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Crony capitalist Buffett?

lewis20
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2/20/2012 1:32:18 AM
Posted: 4 years ago
It's no secret Warren Buffett and the Obama administration have been close these past four years. However their relationship seems to me, and I could be wrong, like blatant crony capitalism.
Buffett invested in Bank of America on Aug. 25, 2011, then on Feb. 09, 2012 the stock nearly doubles on Obama's announcement that a $25B foreclosure abuse settlement was reached.
If Obama shutdowns Keystone Pipeline, Buffetts recently acquired Burlington Northern Santa Fe LLC railroad stands to gain.
These could obviously just be coincidental and I am just paranoid but I don't think a company should stand to gain this much from a single presidents decisions.
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darkkermit
Posts: 11,204
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2/20/2012 1:35:12 AM
Posted: 4 years ago
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.
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FREEDO
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2/20/2012 2:07:44 AM
Posted: 4 years ago
I have a strange admiration for him though. He's funny and lives simply for a mongo-rich guy.
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darkkermit
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2/20/2012 2:32:28 AM
Posted: 4 years ago
At 2/20/2012 2:07:44 AM, FREEDO wrote:
I have a strange admiration for him though. He's funny and lives simply for a mongo-rich guy.

When I think of him I think: "It's not about the money, it's about the game" -Gordon Gekko.

He has plenty of money, but he just enjoys playing the game anyways, for the sake of playing the game.
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Reasoning
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2/20/2012 2:37:01 AM
Posted: 4 years ago
His father was much better.
"What we really ought to ask the liberal, before we even begin addressing his agenda, is this: In what kind of society would he be a conservative?" - Joseph Sobran
Mimshot
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2/20/2012 9:04:30 AM
Posted: 4 years ago
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?
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Greyparrot
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2/21/2012 2:14:00 AM
Posted: 4 years ago
At 2/20/2012 9:04:30 AM, Mimshot wrote:
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?

Because heaven forbid that a innaccurate risk/reward policy should be looked at...nothing to see here move along....
johnnyboy54
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2/21/2012 2:18:05 AM
Posted: 4 years ago
At 2/21/2012 2:14:00 AM, Greyparrot wrote:
At 2/20/2012 9:04:30 AM, Mimshot wrote:
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?

Because heaven forbid that a innaccurate risk/reward policy should be looked at...nothing to see here move along....

Yep
I didn't order assholes with my whiskey.
darkkermit
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2/21/2012 2:47:41 AM
Posted: 4 years ago
At 2/21/2012 2:14:00 AM, Greyparrot wrote:
At 2/20/2012 9:04:30 AM, Mimshot wrote:
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?

Because heaven forbid that a innaccurate risk/reward policy should be looked at...nothing to see here move along....

I'm sure it had something to do with the fact that the Obama administration has fixed the social security, medicare and medicaid entitlements and have found have implemented a solution to sound fiscal policy in the future. Obama's new budget finds a way to pay down the debt.

I mean, either (a) Buffet's analysis is absolutely correct and I'm just too stupid to understand it. (b) I'm smarter then the greatest investor or (c) he has a strong incentive to lie.

Multiple choice answers are fun.
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Mimshot
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2/21/2012 11:35:44 AM
Posted: 4 years ago
At 2/21/2012 2:47:41 AM, darkkermit wrote:
At 2/21/2012 2:14:00 AM, Greyparrot wrote:
At 2/20/2012 9:04:30 AM, Mimshot wrote:
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?

Because heaven forbid that a innaccurate risk/reward policy should be looked at...nothing to see here move along....

I'm sure it had something to do with the fact that the Obama administration has fixed the social security, medicare and medicaid entitlements and have found have implemented a solution to sound fiscal policy in the future. Obama's new budget finds a way to pay down the debt.

I mean, either (a) Buffet's analysis is absolutely correct and I'm just too stupid to understand it. (b) I'm smarter then the greatest investor or (c) he has a strong incentive to lie.

Multiple choice answers are fun.

or (d) Buffet's analysis is aboslutely correct and you could understand it if you bothered to read it.
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darkkermit
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2/21/2012 3:29:17 PM
Posted: 4 years ago
At 2/21/2012 11:35:44 AM, Mimshot wrote:
At 2/21/2012 2:47:41 AM, darkkermit wrote:
At 2/21/2012 2:14:00 AM, Greyparrot wrote:
At 2/20/2012 9:04:30 AM, Mimshot wrote:
At 2/20/2012 1:35:12 AM, darkkermit wrote:
I thought it was obvious that Buffett was a crony. He believe that the US government should be a "quadruple A if that was possible". Come on, he's lying his @ss off.

