    A fellow Marxist, Verginius Frank Coe, who had been White’s assistant in the American Treasury Department, was technical secretary at the Bretton Woods Conference and later appointed secretary of the International Monetary Fund. Following his exposure as a Communist agent, Coe left the U.S.A. and later worked as an economic expert for the Chinese Communist Government.

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    Kevin Moore

    From: The Story of the Commonwealth Bank.

    “At the official opening of the Commonwealth Bank in 1912, William Morris Hughes, the man who later became Australian Prime Minister and known affectionately as ‘the little Digger’, said: It (the Bank) stands here today as the outward and visible sign of the wealth and substance of the whole people. It is indeed Australia commercially translated in the terms of money. It is the symbol of our wealth: it will stand as long as we stand. Of its solvency there can be no doubt while the race that made Australia stands.

    This realistic comment was echoed after the end of the First World War, when Sir Denison Miller said, as reported in the Australian press on 7th July, 1921, The whole of the resources of Australia are at the back of this bank, and so strong is this Commonwealth Bank Whatever the Australian people can intelligently conceive in their minds and will loyally support, that can be done.”

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    Louis Hissink

    Obviously Ray Stevens is an “Austrian”. What a hoot of a song and his one about airtravel is as brilliant!

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    Kevin Moore

    Thou shalt not steal – the banks hate competition.

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    Bruce D Scott

    I have been a Ray Stevens fan for decades. Guitarzan anybody? (pardon the spelling).

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    pat

    who’s sleeping?

    9 Sept: Sydney Morning Herald, Australia: Adam Gartrell, AAP Diplomatic Correspondent: UN boss urges climate sceptics to wake up
    United Nations boss Ban Ki-moon has urged sceptical Australians to face up to the “alarming” reality of climate change as he wrapped up a week-long tour of the Pacific…
    “For those people who are still sceptical about the impact of climate change then I would invite them to visit Kiribati,” Mr Ban told journalists in Canberra.
    “I would invite them to visit the Aral Sea or Lake Chad.
    “You will see very clearly that something is happening much, much faster than you may think. This is alarming.”…
    “The Aral Sea was more shocking,” he said.
    “What I saw was continuing, endless seabed, now only salt. There was no single drop of water I could see.”
    Mr Ban said the science of climate change was clear.
    “We must take action. Every country – big or small – they have to take their national measures. And every citizen, they have to do their own (part).”…
    http://news.smh.com.au/breaking-news-national/un-boss-urges-climate-sceptics-to-wake-up-20110909-1k11a.html

    re the bankrupt solar company which received more than half a billion taxpayer dollars – Solyndra – which was raided by the FBI today and had records sealed (which, some on WUWT think, might be a political tactic):

    Solyndra – The Obama connection
    http://www.zerohedge.com/print/437415

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    Paul R

    Falsify both basic assumptions of:

    a.) The AGW model of Earth’s changing climate, and

    b.) The SSM model of the Sun’s constant heat.

    It’s pretty scary to think that there is deception being perpetrated regarding a harmless trace gas but if the deception involves the true nature of the sun then things start getting really nasty, not that any deception is benign.

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    Bob Malloy

    janama:
    September 9th, 2011 at 1:02 pm

    OT – Catalyst does an attack job on climate change deniers yet again. Disgraceful!!

    http://www.abc.net.au/catalyst/stories/3313559.htm

    Did you have to spoil my day like that.

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    janama

    Pat, regarding the SMH article – from
    Wiki –

    the Aral Sea has been steadily shrinking since the 1960s after the rivers that fed it were diverted by Soviet Union irrigation projects.

    There is now an ongoing effort in Kazakhstan to save and replenish the North Aral Sea. As part of this effort, a dam project was completed in 2005; in 2008, the water level in this lake had risen by 24 m (79 ft) from its lowest level in 2007.[citation needed][6] Salinity has dropped, and fish are again found in sufficient numbers for some fishing to be viable. However, the outlook for the remnants of the South Aral Sea remains bleak. The shrinking of the Aral Sea has been called “one of the planet’s worst environmental disasters”.[7]

    what’s Ban Ki-moon on about?? Trying to link this disaster to climate change??!!

    and as for lake Chad:

    Human population expansion and unsustainable human water extraction from Lake Chad have caused several natural species to be stressed and threatened from declining lake levels

    the guy’s a lying idiot!!

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    Kevin Moore

    The web of global lies are kept alive by means of the despicable politics of persecution and disregard for human dignity.

    The Lobby have devised a devious system, by which they implant lies into the brain by social pressure.

    As soon as there is social pressure applied to the media, schools, economy etc. most people will accept downright lies as truth.

    There are two kinds of adaptation. The first one is a public adaptation, such as, when people modify their opinions so as not to be regarded as outsiders. They accept information from others, but only in a shallow way. Their own information still remains filed away in their memory.

    The other adaptation is the personal one: Here social pressure is actually changing individual memory.

    Let us not forget the World wide robbery instituted in the so-called financial crisis. This is especially with regard to the supposed saving of the Euro, all of which is based on lies and could never have happened without the original lie which the enemies of mankind utilise to gain their all-embracing immunity from harm.

    We have to focus on these facts: The enemies of humanity triumph by Lies and die with the Truth.

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    Robert

    Best wishes to you all from the states.

    Given the “issues” you are having with your government I thought this old piece I ran across might brighten the day for some. Seems fitting:

    A Queensland jackaroo is overseeing his herd in remote territory when suddenly a brand-new BMW advances out of a dust cloud towards him. The driver, a young man in a designer suit, Gucci shoes, Ray Ban sunglasses and YSL tie, leans out the window and asks the cowboy, ‘If I tell you exactly how many cows and calves you have in your herd, will you give me a calf?’

    The jackaroo looks at the man, obviously a yuppie, then looks at his peacefully grazing herd and calmly answers, ‘Sure, why not?’

    The yuppie parks his car, whips out his Dell notebook computer, connects it to his Cingular RAZR V3 cell phone, and surfs to a NASA page on the Internet, where he calls up a GPS satellite navigation system to get an exact fix on his location which he then feeds to another NASA satellite that scans the area in an ultra-high-resolution photo. The young man then opens the digital photo in Adobe Photoshop and exports it to an image processing facility in Hamburg, Germany.

    Within seconds, he receives an email on his Palm Pilot that the image has been processed and the data stored. He then accesses a MS-SQL database through an ODBC connected Excel Spreadsheet with email on his Blackberry and, after a few minutes, receives a response. Finally, he prints out a full-color, 150-page report on his hi-tech, miniaturized HP LaserJet printer then turns to the cowboy and says, ‘You have exactly 1,586 cows and calves.’

    ‘That’s right. Well, I guess you can take one of my calves,’ says the jackaroo.

    He watches the young man select one of the animals and looks on amused as the young man stuffs it into the trunk of his car.

    Then the jackaroo says to the young man, ‘Hey, if I can tell you exactly what your business is, will you give me back my calf?’

    The young man thinks about it for a second and then says, ‘Okay, why not?’

    ‘You work for the Australian Government’, says the jackaroo.

    ‘Wow! That’s correct,’ says the yuppie, ‘but how did you guess that?’

    ‘No guessing required.’ answered the jackaroo. ‘You showed up here even though nobody called you; you want to get paid for an answer I already knew, to a question I never asked. You used all kinds of expensive equipment that clearly somebody else paid for. You tried to show me how much smarter than me you are; and you don’t know a thing about cows… This is a herd of sheep. Now give me back my dog.’

