The Inescapable Math That Dooms Our System

[JettaKnight]

Yes, hundreds of posts and I "only push my website". You sooo totally caught me.
I love it when people who don't have the drive or capacity to come up with stuff of their own crap on other people who do. Hope you feel better about yourself as you pound away on your keyboard. Lol

Hate me if you want, but you haven't been a active participant on INGO in almost two years. Furthermore, it appears the "The XY Rising Team" is comprised of yourself, writing doomsday economic pieces, and Glenn Davidson, who just write macho pieces on dating and how college will turn you into an effeminate liberal. I won't read SJW and BLM hype pieces, and I won't read Conservative hyperbolic articles either.

That said, I do fully agree that the number of non-working individuals taxing the system is an alarming issue with the American, and global, economy.

Jetta has drive and capacity....Seriously he is full of drive....I've seen him drive hundreds of miles just to hang a few lights and eat some ribs....Judging by the amount of BBQ ribs he ate he has lots of capacity as well...

Dude, I'm seriously thinking about a road trip to Nashville for more of Prince's Hot Chicken.

 

[dusty88]

I'm not saying their too dumb, I've seen PHDs tell me that fiat money creation via debt doesn't create money.
I don't know how to explain how smart people can't 7understand it outside of it just being too intagible for them to believe in. Sorta an out of sight out of mind deal.
I can however provide hard facts about the numbers of working 's non working and point out that cost curves and the debt we incur due to them is more than we can bear.

“The process by which money is created is so simple that the mind is repelled.”
― John Kenneth Galbraith, Money: Whence It Came, Where It Went

 

[indiucky]

And Hayek a bit.

Yeah...She's great....

 

[Libertarian01]

I generally don't reward hyperbolic doomsday articles with a click. If you care to sum up what our system is and why it's doomed, I'll be happy to chime in.

Summing up is easy!

#1) We spend a LOT more money than we bring in.
#2) We do this year after year, decade after decade.
#3) We are stupid.

#4) Ergo, as stupid people do stupid , they will inevitably crash the system.

Does this help?

Regards,

Doug

 

[Alpo]

Yeah...She's great....

My favorite Hayek, by far.

 

[dusty88]

Summing up is easy!

#1) We spend a LOT more money than we bring in.
#2) We do this year after year, decade after decade.
#3) We are stupid.

#4) Ergo, as stupid people do stupid , they will inevitably crash the system.

Does this help?

Regards,

Doug

Yep good summary



.... well for those who believe it. I think the problem is that people consider the past 50 years to be "long term history" and a prediction of future events. Hence the reference to "apocalypse" or "doomsday" if you say the financial system can't continue, or the wealth effect is fake, etc. It's considered inconceivable. Financial crashes don't have to devastate a society. The Depression of 1920ish was severe in numbers terms but short. The infamous German hyperinflation was what... 3 years from start to finish? I think what can make them worse is a society that can't conceive they might happen. And our way of life is now highly efficient, but not resilient.

 

[miguel]

I did, but I stopped reading when I saw that the author was just "Aaron".

EDIT: Just now realized it's the OP pushing his own website.

It's Moses' younger brother...They didn't have last names back then....

Yeah, but his sister Yoshabel is damn cute...

 

[Blackhawk2001]

Yeah, but his sister Yoshabel is damn cute...

Hah! You've got her confused with the gal who played her in The Ten Commandments. . . .

 

[Tombs]

The value of our dollar is based on faith in the value of the dollar. Faith represented by many real and tangible factors, but still more or less just people betting on our economy.

Unless China or India really steps up their game, or another democrat gets in office, we don't have much to worry about. The debt is practically meaningless with a system like this, unless foreign nations start deciding it's dangerous and toxic and begin to lose faith in our economy, therefor stop investing in it.

I remain confused how people still think on the scale of nations with fiat currency that you need to have at least X income matching Y spending. You could be running a surplus and if the rest of the world decides your money is useless you'll still fold up and collapse like a broken chair.

