Lol Alan

@dave cullen – Yeah thats his brother Deco’s company – I believe he’s into privatising publin water companies – No Joke. AK47′s master plan has been derailed. Good Ridance to the former minister of Arrogance

Oh Chris I agree .. But it seems the Seanad is the place now for unelected tds ..

Padraig,

I checked out the link there. Many of the academics especially the mainstream economists are part of the problem, not part of the solution. The fraud that they perpetuate is reflected the paragraph below from the link:

“Leading economists throughout the world are warning of the next GFC on the horizon. The American Dollar is failing, and the U.S economy will fail, is failing and the end is nigh. It is not some alarmist conspiracy theory, and it is basic common sense that when you are insolvent, and you have already discounted your product to the floor; plus over 25% of your workforce is unemployed you are in deep shite. Compound that with trillions of debt, a propped up, stock exchange and the ending of the Petrodollar. The removing of the baby boomers money and you are ripe as fallen fruit to crash. Adding insult to injury countries are dropping their U.S debt holdings at a record and alarming rate.”

The simple truth is that there is no size of debt that the U.S. cannot handle once it’s denominated in dollars. The U.S is the monopoly issuer of the dollar and cannot run out of them. So the U.S cannot become insolvent in the dollar.At a macro level, money is just a tool to measure and allocate the real resources which society has at it’s disposal.

You are talking about printing money Wally. Do you know what happens when the Federal Reserve prints money?

Sorry, that statement is slightly wrong. If the Treasury prints money

By your logic, the American economy could not go into recession and could simply honor bond holdings by currency manipulation. Furthermore, even (if) that was true which it is not it does not affect the world want of the currency or indeed the use of. It also does not control employment, the Petrodollar or indeed the issues of housing and the stock exchange.

By your logic, the U.S would never have crashes, recessions or any of the pressures all countries face, and thus the case is rested of the mentality of the AAA.

Padraig,
I’ve engaged with you politely and you’ve replied with insults. I won’t respond in kind but will just point out that it’s best to check your ground before you question others mentality.

What I’ve explained above about U.S debts is correct but you don’t need to take my word for it. Here’s some Central bankers, finance professional and economists (no member of the AAA you’ll note) explaining the same thing:

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.” Alan Greenspan

“In the case of United States, default is absolutely impossible. All U.S. government debt is denominated in U.S. dollar assets.” Peter Zeihan, Vice President of Analysis forSTRATFOR

“In the case of governments boasting monetary sovereignty and debt denominated in its own currency, like the United States (but also Japan and the UK), it is technically impossible to fall into debt default.” Erwan Mahe, European asset allocation and options strategies adviser

“There is never a risk of default for a sovereign nation that issues its own free-floating currency and where its debts are denominated in that currency.” Mike Norman, Chief Economist for John Thomas Financial

“There is no inherent limit on federal expenses and therefore on federal spending…When the U.S. government decides to spend fiat money, it adds to its banking reserve system and when it taxes or borrows (issues Treasury securities) it drains reserves from its banking system. These reserve operations are done solely to maintain the target Federal Funds rate.” Monty Agarwal , managing partner and chief investment officer of MA Managed Futures Fund

“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.” Federal Reserve Bank of St. Louis

“A sovereign government can always make payments as they come due by crediting bank accounts — something recognized by Chairman Ben Bernanke when he said the Fed spends by marking up the size of the reserve accounts of banks.” L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City and a Senior Scholar at the Levy Economics Institute

All sovereign floating currency issuing governments spend their own currency into existence at will and then tax it back out of circulation. Government spending creates the money and taxation destroys it in a continuous flow. At a macro level, the money is just a tool for measuring and allocating the real resources. The government can never run out of its own money in much the same way as a carpenter cannot run out of inches.

You know Wally what can be done, does not mean it can be done. Copy and pasting the words of people that have (failed) to pull in the FED which is what many of the names here wanted to do does not negate the fact you cannot do it. It is currency economics 101.

If that was the case, you devalue the currency and you also create very pissed off holders of debt and the people as you dollar is suddenly not worth the value it was sold at. You bring about massive inflation and furthermore only 2 Trillion of debt is FED housed.

