4 ms·

Some counter perspective laid out by Peter Schiff, while I do not agree with everything said, I find it valuable and entertaining: https://www.youtube.com/watch

by kukx 6y ago

Some counter perspective laid out by Peter Schiff, while I do not agree with everything said, I find it valuable and entertaining: https://www.youtube.com/watch?v=M6k0QEnYpSQ https://www.youtube.com/watch?v=M6k0QEnYpSQ

throw0101a 6y ago
The same Peter Schiff calling for runaway inflation in 2008-2009? > He has that exactly right: the central dispute is between those who see depressions as the result of inadequate demand, implying that inflation will fall and that printing money does nothing unless it boosts employment, and those who see depressions as the result of maladapation of resources or something — anyway, something on the supply side — who predict that running the printing presses will lead to runaway inflation. > How could you test those rival views? Why, how about having a huge slump, to which central banks respond with aggressive monetary expansion? And that is, of course, the test we’ve just run. And everywhere you look, inflation is low, verging on deflation. > So we’ve just run the Schiff test — and his brand of economics, by his own criteria, loses with flying colors. And that goes for just about all anti-Keynesian doctrines: we ran as close to a clean experiment as you’re ever going to get, and the answer is no. * https://krugman.blogs.nytimes.com/2014/11/22/the-wisdom-of-peter-schiff/ https://krugman.blogs.nytimes.com/2014/11/22/the-wisdom-of-p...
- kukx 6y ago
  He predicted the financial crisis. And predicting is hard, especially, if you have a "creative" government. The underlying problem was postponed, not fixed, and it got bigger in the mean time. I do not agree with him on everything, but he has many apt observations and convincing explanations. And at least he looks at fundamental mechanisms, which I like to interpret as a hard reality. I believe we now live in a soft reality, where the sweet falsehoods are preached to and believed by masses.
  - throw0101a 6y ago
    The technical explanation why, when rates are zero, and you 'print money', inflation does not (or at least in all our current experiences has not) appear(ed): * https://en.wikipedia.org/wiki/Liquidity_trap https://en.wikipedia.org/wiki/Liquidity_trap It's what Keynesians (like Krugman) generally follow, and they've been right to date. Krugman for one has been writing about this since (at least) 1998 when Japan entered this situation: * https://www.brookings.edu/bpea-articles/its-baaack-japans-slump-and-the-return-of-the-liquidity-trap/ https://www.brookings.edu/bpea-articles/its-baaack-japans-sl... * Same paper: https://www.princeton.edu/~pkrugman/japans_trap.pdf https://www.princeton.edu/~pkrugman/japans_trap.pdf The paper is probably still relevant today, especially since more places are hitting zero. Krugman has made better predictions than some trillion dollar asset managers: * https://www.businessinsider.com/this-was-the-bill-gross-blunder-that-led-to-his-downfall-2014-10 https://www.businessinsider.com/this-was-the-bill-gross-blun... * https://www.salon.com/2014/10/03/paul_krugman_schools_the_deficit_maniacs_who_keep_“getting_it_wrong”/ https://www.salon.com/2014/10/03/paul_krugman_schools_the_de... * https://delong.typepad.com/delong_long_form/2014/10/pimco-how-to-lose-lots-of-money-and-still-influence-people-the-honest-broker-for-the-week-of-october-10-2014.html https://delong.typepad.com/delong_long_form/2014/10/pimco-ho... I started reading Krugman's weblog around 2009, and AFAICT, everyone who bet/predicted against Keynesian economics in the intervening years has generally been wrong (or at least more-wrong, even if K hasn't been spot-on).
    - kukx 6y ago
      The money printed to finance the government debt is not backed by a production of value. It just increases the money supply, while not increasing the amount of goods that one can buy with that money, hence by nature it is inflationary, ie it makes money less valuable. The market is complex and the effects may be postponed in time by years, but the fundamental mechanisms persist. The consequences are negative and sooner or later we will see them, or it is likely that we are already deeply affected.
      - throw0101a 6y ago
        > The consequences are negative and sooner or later we will see them, or it is likely that we are already deeply affected. This was published ten years ago (November 2010): > We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment. * https://economics21.org/html/open-letter-ben-bernanke-287.html https://economics21.org/html/open-letter-ben-bernanke-287.ht... Still waiting for said debasement and inflation. Any time now. Real soon.

