Miscellaneous And Off Topic Subjects

[SeattleLionsFan]

Facts schmacts Hack. Why do any thinking when you have feelings to rely on.

[Da Geezer]

Greece cannot print its own currency. The dollar is the defacto global currency. A US default hurts absolutely everyone on the planet starting with China. What you are suggesting simply isn't plausible.

Good lord, Hack. Not only is it plausible, it is likely. The dollar is a de facto global currency because the US has a respect for the rule of law and has the world's most productive economy. We will have neither if what you propose were to happen.

I'd like to know what the "Friedman approach" is. I'd particularly like to know the alternative that you (and others who believe as you do) are proposing. I remember one time when you told me that democracy was a whole lot bigger than just elections. I don't want to put words in your mouth, so I'd appreciate your explanation of your vision for the US.

[Da Geezer]

LIZZIE!!! I'm in a tizzy for Lizzie.

Faux-cahontas

[hack]

An American default would require countries that have much more to lose than the US allowing it to happen, with China at the head of that category. The US is too big to fail.

The dollar may have become the de facto currency for those reasons, but it will stay this way because nobody knows if a switch could actually happen. Nothing to do with rule of law anything: the only other possibility is China anyways. China would have to gather up an impossible level of political support, and that’s possibly just a first step. We had nothing approximating this level of global interconnectedness when the dollar took over its role from the pound, so we are in unchartered waters here, but it may also de facto require the global payments system -- the major banks and their stores of gold in New York now -- to move all that to Shanghai or Beijing. In the crazy event that global capital thinks this is a good idea, then it's a staggering logistical challenge: killing the central switchboard of the global economy and rebirthing it somewhere else. Monumental risks here for no apparent reward. Here again, the US is too big to fail.

My vision: always easier to spot problems than to solve them, but you asked. I believe power and money are corrupting influences and humans are fallible. Therefore we should be suspicious of trying to do too much, and of suspicious of all ideologies, given their fallible and corruptible sources. If you’ve read me in the past you know that basically I believe government’s role is a level playing field. Provide it by building and maintaining infrastructure of all types (transportation, social, energy, security, legal, etc). Protect it by preventing corruption, and identifying potential long-term threats and using policy to avoid them, i.e. regulating tobacco out of the way, foreign threats, taxing carbon. More than anything, it has to be clean. My actual preferred candidate was not Sanders but Lessig, who believes that policy direction is irrelevant when implemented in a bad environment, so corruption is the top problem and other things are pointless until that one is fixed.

Once you have that properly level playing field, and since other policy matters are often enough just a best guess anyways, save time and taxpayer money by landing policy between the extremes wherever possible - ``the truth is found between two opinions''. Inequality is a good example. I was a college objectivist and still instinctively side with the idea that what's mine is mine, but I live in the real world now. Find the sweet spot where people have enough money to buy what’s for sale, so we can avoid the mobs with pitchforks and just get on with it in a stable environment.

[iam416]

Yes, but, but while the dollar is going to be the dollar for a long time, the slow-motion trend against it is observable. The tradeability of the yuan has surged in the past decade, China will settle half its trade in itw own currency within a decade supposedly, and the yuan is now one of the four currencies in the basket used to value the IMF's own currency, the SDR. That change will be official on October 1, and as a result the dollar will count for less in that basket. Loss of influence. And with the loss of influence it presumably becomes easier to switch from the dollar. The dollar may be the dollar for a long time, but it's not necessarily permanent and a number of things could accelerate the the slow moving trend against the dollar.

[hack]

Heh -- well done. I have learned more about this, this last week actually. I didn't know before that de facto it might take moving the global payments system out of New York, and therefore that gold storage that is connected to that process. Apparently there is concern on behalf of banks, given that the US has learned to make access to the US banking system a policy tool -- sanctions on Iran, attacking online betting etc. The concern is too much politics creeping in. But this appears to be rather fringe stuff. Doomsday scenarios. It seems like everything is quite entrenched. So the idea is that China can spread the yuan around, and that'll help Chinese manage their foreign-currency transactions whereever they are, but there's probably a hard stop that falls short of a change in de facto global currency. And that probably emboldens the policy people in DC to use access to the banking system as a foreign policy tool. Interesting. Unfortunately far too out there for me to sell a story on it.

[edindetroit]

.

[iam416]

Hack:

Just having fun. I know less about global currency than I do about most other things, so that's really saying something.

[Hannibal]

Socialism is totaly going to work this time (pinky swear honest) because this time we are going to have perfectly honest and uncorruptible people in charge and the country's decisions will be made by intellectual elites like myself instead of inferior bumpkins like you guys.

Summary version

[hack]

Hack:

I know less about global currency than I do about most other things.

Correct.

[Da Geezer]

Pretty interesting discussion of international currency.

In undergrad, I had a professor who began each semester with a lecture titled "it is the job of Economists to take the complex and simplify it so that ordinary folks can understand."

He would begin with the extraordinarily complex proposition: 1 + 1 = 2

From there he would simplify by substituting clarifications such as ( sine squared+cosine squared=1) for the initial 1 in the complex proposition. He would repeat the process over about a 15 minute period, and would fill all the blackboards in the room with the final and fully simplified equation. That's what economists do.

It seems to me that the IMF's basket of currencies and talk of a de facto global currency may be overly "simplified" in my professor's sense. Milton Friedman and others taught that a dollar bill (or yuan or pound) is both a "certificate of good conduct" and a claim on future production of the persons willing (or required) to use that currency. When the humans issuing the currency stop producing, the currency becomes valueless. It is really not more complicated than that.

[hack]

Summary version

???. Either you didn't read it, you don't take it at face value, or you are responding to what you want it to be rather than what it actually is. If you've paid attention here you know that I'm about corruption and kneecapping Wall Street. Your language is completely Randian. Do you believe in financial engineering? She didn't. If you don't belive in restoring Glass-Steagall or a robust Too Big to Fail, I'd be awfully curious to hear your justification for that.

[hack]

Pretty interesting discussion of international currency.

In undergrad, I had a professor who began each semester with a lecture titled "it is the job of Economists to take the complex and simplify it so that ordinary folks can understand."

He would begin with the extraordinarily complex proposition: 1 + 1 = 2

From there he would simplify by substituting clarifications such as ( sine squared+cosine squared=1) for the initial 1 in the complex proposition. He would repeat the process over about a 15 minute period, and would fill all the blackboards in the room with the final and fully simplified equation. That's what economists do.

It seems to me that the IMF's basket of currencies and talk of a de facto global currency may be overly "simplified" in my professor's sense. Milton Friedman and others taught that a dollar bill (or yuan or pound) is both a "certificate of good conduct" and a claim on future production of the persons willing (or required) to use that currency. When the humans issuing the currency stop producing, the currency becomes valueless. It is really not more complicated than that.

Could be. Honestly I don't know. I've never paid attention to currency closely until the commodities price-swoon starting 2014, so I'm in the early stages of learning about it. It may be that simple, but then again a lot of commerce is based on a confidence trick that just needs to be accepted because the alternative is messy. Maybe that's actually because there's always a profit to be made from the unnecessary complication of things.

[Mike]

Trump ripped off contractors to the tune of $69.5M on the Taj Mahal casino alone. But to prove he isn't just a dick to construction workers, he also withholds payment to his real estate brokers, resort workers, and even his own attorneys. His strategy is is to not pay people he owes for services rendered, then settle the impending lawsuits for a fraction of the total owed.

http://www.usatoday.com/story/news/politics/elections/2016/06/09/donald-trump-unpaid-bills-republican-president-laswuits/85297274/

[hack]

Shocked.