Trump election panel asks all 50 states for voter roll data

[timosman]

What is the benefit to pretending that a increase of X in the money supply will always cause a predictable increase of Y in prices, whether stock prices or otherwise? It's simple and from the point of view of philosophy it may feel good, but it's not an convincing argument for anyone who bothers to look at the actual changes in the market because it will never pan out to be a direct 1-for-1 correlation.

I sense Zippy logic here and a strawman. Nobody is claiming the relationship is 1-1. Nice try. -rep

 

[NorthCarolinaLiberty]

Because there are other factors that influence the market besides monetary policy.

There are also other factors besides face value text that influence conclusions one can make about a user.

jllundqu was in that thread too, pointing out another reason why QE hadn't had the effects on the economy that Madison320 had expected. Does mentioning the importance of money velocity make him a liberal democrat?

Obviously not because anyone's posting history can be read for a usually quick and easy determination. One simple post doesn't mean much out of context.

 

[NorthCarolinaLiberty]

I sense...a strawman. Nobody is claiming the relationship is 1-1.

This guy fancies himself some kind of economist. Maybe he's some teaching assistant at the college. Unfortunately, learning about supply & demand widgets didn't help him with logic.

 

[timosman]

This guy fancies himself some kind of economist. Maybe he's some teaching assistant at the college. Unfortunately, learning about supply & demand widgets didn't help him with logic.

I guess he gets away with this BS in college. Poor students.

 

[jllundqu]

Ok... looks like I have to read up on THIS thread for a few minutes....

 

[jllundqu]

I did say what I meant. I was explaining (some of) the reasons why QE had not created a level of inflation equal to the level of monetary expansion. Anyone can see that a 3x expansion in the supply of money did not cause a 3x increase in prices over the same period of time. Why did that not happen? Because there are other factors that influence the market besides monetary policy.


jllundqu was in that thread too, pointing out another reason why QE hadn't had the effects on the economy that Madison320 had expected. Does mentioning the importance of money velocity make him a liberal democrat?

 

[NorthCarolinaLiberty]

I guess he gets away with this BS in college. Poor students.

Yep. Sounds to me like his comparison of the liberty user to himself is like comparing apples to trash bags.

 

[TheCount]

I sense Zippy logic here and a strawman. Nobody is claiming the relationship is 1-1. Nice try. -rep

X to Y is not 1-1. That would be X to X.

From my point of view, the argument that Madison made was that because the result of monetary expansion that he expected had not yet occurred, it must occur at some point in the future. As I said, that ignores other factors involved.

 

[dannno]

X to Y is not 1-1. That would be X to X.

From my point of view, the argument that Madison made was that because the result of monetary expansion that he expected had not yet occurred, it must occur at some point in the future. As I said, that ignores other factors involved.

Other factors, you mean like how our inflation gets exported and used as global trading reserves? Ya, global trading reserves is just the ether, that will all disappear, we will never see those dollars again

 

[timosman]

X to Y is not 1-1. That would be X to X.

From my point of view, the argument that Madison made was that because the result of monetary expansion that he expected had not yet occurred, it must occur at some point in the future. As I said, that ignores other factors involved.

You are right, the economy is so great.

 

[Madison320]

X to Y is not 1-1. That would be X to X.

From my point of view, the argument that Madison made was that because the result of monetary expansion that he expected had not yet occurred, it must occur at some point in the future. As I said, that ignores other factors involved.

You ignored my post. I'll repost it for you.

That's true, an increase in the base of 10%, 20% even 50% could easily be hidden by other factors and we might not ever notice it. But we increased it by something like 400-500%. It will get noticed.

Also you appear to be a Schiff hater. That's a serious red flag considering Peter Schiff is a libertarian with very similar beliefs compared to Ron Paul. But I guess as you said, you're taking the "other side". Other side of what I ask. What's the other side of free markets and liberty?

 

[Madison320]

jllundqu was in that thread too, pointing out another reason why QE hadn't had the effects on the economy that Madison320 had expected. Does mentioning the importance of money velocity make him a liberal democrat?

It's the accumulation.

And you're missing the point. The current low velocity of money strongly supports my argument that we're due for high price increases. That's one reason why we haven't seen a corresponding increase in prices ....yet. Unless you think the velocity of money is never going to rise again. Or that the 2.5 trillion in reserves is always going to stay there. Or that the dollars held by foreigners is always going to stay there. Or whatever other temporary factors are keeping prices from rising are going to remain.

I'm getting deja vu. I swear I've had this argument with Zippy like 10 times.