    Most of us are pulling for you, but as you know by the news we have our own idiots in office (and their supporters) here as well.

    We live in interesting times.

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    Bulldust

    Ban Ki Moon is the ultimate politicians’ politician. He can smile while lying through his teeth and not break step. The problem is it is very hard to attack the UN types on prinicple. They are extremely verbose, waffly and long-winded. This is not a Government model which overthrows your democracy overnight, but slowly stifles it with dense bureaucracy. A slow, smothering death.

    It is a very effective way to kill any sense of resistance. We can certainly see it in action in Europe, the mini-UN model in action.

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    RJ

    Crakar24:
    September 9th, 2011 at 12:36 pm

    “We got in this mess because of the money junkies we have a banking system that runs on debt”

    Why are people so completely and utterly ignorant about the moeny and banking system

    Money and banking has ALWAYS run on debt and credit

    DEBT = CREDIT = MONEY

    As we age we need more credit for savings. The means more debt

    Simple simple simple stuff.

    Jo should read this

    http://moslereconomics.com/ [SNIP link to a commercial] ED

    Or anything on this site

    http://moslereconomics.com/mandatory-readings/

    Or this

    http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    And then help to educate people on this site

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    It is good to see Ray Stevens is still around! He must be getting old. He did “The Streak” back when I struck! And he is still as inciteful as ever!
    [Oh yes they call him the streak..veeewwwww,,fastest thing on two feet...
    Loved it as a kid.] mod oggi

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    NicG

    @RJ
    September 9th, 2011 at 9:46 pm

    Banks and banking may run on debt and credit. That is their business and they do it at their own risk (unless you can get a taxpayer bailout of course) and they are generally obliged to show a profit on the balance sheet. Shareholders take a dim view if they don’t.

    So when the bank uses the money I have invested with them to earn a profit by lending this to somebody, I get a return on this investment in the form of interest.

    Sovereign economies are not banks. They are not in the business of making profit and are not obliged to so. So when they run out money where do they get more from? The taxpayer maybe? So what is the return on my investment here?

    So maybe the question ought to be…

    “Who is holding all the markers?”

    Cheers
    NicG.

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    RJ

    “Banks and banking may run on debt and credit. That is their business and they do it at their own risk (unless you can get a taxpayer bailout of course) and they are generally obliged to show a profit on the balance sheet. Shareholders take a dim view if they don’t.

    So when the bank uses the money I have invested with them to earn a profit by lending this to somebody”

    Banks do run on debt and credit. There is no doubt whatsoever about thos

    And the money that you deposit with the bank is your ASSET but the banks LIABILITY

    They can not use this liability. For example if you sell you house to another person who banks at your bank. All this achieves is credit transfers from the buyer to the seller.

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    Mark D.

    RJ, You are wrong. Banks do not run on DEBT. The correct word is DEBIT and is only one half of an accounting entry (balance sheet). http://en.wikipedia.org/wiki/Debits_and_credits

    In the USA a bank running in debt will be closed by the Bank Examiner. See wiki: http://en.wikipedia.org/wiki/Bank_failure

    More specifically, a bank usually fails economically when the market value of its assets declines to a value that is less than the market value of its liabilities.

    In other words is in debt.

    The rest of your post is like before; accounting mumbo jumbo semantics games.

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    Roy Hogue

    It’s a little easier to comment about America and Obama when you don’t live here. But when you live here these things are a little too close to home.

    If you have followed Obama and read his two books — do read those books: The Audacity of Hope and Dreams From My Father — you will conclude that he brings a personal agenda to his presidency. And that agenda is to tear his country down to third world status. He is well on the way.

    If you don’t believe this I really don’t care. I read and I watch and I listen. It’s quite obvious.

    His progressive friends have no idea what they’re in bed with. And that he’s not done some of the things he said he would, pissing off his supporters in the process, is because of his narcissism that keeps him from persisting in anything that would get him wide spread disapproval. Witness the failure to close Gitmo (disapproval from Conservatives doesn’t count, by the way).

    I don’t envy you with your carbon tax in Australia. But at least you are not already $4 trillion in debt and counting while your prime minister proposes spending another $4 billion of borrowed money as Obama did yesterday. You still have some chance of getting things straightened out. We will be lucky to get to the end of Obama with a recognizable country.

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    Adam Smith

    Why is it that if inflation ever gets a bit too high, central banks respond by jacking up interest rates. Yet the U.S. unemployment rate is currently around 9%, yet the federal reserve is basically sitting on its hands?

    Why is it OK for average people to suffer with high unemployment, but if an increase in inflation risks devaluing the savings of the wealthy, then all hell breaks loose and interest rates are put up ASAP?

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    Mark D.

    Is it central banks or federal reserve? (hint one is plural the other singular)

    Gee Adam, why would the “central banks” be concerned with unemployment?

    Dumbass, inflation devalues EVERYBODY. In fact if you have no savings (ie poor or average) inflation does fairly little harm.

    You seem to have a problem distinguishing between unemployment and inflation. Please explain.

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    Mark D.

    Should be: devalues the savings of EVERYBODY…

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    RJ

    57
    Mark D.:
    September 10th, 2011 at 7:07 am

    “RJ, You are wrong. Banks do not run on DEBT. The correct word is DEBIT and is only one half of an accounting entry (balance sheet). http://en.wikipedia.org/wiki/Debits_and_credits

    You have a little knowledge but not enough.

    Banks earn interest on their customers debt. And pay interest on credit (or deposits).

    To earn interest they need to loan money (credit). This results in the following bank journal entry

    DEBIT Customer loan (banks asset but borrowers liability or DEBT)

    CREDIT Deposit cheque account (banks liability but borrowers asset)

    So the banks needs debt to earn interest. And society also needs debt because

    DEBT = CREDIT = MONEY

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    RJ

    58
    Roy Hogue:

    “If you don’t believe this I really don’t care. I read and I watch and I listen. It’s quite obvious.”

    It is only obvious to peopel who do not understand money and banking

    “But at least you are not already $4 trillion in debt “

    And what is the other side of the $4 trillion Govt debt liability

    A NON GOVT ASSET

    So Govt debt is the ONLY way to generate non Govt net financial savings required for retirement. As savings without this ALWAYS has an offsetting (non Govt) debt.

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    RJ

    60
    Mark D.:
    September 10th, 2011 at 12:50 pm

    Is it central banks or federal reserve? (hint one is plural the other singular)

    You need to do a lot more reading on this subject

    This would be a good start

    http://moslereconomics.com/mandatory-readings/

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    RJ

    Adam Smith:
    September 10th, 2011 at 12:30 pm

    Why is it that if inflation ever gets a bit too high, central banks respond by jacking up interest rates. Yet the U.S. unemployment rate is currently around 9%, yet the federal reserve is basically sitting on its hands?

    Unemployment is due to insufficient consumption bank credit. The ONLY ways to increase bank credit is

    1 New non Govt debt such as bank loans or bank overdrafts.
    2 Govt deficits and the resulting debt.
    3 Reduced Treasury (Govt) bonds held by the NON BANK sector. For example if banks buy Govt bonds from non Govt non bank holders

    That’s it. At present the non Govt sector is up to their neck in debt. So Govt must run higher deficits

    I suggest you could also benefit from the above reading. MMT is about the only accurate information available on money and banking. Hopefully Jo will also read this and then stop posting misleading information on Govt debt. It’s a topic where correcting misunderstandings is more important than CAGW.

