Foreign money lending, debt

[Thrawn]

Originally posted by lasersailor184
We always owe money to someone.  Often it goes to out of country people.  It really doesn't matter who.  The money always gets paid back.

It always get's paid back eh?  Except when it doesn't.  Cripes, if it always get's paid back then can you explain why your federal government has had to start monetizing it's debt?

Because soon we'll be in an economic boom and someone else will be in a recession.  It is just the way it happens in the world.

Well, with arguements like "It just is that way", I'm sure that you will shortly have nay sayer's being crushed in the mighty grip of your reason.

It actually stimulates the world's economy (not just the debtor and loaner) to buy bonds and loans of a (stabile) country in an economic recession.  It has to do with the power of the currency and how it changes as the economies rebound.


Now, as our economy is going up (which it will) it benefits the people who have the loans and bonds and have bought stocks in the US Dollar.

The USD has lost, what 30% of it's value in the past few years?  Many pacific rim nations are diversifying thier reserve currencies.  The UK, Australia and Canada are as well.  Ten years ago 96% of Canada's reserve currency was USDs, it's now down to 46%.  The US current account balance is mind bogglingly huge, and grows massively every year...but everying is find with USD and other promisary notes?  Nope.

[lasersailor184]

I've already explained how it happens thrawn.  Pull your head out of your bellybutton and read it.  It's right here on this page.  I will be damned if I'm going to repeat it because you refuse to read it.

[DREDIOCK]

Lasersailor,
thank you for responding

[Thrawn]

Originally posted by lasersailor184
Everything you just said (if practiced) would **** an economy quicker then disbanding the country itself.

Excellant refutation!  I admit, I am powerless to overcome the, "Well you're just wrong!", arguement.

I figured something like this would happen if I explained why.

You haven't explained squat, you have parroted statements you learned in first year ecomonics without explaining the reasoning behind them.
 

All those practices I explained have nothing to do with socialism, capitalism, conservatism, or liberalism.  They are action reaction events.

 

Are you going to say next that they don't have anything to do with economics?  A centalised government planning the economy isn't socialism?  Well cripes, I guess your commie professors don't actually want you to know what they are teaching you.

Just an FYI, I had two economics professors.  Both of whom were card carrying Republicans.  But they never brought politics into the equation.

Card carrying Republicans?  Have you seen how much money the Republicans have spent in the past few years?  Heck that card almost guarauntees they are socialists.

[Thrawn]

Originally posted by lasersailor184
I've already explained how it happens thrawn.  Pull your head out of your bellybutton and read it.  It's right here on this page.  I will be damned if I'm going to repeat it because you refuse to read it.

Nah, ya didn't you said...


"So here are the general rules for the economy. When the economy is bad, you want to cut Taxes a little, and increase Government spending a lot. I know, it sounds absolutely wrong, but the numbers work out and it makes sense if you could read a few charts.

Visa Versa, when the economy is doing well, you want to increase Taxes and cut Government spending. Sounds contradictory, but until you take an Econ course you're going to have to take my word for it."


To paraphrase, "This is the way I was told it works.  It sounds like bull****, but you better believe me because you are an ignoramous, and I are TEH SMRT!"

You didn't explain anything.



PS:  Vis a vis GDP (heh, that rhymes), can you explain how increasing the speed of currency circulation helps an economy?  Thx.

[DREDIOCK]

Thrawn.

And with all due respect to you.
I havent seen you putting up much in the way of making counterpoints other then finding creatively  different  ways of saying  "your just wrong" Yourself.

If you have a valid counterpoint please make it so those of us less educated on the subject might better understand and see both sides of the coin so's to speak

thanks in advance

[Thrawn]

"It sounds abosolutely wrong because it is. Increasing government spending through debt spending screws up the economy in so many ways. It misallocates resources, of which there is a finite supply no matter how much money the Fed prints off or the government borrows. Investment wealth is misallocated from enterprises that would supply actual demand, to bs government make-work projects. Labour is misallocated to said make-work projects, etc. What's more this debt has to be financed, and it's a gamble that the economy will recover to point where it can pay it off. All you do by increasing government spending is make the recovery take longer."

"Cripes, if it always get's paid back then can you explain why your federal government has had to start monetizing it's debt?"

"Cripes, the US hasn't even begun paying off Reagan's debt and you're sitting here telling people how great supply-side economics is?"

"The USD has lost, what 30% of it's value in the past few years? Many pacific rim nations are diversifying thier reserve currencies. The UK, Australia and Canada are as well. Ten years ago 96% of Canada's reserve currency was USDs, it's now down to 46%. The US current account balance is mind bogglingly huge, and grows massively every year...but everying is find with USD and other promisary notes? Nope."


Wow, I like the word "Cripes".

[lasersailor184]

It's a simple buy low sell high idea.  The dollar is going to trail the economy into a recession.  So companies (and sometimes countries) buy low and then ride the dollar as it goes higher.  We do the exact same thing to other countries.

All of these things always go in patterns.  You will always have a recession, followed by a boom, followed by a recession.  The real question is how big of a change will it be?

[Thrawn]

Originally posted by lasersailor184
It's a simple buy low sell high idea.  The dollar is going to trail the economy into a recession.  So companies (and sometimes countries) buy low and then ride the dollar as it goes higher.  We do the exact same thing to other countries.

Okay, let's run with the company/stock analogy.  What would you expect to happen to the value of a company's stock if every year it issues gobs and gobs more of it, yet does not proportionally increase production capacity?  What would you expect to happen to the value of it's stock if a stockhold went to trade it in, yet no one bought it...not even the company.

The Fed prints off hundreds of billions of more USDs every year.  China recently tried to trade in some of it's hundreds of billions of reserve USDs to by Unical, and was told to go **** itself.  The exchange of USDs isn't analogous to any other country, and that's because a good portion of the world uses it as it's reserve currency.  But that is changing.  There are some 14 trillion USDs sitting out thier out of circulation.  There is no way in hell the US can buy those back.  The US federal government's debt situation is so bad, they have to sell it to the Federal Reserve Bank.  And the Fed has to print off even more dollars to cover it.  

Now tell that this situation is going to go on like that forever, or that magically the actual production capacity of the US increase by several orders of magnitude so that all those promisary notes can be bought back.

All of these things always go in patterns.  You will always have a recession, followed by a boom, followed by a recession.  The real question is how big of a change will it be?

Yeah sure, and the world has always used a fiat currency system as well.  Tell me, you say there has always been a boom-bust cycle, what causes it?

[Sandman]

Originally posted by Holden McGroin

Balancing the check book lies with congress.

IIRC, the Congress does the appropriation. The authorization is up to the President. He shares the burden.

[detch01]

Originally posted by Thrawn
 Tell me, you say there has always been a boom-bust cycle, what causes it?

1950's era text books?