Interesting "Candidate-Agreement" site...

[BigOxley]

And what is Romneys plan? "Im gunto make 12 million new jobs herp derp but im not going to say how im going to do it."

 

 

this is strategic. he is not saying anything so that nobody can bring it back to him in 4 years. he sees that washington is hard to change.

 

but what he would do in the mean time is cut regulation/taxes for corporations and large businesses. freeing them up to have a free-for-all on the backs of the middle class. will it make the economy better, probably. will it increase the quality of life of the regular people, probably not.

 

what I am worried about. a political party itching to go to war.

[Scotty2Hotty]

http://imgs.isidewith.com/results-image/183930596.jpg

I went up 2%.

SUPRISE!

[JuicedH22]

ha! Are you really that dense? After he absolutely asinine things you said, that is funny.

 

 

First, lets talk how the fed increasing the money supply "printing money" (not actually printing) causes inflation, and what that means....

 

The fed will increase the money supply traditionally by buying bonds, and therefore the demand for bonds increases, raising their prices and lowering their interest rates. As the interest rate drops, banks find them less valuable and sell them to the fed, for actually money, dollar bills yo. Now all that money is in excess reverves, which does not earn interest. Banks dont like this so they lower interest rates to attact new borrowers. Lower interest rates adds incentive for companys to invest in new capital, as well as encouraging consumption by the average person for things like cars, new homes, improvement projects (anything people take loans out for). In short investment and consumption rise, i.e. Aggreate demand is rising. Further, since interest rates are lowering as well as bonds, so foreign investors do not invest and the dollar depreciates. Weaker dolalr makes exports attractive, further increasing aggregate demand. This makes prices rise on products produced in the US to keep up with demand. At first, as the prices start rising people 'buy now save less'under the expectation that it will just get more expensive leading to further consumption. The companies increase their invesments now to meet the rising demand expectations. Since prices are going up, workers want more money via raises to beat inflation. Companies must also deal with higher costs from imported materials/goods since hte dollar is worth less. Now the aggregate supply declines as companies begin to struggle covering the rising cost to do business. And so begins the doom and gloom inflationary spriral.... Goods get more and more and more expensive, and businesses struggle more and more and more to make ends meet... All from an initial fixed increase in monetary supply. For further clarification see: Weimar-style runaway inflation

 

Here's a good way to see the "spiral" graphically...

http://upload.wikimedia.org/wikipedia/commons/thumb/8/82/Vicious_circle_in_macroeconomics.svg/500px-Vicious_circle_in_macroeconomics.svg.png

 

 

 

Okay so that's "basic" inflation, but you said "hey Im not talking about increasing monetary supply, im talking about paying our foreign debt"

 

Lets talk about what that means. I will focus on just paying off foreign debt. Foreign investors (and US) have loaned money to the USG on the basis of being repaid with interest. So lets say it's just $1T we owe China (I thought it was more, but thats subjective at this point). The Chinese investors will look for a way to get rid of the liquid money we give them. They will use that money to buy investment assests of other kinds from other countries; things like corporate bonds, stocks, commodities (i.e. goods and services, I am sure many in the US economy). What does that mean? liquid money begins to hit the US economy just like in the first example. You go into the same loop, inflation spirals.

 

 

Going back to inflation rate... The current monetary base is $2.6T If you 'payoff our debt' it is hte monetary base that would increase by 40% very quickly

http://research.stlouisfed.org/fred2/data/BASE_Max_630_378.png

 

So you are increasing inflation of MB by almost double and 'overall' inflation in money supply by 11%... that would DEFINITELY be more than enough to turn into runaway inflation, I am sure most economists would agree. This number starts to increase, via the explanation above... its hyperinflation at work. Its not 11% and thats it, it just goes up and up, "spiraling out of control"

 

On the definition of hyperinflation:

 

The International Accounting Standards Board does not establish an absolute rate at which hyperinflation is deemed to arise, but in International Accounting Standard 29 It lists factors that indicate the existence of hyperinflation:[6]

 

-The general population prefers to keep its wealth in non-monetary assets or in a relatively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power

-The general population regards monetary amounts not in terms of the local currency but in terms of a relatively stable foreign currency. Prices may be quoted in that currency;

-Sales and purchases on credit take place at prices that compensate for the expected loss of purchasing power during the credit period, even if the period is short;

-Interest rates, wages, and prices are linked to a price index; and

-The cumulative inflation rate over three years approaches, or exceeds, 100%.

