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Tywin Manderly

US Politics: Mad Max Beyond Corona Dome

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18 minutes ago, ThinkerX said:

One does have to wonder if Jace has an appropriate selection of Post Apocalyptic outfits, though....

Plague Doctor outfits on the catwalk?

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7 hours ago, Tywin et al. said:

The stimulus package... failed. edit, in the Senate.

Also, dirty Rand Paul was face to face and in the gym with senators as early as this morning. 

And in the goddamned POOL for fucks sake. Number one- I didn’t know we bought them a pool. Number two- gross.

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I am starting to wonder - we have an awful lot of old right wing senators, don't we?  They start keeling over from the Corona Virus, will the rest have the guts to remain in session?  And what of replacing the ones that die?

This whole mess - this whole past year is sounding more and more like the prelude to one of these teenage dystonian novels....

 

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Posted (edited)
6 hours ago, Triskele said:

Except, joy, will probably happen all over the world at the same time.



It's not being widely said yet, either because we're all distracted or because it's deliberately being held because the experts don't want to cause another panic before we know for sure but it's pretty clear this is gonna be a completely unprecedented mauling of the world economy and how it works. I mean I'm not an economist by any measure whatsoever but I don't think you have to be one to put those dots together.

Edited by polishgenius

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Posted (edited)
11 minutes ago, polishgenius said:



It's not being widely said yet, either because we're all distracted or because it's deliberately being held because the experts don't want to cause another panic before we know for sure but it's pretty clear this is gonna be a completely unprecedented mauling of the world economy and how it works. I mean I'm not an economist by any measure whatsoever but I don't think you have to be one to put those dots together.

This is unprecedented in modern times, but the one thing that holds from the Spanish flu pandemic or WWII is that there was no real long-term impact on tangible, material stuff -- it's not like an industry gets wiped out because transport and factories are physically wrecked or there's a labor shortage going forward because the working age cohorts have been decimated.

It's going to be massively disruptive fiscally, the shockwave will work its way through the system, and, I don't know, 3 years out we're going to be looking at this and seeing very little different from what we saw 6 months ago. Maybe you'll be dining at different restaurants or visiting different bars, maybe the mechanic's shop has changed ownership, etc., but the underlying factors that make a good economy and market are still there.

Edited by Ran

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7 minutes ago, polishgenius said:



It's not being widely said yet, either because we're all distracted or because it's deliberately being held because the experts don't want to cause another panic before we know for sure but it's pretty clear this is gonna be a completely unprecedented mauling of the world economy and how it works. I mean I'm not an economist by any measure whatsoever but I don't think you have to be one to put those dots together.

It actually gets worse the more you dig. The USA and the UK have their own currencies. Their Government can literally print themselves silly, so far as the money supply goes. Budget deficits? Nationalisation of major industries to save them? No worries.

The bigger worry is the Eurozone. Italy was profoundly dysfunctional as it was, and it doesn't have its own currency...

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5 minutes ago, Ran said:

This is unprecedented in modern times, but the one thing that holds from the Spanish flu pandemic or WWII is that there was no real long-term impact on tangible, material stuff -- it's not like an industry gets wiped out because transport and factories are physically wrecked or there's a labor shortage going forward because the working age cohorts have been decimated.

There was no destruction of physical assets between 1929 and 1932 either.

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3 minutes ago, Ran said:

This is unprecedented in modern times, but the one thing that holds from the Spanish flu pandemic or WWII is that there was no real long-term impact on tangible, material stuff -- it's not like an industry gets wiped out because transport and factories are physically wrecked or there's a labor shortage going forward because the working age cohorts have been decimated.

It's going to be massively disruptive fiscally, the shockwave will work its way through the system, and, I don't know, 3 years out we're going to be looking at this and seeing very little different from what we saw 6 months ago. Maybe you'll be dining at different restaurants or visiting different bars, maybe the mechanic's shop has changed ownership, etc.,

Yeah, pretty much agree. Besides central banks, etc have practically unlimited capability to inject liquidity to the markets. There are also other economic instruments including nationalization. 

However if this drags on, we will start to see disruption in the supply lines. When or how severe it's hard to say.

I wonder what the financial sharks are doing amid too many sinking boats.

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Just now, The Marquis de Leech said:

There was no destruction of physical assets between 1929 and 1932 either.

33% of banks disappeared. Money was a physical asset at that time because it was pegged to gold. The biggest economies were still on the gold standard and didn't have means to increase money supply to weather the storm. The banking system and fiscal economy is very different. 

