Pandemics can't be stopped with monopoly bills

2BInTO said:

Are we trying to understand each other? or our we trying to educate others by flexing our brain power? You can display great understanding and you connect with more people when the message is simple and understandable.

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I came in with the wrong attitude and I apologize. I would understand if you would prefer to leave the discussion here, but in case I didn't behave too much like a jerk, let me try to start over.

With regards to inflation, in plain English this time, we're trying to capture changes in a price that reflects what your average Mom and Pop would buy. It's based on an abstraction, so there absolutely is an issue of which prices we should consider and of how we should aggregate them, but if we absolutely have to use just one price index for everything, I believe most economists would pick a variant of the consumption price index (CPI). To be fair, that's annecdotal. I don't have a survey of either economists, or the entire literature. So, to revise my statement about what happened during the 2008-2010 period, the Federal Reserve Board increased the monetary base almost three folds and we have not seen abnormally high growth rates for any variants of the CPI.

It's perfectly possible that some prices that either receive a small weight or not weight in those consumption indexes moved a lot. You told me elsewhere that you trade on a daily basis, so you probably have something to say about this. In particular, you said that there was evidence of inflation in money markets. Can you give me more details?

Shale is just one example of several. i can't even remember where this discussion all started but there was significant inflation of many money assets which could be directly tied to the GFC response. junk bonds were floated etc etc.

2BInTO said:

What recession? We don't know the economic impact. We know people can't work so they can't pay rent and buy food. People need relief. Certain businesses may need relief. Blank checks across the board to corporate america may not be required and short demand shocks should be contemplated by prudent well capitalized companies. Big bailouts drive the debt up and could put strain on the USD- this is a valid issue. Sentiment is the driving force but how far should that go. The stock market should be able to go down not just up.

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I really like how you first question my assertion that we are in or headed for a recession.....and then confirm it with the rest of your comment.

We are seeing huge levels of declines in demand. A "recession" I think is the best we can hope for, the US manufacturing sector has been in recession for almost a year, the only sector that was up was services....and we can kiss that goodbye for a while. I'll repost this from another part of the forum:

i just do not see how there is going to be any sort of "sharp-V" recovery from this. In the GR, a relatively small number of consumers who were directly effected either by the loss of wealth from the devaluing of real property and/or the loss of wages. Re-hiring was slow, and I think most of that can be attributed to the lack of fiscal stimulus coming from Congress along with the lack of lending by banks. We peaked at @10% U3 in 09, Goldman Sachs is projecting 13% 2Q20 and 15% 3Q20, with real GDP declining by 34% in 2Q. This is going to be a much deeper and wider impact than the GR since the depletion of savings is going to be greater for the wider population. Unless there is a HUGE fiscal input to the bottom 2/3rds of the population, demand is going to be very low for a long time. Without the demand, it is going to be very tough for any new start-ups to get loans or investment, again making re-employment much like the last recovery...only worse.

2BInTO said:

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Shale is just one example of several. i can't even remember where this discussion all started but there was significant inflation of many money assets which could be directly tied to the GFC response. junk bonds were floated etc etc.

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US oil fracking is completely dependent on $60+ oil prices.

Gimmesometruth said:

I really like how you first question my assertion that we are in or headed for a recession.....and then confirm it with the rest of your comment.

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no. you should re read it. 'We don't know the economic impact'. Basically, i agree with you. last time big corporations were bailed out and the fed went QE crazy- none of it worked or addressed the problem. agree, right? monetary did not work. so we should not rush in and do it again rather cut checks to main streeters in known and real need now.

2BInTO said:

no. you should re read it. 'We don't know the economic impact'. Basically, i agree with you. last time big corporations were bailed out and the fed went QE crazy- none of it worked or addressed the problem. agree, right? monetary did not work. so we should not rush in and do it again rather cut checks to main streeters in known and real need now.

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You are moving the goal post, what is in dispute right now is your countering my assertion that we ARE in a recession.....and then saying:


If you don't think we are in or heading for a recession, what in the world would a person or business need "relief" from?

If you SERIOUSLY think "short term" means less than 2 quarters, I have a bridge for sale...

Gimmesometruth said:

If you SERIOUSLY think "short term" means less than 2 quarters, I have a bridge for sale...

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Ugh! this is beginning to ache. what 'short term' i don't see that anywhere. i don't care about your speculation of a recession or your argument that we have been in a recession for months or years- most people don't agree with that, but, i don't care about them either. ultimately, if you don't know how to fix the economy, monetary stimulus and corporate bailouts, what does 'if' and 'when' matter. what does matter is that joe public can't pay for food now.

relator said:

The debts of the countries convert the money of those countries into monopoly bills, and pandemics must be stopped with real money, not with monopoly bills.

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Gimmesometruth said:

Good grief....

