Comments on: Quote notes (#3)

By: vimothy

vimothy — Fri, 07 Jun 2013 17:49:22 +0000

Maybe and maybe not. However, you are claiming two things: 1) that returns are being held abnormally high by Bernanke; and, 2) that returns are being held abnormally low by Bernanke. That’s obviously a contradiction.

By: admin

admin — Fri, 07 Jun 2013 15:50:43 +0000

“unfair returns”? — dupes buying into a bubble are walking the plank.

By: vimothy

vimothy — Fri, 07 Jun 2013 15:13:40 +0000

Asset holders can’t be earning unfair returns and earning no returns.

By: admin

admin — Fri, 07 Jun 2013 14:04:42 +0000

@ Thales
Again, I completely agree. Caveat emptor, in its widest possible extension.

By: Thales

Thales — Fri, 07 Jun 2013 14:01:41 +0000

Presently, there’s no way to micro-manage this distinction from afar. Societies have run the gambit from banning anything that even looks like interest to basing an entire nation’s economy on debt. Like so many other issues, the ability to self-regulate is what seperates the prosperous from the destitude.

By: admin

admin — Fri, 07 Jun 2013 13:58:06 +0000

@ Vimothy
“How can there be an asset bubble and no remuneration for capital?”
— how can a pistol be held to your head and you have to walk the plank?

By: admin

admin — Fri, 07 Jun 2013 13:55:50 +0000

I’ve no argument with this — in fact your example (home improvement) shows how slippery the consumption / investment distinction can be. Anything that can be reasonably described as investment could, at least potentially, provide sound motivation for a debt. Key point: “… if the individual cannot make profitable use of said capital …”

By: Thales

Thales — Fri, 07 Jun 2013 13:22:37 +0000

Whilst entrepreneurial debt (strictly disciplined by markets) can be enormously productive, consumer debt is sheer poison.

Unsecured consumer debt, I mostly agree. Secured debt (homes, autos) is entrepreneurial debt at the individual level – the consumer is being lent capital, and if the individual cannot make profitable use of said capital, the asset can (and should) be repossessed.

A loan is just the intermediary step – you’re not borrowing the money so much as the asset. Knowing it, it’s clear why taking out a HELOC to, say, fix-up the house is a reasonable use of equity and why buying a jetski or taking a vacation is simply contributing to a potential bubble in jetskis and tourism.

Totally agree with the point about debt barbarism being the lever for Leftism. #OWS

By: vimothy

vimothy — Fri, 07 Jun 2013 09:02:15 +0000

How can there be an asset bubble and no remuneration for capital?

By: admin

admin — Fri, 07 Jun 2013 08:54:00 +0000

Exactly, Bernanke’s strategy in a nutshell: If you don’t want your savings eroded by inflation, go out there and prop up our lunatic asset bubbles (so we can pretend we haven’t terminally wrecked the economy).
There’s got to be a point where this abuse drives everybody into Gold, Bitcoin, and other types of non-fascist money …