Search found 24 matches: Reinhart

Searched query: reinhart

by aeden
Thu Mar 12, 2020 6:28 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

Agree Vin the snowflake Nation in action.
https://www.marklevinshow.com/2020/03/11/march-11-2020/

They will file insolvency and a taxpayer bailout is taxpayer stupid on taxpayer stupid for the taxpayer entitled stupid.

China and financial repression of the taxpayer was theft also.
In effect, financial repression via controlled
interest rates, directed credit and persistent, positive inflation rates is still an effective
way of reducing domestic government debts in the world’s second largest economy--China.
Thats right you been subsidizing them also all along.

Carmen M. Reinhart and M. Belen Sbrancia (March 2011)
"The Liquidation of Government Debt" National Bureau of Economic Research working paper No. 16893

The village idiots may start to figure out Trump was actually interested in us.
The only think he was done incorrect is to not have shot these thieving uniparty useful idiots.
As we noted correctly we said we will be lucky if we go sideways.

Did the 10 year crack.
No.

The Beast knows you and its a feature these dumb asses called Democrats that covet.

"Everything we do will seem alarmist. Everything we do after will seem inadequate" Sun Mar 08, 2020 11:50 am
by aeden
Thu Mar 12, 2020 1:23 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

or

https://upload.wikimedia.org/wikipedia/ ... le_map.png

and the value of a derivative is based on the value of an underlying asset

https://fred.stlouisfed.org/release?rid=52

Since 2010, the U.S. Treasury has been obtaining negative real interest rates on government debt. Such low rates, outpaced by the inflation rate, occur when the market believes that there are no alternatives with sufficiently low risk, or when popular institutional investments such as insurance companies, pensions, or bond, money market, and balanced mutual funds are required or choose to invest sufficiently large sums in Treasury securities to hedge against risk.

The aim of this paper is to document the more subtle and gradual form of debt
restructuring or “taxation” that has ocurred via financial repression

Saint Louis Federal Reserve (2012) "5-Year Treasury Inflation-Indexed Security,
Constant Maturity" FRED Economic Data chart from government debt auctions (the x-axis at y=0 represents the inflation rate over the life of the security)

Carmen M. Reinhart and M. Belen Sbrancia (March 2011)
"The Liquidation of Government Debt" National Bureau of Economic Research working paper No. 16893

Inflation need not take market participants entirely by surprise and, in effect, it
need not be very high (by historic standards). In effect, financial repression via controlled
interest rates, directed credit and persistent, positive inflation rates is still an effective
way of reducing domestic government debts in the world’s second largest economy--
China.

Thats right you been subsidizing them also all along.

Did the 10 year crack.

No.

The Beast knows you and its a feature these dumb asses called Democrats covet.
by Higgenbotham
Sun Dec 29, 2013 8:38 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

Lots of good information there. At one point he said he realized, "It's not supposed to make any sense." This year I came to the same conclusion, coming up with the same phrase, which I repeat at times to remind myself that it is simply not supposed to make any sense. Trying to reason with psychopaths or trying to find any reason in the words or actions of a pack of psychopaths is useless.
All year I scrambled to piece together the Fed garble into a coherent picture with no luck, and then I had an epiphany: It’s not supposed to make any sense. Economist Vince Reinhart nailed it.250 He argues that in 1994, the Fed pushed for transparency by publishing the FOMC minutes, which promptly showed that the governors all sounded like imbeciles. This soon caused the discussions to become stiff, orchestrated, and altogether useless for real decision making. The Fed learned to cover up its foibles a la Breakfast at Bernie’s: the Fed would prop their completely incoherent Fed Chair (Greenspan) in a chair to babble “Fed Speak” at Congress. They branded this garbled dialect as a skill rather than just the bloviating incoherent Fed Chair working from flawed models. With Greenspan’s departure, the Fed desperately needed incoherence. The Fed discovered that a series of seemingly thoughtful statements from the individual governors, when put together, made no sense whatsoever. Shazaam! Total confusion.
http://www.peakprosperity.com/blog/8410 ... iew-part-2
by vincecate
Sat Apr 27, 2013 9:53 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