Did you catch WHY he said it should be AAAA? Do you have any reason to believe his analysis is wrong other than it not supporting your political ideology?

Because heaven forbid that a innaccurate risk/reward policy should be looked at...nothing to see here move along....

I'm sure it had something to do with the fact that the Obama administration has fixed the social security, medicare and medicaid entitlements and have found have implemented a solution to sound fiscal policy in the future. Obama's new budget finds a way to pay down the debt.

I mean, either (a) Buffet's analysis is absolutely correct and I'm just too stupid to understand it. (b) I'm smarter then the greatest investor or (c) he has a strong incentive to lie.

Multiple choice answers are fun.

or (d) Buffet's analysis is aboslutely correct and you could understand it if you bothered to read it.

curious if you have any source for his great analysis. I'm fascinated to read it.
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Mimshot
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2/21/2012 4:40:03 PM
Posted: 4 years ago
or (d) Buffet's analysis is aboslutely correct and you could understand it if you bothered to read it.

curious if you have any source for his great analysis. I'm fascinated to read it.

It's pretty simple:

"The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you're talking about inflation, that's a different question."
http://www.upi.com...

That is, since the U.S. government is the monopoly supplier of dollars, there is no risk of the U.S. running out or being unable to pay its "debts." All of this talk of default and credit ratings distracts from the real issue, which is how to manage the inflation rate. This seems like a very reasoned position to me. Why did you claim he is "lying his @ss off"?
Mimshot: I support the 1956 Republican platform
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darkkermit
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2/21/2012 7:40:45 PM
Posted: 4 years ago
At 2/21/2012 4:40:03 PM, Mimshot wrote:
or (d) Buffet's analysis is aboslutely correct and you could understand it if you bothered to read it.

curious if you have any source for his great analysis. I'm fascinated to read it.

It's pretty simple:

"The U.S., to my knowledge owes no money in currency other than the U.S. dollar, which it can print at will. Now if you're talking about inflation, that's a different question."
http://www.upi.com...

That is, since the U.S. government is the monopoly supplier of dollars, there is no risk of the U.S. running out or being unable to pay its "debts." All of this talk of default and credit ratings distracts from the real issue, which is how to manage the inflation rate. This seems like a very reasoned position to me. Why did you claim he is "lying his @ss off"?

his analysis is based on the idea that they can just print their own money. Well, then based on that logic every nation that has their own currency should have a AAA rating. They dont

http://en.wikipedia.org...
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darkkermit
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2/21/2012 7:43:21 PM
Posted: 4 years ago
actually scratch that, I should have said floating currency.

The US has the choice of either inflating or defaulting, and if the option of inflating is worse then the option of defaulting, they will default.
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Mimshot
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2/22/2012 11:47:41 AM
Posted: 4 years ago
At 2/21/2012 7:46:02 PM, darkkermit wrote:
isn't that hard to find an example either. Mexico uses the floating currency, Peso and has a triple B rating.

Which is just as silly. Sovereign debt (in floating currencies) is not like corporate corporate debt. The way it behaves relative to risk is different in kind, not just in degree.

Also, you keep saying "inflate the currency," this is a phrase thrown around by Peter Schiff and the Mises Institute that really doesn't apply to our monetary system. Inflation is rising prices not money supply, and the effect of money supply on prices is not as monotonic as they suggest.

http://research.stlouisfed.org...
Mimshot: I support the 1956 Republican platform
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Mimshot: Yes
darkkermit
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2/22/2012 4:52:51 PM
Posted: 4 years ago
At 2/22/2012 11:47:41 AM, Mimshot wrote:
At 2/21/2012 7:46:02 PM, darkkermit wrote:
isn't that hard to find an example either. Mexico uses the floating currency, Peso and has a triple B rating.

Which is just as silly. Sovereign debt (in floating currencies) is not like corporate corporate debt. The way it behaves relative to risk is different in kind, not just in degree.