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    RJ

    John Brookes:
    September 9th, 2011 at 12:08 pm

    Read this to understand why Ireland is in the sh+t

    http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    Because a Monetarily Sovereign nation has the unlimited power to create its sovereign currency, it never needs to borrow and it never can be forced into bankruptcy. It can pay any bill of any size at any time. In fact, the federal government creates money by paying its bills. The U.S. has created many trillions of dollars, simply by pressing computer keys, and will continue to do so. It does not “owe” anyone for creating these dollars. The government cannot live beyond its means; it has no means to live beyond.

    Debt hawks do not (or do not wish to) understand the implications of Monetary Sovereignty. You never will see that term on such debt hawk web sites as The Committee for a Responsible Federal Budget” or the Concord Coalition. If you go to those sites you will see federal debt described in the same terms as personal debt – as an unsustainable obligation. While debt can be unsustainable for you, me, businesses, states, cities, counties and the monetarily non-sovereign EU nations, no debt is unsustainable for the U.S. government.

    Debt hawks, and others ignorant of Monetary Sovereignty, suffer from Anthropomorphic economics disease — the false belief that federal finances are like yours and mine.

    The U.S. was not always Monetarily Sovereign. Prior to 1971, the U.S was on a gold standard. It did not have the unlimited ability to create dollars, since every dollar needed to be backed by a fixed amount of gold. No gold; no dollars. Similarly, the EU nations are on a euro standard. Their ability to create euros is limited by law. Our states, counties and cities are on a dollar standard. Their ability to create or obtain money by borrowing or taxing is limited by local law, by voters and by lenders.

    The financial problems of Portugal, Ireland, Italy, Greece and Spain (The PIIGS), are due not to deficits and debt. They are due to these nations having surrendered the single most valuable asset any nation can own — their Monetary Sovereignty

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    Steve Schapel

    Janama (#49)…

    the guy’s a lying idiot!!

    True. But also, he perpetuates the false argument that so many fall into the trap of accepting. He implies that all he has to do is show that climate is changing, or some environmental bad stuff is happening, in order to justify the drastic political steps he supports. But it doesn’t follow, of course – and I realise that you know it doesn’t. It is a huge leap. But how often do we see people missing out the three major intermediate steps:
    - increasing carbon dioxide is largely responsible
    - this is a bad thing
    - it is realistic for governments to try and control it.
    I am heartily sick of seeing people like Ban Ki-moon acting like it’s a big deal to demonstrate that change is happening.

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    theRealUniverse

    A little OT BUT relevant for ALL our health….
    Beware the aides of September!!!!!!!!!!!!!!!

    Webster G. Tarpley, Ph.D.
    TARPLEY.net
    September 9, 2011

    Washington DC, Sept. 9, 2011 – Late yesterday, Obama administration officials speaking off the record told reporters that they had a “credible but unconfirmed” threat warning for a terror attack around the time of the 9/11 anniversary is coming Sunday.

    This announcement caps a week in which numerous veterans of the original 9/11 false flag terror attack and cover-up have been prodigal with their media warnings that a repetition of the bloody tragedy of 10 years ago is simply a question of time. These figures have included former New York Mayor Giuliani, 9/11 commission chairs Hamilton and Kean, and many others.

    Based on the current intelligence constellation, a large-scale false flag terror attack over the coming weeks and months is now increasing in probability. This is because such a terror attack, plus the wars it could unleash and the martial law which it might be used to impose in Europe and North America, would facilitate measures which the ruling finance oligarchs of these nations judge to be essential for their short-term survival. The false flag attack could be blamed on Syria, Iran, Hezbollah, the Palestinians, or a range of others.

    Once again, the initiative may be passing into the hands of that rogue network, invisible government, secret government, parallel government, deep state, or special forces underground which exists at the point where Wall Street and City of London financial bosses intersect with the dominant personalities – active-duty and retired – of the Anglo-American secret intelligence establishment.

    The Rogue Network Behind 9/11 is Still in Place, and may be Preparing to Strike Again

    The only consipracy theory is the one put out by the US Govt after 9-11 2001

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    Tristan

    Because a Monetarily Sovereign nation has the unlimited power to create its sovereign currency, it never needs to borrow and it never can be forced into bankruptcy. It can pay any bill of any size at any time.

    At some level, deficit spending could cause inflation. For instance, if the government were to give every American $1 trillion, I am confident we would have inflation.

    What a genius.

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    Adam Smith:
    September 10th, 2011 at 12:30 pm
    Why is it that if inflation ever gets a bit too high, central banks respond by jacking up interest rates. Yet the U.S. unemployment rate is currently around 9%, yet the federal reserve is basically sitting on its hands?

    Why is it OK for average people to suffer with high unemployment, but if an increase in inflation risks devaluing the savings of the wealthy, then all hell breaks loose and interest rates are put up ASAP?

    If you knew anything about economics, you would not ask such a silly question. While unemployment is now over 9%, that directly affects at most about 18% of the people (and indirectly of course many more). However, inflation, much to your chagrin, affects everyone. It does devalue the savings of the wealthy – and the earnings of the poor. It is the most regressive tax on the poor there is, and it affects EVERYONE. So your grand $100 salary can no longer purchase a dozen eggs and milk, and only a half dozen eggs and a quart of milk. That is what inflation does. It robs everyone, not just the 10-20%.

    Take a class in ecomonics.

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    RJ

    Are you a deficit hawk Tristan

    Because a Monetarily Sovereign nation has the unlimited power to create its sovereign currency, it never needs to borrow and it never can be forced into bankruptcy. It can pay any bill of any size at any time.

    At some level, deficit spending could cause inflation. For instance, if the government were to give every American $1 trillion, I am confident we would have inflation.

    But we are nowhere near that point. (Debt hawks love to propose extreme circumstances, like the $1 trillion gift to each American, as “proof” deficit spending is unsustainable. But that is no more proof than the other extreme circumstance — tax every American $1 trillion — demonstrates taxes are unsustainable.)

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    RJ

    “If you knew anything about economics, you would not ask such a silly question. While unemployment is now over 9%, that directly affects at most about 18% of the people (and indirectly of course many more). However, inflation, much to your chagrin, affects everyone.”

    Maybe if you were unemployed your attitude would be very different.

    And inflation is not so bad. Yes some will lose money but others will also gain.

    I believe Govts are far too obsessed with inflation and not concerned enough about unemployment. Inflation within limit is not so bad (inflation has been well over 10% in Western countries not that long ago). Unemployment can have a terrible impact. Esp with youth unemployment being so high.

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    Tristan

    I don’t think so. I don’t love paying interest but presumably some circumstances warrant it. $18T seems like a lot of debt for a country with a $2T federal budget.

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    RJ

    Govt debt (a liability) always equals non Govt financial assets (either bank deposits or non bank held Govt bonds)

    and

    Govt interest expense = non Govt interest revenue.

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    Roy Hogue

    RJ @63,

    Wow! One more idiot weighs in on how you can borrow your way to prosperity.

    I can do without all the economic theories. The facts are staring us in the face. It’s requiring more and more of our GDP just to pay the interest. This will collapse in the not too distant future if we cannot stop the damned printing presses at the Federal Reserve Bank.

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    RJ

    Roy Hogue: @ 75

    The real facts are these

    A govt interest expense = exactly interest revenue for a non Govt entity. Like pension funds for example

    Govt debt = exactly an asset for a non Govt entity

    These are the facts that (ignorant) deficit hawks like to ignore. As they do this one

    We are currently short of credit. And the only realistic means of increasing credit is to increase debt.