Monetary and fiscal actions are being implemented to mitigate the recession.

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2BInTO said:

What recession? We don't know the economic impact. We know people can't work so they can't pay rent and buy food. People need relief. Certain businesses may need relief. ....

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2BInTO said:

i don't care about your speculation of a recession or your argument that we have been in a recession for months.....

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Good grief, you challenge my assertion that we are in a recession, I point out the flaws in your flip-floppy response.....and then I get the "I don't care about your recession argument....NOW!"

Stop notifying me of your failure to support a counter argument, your change of mind....mkay?

Gimmesometruth said:

Good grief, you challenge my assertion that we are in a recession, I point out the flaws in your flip-floppy response.....and then I get the "I don't care about your recession argument....NOW!"

Stop notifying me of your failure to support a counter argument, your change of mind....mkay?

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okay, i shook my head and circled back. what flip flop?! i never challenged your assertion about a recession- i didn't offer an opinion. if your inferring that a few weeks of joe blow public not being able to pay for groceries just automatically qualifies as recession your misunderstanding me and pretty much any definition of what a recession is. my point is don't bail out corps, no QE, don't try to ,in your words to 'mitigate a recession' by doing this. Even if it is/was a recession it doesn't work and makes monopoly money out of the USD.

please some acknowledgement.

2BInTO said:

What recession?

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2BInTO said:

okay, i shook my head and circled back. what flip flop?! i never challenged your assertion about a recession-

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I swear to gawd, you are absolutely blind.

STOP RESPONDING TO ME.

Gimmesometruth said:

I swear to gawd, you are absolutely blind.

STOP RESPONDING TO ME.

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Your self pontificating about whether or not a recession exists is not important especially if you have no idea how to deal with it effectively. the call of recession is by corporations and money managers just another way to cry for another fed put. the market can't always go up. it's joe public that needs attention they can't work and the real wages haven't grown for years.

ugh!!!

2BInTO said:

Your self pontificating about whether or not a recession exists is not important

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And yet you continue to notify me AND still claim you are not countering my point.

you have no point. you just want to argue or 'win' not understand or grow or seek consensus. which is a waste of everyone's time.

2BInTO said:

Ugh! this is beginning to ache. what 'short term' i don't see that anywhere. i don't care about your speculation of a recession or your argument that we have been in a recession for months or years- most people don't agree with that, but, i don't care about them either. ultimately, if you don't know how to fix the economy, monetary stimulus and corporate bailouts, what does 'if' and 'when' matter. what does matter is that joe public can't pay for food now.

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your wasting your time in attempting to present a reasoned logical argument.
appeal to emotion is all they understand.

What they don't understand is that currently any economic data will be 100% skewed by the fact the Gov's of states have shut businesses down.
once these are lifted and businesses open up and people are back to work things will rush back into operation.
Also there is the fact that the fed just start sending out stimulus checks that will help.

2BInTO said:

you have no point. you just want to argue or 'win' not understand or grow or seek consensus. which is a waste of everyone's time.

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Actually, I had multiple points, we are in a recession, you objected, then gave reasons for relief(!), then became blind to your hypocrisy, kept notifying of this continuing absurd argument.....and then topped it off with a "I'm not interested". You are not seeking "consensus", you can't even see how utterly contradicting your own posts have been.

You know where the rest of these exchanges can continue.

2BInTO said:

you have no point. you just want to argue or 'win' not understand or grow or seek consensus. which is a waste of everyone's time.

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You'll find that both sides of the political coin here are pretty sensitive, because for those of us that have been here a while, reasoned debate (which was always pretty scarce) has been drowned out by partisan bickering. If you aren't crystal clear about what side you are on, both sides are likely to start attacking.

2BInTO said:

With you except, this is a tragic question of perspective. The flu causes 50k deaths annually. Poverty and despair causes death. This is tragically a lives vs lives issue.

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Yes, but the mortality rate of the novel coronavirus is somewhere in the neighborhood of 20 to 40 times higher than the mortality rate of the flu and it is more infectious. If they were comparable then it would make sense not to create poverty and despair just to prevent something similar to the seasonal flu, but due to the mortality rate the lives vs lives calculus is clearly in favor of isolation to reduce the transmission rate and not overwhelm the healthcare system, even at the cost of economic hardship.

yeah, finding that. i just wanted to get some more macro insight not debate or get technical over a word here or there right or wrong.

I have no idea what is partisan about understanding that we are in, at minimum, a recession.

Updated April 10, 2020


With the coronavirus outbreak shutting businesses in every state, fresh evidence of the economic devastation was delivered Thursday as a government report showed that 6.6 million more workers had lost their jobs.

The Labor Department announcement, reflecting last week’s filings for unemployment benefits, meant that more than 16 million people had been put out of work in just three weeks, an unheard-of figure. Two years of job losses from the last recession produced barely half that total.