Also, you keep saying "inflate the currency," this is a phrase thrown around by Peter Schiff and the Mises Institute that really doesn't apply to our monetary system. Inflation is rising prices not money supply, and the effect of money supply on prices is not as monotonic as they suggest.

http://research.stlouisfed.org...

So your agreeing that Mexico should not be a triple B rating?

Don't think I used the term inflate the currency. Stop trying to state things I didn't say to make yourself sound smart. Nice try body. Yes I know how inflation works. It's the following equation.

dP/P = dV/V +dM/M - DY/Y

Check to make sure its right. I did it via memory. Yes, monetary policy isn't the only thing that effects prices but increasing the money supply can and usually does in fact increase prices.
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Mimshot
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2/22/2012 7:25:07 PM
Posted: 4 years ago
At 2/22/2012 4:52:51 PM, darkkermit wrote:
At 2/22/2012 11:47:41 AM, Mimshot wrote:
At 2/21/2012 7:46:02 PM, darkkermit wrote:
isn't that hard to find an example either. Mexico uses the floating currency, Peso and has a triple B rating.

Which is just as silly. Sovereign debt (in floating currencies) is not like corporate corporate debt. The way it behaves relative to risk is different in kind, not just in degree.

Also, you keep saying "inflate the currency," this is a phrase thrown around by Peter Schiff and the Mises Institute that really doesn't apply to our monetary system. Inflation is rising prices not money supply, and the effect of money supply on prices is not as monotonic as they suggest.

http://research.stlouisfed.org...

So your agreeing that Mexico should not be a triple B rating?

Don't think I used the term inflate the currency. Stop trying to state things I didn't say to make yourself sound smart. Nice try body. Yes I know how inflation works. It's the following equation.

You're right, I had two threads confused. I'm sorry. You did say "The US has the choice of either inflating or defaulting" so you used "inflating" as a verb when not talking about balloons.


dP/P = dV/V +dM/M - DY/Y

Check to make sure its right. I did it via memory. Yes, monetary policy isn't the only thing that effects prices but increasing the money supply can and usually does in fact increase prices.

Only if all else is held constant.
Mimshot: I support the 1956 Republican platform
DDMx: So, you're a socialist?
Mimshot: Yes
darkkermit
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2/22/2012 8:06:05 PM
Posted: 4 years ago
At 2/22/2012 7:25:07 PM, Mimshot wrote:
At 2/22/2012 4:52:51 PM, darkkermit wrote:
At 2/22/2012 11:47:41 AM, Mimshot wrote:
At 2/21/2012 7:46:02 PM, darkkermit wrote:
isn't that hard to find an example either. Mexico uses the floating currency, Peso and has a triple B rating.

Which is just as silly. Sovereign debt (in floating currencies) is not like corporate corporate debt. The way it behaves relative to risk is different in kind, not just in degree.

Also, you keep saying "inflate the currency," this is a phrase thrown around by Peter Schiff and the Mises Institute that really doesn't apply to our monetary system. Inflation is rising prices not money supply, and the effect of money supply on prices is not as monotonic as they suggest.

http://research.stlouisfed.org...

So your agreeing that Mexico should not be a triple B rating?

Don't think I used the term inflate the currency. Stop trying to state things I didn't say to make yourself sound smart. Nice try body. Yes I know how inflation works. It's the following equation.

You're right, I had two threads confused. I'm sorry. You did say "The US has the choice of either inflating or defaulting" so you used "inflating" as a verb when not talking about balloons.

You can use inflating as a verb. You can cause inflation by increasing the money supply. See equation below. In fact the ideal gas equation: PV = nRT is pretty similar looking the the quanititive theory of money P*Y = V*M. Just like in PV = nRT If you increase the moles (through pumping) you increase the volume, if you increase the monetary supply, you increase the P value (prices causing inflation).


dP/P = dV/V +dM/M - DY/Y

Check to make sure its right. I did it via memory. Yes, monetary policy isn't the only thing that effects prices but increasing the money supply can and usually does in fact increase prices.

Only if all else is held constant.

Did you not see the equation!
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Mimshot
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2/22/2012 11:33:17 PM
Posted: 4 years ago
At 2/22/2012 8:06:05 PM, darkkermit wrote:
At 2/22/2012 7:25:07 PM, Mimshot wrote:
At 2/22/2012 4:52:51 PM, darkkermit wrote:
At 2/22/2012 11:47:41 AM, Mimshot wrote:
At 2/21/2012 7:46:02 PM, darkkermit wrote:
isn't that hard to find an example either. Mexico uses the floating currency, Peso and has a triple B rating.