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    RJ

    This will collapse in the not too distant future if we cannot stop the damned printing presses at the Federal Reserve Bank

    And this is complete garbage

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    RJ:
    September 10th, 2011 at 10:30 pm
    Maybe if you were unemployed your attitude would be very different.

    And inflation is not so bad. Yes some will lose money but others will also gain.

    And maybe if you were dead you would understand death. What a moronic statement!

    just do you know, I have been unemployed. I also lived through he stagfaltion of the late 70s. Inflation is the insidious tax on the poor. Unemployment affects some, but not all. Like I said, get an education in economics. Your knowledge of the field is non-existent.

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    RJ:
    September 10th, 2011 at 11:06 pm
    Govt debt (a liability) always equals non Govt financial assets (either bank deposits or non bank held Govt bonds)

    and

    Govt interest expense = non Govt interest revenue.

    So a household should just go into debt without end? The balance sheet of the world does not change, but as we see in the last stages of the spiral (Greece), A COUNTRY (or individual, household, company) cannot sustain enormous debt without disaster. The holders of the debt expect to be paid back, and not with inflation reduced money. If they see inflation eating away at their investment in the their holdings, they demand a higher return (thus the reduction in the US debt rating). it is really simple economics, but apparently over your head.

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    RJ:
    September 10th, 2011 at 11:37 pm
    This will collapse in the not too distant future if we cannot stop the damned printing presses at the Federal Reserve Bank
    And this is complete garbage

    No, it has happened before. Argentina, Weimar Germany. it will lead to collapse, the only question is when, not if.

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    Roy Hogue

    I need to correct a typo at 58. I dropped off the “1″ from the national debt and didn’t catch it. The figure is really $14 Trillion. That’s $14,000,000,000,000 spelled out. Compare that with annual income levels in the thousands, say $50,000.

    There are roughly 300 million people in the U.S. A quick calculation will tell you that every man, woman and child in the country is on the hook for $47,000, not counting interest. And it’s going up day by day.

    Most of that money is wasted, accomplishing nothing. Oops, sorry, it went to Obama’s supporters and Democrats favorite programs. It created no jobs and did absolutely nothing useful for a country in deep recession.

    I don’t understand why this doesn’t scare the stuffing out of everyone in Congress. But it doesn’t.

    There will be inflation — it has already started. The Fed will raise interest rates. Savings will drop precipitously in value. You want to ruin a nation? Just keep on spending money you don’t have. And I have no doubt that Obama is enjoying it.

    I have not even mentioned the new taxes that are needed to support Obama’s health care reform. He cleverly set it up so they don’t start until after he hopes to be elected to a second term. Does that tell you he knows those taxes will be, to put it politely, very unpopular?

    I cannot understand how so many people can look at 2 + 2 = ? and not get 4.

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    RJ

    Debt = credit = money

    If all debt is paid back there would be no money

    and countries in the Euro are in a much worse position than countries like the US

    http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    Perhaps no words more accurately and succinctly illustrate the confusion about economics than “Monetary Sovereignty.” A Monetarily Sovereign government has the exclusively unlimited power to create its sovereign currency. Monetary Sovereignty is the foundation of economics. The United States is Monetarily Sovereign. It has the exclusively unlimited power to create the dollar. China, Canada, Australia and Japan are Monetarily Sovereign. They have the exclusively unlimited power to create their sovereign currencies.

    Illinois, Cook County and Chicago are not Monetarily Sovereign. The dollar is not their sovereign currency, and they do not have the unlimited power to create dollars. France, Germany and Italy are not Monetarily Sovereign. They do not have the exclusively unlimited power to create their currency, the euro. You, your business and I also are not Monetarily Sovereign. Even Bill Gates and Warren Buffet do not have the unlimited power to create dollars. They are not Monetarily Sovereign.

    Because a Monetarily Sovereign nation has the unlimited power to create its sovereign currency, it never needs to borrow and it never can be forced into bankruptcy. It can pay any bill of any size at any time. In fact, the federal government creates money by paying its bills. The U.S. has created many trillions of dollars, simply by pressing computer keys, and will continue to do so. It does not “owe” anyone for creating these dollars. The government cannot live beyond its means; it has no means to live beyond.

    By contrast, if the debts of France, Germany et al, exceed their ability to obtain euros they, as monetarily non-sovereign nations, could be forced into bankruptcy.

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    RJ:
    September 11th, 2011 at 12:04 am
    Debt = credit = money

    If all debt is paid back there would be no money

    That is pure BS. Debt and Credit are one Means to enlarge the money supply, but they are not the enlargement of wealth. The increase in goods and services is the enlargement of the wealth. Debt and credit merely allow a more rapid expansion of capacity to achieve the end result. Please! You are embarrasing yourself with your foolishness! Take econ 101!

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    Roy Hogue

    RJ,

    Bullshit!

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    RJ

    No, it has happened before. Argentina, Weimar Germany. it will lead to collapse, the only question is when, not if.

    Completely different circumstances to the US (or Australia) today. Even moving off the gold standard has changed the whole ball game (for the better too) for the US.

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    RJ

    That is pure BS. Debt and Credit are one Means to enlarge the money supply, but they are not the enlargement of wealth. The increase in goods and services is the enlargement of the wealth. Debt and credit merely allow a more rapid expansion of capacity to achieve the end result. Please! You are embarrasing yourself with your foolishness! Take econ 101!

    Why are people so unbelievably ignorant about money?

    Money is the credit of the credit and debit entries to record trade between two parties. When they exchange assets, goods or services

    Without this we would have to move back to barter.

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    RJ

    There are roughly 300 million people in the U.S. A quick calculation will tell you that every man, woman and child in the country is on the hook for $47,000, not counting interest. And it’s going up day by day.

    Government $deficit = non government $surplus (net financial assets)

    SO A GOVT LIABILITY EQUALS EXACTLY A NON GOVT ASSET

    The ONLY way to generate net financial saving for retirement is from Govt debt

    $47000 retirement savings on average per head IS FAR FAR FAR FAR TOO LOW

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    RJ

    Roy @ 84

    Bullshit!

    Agree. Just about everything written by deficit hawks is

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    Alexander K

    @ Paul M – you obviously don’t do irony!
    And if you lived in the UK, as I currently and temporarily do, you would understand my comments. I am watching my income shrink alarmingly in real terms as energy charges head toward becoming unaffordable and literally millions of pensioners have to choose between being warm or being hungry, while the fat cats (the UK PM’s father-in-law as an example)draw down huge subsidies renamed as feed-in tariffs and frequently twice as much as the price consumers pay for their electricity, from the large installations of bird-mincers and sun-harvesters on the estates that their families have owned for hundreds of years, and so on.
    Mugabe, at least, does not pretend to be a nice bloke, and that is NOT irony!

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    Roy Hogue

    RJ,

    Being in debt is not necessarily a bad thing. I have a mortgage which I can manage quite easily. I also have a credit card that I use on a daily basis. But I pay the balance in full every month when the bill arrives. So no real debt there, I’m spending only money I have.

    Manageable debt is OK.

    What is not OK is when my government is continually raising the legal borrowing limit just to keep going the way it wants to go. That my friend is bullshit along with the idiotic theory to which you subscribe.

    You’ve been lecturing quite a lot here. Yet you can’t seem to find any support. How could that be? You know it all! How could all the dummies here fail to recognize your genius?