Let’s pay off the current U.S debt and look at what might happen

The consequences of such a series of events would be catastrophic. The purchasing power of the dollar would decrease enormously. This would place a strain on American buyers who now have to pay more for goods without the higher income that China has received and thus cause a recession that would dwarf that of 2008. Unemployment would then spike, as many firms would find it advantageous to migrate to China and elsewhere where there is new demand for their products. Meanwhile, the People’s Bank of China, for one, would be pissed because, even though they now have more dollars than they did before, those dollars aren’t worth nearly as much as when they sold that debt to the US.

Here is a good example from Economics help and the same question asked about the UK

Many often ask why government don’t print more money to deal with the problem of National debt. The reason is that printing more money doesn’t increase economic output in any way – it merely causes inflation.

http://www.economicshelp.org/blog/634/economics/the-problem-with-printing-money/

You know Trump only the other day was with some vigor called out for saying the exact same thing, unceremoniously became the laughing stock of half the world’s economists.

Currency only has value due to keeping the scarcity, change that and it becomes no more than paper.

Not sure what you are going to say when the U.S economy (as predicted) tanks in the next couple of years and all indicators are at that level now (including the dumping of debt) –

I have liked many things you have had to say here Wally but that is spectacularly wrong on so many levels.

Never before in the history of the United States have so many top authorities agreed on one thing: the end of the US Dollar is almost here, and a global economic crisis will start in 2016.

This is very, very clear.

“Cash is trash.” – Robert Kiyosaki

“A U.S. financial crisis—greater than the crisis of 2008—is fast approaching… and this crisis will be very different from the last one.” – Ron Paul

“The Dollar As We Know It Will Be Gone Within 6 Years.” – Mike Maloney

“The American people have no idea they are paying the bill.” – G. Edward Griffin

http://www.survivopedia.com/signs-the-economic-crash-will-hit/

Padraig,
I’m not wrong and would ask you to take a deep breath and think before you dig your heels in and refuse to budge your mindset on this. Your quotes explain nothing about the nature of money and sovereign debt.

The Alan Greenspan quoted above was the chairman of the Fed? Don’t you think he might know a little bit about the operation of the U.S monetary system?

As I said, the U.S. faces no financial constraint in a currency it issues at will. The only limitation is the availability of real resources (e.g. energy, labour etc) and the only relevant question is how best to manage them to meet the needs of the population. Fundamentally, money is just a tool to measure and allocate those resources.

There is no linear relationship between the creation of money and inflation. Damaging levels of inflation will only occur when there is chronic excess demand relative to the real capacity of the economy to produce output to meet that demand. This is rarely a concern in a modern economy which produces an excess of virtually all essential goods & services relative to demand. In other words there is no inflation risk in the creation of new money once there is sufficient real wealth of goods and services to absorb that additional money as clearly borne out in the data.

Since the 1980s the global money supply has increased almost exponentially as the deregulated commercial banks massively increased their loan books and expanded the money supply (The money is uncreated as the loans are repaid but at a much slower pace). And yet there has been no hyperinflation that the monetarists continually hyperventilate about.

See here:
http://positivemoney.org/how-money-works/how-much-money-have-banks-created/

Sovereign currency issuing states like the U.S., Japan, New Zealand etc are not “in debt’ as the term is generally understood. They issue and redeem government bonds as a mechanism to drive their interest rate to target, not because they need to obtain their own money from anywhere.

So for example, the U.S is often portrayed as being in huge debt to China. China does indeed hold vast sums in U.S. government treasuries/ bonds denominated in dollars. These bonds pay interest/yield periodically which the Federal Reserve pays by simply pressing keys to mark up the account named “China” on its computer. When the term of the bond it up, the Fed again redeems the value of the bond via keystrokes into the “China” account.

If the U.S. wanted to clear it’s “debt” with China, it need simply stop issuing bonds/treasuries tomorrow and in a few years all the “debt” would be gone. The Chinese would be most unhappy with this move though.

The bonds/treasuries pay a higher yield/interest than the dollar reserves which China holds in another account at The Fed. The reserves are a reflection of the trade surplus which China runs with the U.S where it’s net exports ultimately manifest as large holdings of dollar reserves. The reserves earn little or no interest so the Chinese much prefer to swap them for bonds and the U.S. government duly obliges.
The key point is this. The U.S. has no need to “borrow” in a currency it creates at will.