Which is just as silly. Sovereign debt (in floating currencies) is not like corporate corporate debt. The way it behaves relative to risk is different in kind, not just in degree.

Also, you keep saying "inflate the currency," this is a phrase thrown around by Peter Schiff and the Mises Institute that really doesn't apply to our monetary system. Inflation is rising prices not money supply, and the effect of money supply on prices is not as monotonic as they suggest.

http://research.stlouisfed.org...

So your agreeing that Mexico should not be a triple B rating?

Don't think I used the term inflate the currency. Stop trying to state things I didn't say to make yourself sound smart. Nice try body. Yes I know how inflation works. It's the following equation.

You're right, I had two threads confused. I'm sorry. You did say "The US has the choice of either inflating or defaulting" so you used "inflating" as a verb when not talking about balloons.

You can use inflating as a verb. You can cause inflation by increasing the money supply. See equation below. In fact the ideal gas equation: PV = nRT is pretty similar looking the the quantitative theory of money P*Y = V*M. Just like in PV = nRT If you increase the moles (through pumping) you increase the volume, if you increase the monetary supply, you increase the P value (prices causing inflation).



QTM was developed around the turn of the 20th century under a monetary regime that was very different from what we have today. Additionally, it implicitly assumes that dV/dt = 0, an assumption that is plainly false in the modern economy. Please, if you would, tell me what "M" is in the U.S. economy today. I don't need a number, just what quantity does it refer to? (e.g., M0, M1, M3, currency)

dP/P = dV/V +dM/M - DY/Y

Check to make sure its right. I did it via memory. Yes, monetary policy isn't the only thing that effects prices but increasing the money supply can and usually does in fact increase prices.

Only if all else is held constant.

Did you not see the equation!

Yes, so positive DM/M only causes DP/P if V and Y are constant. Since M is increased through deficit spending, that spending also increases Y. In fact, if the added government deficit is all spending and the spending is all consumption then DM = DY and if DV = 0 (QTM's implicit assumption) then DP/P = DY/M - DY/Y = (Y-M)DY/YM. So, over the long run, to keep prices stable, one should try to make the money supply grow at the same rate as the GDP.

Add to that the fact that you want to be counter-cyclical (run bigger deficits in bad economic times and smaller ones in good times) and you have Mimshot's theory of macro-economic policy.
Mimshot: I support the 1956 Republican platform
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darkkermit
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2/23/2012 12:38:00 AM
Posted: 4 years ago
At 2/22/2012 11:33:17 PM, Mimshot wrote:
At 2/22/2012 8:06:05 PM, darkkermit wrote:
At 2/22/2012 7:25:07 PM, Mimshot wrote:
At 2/22/2012 4:52:51 PM, darkkermit wrote:
At 2/22/2012 11:47:41 AM, Mimshot wrote:

QTM was developed around the turn of the 20th century under a monetary regime that was very different from what we have today. Additionally, it implicitly assumes that dV/dt = 0, an assumption that is plainly false in the modern economy.

Classical economists assumed that. However mainstream economists know this to be false. However, this is no way makes the equation wrong since it just means that the velocity of money can change.

Please, if you would, tell me what "M" is in the U.S. economy today. I don't need a number, just what quantity does it refer to? (e.g., M0, M1, M3, currency)

M3 , however those covered in both M1+ have faster monetary velocity then those in M3.

Yes, so positive DM/M only causes DP/P if V and Y are constant. Since M is increased through deficit spending, that spending also increases Y.

M is increasing through deficit spending! I think you better read this debate:

http://www.debate.org...

In fact, if the added government deficit is all spending and the spending is all consumption then DM = DY

Except you fail in two accounts. One, increased government spending =/= increased money supply. Two, government spending crowds out other forms of spending.

and if DV = 0 (QTM's implicit assumption)

Which you just said, and I agreed, is false. The velocity of money consistently changes.

then DP/P = DY/M - DY/Y = (Y-M)DY/YM.

^Above equation is clearly wrong.

So, over the long run, to keep prices stable, one should try to make the money supply grow at the same rate as the GDP.