by kukx 6y ago

throw0101a 6y ago

The same Peter Schiff calling for runaway inflation in 2008-2009? > He has that exactly right: the central dispute is between those who see depressions as the result of inadequate demand, implying that inflation will fall and that printing money does nothing unless it boosts employment, and those who see depressions as the result of maladapation of resources or something — anyway, something on the supply side — who predict that running the printing presses will lead to runaway inflation. > How could you test those rival views? Why, how about having a huge slump, to which central banks respond with aggressive monetary expansion? And that is, of course, the test we’ve just run. And everywhere you look, inflation is low, verging on deflation. > So we’ve just run the Schiff test — and his brand of economics, by his own criteria, loses with flying colors. And that goes for just about all anti-Keynesian doctrines: we ran as close to a clean experiment as you’re ever going to get, and the answer is no. * https://krugman.blogs.nytimes.com/2014/11/22/the-wisdom-of-peter-schiff/ https://krugman.blogs.nytimes.com/2014/11/22/the-wisdom-of-p...

kukx 6y ago
He predicted the financial crisis. And predicting is hard, especially, if you have a "creative" government. The underlying problem was postponed, not fixed, and it got bigger in the mean time. I do not agree with him on everything, but he has many apt observations and convincing explanations. And at least he looks at fundamental mechanisms, which I like to interpret as a hard reality. I believe we now live in a soft reality, where the sweet falsehoods are preached to and believed by masses.
- throw0101a 6y ago
  The technical explanation why, when rates are zero, and you 'print money', inflation does not (or at least in all our current experiences has not) appear(ed): * https://en.wikipedia.org/wiki/Liquidity_trap https://en.wikipedia.org/wiki/Liquidity_trap It's what Keynesians (like Krugman) generally follow, and they've been right to date. Krugman for one has been writing about this since (at least) 1998 when Japan entered this situation: * https://www.brookings.edu/bpea-articles/its-baaack-japans-slump-and-the-return-of-the-liquidity-trap/ https://www.brookings.edu/bpea-articles/its-baaack-japans-sl... * Same paper: https://www.princeton.edu/~pkrugman/japans_trap.pdf https://www.princeton.edu/~pkrugman/japans_trap.pdf The paper is probably still relevant today, especially since more places are hitting zero. Krugman has made better predictions than some trillion dollar asset managers: * https://www.businessinsider.com/this-was-the-bill-gross-blunder-that-led-to-his-downfall-2014-10 https://www.businessinsider.com/this-was-the-bill-gross-blun... * https://www.salon.com/2014/10/03/paul_krugman_schools_the_deficit_maniacs_who_keep_“getting_it_wrong”/ https://www.salon.com/2014/10/03/paul_krugman_schools_the_de... * https://delong.typepad.com/delong_long_form/2014/10/pimco-how-to-lose-lots-of-money-and-still-influence-people-the-honest-broker-for-the-week-of-october-10-2014.html https://delong.typepad.com/delong_long_form/2014/10/pimco-ho... I started reading Krugman's weblog around 2009, and AFAICT, everyone who bet/predicted against Keynesian economics in the intervening years has generally been wrong (or at least more-wrong, even if K hasn't been spot-on).
  - kukx 6y ago
    The money printed to finance the government debt is not backed by a production of value. It just increases the money supply, while not increasing the amount of goods that one can buy with that money, hence by nature it is inflationary, ie it makes money less valuable. The market is complex and the effects may be postponed in time by years, but the fundamental mechanisms persist. The consequences are negative and sooner or later we will see them, or it is likely that we are already deeply affected.
    - throw0101a 6y ago
      > The consequences are negative and sooner or later we will see them, or it is likely that we are already deeply affected. This was published ten years ago (November 2010): > We believe the Federal Reserve's large-scale asset purchase plan (so-called "quantitative easing") should be reconsidered and discontinued. We do not believe such a plan is necessary or advisable under current circumstances. The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment. * https://economics21.org/html/open-letter-ben-bernanke-287.html https://economics21.org/html/open-letter-ben-bernanke-287.ht... Still waiting for said debasement and inflation. Any time now. Real soon.