 

The IASB´s definition is the generally accepted definition of hyperinflation in the accounting profession since April 1989 followed by all countries implementing International Financial Reporting Standards.

 

Basically put: Hyperinflation is the result of a continuing rapid increase in the amount of money that is not supported by a corresponding growth in supply (goods and services).

[JuicedH22]

Basically, if you dont think a sudden addition of $1TRILLION dollars to the US money supply could spark hyperinflation and crush the economy, you are absolutely on another planet.

 

Do you really think if it was that simple, and a "small burden that people would get over" WE would hold foreign debts that large???? The Fed has a hard time swallowing an increase of money supply in the high millions/low billions... yet alone a TRILLION!

[copperhead]

Obama's fantastic vision of America has put our companies in a world of hurt and thanks to his leadership and Moving us Forward into more debt, weaker credit and shitty financial situations has pretty much put everything in America on Sale in the eyes of foreign companies. China was on a buying spree and now even Japan is buying up companies.

 

It's time for a leader to come in strengthen our economy and insure our dollar doesn't continue to be so weak. Time for someone to stop spending and borrowing and putting our industries that are left here in a position where they need to sell out.

 

 

• Sprint is likely going to Japan.
  
• China Petrochemical Corp, also known as Sinopec, bought up 30% of Devon Energy Corp. of Oklahoma City
  
• Dalian Wanda Group bought up AMC Entertainment who is all but broke. I think their flying the Chinese flag over Dublin Theathers.
  
• Wanxiang Group Corp. announced plans to provide a $465-million in loans to A123 Systems Inc., based in Waltham, Mass. who is struggling. Why? Because they are leading provider to hybrid cars. Was that part of Obama's Green plan too?
  
• China National Offshore Oil Corp., or CNOOC, is looking to buy Nexen Inc., a Canadian oil company with operations in U.S. waters in the Gulf of Mexico
  
• Xinjiang Goldwind Science and Technology Co., China's second-largest wind turbine maker has invested more than $200 million in U.S. wind farms in Illinois and Montana.
  

 

Not exactly a buyout, but you missed one

http://washingtonexaminer.com/jeep-an-obama-favorite-looks-to-shift-production-to-china/article/2511703#.UIoCPGf4Ke6

Jeep (and probably all of Chrysler) is considering moving all of their production to China. Thanks for the bailout! :gabe:

[TTQ B4U]

And what is Romneys plan? "Im gunto make 12 million new jobs herp derp but im not going to say how im going to do it."

 

I think he's been pretty clear on how to do it. You have to increase demand to increase product flow to increase jobs. That said, he has to balance the budget and put a solid plan to show others we're going to pay off debt. If not, who the fuck would want to invest in us or buy our stuff. No different that me as an employer, I would do business with a vendor that has shitty credit, $17T in debt, no plan and continuing to spend and who's revenue stream has been flat at best. Make sense so far?

 

That's why Mitt is talking about opening up markets and shoring up trade agreements. Fuck, China alone grew their economy 10% on exports alone by insuring their was demand for goods. Must be nice to have money laying around to buy up our debt and have such power. I wonder why Obama hasn't had that a part of his plan? Perhaps because he has no idea on how to make money....but he sure can criticize Mitt for doing it. Yeah, I'd hate to have a POTUS that could put us in a position to have cash flow like that.

 

There's more to it, but in the end, Obama hasn't been able to do any of the above so it's really no secret as to why the country is stagnate. Romeny has done this his entire life, Obama has never done it and has had four years at POTUS to do it and hasn't. What makes anyone think the next four years would be any different? It's fucking amazing anyone could believe in him. If he was such a good POTUS, then where are the results that back that success?

 

We have companies sitting on ass-loads of cash and as I've already posted not going to spend any of it due to lack of demand in the market place and in part to what's coming in January in terms of uncertainty with tax code. Get ready, because just about everyone on this board is going to be paying $2k more minimum in taxes thanks to Obama. Not going to spend any of it if healthcare reform is coming down as that's not going to be cheap and is only going to crush our economy even more. Again, amazing that Obama and his campaign have spent millions on talking about what the other guys' plan and not about their own or about their history of how it's worked and being seen in our daily lives. Hmmm.....