What do you mean by price stability? Do you think lowering nominal costs of cell phones computers and electronics is "unstable prices". Any change in the money supply must necessarily go to someone first and its means of implementation arbitrary. This necessarily creates an instability in the market equilibrium and there is an allocations efficiency problem.

Add to that the fact that you want to be counter-cyclical (run bigger deficits in bad economic times and smaller ones in good times) and you have Mimshot's theory of macro-economic policy.

Sorry to tell you this but Keynes basically implemented this theory in the 1930s. Your off by a long shot bud.
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2/23/2012 9:27:37 AM
Posted: 4 years ago
Please, if you would, tell me what "M" is in the U.S. economy today. I don't need a number, just what quantity does it refer to? (e.g., M0, M1, M3, currency)

M3 , however those covered in both M1+ have faster monetary velocity then those in M3.

M3 includes swaps. So, by your logic the big banks could set the inflation rate by entering or exiting forex or interest rate swaps at will. Since there is no nominal limit on the value of these swaps, BoA and Citi could wake up tomorrow and decide to double M3 by entering offsetting swaps. Are you seriously arguing that this would double prices? It would have no effect whatsoever.

Add to that the fact that you want to be counter-cyclical (run bigger deficits in bad economic times and smaller ones in good times) and you have Mimshot's theory of macro-economic policy.

Sorry to tell you this but Keynes basically implemented this theory in the 1930s. Your off by a long shot bud.

The only part of what I proposed that is similar to Keynes was being counter-cyclical. He also developed his theory in a very different monetary regime than what we have today. And what is "off by a long shot" exactly?
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lewis20
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2/23/2012 9:35:52 AM
Posted: 4 years ago
Swaps part of M3? you sure?
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2/23/2012 9:45:40 AM
Posted: 4 years ago
At 2/23/2012 9:35:52 AM, lewis20 wrote:
Swaps part of M3? you sure?

"M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements."
http://en.wikipedia.org...

A swap is two offsetting repo agreements.
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darkkermit
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2/23/2012 1:50:13 PM
Posted: 4 years ago
At 2/23/2012 9:45:40 AM, Mimshot wrote:
At 2/23/2012 9:35:52 AM, lewis20 wrote:
Swaps part of M3? you sure?

"M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements."
http://en.wikipedia.org...

A swap is two offsetting repo agreements.

Swaps is not included in that. Please find a source for this. Money supply increases as the amount of debt increases, but unless somehow credit swaps increase the amount of debt, then this seems to be really faulty reasoning.
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2/23/2012 1:58:24 PM
Posted: 4 years ago
At 2/23/2012 1:50:13 PM, darkkermit wrote:
At 2/23/2012 9:45:40 AM, Mimshot wrote:
At 2/23/2012 9:35:52 AM, lewis20 wrote:
Swaps part of M3? you sure?

"M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements."
http://en.wikipedia.org...

A swap is two offsetting repo agreements.

Swaps is not included in that. Please find a source for this. Money supply increases as the amount of debt increases, but unless somehow credit swaps increase the amount of debt, then this seems to be really faulty reasoning.

If I lend you money, we've increased the amount of debt. If you lend me money, we've increased the amount of debt. If we lend each other money at different interest rates then we've increased the amount of debt. I agree completely that M3 is a stupid way to measure money supply.
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darkkermit
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2/23/2012 2:09:28 PM
Posted: 4 years ago
At 2/23/2012 1:58:24 PM, Mimshot wrote:
At 2/23/2012 1:50:13 PM, darkkermit wrote:
At 2/23/2012 9:45:40 AM, Mimshot wrote:
At 2/23/2012 9:35:52 AM, lewis20 wrote:
Swaps part of M3? you sure?

"M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements."
http://en.wikipedia.org...

A swap is two offsetting repo agreements.

Swaps is not included in that. Please find a source for this. Money supply increases as the amount of debt increases, but unless somehow credit swaps increase the amount of debt, then this seems to be really faulty reasoning.

If I lend you money, we've increased the amount of debt. If you lend me money, we've increased the amount of debt. If we lend each other money at different interest rates then we've increased the amount of debt. I agree completely that M3 is a stupid way to measure money supply.

Okay, my mistake. I meant increasing the debt via fractional reserve system.
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