 

[Swordsmyth]

I did say what I meant. I was explaining (some of) the reasons why QE had not created a level of inflation equal to the level of monetary expansion. Anyone can see that a 3x expansion in the supply of money did not cause a 3x increase in prices over the same period of time. Why did that not happen? Because there are other factors that influence the market besides monetary policy.


jllundqu was in that thread too, pointing out another reason why QE hadn't had the effects on the economy that Madison320 had expected. Does mentioning the importance of money velocity make him a liberal democrat?




I'm not even sure what the argument is here. Is there some sort of emotional attachment to the topic of monetary policy and the Federal Reserve such that discussion of facts is undesirable? What is the benefit to pretending that a increase of X in the money supply will always cause a predictable increase of Y in prices, whether stock prices or otherwise? It's simple and from the point of view of philosophy it may feel good, but it's not an convincing argument for anyone who bothers to look at the actual changes in the market because it will never pan out to be a direct 1-for-1 correlation.

My comment was general not specific, you "Mean what you say" with great frequency but you rarely "Say what you mean".
And you are wrong about the money policy somebody somewhere felt the impact of all that new money, just because you were temporarily and perhaps permanently shielded does not mean everybody in the world was.

But this thread has gotten way off topic so I will not discuss further anything but the original topic.

 

[TheCount]

Also you appear to be a Schiff hater. That's a serious red flag considering Peter Schiff is a libertarian with very similar beliefs compared to Ron Paul.

I don't hate Schiff, I just think that he's mostly full of shit and generally gives poor advice.

A financial advisor's quality does not stem from his ideological purity, but rather from his accuracy.

 

[TheCount]

The current low velocity of money strongly supports my argument that we're due for high price increases. That's one reason why we haven't seen a corresponding increase in prices ....yet. Unless you think the velocity of money is never going to rise again.

Again, velocity is only one of many factors involved...

Or that the 2.5 trillion in reserves is always going to stay there. Or that the dollars held by foreigners is always going to stay there. Or whatever other temporary factors are keeping prices from rising are going to remain.

Or if the velocity increases slowly.

Or if the Fed intervenes to deal with the excess reserves.

Or if American growth outstrips the growth of other countries such that international demand for dollars increases.

Or a dozen other possibilities which neither of us have considered.


You seem to be saying that the monetary supply expansion must come home to roost at some point in the future... and then you list a number of possibilities for things that could change and affect the outcome. I don't see how you can say that we're "due" for the inflationary effects of QE while simultaneously understanding that other equally important factors exist. Perhaps it's just a differing point of view, but I look at that and say what I said before... It hasn't happened yet, I see no evidence that it's happening right now, and it's entirely possible that it will never happen.

Prices are definitely higher than they would have been without QE, but trying to make Schiff-esque predictions based upon ideology is a bad idea.

 

[Zippyjuan]

I don't hate Schiff, I just think that he's mostly full of $#@! and generally gives poor advice.

A financial advisor's quality does not stem from his ideological purity, but rather from his accuracy.

Financially, Schiff is a one- trick pony: The economy is going to crash at any moment and gold and silver will soar. Buy his gold and be safe. He was right once that the economy did crash- and has been wrong dozens of times since.

We haven't seen high inflation from the stimulus because the money supply did not increase by $2.4 trillion. The money held by banks in reserves did. That is where most of the money the Fed spent buying securities went. The monetary base soared, but the money supply didn't. That has continued a slow but steady growth. I have tried to explain that the monetary base cannot be used to try to predict anything about price inflation because it is not a useful measure of money supply.

Does increasing the money supply lead to increases in prices? Not necessarily. First, money has to be spent to impact prices. You need a higher supply of money relative to the supply of goods- more dollars chasing the same amount of goods. And that assumes that the costs to produce those goods does not change and productivity remains the same. Money in the bank vaults (those $2.4 trillion in excess reserves) isn't out there chasing any goods and services. It isn't impacting prices.

"But what about when those reserves get out?" Yes, that would increase the supply of circulating money. Would that lead to high price inflation? Again, that depends. It depends on how quickly that money enters the system. If it is slowly released in small amounts, it will have little to no impact on prices. If the money supply grows either at the same rate as the economy or at a slower rate, there should be no price inflation. The increase in the supply of goods would be matching the increase in the supply of money. If it is dumped in a very short period of time, it will have a very big impact on prices. Excess reserves have been starting to decline from their peak. Has inflation picked up? Nope. Reserves have been coming down slowly. The Fed will likely use a slow process when they decide to unwind their security holdings (should they decide to do so)- slowly over a long period of time.

 

[Madison320]

Again, velocity is only one of many factors involved...