    You are a fool!

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    MaryFJohnston

    Alexander K you have summed up the situation quite nicely and most people should be able to get the message from it.

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    Mark D.

    I am pretty sure I said this before but RJ is insane. It is possible that he is he is just stupid but I think his affliction is much more complicated than simple stupidity.

    Just for the record, how do I spend the 47,000 I owe to balance the US deficit? C’mon RJ tell me how I can use that for my retirement meals?

    Insane. No; looney.

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    RJ

    You are a fool!

    From someone who hangs onto flawed beliefs. And will not let evidence and facts change their mind

    And this on a site where alarmists are rightly criticised

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    RJ

    Mark D.:
    September 11th, 2011 at 10:25 am

    Facts and evidence can be a curse at times. But stay in your Govt debt is bad church if you wish. But it’s based on ignorance of money and banking not facts.

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    Nick

    It does not matter a cracker how you juggle the books, which seems to be a fashionable way of “convincing” someone that your making a profit.

    Unless you are actually selling something for more than it cost you your doomed.

    The wests productivity has been taking a battering over the 10-20 years.

    It’s costing more to produce stuff, (which is why stuff is being manufactured elsewhere), and sells for less.

    Productivity is what it’s all about, and you can spin what ever monetary argument you like. Make more with less or get beaten!

    By the way, no dams, crap roads, a dysfunctional education system that prizes participation over achievement and the convincing of the young that what their parents have achieved is irrelevant, and therefore of no value, which leads to contempt leads me to beleive we’re done here.

    The west seems on a slide that will require assistance to recover from.

    Anyone here know how to speak hindi?

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    RJ

    That is pure BS. Debt and Credit are one Means to enlarge the money supply, but they are not the enlargement of wealth. The increase in goods and services is the enlargement of the wealth.

    It is not bullshit.

    We CAN NOT increase goods and services if we are short of credit (money). And to increase credit DEBT MUST ALSO INCREASE by an equal amount.

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    RJ

    But explaining facts on this site about money and debt is like explaining facts about global warming on an alarmists web site.

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    Roy Hogue

    We CAN NOT increase goods and services if we are short of credit (money). And to increase credit DEBT MUST ALSO INCREASE by an equal amount.

    RJ,

    If I could believe you were talking about actual wealth creators using credit (going into debt) then I would have no quarrel with that statement. Unfortunately I can’t make that leap of faith given all your prior nonsense.

    What I can believe is that you’re trying to justify government debt based on some bass ackward economic theory. Apparently it’s, “The more the merrier.” It won’t fly.

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    RJ

    What I can believe is that you’re trying to justify government debt based on some bass ackward economic theory. Apparently it’s, “The more the merrier.” It won’t fly.

    Do you agree with this

    Government $deficit = non government $surplus (net financial assets)

    In other words a Govt deficit and the resulting GOVT DEBT exactly equals a non Govt ASSET.

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    RJ

    “actual wealth creators using credit”

    By wealth creation I assume you mean production of real goods, services or assets.

    Actual wealth creation can ONLY really occur with credit and debt (unless we move back to barter). If a country is short of credit (or debt) then wealth creation will be less than it could be if credit is at a higher level.

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    Roy Hogue

    In other words a Govt deficit and the resulting GOVT DEBT exactly equals a non Govt ASSET.

    I don’t know how you can justify this kind of reasoning. Government debt is a bill the people must pay either with higher taxes or inflation. Both are destructive of the wealth of the people.

    And yes, I mean those who produce something that others are willing to pay for voluntarily. Those people borrow from banks, not the government. Right now banks are pretty tight fisted and you haven’t even begun to address the reason for that.

    I also realize that normally banks borrow from the Federal Reserve. Those loans are short term and banks pay them back. But that isn’t even happening at the moment. Banks are being very careful who they loan money to. After all, it was the making of thousands of really bad loans that finally broke the bubble and brought us to the situation were now “enjoying”.

    Meanwhile back at the White House, no one cares. They intend to keep going until they have destroyed capitalism and the prosperity that goes with it. Universal poverty suits them just fine. If you believe otherwise then you have not been a very astute observer of Obama and his henchmen.

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    Roy Hogue

    PS:

    Credit is not debt until someone borrows the money.

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    Mark D.

    Roy, I think you can stand down until RJ answers my question @ 92:

    Just for the record, how do I spend the 47,000 I owe to balance the US deficit? C’mon RJ tell me how I can use that for my retirement meals?

    After all that is debt and debt = money. So insane dumbass RJ, please answer my question: $47,000 of national debt (my share) how do I get cash (money) for it?

    Until the insane RJ can answer that his formula and useless links are worthless.

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    Crakar24

    Increase the limit on your credit card?, works for the US government.

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    Mark D.

    Crakar24 re104
    See, the trouble is since my government has been so useless these days, I have had to put much of my living expense on credit cards. I have no credit left to “tap”.

    According to the insane RJ, debt = money. I want the money for what my government has put into debt. (my share)

    Let him tell us how to do it.

    Oh and I bet any and all here $100 that he won’t be able to.

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    RJ

    After all that is debt and debt = money. So insane dumbass RJ, please answer my question: $47,000 of national debt (my share) how do I get cash (money) for it?

    What does D stand for. Because I do not know how much more I can give you (this is one last attempt before I just give up)

    You (or whoever you have transferred your money or credit to for assets or good or services) get the money back from the bank of course.

    Example

    A Govt runs a deficit to fund a payment to Mark for consultancy work

    The various journal entries are

    Treasury

    DEBIT Profit and loss Expenses (P+L aa)
    CREDIT Liability Govt debt (Balance sheet bb)

    Central Bank

    DEBIT Asset or reduced liability Govt debt held (Balance sheet bb)
    CREDIT Liability Bank reserves (Balance sheet cc)

    Commercial banks

    DEBIT Asset Central bank reserves (Balance sheet cc)
    CREDIT Liability Customer deposit (Balance sheet dd)

    Mark D

    DEBIT Asset Cash at bank (Balance sheet dd)
    CREDIT Profit and loss revenue (P+L aa)

    Now Mark d can either save or spend this money

    Lets say you invest this bank deposit in a pension fund

    The journal entry is

    Commercial banks

    DEBIT Liability Customer deposit Pension fund
    CREDIT Liability Customer deposit Mark D

    Mark D

    CREDIT Asset Cash at bank
    DEBIT Pension fund investment

    Pension Fund Ltd

    CREDIT Customer account Mark D
    DEBIT Cash at bank

    Now can you see what happens.

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    RJ

    CORRECTION

    This of course should be

    Commercial banks

    DEBIT CREDIT Liability Customer deposit Pension fund
    CREDIT DEBIT Liability Customer deposit Mark D

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    RJ

    And note the

    aa
    bb
    cc and
    dd

    above

    This shows that where financial assets are concerned

    A financial liability held by one party equal a financial ASSET held by another one

    An expense by one party equals revenue by another one

    So

    Govt expenses = non Govt revenue

    Govt debt (a liability) = Non Govt financial assets

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    RJ

    Mervyn Sullivan:
    September 8th, 2011 at 11:45 pm

    As a professional accountant and auditor, I am simply stunned by the way politicians administer the public purse.