Edited October 26, 2012 by TTQ B4U

[TTQ B4U]

Not exactly a buyout, but you missed one

http://washingtonexaminer.com/jeep-an-obama-favorite-looks-to-shift-production-to-china/article/2511703#.UIoCPGf4Ke6

Jeep (and probably all of Chrysler) is considering moving all of their production to China. Thanks for the bailout! :gabe:

 

A great example of how Obama's ideas actually lead to outsourcing....fuck up a company enough, lower the value of the dollar enough and there's fire sale in the US with companies begging to be bought out. Once bought, said companies move production elsewhere.

 

It's a brilliant plan though because in the meantime, he stood buy all those union workers talking about how "the other guy" said he'd let you fail (wrong) but they won't ever know that and in the mean time said union workers vote for you and put you back in office again. Days later, you're working in China or unemployed. Nice. Moving Forward alright. Forward in the unemployment line. Come get your EBT Car guys!!!! If America votes Obama back in I hope every car manufacturer moves shit over seas and puts the dumb ass union workers out of a job. Perhaps then they will look failure in the face and recognize it as obviously they aren't seeing it today.

Edited October 26, 2012 by TTQ B4U

[TTQ B4U]

Nitpick -- China can't "demand their money." They're not a bookie. The roughly 1 trillion in debt is held in the form of government bonds, which are scheduled to be paid back (with interest) at a certain time (5, 10, 20 years, etc). Only about 1/16th of the national debt

 

in 2011 China converted 97% of our debt we owe them into treasuring notes. Those notes can be 2, 3, 5, and 10 years. So really, yes they can demand their money anytime when they are due. They actually hold about $1.2T of our $11T debt. (10%) that's outside the debt we owe ourselves which combined puts our debt at about $16T.

 

Now they wouldn't call in all their chips because that would be a nightmare for the entire world economic system and they too would suffer. Won't happen.

 

I doubt they would even slowly sell it off either because if they did the dollar demand would drop and the cost of their exporting goods would go up and that's bad for them considering they are the worlds #1 exporter and we in the US Buy a shit ton of their goods. That's why Japan has bought into our debt so much too. When I worked at Panasonic they were just starting to do so and it was widely known they were doing so to gain and edge on export costs to compete with the up and coming Korean brands. Makes sense that Japan is within a few bucks of China in terms of holding our debt. It gives them tremendous buying power.

[TTQ B4U]

Basically, if you dont think a sudden addition of $1TRILLION dollars to the US money supply could spark hyperinflation and crush the economy, you are absolutely on another planet.

 

Do you really think if it was that simple, and a "small burden that people would get over" WE would hold foreign debts that large???? The Fed has a hard time swallowing an increase of money supply in the high millions/low billions... yet alone a TRILLION!

 

He obviously has no idea what it was like for people in the early 80's. If inflation spiked into double digits, every mofo with a second mortage or credit card debt would jump off a bridge. I remember the days of 20%+ car loans and 18% mortgage rates. Both my brothers were driving POS's because if it. Can you imagine if that happened from 2013 through 2016? There would truly be a rebellion. Scary thing is it could happen.

 

Actually growing up as I did in a cash only household and fortunate to do so, is why I'm a cheap fucker like I am living below means.

[V8 Beast]

http://imgs.isidewith.com/results-image/184310765.jpg

[Scotty2Hotty]

Your 100% is noble.

[Mallard]

Not exactly a buyout, but you missed one

http://washingtonexaminer.com/jeep-an-obama-favorite-looks-to-shift-production-to-china/article/2511703#.UIoCPGf4Ke6

Jeep (and probably all of Chrysler) is considering moving all of their production to China. Thanks for the bailout! :gabe:

Woah, woah, woah! Let's not confuse what's actually happening with what you posted above. Demand for Jeep's is very strong overseas, in fact 3 out of every 4 Chrysler sales outside the US was a Jeep model. They are in talks with a Chinese JV to build the Wrangler, and possibly more, in China. This has never been said it would replace the production in the US, it would supply the high demand in China (and probably surrounding area's) for Jeep's. It's very expensive to import a vehicle for sale in China, so building it there will give them a higher margin.