Many economists say the actual job losses so far are almost certainly greater, and there is wide agreement that they will continue to mount.

It’s as if “the economy as a whole has fallen into some sudden black hole,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.

2BInTO said:

[T]he real wages haven't grown for years.

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Real median household income has been increasing since a low point in 2014 and has reached an all time high in 2018. A similar, though noisier story can be said about real median weekly earnings (wages and salary workers) for full time employment positions. That's actually one of the surprising news of the last 3 years: real income of the bottom 50% has been growing faster than real income of the top 50%. Trump boasted about it during his SOTU. Even though I have no idea how much he deserves credit for it, that actually is a fact. Eye balling it, some of that growth seemed like it was slowing down lately, so maybe that's what you had in mind.

To be fair, these measures are also pretty noisy and I don't think we should read too much into just a few data points. Still, as a matter of fact, our best measures of what is going on would suggest wages were in the middle of an upward trend prior to the pandemic.

lwf said:

Yes, but the mortality rate of the novel coronavirus is somewhere in the neighborhood of 20 to 40 times higher than the mortality rate of the flu and it is more infectious. If they were comparable then it would make sense not to create poverty and despair just to prevent something similar to the seasonal flu, but due to the mortality rate the lives vs lives calculus is clearly in favor of isolation to reduce the transmission rate and not overwhelm the healthcare system, even at the cost of economic hardship.

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The mortality rate as is polluted by selection bias and a lack of uniform procedure for assigning deaths to coronavirus. My guess is that the former is by very far the biggest problem: the near totality of people who are diagnosed with the virus are people who already present enough symptoms to show up at a hospital, with the rest being people who interracted with them. That's a segment of the population which is likelier to experience complications on account that this is usually what motivates people to seek out medical opinions or support. Some experts said that we might be underestimating the number of cases by a factor of a few hundreds. For all we know, in the US, there might be a few million cases. Short of implementing large scale randomized testing, you can't know how lethal it is. In all likelihood, a lot less than we think.

Still, absent better information, the prudent thing to do is to assume the worst. Personally, I would immediately seek to implement large scale randomized testing to get more accurate information. You need that information to get an idea of when you can marginally loosen the grip on the movements of people, as well as to anticipate where you will need supplies and how much you will need. It's not like iddleness is free of consequences on the lives of people either. Of course, until treatments and vaccines are available, it might be wise to err on the side of a doing little too much. As long as it is understood to be temporary, that it is understood that we will not accept overbearing governments as the new norm, I am perfectly happy to comply with the demands of all levels of governments.

2BInTO said:

In history, there are a total of zero cases of fiat currency surviving. Just look at the British pound not so long ago. The USD end game is a real concern.

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Your example, the Pound, still exists.

Have you an example of gold backed currencies?

2BInTO said:

In history, there are a total of zero cases of fiat currency surviving. Just look at the British pound not so long ago. The USD end game is a real concern.

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The British pound still exists though.

Fledermaus said:

Your example, the Pound, still exists. Have you an example of gold backed currencies?

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On the issue of money circulation, I rather adhere to the position of the TheEconomist discussion participant. Modern paper and electronic money are not provided with gold, but with goods, since they are exchanged for goods. At the same time, electronic, paper and non-cash money is easily exposed to emissions (practically without costs), and therefore can serve the rapidly growing mass of goods in expanded reproduction. At the same time, the cost of such a service is minimal, in comparison with gold and other commodity money. In order to service modern production and its growth in gold money, you need to spend twice the amount of labor, one part on the production of goods, the second part on the extraction of gold. That as you understand it is completely unprofitable. Moreover, with today's rapidly growing production, there is simply nowhere to get so much gold. In view of this, there have been at least two crises related to gold circulation. The first crisis occurred with a sharp increase in the volume of manufacturing in the 17-18 century. Second during the Great Depression of the United States. Actually, this depression was such a crisis of gold circulation, when the commodity mass grew faster than gold mining. In view of this, deflation has stalled commodity circulation and a crisis has erupted. It was overcome at first by correcting the gold content of paper and non-cash money, and then completely abandoning this content. In view of which gold has received a free exchange rate. Now all the gold reserves in the world are hardly enough to ensure 0.01 turnover of goods. Therefore, talking about commodity money in the form of gold is currently pointless. Since, electronic money performs its functions much better than gold. Whereas as long as there is mass modern production, there will be electronic and other credit money. Including cryptocurrency and other forms of money. And they are not in danger, as they cope with their functions.

ludin said:

The British pound still exists though.

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The British pound exists in name only since 1694.


It has not existed as a fiat currency since 1694. It was first a commodity currency before becoming a fiat currency in the 1970’s.