This recent up surge in the market may be due to the Reinhart and Rogoff paper on the problems with high government debt getting a bad name in the press due to an error. As Krugman and others marginalize this paper it clears the way for more money printing. The stock market likes money printing.

http://www.cnbc.com/id/100674381
by Higgenbotham
Sun Apr 14, 2013 2:06 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

SPIEGEL: Ms. Reinhart, central banks around the world are flooding the markets with cheap money in order to spur economies and support governments. Are these institutions losing their independence?

Reinhart: No central bank will admit it is keeping rates low to help governments out of their debt crises. But in fact they are bending over backwards to help governments to finance their deficits.
http://www.spiegel.de/international/bus ... 93213.html
Federal Reserve Bank of Atlanta President Dennis Lockhart rebutted critics of the central bank who say its policies are monetizing the national debt or encouraging more deficit spending.

“I object to the view that the Fed is monetizing the debt,” Lockhart said today as part of a panel discussion at the University of Iowa in Iowa City.

Fed officials led by Chairman Ben S. Bernanke have said repeatedly they would not try to monetize debts by increasing money and stimulating inflation.
http://www.bloomberg.com/news/2013-04-1 ... -debt.html
by aedens
Thu Apr 11, 2013 11:05 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

Reinhart: Let me be a little blunter: A haircut is a transfer from the creditor to the borrower. Who would get hit by a haircut? French banks, German banks, Dutch banks -- banks from the creditor countries. So you can see why this is politically torched. This is why it is not done, it's a redistribution. But ultimately it is going to happen, because the level of debt is too high.
by aedens
Thu Apr 11, 2013 8:17 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

We are at a crossroads on many topical complications H. To easy going forward for the confused ones to dig in as even keynes warned
for the wrong reasons.

t noted what we alluded to with the drilldown to the fisher mutliplier effect when we posted romers work.
But in fact they are bending over backwards to help governments to finance their deficits," and guess what, "this is nothing new in history."
After World War II, all countries that had a big debt overhang relied on financial repression to avoid an explicit default.
Only when inflation picks up, which is ultimately going to happen, will it become obvious that central banks have become subservient to governments." Nations "seldom just grow themselves out of debt," as so many believe is possible, "you need a combination of austerity, so that you don't add further to the pile of debt, and higher inflation, which is effectively a subtle form of taxation," with the consequence that people are going to lose their savings. Reinhart succinctly summarizes, "no doubt, our pensions are screwed."


Our sniplet was the backdrop from Jun 21, 2009, and theres, to effects and the onramp to the dialectic of thought map which was a clear representation
to why we have noted the direction and calculation under socialism which is correct and will work on that presentation of reality since it is nearing completion in context of the damages we are trending. This is why and how these cargo cult cannibals in DC will take us under, and have in "seen and unseen dialog" we understand here clearly as do a few others on task.
by Carl Lieberman
Thu Dec 08, 2011 9:51 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