 

[BehindBlueI's]

Summing up is easy!

#1) We spend a LOT more money than we bring in.
#2) We do this year after year, decade after decade.
#3) We are stupid.

#4) Ergo, as stupid people do stupid , they will inevitably crash the system.

Does this help?

Regards,

Doug

Ah, pretty standard. I think we've been hearing how debt and the evils of the fiat currency system will doom us all pretty soon since at least the 1970s. Sort of like peak oil, it's always just around the corner...as long as you assume everything else remains static.

Looking at debt owed to entities outside the Federal government (Ie, ignoring the IOUs to the Social Security Trust), we're at the same debt to GDP percentage we were at in the early 1950s. I'm not terribly worried just yet. Although I might be if I were to be reliant on SSI in the next few decades.

 

[dusty88]

The value of our dollar is based on faith in the value of the dollar. Faith represented by many real and tangible factors, but still more or less just people betting on our economy.

More specifically, it's based on the perception of value of the unit of currency. Whether the economy is growing or not isn't the specific factor. If you accept $1 in exchange for a candy bar, you want confidence that $ will still buy you another candy bar next week.

I remain confused how people still think on the scale of nations with fiat currency that you need to have at least X income matching Y spending. You could be running a surplus and if the rest of the world decides your money is useless you'll still fold up and collapse like a broken chair.

The scale of nations allows the debt problem to be postponed. The scale of "most of the global economy" postpones it the longest. But it doesn't change physical realites.

 

[T.Lex]

Is there really 2 kinds of math - inescapable and... well... escapable? I mean, I've been trying for years to escape math, so I would really like to know.

 

[Double T]

Before I report for clickbait, what are the ads paying you for every redirect to your site?

 

[dusty88]

Ah, pretty standard. I think we've been hearing how debt and the evils of the fiat currency system will doom us all pretty soon since at least the 1970s. Sort of like peak oil, it's always just around the corner...as long as you assume everything else remains static.

Looking at debt owed to entities outside the Federal government (Ie, ignoring the IOUs to the Social Security Trust), we're at the same debt to GDP percentage we were at in the early 1950s. I'm not terribly worried just yet. Although I might be if I were to be reliant on SSI in the next few decades.

You are discussing the government debt, which is the common discussion. The larger problem is the aggregate private debt.

And yes, some guys predicted things would bust in the 80s. I think what they did not anticipate was the extent to which other countries would participate in our Ponzi.

I didn't anticipate we would get anyone to participate in rates below zero.

Now the total weirdness is central banks directly buying equities. The Bank of Japan is now one of the largest equity holders in Japan and probably elsewhere. Our FED hasn't said they are directly buying into the market, but more and more large investors are commenting the market makes no sense. I wouldn't be surprised if our FED is buying the market. Now the outcome of THAT is what.... maybe something more scary than a debt collapse?

 

[dusty88]

Is there really 2 kinds of math - inescapable and... well... escapable? I mean, I've been trying for years to escape math, so I would really like to know.

I'd like to escape gravity, especially as I get more clumsy.


If anyone is interested, I recommend this video by Grant Williams. Williams combines a lot of the information of the current global imbalances into 1 video. There is enough there that it's hard to absorb it all casually (ie when I was first listening while driving/exercising I ended up going back through it again more slowly). From other data I've seen there is nothing inaccurate though you can of course argue with his conclusions. He's also fairly witty, so it's not bad to listen to. I don't necessarily agree with the advice at the end, but I think it's geared toward traders that might change their investment status frequently. My reason for sharing it is the perspective, not the advice.

[video=youtube;CLQsT9BPHpg]https://www.youtube.com/watch?v=CLQsT9BPHpg[/video]

 

[Libertarian01]

Ah, pretty standard. I think we've been hearing how debt and the evils of the fiat currency system will doom us all pretty soon since at least the 1970s. Sort of like peak oil, it's always just around the corner...as long as you assume everything else remains static.