 

This is NOT a replacement of US production, it's an expansion of capacity in order to meet high demand.

[copperhead]

Woah, woah, woah! Let's not confuse what's actually happening with what you posted above. Demand for Jeep's is very strong overseas, in fact 3 out of every 4 Chrysler sales outside the US was a Jeep model. They are in talks with a Chinese JV to build the Wrangler, and possibly more, in China. This has never been said it would replace the production in the US, it would supply the high demand in China (and probably surrounding area's) for Jeep's. It's very expensive to import a vehicle for sale in China, so building it there will give them a higher margin.

 

This is NOT a replacement of US production, it's an expansion of capacity in order to meet high demand.

 

That's not how that article sounds to me

[greg1647545532]

He obviously has no idea what it was like for people in the early 80's. If inflation spiked into double digits, every mofo with a second mortage or credit card debt would jump off a bridge. I remember the days of 20%+ car loans and 18% mortgage rates. Both my brothers were driving POS's because if it. Can you imagine if that happened from 2013 through 2016? There would truly be a rebellion. Scary thing is it could happen.

 

Actually, I'm suggesting that it could potentially be worse than the early 80's. 15% was the inflation number I pulled out of my ass, a number which is higher than the 1980's 13.5%. This is why, in this very thread, I've said that this idea of paying off China by printing money is moronic and that we should not do it. Is that clear?

 

What it won't do is cause hyperinflation, just like we didn't have hyperinflation in the early 80s. Do you really think so little of America that you think we couldn't live through that again? Of course you do, down there in your little fear bunker.

[greg1647545532]

Those notes can be 2, 3, 5, and 10 years. So really, yes they can demand their money anytime when they are due.

 

Yeah, they can "demand their money" exactly when we've already agreed to give it back to them. Thanks for agreeing with me that China doesn't have a big red button labelled "Destroy America's Economy."

[greg1647545532]

Basically, if you dont think a sudden addition of $1TRILLION dollars to the US money supply could spark hyperinflation and crush the economy, you are absolutely on another planet.

 

Do you really think if it was that simple, and a "small burden that people would get over" WE would hold foreign debts that large???? The Fed has a hard time swallowing an increase of money supply in the high millions/low billions... yet alone a TRILLION!

 

Well your last sentence is just not true, since they've increased the money supply by that much before.

 

In the end, they came very, very close to their target: They told us they were just 61 cents short. (In other words, they bought $1,249,999,999,999.39 worth of mortgage-backed bonds.)

 

The Fed was able to spend so much money so quickly because it has a unique power: It can create money out of thin air, whenever it decides to do so. So, Dzina explains, the mortgage team would decide to buy a bond, they’d push a button on the computer — "and voila, money is created."

 

The thing about bonds, of course, is that people pay them back. So that $1.25 trillion in mortgage bonds will shrink over time, as they get repaid. Earlier this month, the Fed announced that it will use the proceeds from the mortgage bonds to buy Treasury bonds — essentially keeping all that newly created money in circulation.

 

Now, that was a unique situation - the creation was carefully controlled over a 15 month period, and not in one fell swoop. But there's nothing saying we can't do the same thing with China.

 

Look, I enjoyed your charts and graphs and explanations of hyperinflation, and - no snark intended - I appreciate you taking the time to post it. And if China owned, say, 1/3 of our debt, I would wholeheartedly agree with everything you said. The US can't absorb a 50% increase in the money supply without some very bad shit happening. But 11%? I believe that's well below the threshold that would cause hyperinflation.

 

You say, "So you are increasing inflation of MB by almost double and 'overall' inflation in money supply by 11%... that would DEFINITELY be more than enough to turn into runaway inflation, I am sure most economists would agree." Find some of these economists, because I don't believe you, and you haven't posted any cites. Surely we agree that there's some threshold at which inflation will turn into runaway inflation - 13.5% wasn't enough in the 80s, 18% wasn't enough during WWI. What is it? 20% 30%? What amount of increase in the monetary supply will get us to that threshold? 11%? 15%? 30%?