Let’s put one more in here, James Dale Davidson is an economist that has been an adviser to Priministers and Presidents and predicted every crash over the last 30 years with an uncanny acracy. In a few cases, he was a few years off but overall has been depressingly correct. He also warns of the issue that the U.S economy simply cannot escape, not a question of if just when.

Billionaire Carl Icahn is among those who have recently tossed red flags into the air. Icahn recently declared in a national interview, “The public is walking into a trap again as they did in 2007.”

As dire as that prediction sounds, it is much tamer than those of some of his peers.

“U.S. stocks are now about 80 percent overvalued,” Andrew Smithers, the chairman of Smithers & Co, said.

Foreign governments are dumping U.S. debt like never before.

In a bid to raise cash, foreign central banks and government institutions sold $57.2 billion of U.S. Treasury debt and other notes in January, according to figures released on Tuesday. That is up from $48 billion in December and the highest monthly tally on record going back to 1978.

It’s part of a broader trend that gathered steam last year when central banks sold a record $225 billion of U.S. debt.

Even the Royal Bank of Scotland says the markets are flashing stress alerts akin to the 2008 crisis. They told their clients to “Sell Everything” because “in a crowded hall, the exit doors are small.”

Ok Wally – can you tell me why so many economists, banking heavies, and investment advisers are calling on the U.S dollar tanking?

Can you tell me why the U.S stock exchange has the smallest diversity of investors yet companies are buying their own stock at a record rate and financial advisers are recommending to get out of any stocks?

Can you answer me why the majority of leading people that are known for being right including the 2007 crash are all recommending we brace for the US economy tanking?

The only way the U.S has kept its head above water is by bonds and the FED Wally, so is everybody wrong?

If you go and look at the U.S stock exchange right now would you with your money invest? I sure as hell would not. I am no economist but have been in business for 30 years and the writing is not on the wall, it is written in bright red spray paint.

I hope to be wrong and the growing list of financial heavyweights be wrong, but when you are faced with undeniable evidence and historical reference you would have to be a lover of risks if you ignore it. Plus you have another indicator all is not well, the US trying their hardest to push through the TPP and TTIP agreements.

You also have to ignore The private Federal Reserve System, as well as the franchise the City of London RKM, are both nearing complete collapse.

The ending of the US Petro Dollar, as the oil sales medium and the World’s Reserve Currency. The emergence of the BRICs Development Bank, the Chinese AIIB and their new Swift type electronic exchange system.

Padraig,

And again, your quotes explain nothing about the nature of sovereign floating currencies and of national debt.

The U.S. doesn’t care who dumps or holds its debt. The “debt” is paid via keystrokes at the Federal Reserve when it falls due. As explained, the U.S. could clear it’s debt with China and the rest of the world in a few years by simply not issuing anymore government bonds.

“The only way the U.S has kept its head above water is by bonds and the FED” This is just plain wrong. The U.S can never run out of dollars. They issue the currency.

Or is Alan Greenspan (you know the lad who used to run the Fed) wrong?

Sovereign floating currency issuing nations like the U.S. and U.K. don’t need to issue debt in their own currency in reality. They’re not really “borrowing” as is generally understood by the term.

When those states choose to issue government bonds, the primary objective is to implement monetary policy (usually to drive their chosen base interest rate to target) not as a necessity to obtain their own currency from the financial markets.

In order to reduce the overnight interest rate to target, the central bank buys government bonds from the commercial banks giving them central bank reserves in return and so pumping more reserves into the commercial banking system to reduce the interest rate.

In the reverse transaction, the central bank will sell government bonds draining reserves from the commercial banks and so increasing the interest to target. The government bonds and reserves are created electronically at will as necessary to maintain liquidity and the desired overnight interest rate in the interbank reserves market.

