Saturday, January 02, 2016

Why the Economy Hasn't Collapsed Yet

Please forward and share because this really would advance and resolve some debates in economics:


14 comments:

LooseScrew said...

Once again the Captain drills it with a terrific discourse about THE most important topic of the day which should concern everyone. But sadly, when it comes to govt’s financial matters, most seem numb. Why? Because 98% of the population are utterly ignorant & illiterate when it comes to the structure & operation of that evil beast with 9 lives, the FED. All other issues take a back seat to the importance of the problems caused by fiat money, central banking, & inflation. To paraphrase Henry Ford, If people understood our banking and money system, I believe there would be a revolution before tomorrow morning. Yes indeed, it really is that bad.

Fortunately it’s a simple problem to understand, but it does take quite a bit of study to gather all the facts & details and put them in logical order to fully comprehend the situation. But not to fret. The Captain has done such a great job with his video, and here are a few links to additional material that will help put the puzzle together:

http://www.theburningplatform.com/2015/02/27/inflation-economics-in-one-easy-lession-or-how-i-learned-to-stop-worrying-and-loathe-the-fed/#more-93292

https://www.caseyresearch.com/articles/that-couldnt-possibly-be-true-the-startling-truth-about-the-us-dollar

“I believe that banking institutions are more dangerous to our liberties than standing armies.” –Thomas Jefferson

Anonymous said...

I have a question for you Dr. Clarey. What difference does it make if the Federal Reserve gets stuck with the tab at the end of the party? It's not like it takes any labor or productive value for someone to hit any non zero digit on the keyboard, and then set the corner of a whiskey glass on the 0 key to create an infinite amount of money to pay off all the debts on its balance sheet. It's not the money is going to be worth anything at the end of the party anyway.

Look at me I could work for the Federal Reserve: 300000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

Maybe you should delete that before I get thrown in prison for counterfeiting.

Samson said...

Cap'n, I will be sharing this, as it is far and away the best, easiest-to-understand explanation I've seen.

grey enlightenment said...

Strong profits & earnings help too. People keep buying stuff. Business to business as well.

Anonymous said...

An excellent succinct summary. Well done, I will recommend to my friends.

Tucanae Services said...

EXCELLENT expose! When the foreign dollars come home to roost all hell is going to break loose.

One thing you did not touch on is why many corps are buying TBills. The simple answer is of course, there are not investments in the economy right now providing a better (albeit negative return) than the TBill rate. So the saying goes, 'when all else fails, by bonds. You will get your money back.'

sth_txs said...

http://charleshughsmith.blogspot.com/2015/12/theres-no-upside-left.html

http://charleshughsmith.blogspot.com/2015/12/honey-i-shrunk-middle-class-perhaps-13.html

Anonymous said...

I'll watch this videos as soon as I have time. Meanwhile I have to say I finally understood RELIGION Cappy.
Guess what will happen when the Economy will collapse Cappy ? We will need a new JESUS. And they are teaching some of us since our early days to be prepared to be crucified like Jesus. Another reason to isolate all institutionalised religions.

Anonymous said...

Thank you for your insight. You've explained and confirmed things that I've suspected for awhile.

I would like to know what things specifically drive up rent, other than increased property taxes and more demand because of more people moving into cities, who are economically unable to afford to buy a house. Wages are flat, so maintenance people shouldn't be more expensive. Some utilities are getting more expensive, but a lot of landlords don't provide them. What kind of overhead are landlords facing now?

In Seattle, where I live, it seems like the real estate market has gone insane. The city is being bulldozed for condos, apartments, and tiny apartments that are often smaller than a dorm room. The justification behind all of this construction is that the city needs more "affordable housing". I think the situation is a scam. The new housing stock can't afford to be "affordable" as defined by the City Council. They're also overbuilding, so I think that the banks will get screwed because there won't be enough tenants to keep up cash flow.

I suspect that the only business loans being granted by local banks around here are loans to developers. Undoubtedly, the banks have been having problems trying to find things to invest in; just as individual investors have been having problems finding anything lucrative to invest in. While I understand the possible reasoning behind the bank loans, I think it's suicidal.

I've been wondering if there might be some sort of federal mandate that I don't know about that may be encouraging this kind of sudden, runaway, urban development? After all, construction is one of the "leading economic indicators" according to the feds. Could this also be a badly thought out "jobs program"?

Finally, to add to the clusterfuck, the city wants to upzone the entire city and force developers to add low income housing to their projects. This year they've played with property assessments in districts that they've already upzoned. The sudden tax increase has skyrocketed in one year. It's enough to make your eyes bleed when you read the notice. Obviously, the increase was designed to force single family homeowners to sell out to developers. The social engineering by the city is absolutely insane. Who wants to pay market rate for an apartment when someone on Section Eight can get it for pennies on the dollar? They would also like to start rent control, but they currently can't because it would go against the state constitution.

I'd like to know if these things are happening in other U.S. cities?

TroperA said...

Anonymous, Obama has recently passed a housing initiative that will bring the Section 8 crowd right to your door. He's targeted it towards middle class neighborhoods and what you're seeing might be part of that. Apparently productive white middle class neighborhoods were hoarding all of the Magic Dirt, so our leaders figure if they can bulldoze some of the existing residences and build some Cabrini Greens on top of said Magic Dirt, it will make LaQueesha stop pumping out crack babies and start studying for her degree in Chemical Engineering.

Because that's how Geography works. Just move unproductive people next to productive people and the unproductive people will magically become productive. Every time! The reverse never happens! Ever!


Around here, rents are going up because Chinese investors have been buying up all of the properties and setting the rents at higher rates. And demand is still strong for them (I'm guessing because people can't afford to buy houses anymore.)

Koch Bro said...

Another way to create foreign demand for excess local money supply is to sell weapons on credit, and venues to use said weapons, so that more weapons can be bought.

Anonymous said...

There is one school of thought that when our debt is no longer desired there will be a big demand for cash, thus deflation initially, until folks wise up and reject the worthless dollars, too. Then hyperinflation "to the moon".

Red Knight said...

Capn, your explanation for why the economy hasn't collapsed yet might be true. How are we, though, to know whether it is? You provide your explanation partly in response to the sneers from the Left about all the failed right-wing predictions of economic collapse. However, if you get to do that, is your position even falsifiable? Is there any hypothetical future event that would prove the Left to be right in this case?

Eduardo Cuevas said...

That was a whole several years education wrapped in a 25 mins video! damn! way to go dude, and for free!