 

To be honest, I've looked and I can't find an answer. I'm more than willing to be educated, but just stating that it would cause hyperinflation isn't going to cut it, especially since every bit of evidence I can find suggests that $1.2 trillion wouldn't be that big of a shock to our system.

[TTQ B4U]

Yeah, they can "demand their money" exactly when we've already agreed to give it back to them. Thanks for agreeing with me that China doesn't have a big red button labelled "Destroy America's Economy."

 

Just correcting you on their percentage of debt and the fact that their investments are in Notes and for much shorter terms.

 

Do you really think so little of America that you think we couldn't live through that again? Of course you do, down there in your little fear bunker.

 

I absolutely think we'll survive it but at a huge price to the American People just like has happened over the entire term Obama has been in office not fixing what he said he would.

 

No fear bunker just a bunker of pissed off anger that America's first black president took his first term and flushed it. I say that after having a conversation with my brother in law who is black and he voted for Obama in 2008 but not this time. He basically said as a black man he's fucking pissed that such an opportunity was wasted. I agree. Obama may have a plan but he ain't no MLK who had a dream....and led people to make that dream come true. Obama couldn't lead a line dance to save his life.

 

That's not how that article sounds to me

 

Agree.

 

 

Jeep, the rugged brand President Obama once said symbolized American freedom, is considering giving up on the United States and shifting production to China.

Chrysler is looking back and now considering cutting costs by shifting production of all Jeeps to China,

"Fiat SpA, majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country

"We're reviewing the opportunities within existing capacity" as well as "should we be localizing the entire Jeep portfolio or some of the Jeep portfolio" to China.

IMO that last comment is political talk for now that we own your car company we can move it where ever we want and we'll decide what factors we base that on...cough......labor costs...ahem.

[Mallard]

That's not how that article sounds to me

http://www.bloomberg.com/news/2012-10-21/fiat-says-china-may-build-all-jeep-models-as-demand-climbs.html

 

That's because people are twisting words. All that's been stated is they may restart Jeep production in China in order to meet rising demand, and eventually may manufacture the entire product line locally. This is no different than all other automakers producing models in China, like Buick, for example. They will not shift all their domestic production overseas, this is to supplement the local demand. In fact, I talked to several people at SAE convergence last week that stated that China is more expensive than than Mexico by a large margin now, and is close to the cost of US production. Also, many of thuse people also spoke about having so much business that they have run out of production capacity, and they've had to turn down several contracts due to a lack of capacity and good engineers that could work on the projects.

[Mallard]

http://finance.yahoo.com/news/tax-policy-center-spotlight-romney-173604062.html

 

just to stir the pot....

[JuicedH22]

just like you cant find a number or percentage or the trigger, I could not either... because it is a VERY complex phenomena. The difference of the hit in hte 80s wasnt precluded by an already skyrocketing money supply/monetary base. Look at the 80s inflation, the monetary base rose, but not nearly at hte rate it has the past 5-6 years. We are on an exponential increase in money supply, along with exponential increases in US held debt... not to mentiona very volitile world financial market

 

Look at hte money supply in the 80s... it wasnt flying out of control like it is now...

http://theeconomiccollapseblog.com/wp-content/uploads/2011/03/Adjusted-Monetary-Base.png

 

here is a good article, it primarily is about how this whole problem is hte fault of the Fed... but the points are stil lthe same...

http://theeconomiccollapseblog.com/archives/19-reasons-why-the-federal-reserve-is-at-the-heart-of-our-economic-problems

 

Even he is suggesting that as the Fed issues all this money, it could be explosive if/as the money hits the open market.

 

BTW, the Weimer hyperinflation event was 21% greece suffered a hyperinflation event in the 1940s, that was 18%, China's in the 40s was 14%, and Peru suffered hyperinflation in the 90s with an inflation rate that was 5%.... Several more can be found here:

http://www.businessinsider.com/9-hyperinflation-horror-stories-2012-9?op=1

 

 

However, helping your argument that we wont hit hyperinflation, is this article I read... which suggests that it is hte deleveraging of debt that will prevent hyperinflation, he does make some good points...

http://www.businessinsider.com/hyperinflation-myth-2012-10

[JuicedH22]

The bottom line is... its very very very hard to say, because economic policy is a very complex thing. There is nothing that could tell me, you, or anyone, what it would take to spark a hyperinflation event that would crash our financial system. And 2 different ecomonimists will tell you 2 different things.