There is a good example of this reality recently where the Swiss Government was actually charging investors to buy their 10 year government bonds (so called ‘debt’). Buyers of Swiss debt are getting a negative interest rate and are willing to pay money to hold Swiss bonds. In other words, it is a secure deposit facility offered by the Swiss Franc, backed by a sovereign currency issuer. That is why such Swiss government ‘debt’ is issued. Switzerland don’t need to borrow anything to spend in a currency they create from thin air.

http://www.reuters.com/article/2015/04/08/swiss-treasury-idUSL5N0X52TR20150408

This is the fundamental monetary difference between a currency issuer like a sovereign government and a currency user such as individuals or firms. It would be a neat trick indeed if a person could borrow their mortgage from the bank and then charge that bank interest for holding the money. And yet that is exactly what the Swiss state is doing.

More usually the government bond market offers positive yields and is therefore a risk free, interest bearing, deposit facility for the large financial institutions and the ultra wealthy. This is actually what the government ‘bond’ market really is, a very favorable service to the banking & finance sector.

Nor did I claim that the U.S would not enter recession. The capitalist class benefit disproportionately in both the boom and bust phases of the inherently unstable free market economic cycle always at the expense of labour (vast majority). Therefore that elite and their political enablers continually promote policy and measures to inflate the booms and deepen the busts at the expense of the many.

So the booms are fueled by massive credit expansion through the commercial banks as we saw during the Irish property bubble. This drives up asset prices and profit margins for the plutonomy at a much faster rate than any wage increases. The capital owning classes have always known when to get out of the losing plays in time while a complicit media will continue to cheerlead the booms to manipulate the masses until the inevitable crash occurs. (This will sound very familiar to Irish ears).

In the reverse, the supply of money is restricted to deepen and prolong the bust. As we can see under the Austerity program, the ongoing recession and consequent unemployment is being used as a lever to viciously drive down wages and working conditions which also maximizes the gains to capital. In parallel, the national assets (like water) and social support systems (like health) are shredded and opened up for predatory fire sale purchases and privatization which enriches Denis O Brien and his ilk.

Economic stability is relatively unprofitable for capital but the vast majority of us are far better served by a stable system with modest economic growth ultimately limited by environmental, resource, population factors etc.

The truth is that fiat currency money is created (and deleted) at will on the computer keyboards of the world’s commercial and central banks. The real wealth of goods and services that we all depend on is created by the labour and skill of the working class from the raw material of the planet.

Money is a claim on that real wealth produced by the working class and this is where money derives it’s power. The capitalist system peddles the illusion that there is a shortage of money (balance the books, reduce the deficit, live within your means etc) in order to oppress and control the working class who are the real creators of wealth.

Just wrote a reply that did not post, maybe too many links but not writing it again – very annoying

Wally’s other hobby is collecting photographic evidence of alien bases on the moon from YouTube.

It’s more credible than his grasp of economics.

And yet you can pose no credible counter argument Alpha.

PAdraig the irish economy has consistently crashed since the state was founded. each crash was followed by a recovery triggered solely by currency deflation.
The only time this didn’t happen was the last crash when instead of currency deflation QE was implemented. This is ongoing by the way, the ECB are printing billions of euro and pushing it our to the citizens via bank loans to be spent. The last crash was 9 years ago, the next one can;t be more than 2-3 years away.
Your argument loses any credibility when you use the economics of TRump to argue your point The original boom bust boom bust businessman, walking away from his debts each time which are then picked up by the taxpayer. SOund familiar?

Read again Ciaran, I used trump as he has Wally’s point not mine -

“You know Trump only the other day was with some vigor called out for saying the exact same thing, unceremoniously became the laughing stock of half the world’s economists.”

Actually looking further at your reply Ciaran it is like you mixed up me with Wally – as you basically backed up the point – but anyway -

Not to mention Bilderberg.

Chris, not to forget the TiSA Agreement either?

Bilderberg, Rich nuts who think they should control the world as they see fit?

Now you’ve lost me bud

http://www.coinop.org/CoinopImage/4dc82783-eeb1-4258-bd0c-8dff5691f252/560/733/75

http://donkeykongmuseum.com/history/_picts/scr_board_first.gif

Kelly is nothing but a selve serving gimp and is a liability to all he associates with

Like the principalled way he held a meeting where no minutes were taken with a company involved in a tendering process, while the process was ongoing, said company then going on to win the contract?

His ego is class though

straight answer yeah, so maybe when asked about his brothers connection to IW, he could be honest and upfront its easy to abuse and bully people and be told ur speaking your mind….