If you’re interested in the 70 year trend of wealth transfer that actually got us here I recently posted a stack on the topic. Monetary easy and modern monetary theory fundamental exist to transfer wealth from the poor to the wealthy, and more fundamentally from the people to the government.
If you’re interested in the 70 year trend of wealth transfer that actually got us here I recently posted a stack on the topic. Monetary easy and modern monetary theory fundamental exist to transfer wealth from the poor to the wealthy, and more fundamentally from the people to the government.
There’s a lot of time spent bemoaning “big business” these days - and those people are half right. Big business is a huge part of the problem - the enormous government and the regulation, taxation, and interest rate management that created the environment in the first place are the actual culprit.
We want the American dream back? Deregulation (a return to actual corporate competition), a massive reduction in the tax base, and long term yields above 3% (the almost universally agreed to absolute cost of capital) MUST happen. Any and everything else is just playing games that will continue to cost the bottom half of the country in monetary and life expectancy terms while the top 5% continue to live a life unimaginable even two generations ago…
Yes. Yes. Yes. Reading history shows that the very day any nation goes to a fiat currency not backed by a hard asset they begin the road to their own destruction.
Richard Nixon should have to answer for a lot of things, but no evil he ever did equals taking the United States off the gold standard. Governments have an irresistible urge to expand; to do that they need money. Politicians and bureaucrats have an irresistible urge for more and more power; to do that they also need money. Raising taxes in a constitutional republic like ours requires facing voters at the polls, so there is a natural curb on raising money that way, But inflation! There's the idea! Simply print money and you have transferred the people's money into your pocket with complete deniability. "I didn't do it! It's the economy! It's corporate greed! It's poltergeists!"
Economist John Maynard Keynes is often denigrated as the consummate socialist, but his economics were much more nuanced, and he summed it perfectly:
“Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
You nailed it. The central banks have been protecting the wealthy for 50 years by directly supporting asset prices. As a result, levels of wealth inequality have hit new all-time records. There's a simple solution to the problem: get the central banks the hell out of the markets, and let rich people FAIL for a change.
The interest rate game is very easy - but we are economically illiterate in this country so we don't understand. Low interest rates can only help the wealthy. To take borrow money you must borrow against assets - who has assets against which to borrow? The wealthy. And the more assets you have the more money you can borrow - for free, and the more assets you can procure, and thus the more you can borrow against, and this loop continues indefinitely. This is the absolute definition of a hedge fund, or a modern day PE firm (they used to have to actually create operating efficiency's, today they just accumulate assets to borrow against).
On the flip side, high interest rates help the less fortunate because you need VERY little assets to be able to take advantage of compounding interest. So, even if I have too small a base to borrow against (and wouldn't want to at 7%) I can put my small amount of capital away and let it accrue, and take advantage of compounding interest, at 7% per year and watch my wealth grow literally exponentially.
But interest rates aren't even half the battle - the tax base - the "asset" that allows our government to borrow money it can launder through foreign "wars" are the biggest problem, and the regulations that prevent competition in the market thus ensuring the firms borrowing against all those assets stay huge (and thus don't burst the bubble when they are outcompeted by someone offering a better product at a lower price to the market) are the second biggest problem. Interest rates matter MUCH less if we aren't, for literally no practical reason, giving the government 40% of our income and if we returned to mostly-free market economy that allowed competition and thus the best solution to win.
Clearly YOU get it. Very few do. Have you seen Milton Friedman's series on YouTube?
Side editorial: it is places like Substack that represent the greatest threat to the globalists, the grifters, the Congress (but I repeat myself). If we survive this regime - not administration, regime - when the cuttin's done, I believe it will be directly traceable to the elites' inability to stifle places of free enquiry like Substack, and most particularly, Common Sense. Well done. Bloody well done.
I'm not sure I get it... but I'm trying. And I could not agree more that places for open discussion and open analysis where we can learn from each other and challenge each other and push each other is the only way path forward. We will survive this regime, and you're absolutely right, it will be because we care enough to find places where truth can breathe and grow... And Bari, despite how much I disagree with many of her opinions, has created one of those places, and for that she should be roundly applauded and appreciated.
Clearly Common Sense is flourishing, when in my experience the vast majority of Internet forums have gone toes-up over the years. Why? I'm still trying to figure that out, but I believe that most of it is that the articles are presented in a respectful way that all sides can read an appreciate, even if they disagree, as you have said.
I'm not a believer, but the Bible has a wealth of wisdom and the one about a soft voice turning away wrath is SO powerful, and for someone like me who tends to be opinionated and aggressive, I'm trying to learn just like you are. There is so much at stake now that egos have to take a back seat. I don't always to it, though, but still trying.