 

What I can tell you is suggesting that inserting $1T into the monetary base is a foolhardy notion, to believe it 'couldnt' cause a catastrophy. In the LEAST it 'could' cause for a serious inflation problem.

 

Minimizing that one single county owns at little under 10% of hte US's total debt, is also silly. Not to mention the asinine suggestion of borrowing from someone eles to pay it off if needed.

 

im not into fear mongering or afraid of China asking for all of its money back, because sthat is a silly suggestion they would just demand it back, without need. (such as if htey had a financial halt and needed the money, which is very unrealistic with their GDP growth) What I am suggesting is, holding such a large debt to them, to be repaid with interest HELPS their economy,and HURTS ours... The economic policy of borrowing from them is poor for our country IMO.

[TTQ B4U]

That's because people are twisting words. All that's been stated is they may restart Jeep production in China in order to meet rising demand, and eventually may manufacture the entire product line locally.

 

pretty fishy wording if you ask me. I don't think it was a twisting of words. If anything Jeep's president used some pretty poor wording. That or someone got a nasty call from the White House or both.

[greg1647545532]

Well I can agree with almost all of that, I guess. I wouldn't say it's "silly" to point out that China only owns 10% of our debt; I also wouldn't say that I'm minimizing it, merely pointing out that the reality isn't as bad as the perception. If that seems minimizing to you, then I may suggest it's because the Republican party has been so effective at painting China out to be an economic boogeyman. Mitt Romney standing up in the debate and saying, "We need to ask ourselves if it's worth borrowing this money from China" is misleading; he should be saying "if it's worth borrowing 10% of this money from China." But it's in his best interest to create an enemy, even if that means misleading everyone. You yourself said you didn't realize that the percentage of our debt owned by China was that low.

 

I also don't think that pointing out that we could borrow money to pay off China is "asinine." That's too strong of a word for what I admitted was a dumb suggestion.

 

In any case, will you agree that this...

 

im not into fear mongering or afraid of China asking for all of its money back, because sthat is a silly suggestion they would just demand it back, without need. (such as if htey had a financial halt and needed the money, which is very unrealistic with their GDP growth) What I am suggesting is, holding such a large debt to them, to be repaid with interest HELPS their economy,and HURTS ours... The economic policy of borrowing from them is poor for our country IMO.

 

is a reasonable position, but this...

 

Or until China demands their money and/or we just become the North American People's Republic of China....

 

is inflammatory baloney. It's hard to believe that both of those quotes came from the same person.

[Mallard]

pretty fishy wording if you ask me. I don't think it was a twisting of words. If anything Jeep's president used some pretty poor wording. That or someone got a nasty call from the White House or both.

http://www.bloomberg.com/news/2012-10-21/fiat-says-china-may-build-all-jeep-models-as-suv-demand-climbs.html

 

The Bloomberg report came out 2-3 days before that Washington Examiner piece, so the white house has nothing to do with it.

[JuicedH22]

1) Its when you say "only" that I call it minimizing. I think for one entity to own 10% of our debt is large. I think $1.2 trillion is a huge amount of money, I thought it was closer to $2T which to you would still be small it seems.

 

2) Yes, Mitt uses fear tactics when saying borrow from China, but he is right on where/what we borrowed. He never suggested the entirety of our debt was with China, but that the largest lump of what the 111th congress borrowed (under Obama as president) is a large chunk of that. And when it comes to using fear tactics, are you going to suggest that the Obama campaign, and Obama himself, dont do the EXACT same thing... such as saying Mitt is going back to "the old policies that got us in trouble in the first place" Which is a stupid thing to say on so many levels.

 

3) Keep in mind, Mitt also suggested we should partner and work WITH China to help grow our economy not view them as the enemy... those were nearly his EXACT words in the last debate.

 

4) Yes, I also used a strong "inflammatory" suggestion to get attention.

 

5) another "bottom line".... Democrat ran govt (congress and with the help of pres) has played a significant roll in the US debt skyrocketing to astronomical levels Too much of this goes on the president when it is really congress that is doing this.