    And maybe Mervyn can confirm my journal entries above. And also admit that in his post he (foolishly) only looked at one side of Govt debt. And forgot that

    Government $deficit = non government $surplus (net financial assets)

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    RJ

    Here’s an excellent post on US Govt debt

    And securities = Govt / treasury bonds

    And for me 2 should also include 2. Let deficits grow until we reach full employment and until we have greater net financial saving for retirement

    http://moslereconomics.com/2011/09/11/from-prof-andrea-terzi/#comments

    The US government currently owes about $14.2 Trillion. Who did we borrow that money from, and how did those financiers get that money?

    Has that money always been on earth? If not, then where did it come from? Did somebody issue it into existence? If so, then by what authority did they do so, and for what reason do nations lack that authority?

    This is an excellent question. Where does the money that the Government borrows come form? And the answer is: It comes from the Treasury and the Fed! And it cannot come from any other source. This is what so few people realize, perhaps because economists are too reluctant to explain.

    When the Government ‘borrows’, it sells Treasury securities and receives reserves from banks. Bank reserves are deposits at the Fed owned by banks. Deposits at the Fed can only come into existence through two channels:
    1. Government spending (e.g., when the Treasury buys output from business or pays federal employees); and
    2. Fed lending (e.g., when the Fed makes loans to banks).
    This means that the money that government borrows (bank reserves) ultimately comes from the Treasury or from the Fed.

    This simple statement has significant consequences:
    -The Government does not borrow money created by others,
    -The Government does not borrow anything it cannot create itself,
    -The Government has no functional need to borrow,
    -The Government issues securities because if it did not, the banks would have an excessive amount of reserves and the interest rate would go to zero,
    -When the Government borrows, it functionally makes monetary policy (in the same way as the Fed doing open market operations),
    -Governments self inflict deficit and debt rules onto themselves that are causing the world economy to collapse

    -Rules for governments that aim to promote jobs and prosperity should be:
    1. Do not overtax the economy for any desired size of the government sector;
    2. Let deficits grow until we reach full employment;
    3. Do ‘quality spending’ to create jobs and control prices.

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    RJ:
    September 11th, 2011 at 12:12 am
    Completely different circumstances to the US (or Australia) today. Even moving off the gold standard has changed the whole ball game (for the better too) for the US.

    Every situation is unique as to cause, but the factors are the same. Irresponsible printing of money in both cases (I will not comment on the Australia sitatuation as I am not totally familiar with it) is the same that is happening in the US today. So while we are not “repaying war debts” (as in Weimar Germany), we are trying to print money to pay for a social network that is unsustainable (just as in Argentina). So you are incorrect to say “completely different”. There are enough similarities, and regardless of the reasons, the same actions being taken.

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    RJ:
    September 11th, 2011 at 12:15 am Why are people so unbelievably ignorant about money?

    Money is the credit of the credit and debit entries to record trade between two parties. When they exchange assets, goods or services

    Without this we would have to move back to barter

    You are confusing accounting with economics. While somewhat related (in that they both deal with money), they are hardly interchangeable. Money is the medium of exchange in Macroeconics (it is the debits and credits in Accounting). I am sure your accounting degree does you well in your career, but it is hardly a substitute for economic knowledge.

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    RJ:
    September 11th, 2011 at 6:11 pm
    But it’s based on ignorance of money and banking not facts.

    Exactly! But “money and banking” is not economics. He is right, and you are wrong. Please take some econ courses. They will not hurt your accounting degree, but will make you wiser on why debt is not an unlimited asset.

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    RJ:
    September 11th, 2011 at 7:30 pm
    It is not bullshit.

    We CAN NOT increase goods and services if we are short of credit (money). And to increase credit DEBT MUST ALSO INCREASE by an equal amount.

    You CAN increase wealth without debt and credit. But it is much slower to accomplish it. For a growing population, it is not enough to just live off barter (wealth was created when there was only barter), but again, you are confusing Accounting with economics. Unlimited debt is not good, and while it balances on a T-Chart, it does not serve a public as it leads to inflation and the devaluation of the money held by everyone (poor even hold money, even if for a short time). Thus it is a tax on everyone. Small debt means small devaluations, and is not usually detrimental. Large debt is. See Greece, Spain, Portugal, Ireland, Italy, etc. for current examples of runaway debt.

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    RJ:
    September 12th, 2011 at 5:57 pm
    Here’s an excellent post on US Govt debt

    And securities = Govt / treasury bonds

    And for me 2 should also include 2. Let deficits grow until we reach full employment and until we have greater net financial saving for retirement

    yes, just like in Weimar Germany and Argentina. Your quoted text is fine for idiots. The man does not know what he is talking about. The dollar bills come from where he indicates, but not all debt is held in dollar bills. Most of it is just on a balance sheet, so China buys our debt with their currency. That does not create a dollar bill, just a ledger entry. WHen no one wants to buy the debt (because the return stinks), then the Fed has to step in and print the money (like it did). So while we are not on the gold standard (an easier concept to grasp for many), we are still on the asset standard. In otherwords, the wealth of a nation is not measured by how many dollar bills (Marks, Francs, Yuan, or whatever) it has, but on the assets it has. More dollar bills means that each dollar represents fewer assets, and thus it is a devaluation.

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    Mervyn Sullivan

    President Obama is so devoid of innovative ideas on job creation and wealth creation in the U.S., and what made America great in the first place, he could learn a worthwhile lesson from the following article about Canada:

    http://online.wsj.com/article/SB10001424053111904836104576560933917369412.html?mod=rss_opinion_main

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    RJ

    “You CAN increase wealth without debt and credit. But it is much slower to accomplish it. For a growing population, it is not enough to just live off barter (wealth was created when there was only barter), but again, you are confusing Accounting with economics.”

    What sort of economics are you referring too. Economics that does not understand the link between debt and credit.

    This is fiction based on ignorance of money and banking not economics.

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    RJ

    so China buys our debt with their currency.

    I give up. This is complete nonsense.

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    RJ:
    September 13th, 2011 at 12:40 am
    What sort of economics are you referring too. Economics that does not understand the link between debt and credit.

    This is fiction based on ignorance of money and banking not economics.

    Your ignorance is again showing. You are talking accounting. Again, debits and credits are accounting terms for a T-Chart. It is not economics. It is a small part of economics, but not the totality of it. The fiction is the one where you are trying to make economics a subset of accounting. it is the other way around.

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    RJ:
    September 13th, 2011 at 12:42 am
    I give up. This is complete nonsense.

    No, it is called economics. A field you apparently have no clue in. I am sure you are a cracker jack accountant. That does not make you an economist. It means you can balance a ledger. Should we ever come to “one world government”, you can then come back to your T-Chart and spout your accounting. However as long as we have different systems with different governments and rules, your “one world” accounting does not work on a global basis.

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    RJ

    Phil the economic guru

    Where do you think investors in China got the equivalent of us$1 trillion Chinese Yuan from to buy US Bonds.

    so China buys our debt with their currency.

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    RJ

    your “one world” accounting does not work on a global basis.

    Why don’t you just admit you know very little about accounting, money and banking and economics.

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    RJ:
    September 13th, 2011 at 1:05 am
    Phil the economic guru

    Where do you think investors in China got the equivalent of us$1 trillion Chinese Yuan from to buy US Bonds.

    No just an economist. They get their money from their assets. They are not the US assets any more than Chrysler’s assets are the property of Ford. They are not interchangeable. You do understand the difference between a Ford Asset and a Chrysler asset, do you not?

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    RJ:
    September 13th, 2011 at 1:07 am
    Why don’t you just admit you know very little about accounting, money and banking and economics.

