tag:blogger.com,1999:blog-2098432983500045934.post2113000558110006356..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Ballparking the cost of creditThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2098432983500045934.post-28865053526143690252013-08-12T04:13:07.427-04:002013-08-12T04:13:07.427-04:00This is cool!This is cool!Ameehttp://bestellipticalsmachine.us/noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-8817650549033243252013-06-30T18:24:48.721-04:002013-06-30T18:24:48.721-04:00Right
Everyone calling for lower growth is safely...Right<br /><br />Everyone calling for lower growth is safely (so they think) in the game. They dont worry about not getting anything they want. Might they have to pay a little more? Sure. Will they ever lack for something they need? No<br /><br />Its pathetic<br /><br />I thnk your right about the medium of account thing. Those are the "assets" which are supposed to increase in value. The Feds entire purpose is to keep those assets increasing in value. The rest of us do benefit some form those assets not tanking, thats for sure, but its not our primary form of money.... that the rich folks money.Greghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-47884350942642735462013-06-29T11:35:24.106-04:002013-06-29T11:35:24.106-04:00Greg, I was writing this morning for tomorrow, rev...Greg, I was writing this morning for tomorrow, reviewing an old Felix Salmon post. His conclusion is that we have to "resign ourselves" to lower growth.<br /><br />But Salmon's "we" probably excludes Salmon himself. It's easy to resign oneself to the failure of others.<br /><br />I agree, it's the same economy. But cream naturally rises to the top and separates itself from the rest of us, I guess. (It's the "medium of account" thing, again. Their money is so much better than our money that they even give it a special name.)<br /><br />Oh jeez, I'm getting myself all depressed. But...<br /><br />"It's the same economy."<br /><br />"It's the same sheep."<br /><br />Remember the episode of Seinfeld where Kramer reduced cloning to a magic trick? <i>I saw Harry the Magnificent do that trick on the Tonight Show</i>, he said. <i>There's not two sheep. It's the same sheep!</i><br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-82674258560871905922013-06-28T07:21:21.131-04:002013-06-28T07:21:21.131-04:00"Greg, maybe they're thinking of their ec..."Greg, maybe they're thinking of their economy"<br /><br />Yep<br /><br />One day they might learn that our economy IS their economyGreghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-24367478871983434292013-06-28T05:19:32.733-04:002013-06-28T05:19:32.733-04:00"The current "brain trusts" ideas t..."The current "brain trusts" ideas that lowering incomes along with lowering monthly payments on debts will be stimulatory to our economy is beyond comprehension."<br /><br />Greg, maybe they're thinking of <i>their</i> economy.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-86614281538323844232013-06-27T10:13:06.845-04:002013-06-27T10:13:06.845-04:00I remember that post too ( I actually made a coupl...I remember that post too ( I actually made a couple comments at it) and remember a comment by someone I think illustrates the way in which we use math to obfuscate problems.<br /><br />This was the comment<br /><br />"While the bottom 95% have more debt/income. It costs them less to service this debt, and therefore people have more disposable income.<br /><br />Debt/income is meaningless.<br /><br />If we look an important statistic like disposable income after servicing your debts, then we see a direct correlation to the “demand rate” curve you present. Demand went up WITH increased debt payments. Demand is now recessing ALONG WITH lower debt servicing payments."<br /><br /><br />First, I disagree that debt to income is meaningless. Its almost everything. Providing a longer time horizon to pay back something usually increases total costs not lowers them. So while the lowered interest rate might look like costs are lowered they can actually be more costly if you use the entire time to pay off the debt...... its sneaky that way. Fact is the overwhelming majority of people who want to reservice their debt are doing so to pay it all back quicker by paying more than the minimum and paying down principle faster. Yes they might have a little more to use for present period consumption but not appreciably more I suspect.<br /><br />When 7 out of 10 people are reservicing their old debt (not creating new debt) that is a fall in demand for credit, which in todays economy is a recession. Even if their new debt contract is cheaper by the month, the overall cost is still higher and is providing a downward push on demand. <br /><br />Not to mention that even a lower monthly cost is still being met, on average, with lower monthly income for most people.<br /><br />The current "brain trusts" ideas that lowering incomes along with lowering monthly payments on debts will be stimulatory to our economy is beyond comprehension.<br /><br /><br /><br />Greghttps://www.blogger.com/profile/03139782404004492965noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-54823979432210092062013-06-26T11:06:40.334-04:002013-06-26T11:06:40.334-04:00Maybe it's the Fed tinkering with the interest...Maybe it's the Fed tinkering with the interest it pays on bank reserves that's constricting the recovery. Apparently 81% of the money created through QE is sitting in bank reserves, what is called by some "dark pools" of inert capital.<br /><br />Quoting some excellent sources, this interesting article I saw today is posted at: http://investmentwatchblog.com/81-5-of-money-created-through-quantitative-easing-is-sitting-there-gathering-dust-instead-of-helping-the-economy/<br />jbpeebleshttps://www.blogger.com/profile/11386620564536871255noreply@blogger.com