Here is why I believe in an inflationary cycle. Let me start by saying that all of the current indicators are pointing towards deflation. I do not think that an extended period of deflation is possible in an advanced democratic system. Japan is not equivalent to the U.S. They are a military protectorate of ours and have limited defense responsibilities. In addition, Japan was an insulated economy before its crash and had exorbitantly high prices. Much of their deflation is a normal correction to more sustainable levels. Currently we are meeting 40% of our daily operating expenses with borrowed money. Would our citizens ever vote for a party that promised to cut their benefits by 40%? Never going to happen. We will fill the gap by creating that 40% by any means necessary. Rogoff and Reinhart show that small countries default on their debts, but large countries default on their debts through serial inflationary crises. I don't think of the coming inflation in the normal manner of "too many dollars chasing too few goods". I think of it more as a result of a collapse of our currency. We are currently insulated because the dollar is the world's reserve currency. We were victorious in World War 2 and created the Bretton Woods standards, we were dominant in 1971 when those standards were revised to completely detach the value of the dollar from any physical restraints. In the future we will have neither the money nor the political will to force the world to accept our fiat currency as the world standard. In brief, I expect the dollar to appreciate for awhile as the rest of the world collapses, this in and of itself will be deflationary. But the scale of our debts is so huge that there will come a tipping moment when the world loses faith in our dollar. This will usher in an era of sequential dollar collapses, making all necessities more expensive. This could also usher in significant wars. These are always inflationary. In this environment, credit will be very restricted and it will be harder and harder to sell large assets. Investments will be deflating as the costs of living will be inflating. In this scenario, I would advise using the coming deflation as a time to take physical possession of precious metals. They are an asset that will hold their value in any scenario. Don't bet the farm on gold and silver. MF Global has once again revealed how untrustworthy all of our financial institution are. Do you really want all of your wealth stored on their servers? Those in power will never allow a complete deflationary collapse to occur without taking all available options to stop it. Who knows what the world will look like after the coming crises wars. In all of my travels I have frequently come across old currencies that have had multiple zeros lopped off of their value. Just seems like the way of the world.
by Carl Lieberman
Tue Jun 21, 2011 10:45 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

I think that Carmen Reinhart's financial repression paper should be taken seriously. She and her husband, Vince are heavy hitters. Until the deregulation of the 70's, rates of return were capped by policy at a very low level. I believe that the Bernank is intending to have -4% real interest rates for years to come as the way of lowering our debt. Generational analysis is not part of their thinking. They are trying to recreate the real interest rate conditions of the 50's and 60's. After reading the Fourth Turning 15 years ago, I was persuaded to this cyclical view of history. There are too many "black swans" lurking about, to grant us the decades necessary for this strategy to work. In some eras, 6 sigma events really are 6 sigma events. In crisis periods of history, events that are thought to be 6 sigma, turn out to be much more common. Winter is coming. But that's not news to anyone on this site.
by abs
Tue Jun 21, 2011 9:49 pm
Forum: Finance and Investments
Topic: Financial topics
Replies: 29813
Views: 14795081

Re: Financial topics

vincecate wrote: The idea in that paper that the current debt situation is like after WW2 is bogus. Most of the deficit spending was for the war so it was easy to make huge cuts in spending after the war and have a budget surplus. There is no easy way to cut 50% of the US government budget now. So now the debt is getting 10% bigger every year but back then it was getting smaller. This is not like then. This is much worse.

The other problem is that few people understood inflation in 1945 and many more do today. It is much harder to find enough fools to buy bonds that pay an interest rate lower than the inflation rate today. There is just no way this could go on for 30 years now.

http://howfiatdies.blogspot.com/2011/06 ... -wwii.html
I don't disagree with your comments with respect to WW2, however, Reinhart covers a much longer time frame than just the post war period in that she argues the US government had a sustained policy of bond yields being lower than inflation for decades on end only ending around 1980. She also does the work to analyze similar scenarios across a range of developed countries, not just the US and has identified consistencies across the countries. The point is that even though the current situation is in the US is worse now than it was after WW2, due to the "political economy" in which we currently find ourselves, that it strikes me that the politicians, the FED and the Treasury will following the easiest course of action they can find which, based on historical precedent, is most likely what Reinhardt has described.

If you think about the fact that most of the money created for QE1 and QE2 still has not flowed into the real economy but instead is locked up in Federal bonds, it would suggest that Bernanke is very much aware of the long term benefits that can be achieved by lowering bond yields as it pertains to monetizing the debt.

I'm also surprised at your response since Reinhardt is essentially arguing for a long period of sustained moderate to high inflation to help monetize the federal debts. This strikes me as quite consistent with your forecasts for coming inflation and just adds further impetus for an unspoken determination on the part of policy makers to create substantial inflation along with a weak dollar policy . . .

Bottom line, if we see a significant bout of high inflation, according to Reinhard, our politicians would view it as a very good thing. Whether or not this will happen is another question altogether.