    I never said I was an accounting guru, and if it makes you feel better, I will admit I am no accounting expert. Happy?

    I am an ecomomist and do understand money and banking and how it relates to economies and growth. You are too far down the rabbit hole to understand that rules for companies do not apply to the world (or even a country). While similar, they are not the same.

    So since we are being honest, and I have admitted I am no accounting expert (I know enough to be dangerous), please admit you are no economist and do not know what you are talking about.

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    RJ

    No just an economist. They get their money from their assets. They are not the US assets any more than Chrysler’s assets are the property of Ford. They are not interchangeable. You do understand the difference between a Ford Asset and a Chrysler asset, do you not?

    The Chinese sold real goods to the US and were paid with US currency. The US creates this US bank credit by a journal entry.

    The Chinese then use this US currency to buy US treasury bonds

    So now I have explained this to you can you agree this is incorrect

    so China buys our debt with their currency.

    So can you now agree with this.

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    RJ

    I am an ecomomist and do understand money and banking

    You do not understand money and banking

    For example you refer to Argentina. But do not understand the difference between Argentina that pegged its currency to the US (and paid the price). And the US that is the reserve currency

    Argentina’s problem was the US peg

    And Germany (or Zimbabwe)

    Read this article

    http://webofdebt.wordpress.com/2010/12/02/is-qe2-the-road-to-zimbabwe-style-hyperinflation-not-likely/

    Anatomy of a Hyperinflation

    Professor Michael Hudson has studied hyperinflation extensively. He maintains that “every hyperinflation in history stems from the foreign exchange markets. It stems from governments trying to throw enough of their currency on the market to pay their foreign debts.”

    It is in the foreign exchange markets that a national currency becomes vulnerable to manipulation by speculators.

    The Zimbabwe economic crisis dated back to 2001, when the government defaulted on its loans and the IMF refused to make the usual accommodations, including refinancing and loan forgiveness. Zimbabwe’s credit was ruined and it could not get loans elsewhere, so the government resorted to issuing its own national currency and using the money to buy U.S. dollars on the foreign exchange market. These dollars were then used to pay the IMF and regain the country’s credit rating. According to a statement by the Zimbabwe central bank, the hyperinflation was caused by speculators who charged exorbitant rates for U.S. dollars, causing a drastic devaluation of the Zimbabwe currency.

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    RJ

    And I have explained the difference between the Euro countries and the US

    This article is 100% correct. Even though Govt deficit hawks will not address the points raised

    http://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    Perhaps no words more accurately and succinctly illustrate the confusion about economics than “Monetary Sovereignty.” A Monetarily Sovereign government has the exclusively unlimited power to create its sovereign currency. Monetary Sovereignty is the foundation of economics. The United States is Monetarily Sovereign. It has the exclusively unlimited power to create the dollar. China, Canada, Australia and Japan are Monetarily Sovereign. They have the exclusively unlimited power to create their sovereign currencies.

    Illinois, Cook County and Chicago are not Monetarily Sovereign. The dollar is not their sovereign currency, and they do not have the unlimited power to create dollars. France, Germany and Italy are not Monetarily Sovereign. They do not have the exclusively unlimited power to create their currency, the euro. You, your business and I also are not Monetarily Sovereign. Even Bill Gates and Warren Buffet do not have the unlimited power to create dollars. They are not Monetarily Sovereign.

    Because a Monetarily Sovereign nation has the unlimited power to create its sovereign currency, it never needs to borrow and it never can be forced into bankruptcy. It can pay any bill of any size at any time. In fact, the federal government creates money by paying its bills.

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    RJ:
    September 13th, 2011 at 1:44 am

    The Chinese sold real goods to the US and were paid with US currency. The US creates this US bank credit by a journal entry.

    The Chinese then use this US currency to buy US treasury bonds

    So now I have explained this to you can you agree this is incorrect

    So you are going to double down on stupid? Your choice. They traded assets for paper (debt). That paper has to be backed up with assets. When you run out of assets, you are broke. You can print more paper, but still no assets to back them up, the paper is only good for wiping the nether regions.

    So how much paper do you need to wipe your nether regions? At the current rate of printing, several Benjamins should do you fine.

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    RJ

    I never said I was an accounting guru, and if it makes you feel better, I will admit I am no accounting expert. Happy?

    And it is impossible to understand money and banking if you do not understand double entry book keeping.

    This is why so many economists do more harm than good.

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    RJ

    They traded assets for paper (debt). That paper has to be backed up with assets. When you run out of assets, you are broke. You can print more paper, but still no assets to back them up, the paper is only good for wiping the nether regions.

    Give me strength. Do some reading on money.

    Money is the credit entry of a credit and debit accounting entry when trade takes place between two parties ie when real good services or assets are traded

    But you are so confused you need to do a lot of reading. I suggest you start with this

    http://moslereconomics.com/mandatory-readings/

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    RJ:
    September 13th, 2011 at 1:58 am
    And it is impossible to understand money and banking if you do not understand double entry book keeping.

    This is why so many economists do more harm than good.

    I did not say I did not understand it, nor did I say I did not understand double entry bookkeeping (so you are merely a book keeper?). Clearly you have never worked for a company run by an accountant. Not surprising – they do not last long. But that is besides the point. Your ad hominem not with standing, you understand T-charts and nothing else.

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    RJ:
    September 13th, 2011 at 2:03 am

    Give me strength. Do some reading on money.

    Money is the credit entry of a credit and debit accounting entry when trade takes place between two parties ie when real good services or assets are traded

    But you are so confused you need to do a lot of reading. I suggest you start with this

    http://moslereconomics.com/mandatory-readings/

    I would suggest the same. You think money is some type of asset. it is not. It represents assets, it is not an asset in itself. I would suggest you grab an old 1m Deutsch mark and see how much it is going to buy you (a hint – nothing – even collectors will not pay you for them). I do not have to read clowns who know nothing about that which they pontificate (as you seem to). I got my schooling from Dr. Williams. I know that is going to set you off, but then I cannot help your prejudices.

    I admitted I was not an accountant, but know enough to balance a ledger and fill out a T-Chart. You have yet to admit you do not know anything about economics. Sorry, you are just plain wrong. I am surprised they did not require you to take a class in econ when you got your training in accounting. But then the workings of most institutions of higher education is not about learning these days (sadly).

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    RJ

    http://blogs.independent.ie/independent_blog/2011/09/the-newera-stimulus-how-does-it-add-uplast-week-president-obama-announced-a-new-450bn-stimulus-program-to-promote-us-job-g.html

    When we entered the Euro we gave up our ability to issue currency and with it our ability to spend without revenue constraints – now, as in the case of the NewERA project, we essentially have to make do with what we have.

    This will become more and more of a burden in the future as the Irish government gradually learn from the Japanese and come to realise that the only realistic way for households to pay down debt is for the government to increase its spending.

    If the Europeans continue to ignore this simple but powerful truth and keep calling for austerity, the Irish will have to do something about this themselves. There are a few options on the table in this regard without dropping out of the eurozone.

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    RJ:
    September 13th, 2011 at 3:08 am

    WOW! Living within your means is now an anathema! You can find “experts” maintaining the earth is the center of the universe on the Internet. That does not make the right, nor this clown. He is bemoaning the fact they cannot print their way to prosperity! (but show me that has ever occurred).

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    Roy Hogue

    RJ,

    Still going I see.

    He is something I am absolutely convinced of — whatever you have said indicating to the contrary.

    The United States has borrowed huge sums of money from China and elsewhere in the world.