Anyway, here's the Friedman series (from NPR, of all things!). It will change your life. All best.
If you’re interested in the 70 year trend of wealth transfer that actually got us here I recently posted a stack on the topic. Monetary easy and modern monetary theory fundamental exist to transfer wealth from the poor to the wealthy, and more fundamentally from the people to the government.
There’s a lot of time spent bemoaning “big business” these days - and those people are half right. Big business is a huge part of the problem - the enormous government and the regulation, taxation, and interest rate management that created the environment in the first place are the actual culprit.
We want the American dream back? Deregulation (a return to actual corporate competition), a massive reduction in the tax base, and long term yields above 3% (the almost universally agreed to absolute cost of capital) MUST happen. Any and everything else is just playing games that will continue to cost the bottom half of the country in monetary and life expectancy terms while the top 5% continue to live a life unimaginable even two generations ago…
Yes. Yes. Yes. Reading history shows that the very day any nation goes to a fiat currency not backed by a hard asset they begin the road to their own destruction.
Richard Nixon should have to answer for a lot of things, but no evil he ever did equals taking the United States off the gold standard. Governments have an irresistible urge to expand; to do that they need money. Politicians and bureaucrats have an irresistible urge for more and more power; to do that they also need money. Raising taxes in a constitutional republic like ours requires facing voters at the polls, so there is a natural curb on raising money that way, But inflation! There's the idea! Simply print money and you have transferred the people's money into your pocket with complete deniability. "I didn't do it! It's the economy! It's corporate greed! It's poltergeists!"
Economist John Maynard Keynes is often denigrated as the consummate socialist, but his economics were much more nuanced, and he summed it perfectly:
“Lenin was right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”
Modern-day America? Q.E.D..
You nailed it. The central banks have been protecting the wealthy for 50 years by directly supporting asset prices. As a result, levels of wealth inequality have hit new all-time records. There's a simple solution to the problem: get the central banks the hell out of the markets, and let rich people FAIL for a change.
The interest rate game is very easy - but we are economically illiterate in this country so we don't understand. Low interest rates can only help the wealthy. To take borrow money you must borrow against assets - who has assets against which to borrow? The wealthy. And the more assets you have the more money you can borrow - for free, and the more assets you can procure, and thus the more you can borrow against, and this loop continues indefinitely. This is the absolute definition of a hedge fund, or a modern day PE firm (they used to have to actually create operating efficiency's, today they just accumulate assets to borrow against).
On the flip side, high interest rates help the less fortunate because you need VERY little assets to be able to take advantage of compounding interest. So, even if I have too small a base to borrow against (and wouldn't want to at 7%) I can put my small amount of capital away and let it accrue, and take advantage of compounding interest, at 7% per year and watch my wealth grow literally exponentially.
But interest rates aren't even half the battle - the tax base - the "asset" that allows our government to borrow money it can launder through foreign "wars" are the biggest problem, and the regulations that prevent competition in the market thus ensuring the firms borrowing against all those assets stay huge (and thus don't burst the bubble when they are outcompeted by someone offering a better product at a lower price to the market) are the second biggest problem. Interest rates matter MUCH less if we aren't, for literally no practical reason, giving the government 40% of our income and if we returned to mostly-free market economy that allowed competition and thus the best solution to win.
Clearly YOU get it. Very few do. Have you seen Milton Friedman's series on YouTube?
Side editorial: it is places like Substack that represent the greatest threat to the globalists, the grifters, the Congress (but I repeat myself). If we survive this regime - not administration, regime - when the cuttin's done, I believe it will be directly traceable to the elites' inability to stifle places of free enquiry like Substack, and most particularly, Common Sense. Well done. Bloody well done.
I'm not sure I get it... but I'm trying. And I could not agree more that places for open discussion and open analysis where we can learn from each other and challenge each other and push each other is the only way path forward. We will survive this regime, and you're absolutely right, it will be because we care enough to find places where truth can breathe and grow... And Bari, despite how much I disagree with many of her opinions, has created one of those places, and for that she should be roundly applauded and appreciated.
Clearly Common Sense is flourishing, when in my experience the vast majority of Internet forums have gone toes-up over the years. Why? I'm still trying to figure that out, but I believe that most of it is that the articles are presented in a respectful way that all sides can read an appreciate, even if they disagree, as you have said.
I'm not a believer, but the Bible has a wealth of wisdom and the one about a soft voice turning away wrath is SO powerful, and for someone like me who tends to be opinionated and aggressive, I'm trying to learn just like you are. There is so much at stake now that egos have to take a back seat. I don't always to it, though, but still trying.
Anyway, here's the Friedman series (from NPR, of all things!). It will change your life. All best.
https://www.youtube.com/watch?v=D3N2sNnGwa4