Or if the velocity increases slowly.

Or if the Fed intervenes to deal with the excess reserves.

Or if American growth outstrips the growth of other countries such that international demand for dollars increases.

Or a dozen other possibilities which neither of us have considered.


You seem to be saying that the monetary supply expansion must come home to roost at some point in the future... and then you list a number of possibilities for things that could change and affect the outcome. I don't see how you can say that we're "due" for the inflationary effects of QE while simultaneously understanding that other equally important factors exist. Perhaps it's just a differing point of view, but I look at that and say what I said before... It hasn't happened yet, I see no evidence that it's happening right now, and it's entirely possible that it will never happen.

Prices are definitely higher than they would have been without QE, but trying to make Schiff-esque predictions based upon ideology is a bad idea.

If it was possible for the Fed to print money without an eventual corresponding increase in prices, it would be like inventing a perpetual motion machine. Something for nothing.

 

[TheCount]

If it was possible for the Fed to print money without an eventual corresponding increase in prices, it would be like inventing a perpetual motion machine. Something for nothing.

That's like saying 'it's not possible for a person to pour water into a tub without the water level within the tub rising.' Does the tub leak? Is the drain closed? How quickly is the water evaporating? How quickly is the person pouring water into the tub? Depending on the answers to these questions, the water level in the tub can go down even as the person continues to add water to it.

This concept is not all that different from an economy, as it's a system with inputs and outputs just like any other. Economically speaking, expansion of the money supply without increased prices is possible so long as there are matching or overpowering deflationary pressures. Keep in mind that, as I said in the post that you quoted, prices would be higher than they otherwise would have been; IE: there would have been deflation if the printing had not happened, and therefore a zero rate of inflation was substituted for a negative rate of inflation. The effect of the expansionary monetary policy is still there, it's just hidden by other factors.

For example, think of a town containing 1000 people, all of whom are using a currency with a total money supply of $100,000. If 1000 more people join the community, no other currency is printed, and nothing else is changed, then the money will tend to increase in value as there are more people desiring to possess and use it, as well as a larger total economic output of the town. If the central bank of the town printed more money, they could compensate for this effect - expanding the money supply without increasing prices.

Likewise, consider an economy in which the price of everything or nearly everything is dependent upon the price of oil. If the price of oil is falling, then the prices of all other products which rely upon the price of oil for production, transport, energy, etc. will also fall. Again, in this case a central bank could expand a money supply during this period and still have the end result be lower prices or zero price change on those oil-related products if the deflationary pressure upon the economy of the declining price of oil is greater than the inflationary pressure of the expansionary monetary policy.


All of these examples are similar to the ones I offered in my previous post. The central bank is not the only factor in the market.

 

[Swordsmyth]

That's like saying 'it's not possible for a person to pour water into a tub without the water level within the tub rising.' Does the tub leak? Is the drain closed? How quickly is the water evaporating? How quickly is the person pouring water into the tub? Depending on the answers to these questions, the water level in the tub can go down even as the person continues to add water to it.

This concept is not all that different from an economy, as it's a system with inputs and outputs just like any other. Economically speaking, expansion of the money supply without increased prices is possible so long as there are matching or overpowering deflationary pressures. Keep in mind that, as I said in the post that you quoted, prices would be higher than they otherwise would have been; IE: there would have been deflation if the printing had not happened, and therefore a zero rate of inflation was substituted for a negative rate of inflation. The effect of the expansionary monetary policy is still there, it's just hidden by other factors.

For example, think of a town containing 1000 people, all of whom are using a currency with a total money supply of $100,000. If 1000 more people join the community, no other currency is printed, and nothing else is changed, then the money will tend to increase in value as there are more people desiring to possess and use it, as well as a larger total economic output of the town. If the central bank of the town printed more money, they could compensate for this effect - expanding the money supply without increasing prices.

Likewise, consider an economy in which the price of everything or nearly everything is dependent upon the price of oil. If the price of oil is falling, then the prices of all other products which rely upon the price of oil for production, transport, energy, etc. will also fall. Again, in this case a central bank could expand a money supply during this period and still have the end result be lower prices or zero price change on those oil-related products if the deflationary pressure upon the economy of the declining price of oil is greater than the inflationary pressure of the expansionary monetary policy.


All of these examples are similar to the ones I offered in my previous post. The central bank is not the only factor in the market.

The water still has an effect on the floor or the sewer or the humidity.

 

[TheCount]

The water still has an effect on the floor or the sewer or the humidity.

Madison isn't checking any of those, he's only looking at the water (price) level.