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2 minutes ago, Ran said:

33% of banks disappeared. Money was a physical asset at that time because it was pegged to gold. The biggest economies were still on the gold standard and didn't have means to increase money supply to weather the storm. The banking system and fiscal economy is very different. 

My point was that the "real" economy (human labour, the land, the factories) was still very much intact, not that it did much good.

We also have a modern variant of the gold standard, in the form of the Euro.

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Posted (edited)
23 minutes ago, The Marquis de Leech said:

My point was that the "real" economy (human labour, the land, the factories) was still very much intact, not that it did much good.

Because there was no money. That's not an issue this time. The Spanish Flu shows you what happens when neither the monetary system nor the physical inputs into the economy are wrecked by a global disaster.

Quote

We also have a modern variant of the gold standard, in the form of the Euro.

I think those arguments are overstated

Edited by Ran

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Yeah, the argument about the Euro here appears to proceed from the belief that the Euro is a priori a Bad Thing.

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The Euro might not be such a problem if the whole of the eurozone is going through similarly terrible times. It can react accordingly.

But if Germany is doing fine and Italy isn’t then you can guess what will happen again 

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Posted (edited)
7 hours ago, Ran said:

I think those arguments are overstated

I don't think so. The Euro has been a disaster for Europe. In making his analysis the author doesn't seem to understand why the gold standard caused or more made the depression worse. Under the gold standard, every nation's price level was in some fashion tied to the international gold standard. When the demand for gold increased, and prices don't adjust quickly enough, aggregate demand falls. And suppliers of gold couldn't simply meet the increased demand for gold quickly enough. Little surprise then that the countries that left the gold standard tended to recover more quickly.

The problem with the Euro is similar. Every nation  that is on it has its price level tied to it. And if the demand for Euros increase and the price level can't adjust quickly enough to restore a new full employment equilibrium aggregate demand falls. The ECB could of course increase the amount of Euros to meet demand, but that often becomes controversial as different nations have different economic agendas. Germany for instance may not want more Euros, while Spain desperately needs it.

Interestingly enough, when the Euro was being proposed, US liberals and British conservatives were generally allied in thinking it was a bad idea, while European Socialist and Wall Street were allied in being for it.

Edited by OldGimletEye

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5 minutes ago, OldGimletEye said:

The ECB could of course increase the amount of Euros to meet demand

Like so?

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57 minutes ago, Heartofice said:

The Euro might not be such a problem if the whole of the eurozone is going through similarly terrible times. 

In order for the Euro to work, Europe would have to integrate fiscally and allow free immigration within Europe. Until that happens the Euro isn't what is called an optimal currency area.

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Posted (edited)
7 minutes ago, Ran said:

Like so?

And 1 trillion probably won't be enough, particularly in a liquidity trap. The ECB will have to abandoned inflation targeting and switch to something like GDP or Price targeting or the Eurozone countries will have to increase fiscal spending or a combination of all of them.

And anyway, before this low interest rate era, the ECB during during to 2008 was too tight, in large part because the German aversion to inflation. That is one reason why Spain suffered 25% unemployment.  That was disaster and shouldn't have happened. Spain had plenty of fiscal capacity to counter act falling aggregate demand if only the ECB would have aggressively went out and bought Spanish bonds.

Edited by OldGimletEye

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1 minute ago, OldGimletEye said:

And 1 trillion probably won't be enough, particularly in a liquidity trap.

Pretty clear they're ready to do more. No reason to spit out 10 trillion all in a go.

1 minute ago, OldGimletEye said:

The ECB will have to abandoned inflation targeting or the Eurozone countries will have to increase fiscal spending.

All of this stuff is on the table.

1 minute ago, OldGimletEye said:

And anyway, before this low interest rate era, the ECB during during to 2008 was too tight

Seems they are aware of that and aren't planning to make the same mistake. 

I think the responses from all sorts of governments show that they recognize this thing will need a lot of liquidity. Germany isn't allowing gatherings of more than 2 people in public, they know what that means for the economy for the next month or two.

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1 minute ago, Ran said:

Pretty clear they're ready to do more. No reason to spit out 10 trillion all in a go.

All of this stuff is on the table.

Seems they are aware of that and aren't planning to make the same mistake. 

I think the responses from all sorts of governments show that they recognize this thing will need a lot of liquidity. Germany isn't allowing gatherings of more than 2 people in public, they know what that means for the economy for the next month or two.

The point is all this stuff only works if all the countries agree. Right now with low interest rates and the threat of Coronavirus, even Germany can be made to agree to increasing liquidity.

In other situations, all the countries may not agree as their perceived priorities may differ.

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