    DO YOU DISPUTE THIS?

    DO YOU DISPUTE THAT THIS DEBT MUST BE PAID BACK TO THE LENDER WITH INTEREST?

    DO YOU DISPUTE THAT THE MONEY TO REPAY THIS DEBT MUST COME FROM THE PRODUCTIVE CITIZENS OF THIS COUNTRY, EITHER IN THE FORM OF TAXES OR INFLATION OR BOTH?

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    RJ

    Roy

    I have explained why what you have posted is ALL complete and utter fiction based on ignorance of money and banking.

    But just to address one point

    The United States has borrowed huge sums of money from China and elsewhere in the world.

    Money (credit) must initially come from somewhere. Now I have clearly explained above where the US dollars came from (from US trade and Govt deficits).

    If it came from China then Chinese citizens must either

    Borrow 1 trillion is Yuan (take on yuan debt)or
    The Chinese Govt must run deficits equal to 1 trillion US dollars

    Neither has happened.

    But don’t let evidence and logic stand in the way of your flawed the world is going to end because of CO2 Govt debt beliefs.

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    RJ:
    September 13th, 2011 at 4:00 pm
    Roy

    I have explained why what you have posted is ALL complete and utter fiction based on ignorance of money and banking.

    But just to address one point

    You are like the man who jumped off the Empire state Building, and was heard to remark by a witness as he passed the 87th floor ‘so far so good’.

    We do not need theory or your inadequate knowledge of economics to know what happens when you mortgage your country to another. We have already seen the results (China, 19th Century to Britain, Germany post WWI to the Allies). When you can no longer keep your assets to work for you, you become a slave to another power (without them having to occupy you). I do not know where you get your ideas, but I do know they are so wrong as to be laugable (if the situation was the least bit funny). I have suggested you get an education, but like all “Know-it-alls”, you have dismissed that out of hand.

    Ingorance is curable with education. Stupid is chronic.

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    Mark D.

    RJ @ 106

    I understand the journal entries. That is basic accounting. I have to laugh that you have not understood what information you are missing.

    That “explanation” @ 106 did nothing to prove why or how the government deficit gets paid back. Does not explain how interest paid by the US government to China is not harmful to the US economy.

    Answer my question: If deficits are so good why do we pay taxes at all?

    Answer my question: why doesn’t the government just “write off the deficit” Why does it even record it at all?

    What is your ideal deficit?

    What is the ideal debt the US government should carry?

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    RJ

    What is your ideal deficit?

    The ideal deficit is one that

    1 Cuts unemployment and

    2 Generates retirement and other savings to the level required

    As

    Government $deficit = non government $surplus (net financial assets)

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    RJ

    I understand the journal entries. That is basic accounting.

    So can you see then why Govt deficits are essential to generate non Govt net financial assets needed for retirement?

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    RJ

    did nothing to prove why or how the government deficit gets paid back

    People need Govt debt for retirement saving. In effect this debt will be paid back AFTER people retire and start spending the money

    So

    Government $deficit = non government $surplus (net financial assets)

    The credit generated from a Govt defcit will go into pension funds. And stay in the pension fund until after a person retires. When they will start spending it

    So in effect

    Govt can start to run surpluses (and reduce Govt debt) if the average age (excluding the retired) starts to decrease.

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    RJ

    But do the reading. I have not got time to rewrite everything in the MMT articles.

    My logic is right. But people need to let flawed beliefs go

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    RJ

    I do not know where you get your ideas, but I do know they are so wrong as to be laugable

    This is what people revert to when the battle has been lost.

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    RJ

    http://rodgermmitchell.wordpress.com/2011/09/12/the-end-of-the-euro-as-we-know-it-greece-ireland-portugal-italy-spain-too/

    Though the PIIGS are monetarily non-sovereign and the U.S. is Monetarily Sovereign, there is at least one parallel: Austerity breeds austerity. Tax increases and federal spending decreases reduce economic growth, increase unemployment, and reduce the quality of life for all residents.

    This is a lesson not yet learned by the Tea/Republicans, old-line economists and the media. These slow learners, by demanding a reduction in the federal deficit, effectively will make the U.S. monetarily non-sovereign, and will guarantee a return to recession if we are lucky and depression if we are not.

    Greece is the bellwether. That nation demonstrates what happens to monetarily non-sovereign entities, long term. Though it is the Tea/Republicans who strive to make the U.S. monetarily non-sovereign, perhaps these politicians can be excused their ignorance. They are, after all, politicians. The economists cannot be so excused. They should know better.

    Austerity breeds austerity, in the PIIGS and in America. Unless we see a dramatic change in economics understanding, the last chapters of the Age of America now are being written. These chapters will describe a life of misery for you, your children and your grandchildren.

    It’s not to late to rewrite this ending. The first necessary step is to understand that a growing federal deficit is necessary — today, tomorrow and forever.

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    RJ:
    September 14th, 2011 at 12:05 am
    So can you see then why Govt deficits are essential to generate non Govt net financial assets needed for retirement?

    No they are not. They have not always been, and yet governments survived. You know nothing other than balance sheets. YOur ignorance of both history and economics is mind boggling.

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    RJ:
    September 14th, 2011 at 12:14 am
    But do the reading. I have not got time to rewrite everything in the MMT articles.

    My logic is right. But people need to let flawed beliefs go

    Your logic is not existent. Your postings are so bizarre as I will not even respond to most of them as they are pure garbage! Government’s do not need debts or deficits to pay retirees. If companies tried to do that, the officers would be locked up! Government can do it because they make the rules, not because it is a good thing to do.

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    RJ

    Government’s do not need debts or deficits to pay retirees. If companies tried to do that,

    This is the mistake the ignorant (of money and banking) often make. Comparing a monetary sovereign Govt to a company.

    If you will not do the above reading by monetary experts but prefer to hang onto flawed beliefs supporting by nothing but you own confusion then I can do no more.

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    RJ:
    September 14th, 2011 at 5:18 am
    This is the mistake the ignorant (of money and banking) often make. Comparing a monetary sovereign Govt to a company.

    Sadly for you, it is not. A country is a special company. Nothing more. As I said, they write the rules so they can engage in Ponzi schemes (such as SS), but the laws of economics apply to them just as they apply to any other financial entity. You have no clue about economics, or how the laws of supply and demand work. You have listed no monetary experts, just a bunch of bloggers and stuffed shirts that sadly are probably teaching our children – teaching them incorrectly.

    I am sorry you are too ignorant to know when you are just too ignorant (that is a statement of fact, not an insult). But I can tell while you are probably a decent book keeper, you have not run a company, and definitely not a company of any significant assets. Debt only works when you can service it. The debt of the US, like that of Greece, Ireland, etc. is rapidly approaching the point where it can no longer be serviced. Unlimited debt is not an asset, it is a liability. once you start repaying debt with capital, you are done. That is what happened in Weimar Germany and Argentina. That is what lead to hyper inflation. Companies cannot print money, so they declare bankruptcy. Countries just print money and make it worthless.

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    Roy Hogue

    RJ,

    As I said, you are a fool.

    Have a nice day.

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    Mark D.

    Phil, Roy, I think the most telling analysis is in the questions RJ does not answer.

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    Roy Hogue

    Mark D.,

    Unless I missed something he doesn’t seem to answer any question. He just spews out his netherworld economic theory and hopes we’ll buy it.

    We get called deniers undeserved but RJ is a DENIER of reality in bold capital letters.

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