Looking at debt owed to entities outside the Federal government (Ie, ignoring the IOUs to the Social Security Trust), we're at the same debt to GDP percentage we were at in the early 1950s. I'm not terribly worried just yet. Although I might be if I were to be reliant on SSI in the next few decades.

Dude,

Really? You ask for a "summary." I give a "summary." I did NOT limit my comments to the Federal government. I did not say a word about credit card debt, nor student loans, nor corporate debt, nor the false sense of security granted to lenders after TARP.

I did not mention the tens of trillions of dollars in unfunded liabilities. I did not mention how social security has been underfunded since its inception, nor how it nearly died in the 50's.

I did not mention the exponential cost of health care...

I gave a "summary" then you straw man me!

That's just mean, man. That's just mean!<span style="font-family: arial"><font size="3">[video]https://youtu.be/BKHoMi-U8g4[/video]

Doug

 

[BehindBlueI's]

Dude,

Really? You ask for a "summary." I give a "summary." I did NOT limit my comments to the Federal government. I did not say a word about credit card debt, nor student loans, nor corporate debt, nor the false sense of security granted to lenders after TARP.

I did not mention the trillions of dollars in unfunded liabilities. I did not mention how social security has been underfunded since its inception, nor how it nearly died in the 50's.

I did not mention the exponential cost of health care...

I gave a "summary" then you straw man me!

That's just mean, man. That's just mean!<span style="font-family: arial"><font size="3">[video]https://youtu.be/BKHoMi-U8g4[/video]

Doug

I'm not sure what strawman you think I made. Unless you're going to argue this is somehow revolutionary thinking about debt and fiat currencies. If so...how is this not the normal "fiat currency sucks, the system will collapse" doom and gloom we've been hearing is just around the corner for over 40 years (and likely earlier, I just wasn't paying attention yet). Consumer debt? The one that's been trending down vs gdp for over a decade and is at roughly 2004 levels? The only thing missing is a pitch for gold.

 

[AtTheMurph]

The world has seen many instances where fiat currencies have collapsed.

What the world has never seen is the collapse of the reserve currency.

That is what makes this fiat destruction so dangerous and what will cause it to be a world altering event.

When money dies, society is a casualty.

 

[BehindBlueI's]

The world has seen many instances where fiat currencies have collapsed.

What the world has never seen is the collapse of the reserve currency.

That is what makes this fiat destruction so dangerous and what will cause it to be a world altering event.

When money dies, society is a casualty.

A reserve currency has never collapsed? You sure about that?

 

[dusty88]

I'm not sure what strawman you think I made. Unless you're going to argue this is somehow revolutionary thinking about debt and fiat currencies. If so...how is this not the normal "fiat currency sucks, the system will collapse" doom and gloom we've been hearing is just around the corner for over 40 years (and likely earlier, I just wasn't paying attention yet).

This currency as it exists today just started in 1971. So yes, some people knew it was doomed at Bretton Woods and 1971 confirmed it. What would be unrealistic, insurmountable, historically unthinkable is if this one survives much longer. (ETA: that is without a revaluation. The dollar was revalued twice in the last 100 years. It would have to happen differently than the last two.)

Consumer debt? The one that's been trending down vs gdp for over a decade and is at roughly 2004 levels?

Some of the private debt went down briefly while government debt picked up the pace. Did you look at the chart I posted? I would suggest the video for a more thorough but still very concise explanation.

If you really want to see the evidence of why it matters, watch some lectures from Steve Keen an Australian economist. He actually dismisses the government portion, and I think that's a bias of his socialist leanings. But he makes a more mathematical case for the total private debt problem that so many others gloss over.

The only thing missing is a pitch for gold.

Most Americans born in the last 60 years or so are so biased to the faith in our dollar, that they don't see the insurance/wealth storage value in gold and silver. Nor do they understand that there is a reason why society bounces back to metals at least for a time, every time someone screws up another fiat currency. But I don't have a "pitch". I don't have any for sale.