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Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

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Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#141

Post by throw0101a »

ardy42 wrote: post #75
gbasin wrote: post #60

Earlier quoted context omitted.

Bingo. Would you rather have a poorly managed company hold on to their cash and spend it internally, or return it to shareholders?

> Bingo. Would you rather have a poorly managed company hold on to their cash and spend it internally, or return it to shareholders? It's not an either/or. A poorly managed company can make itself more dysfunctional by neglecting investment and returning too much cash to shareholders.

A poorly managed company can spend money internally on inappropriate things as well. It's not like IBM doesn't spend on R&D:

* https://www.macrotrends.net/stocks/charts/IBM/ibm/research-d...

AAPL spends on R&D, and dividends, and buybacks.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#142

Post by throw0101a »

codeisawesome wrote: post #70
throw0101a wrote: post #42

Earlier quoted context omitted.

> IBM did 140 billion in stock buy backs in the last decade. And? What is the alternative, and is it any better? > IBM has effectively been dead money for the last decade. They’re up 20%, including dividends, versus 315% for the tech index (XLK). IBM currently has a market cap of ~$100 billion, so when people hear they spent $45 billion on buybacks while their share price went down 38%, people get angry. I get it, it…

If IBM invested the money into actual research and product development - that would mean the money still enters the economy via the workers doing the research and development. I feel like this point isn't emphasised well enough in the quote above - and I wonder if the "anti buyback crowd" would have anything to say against that.

> that would mean the money still enters the economy via the workers doing the research and development.

How much is it IBM's job to have more money 'enter the economy' versus for it to make money for its owners at a good ROI?

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#143

Post by throw0101a »

godtoldmetodoit wrote: post #105
colinmhayes wrote: post #100

Earlier quoted context omitted.

>Stock buy backs weren't a thing until a SEC rule change in the 80's, this is a relatively new phenomenon and not intrinsic to a functioning market. Buybacks and dividends are essentially equivalent. This comment shows a distinct lack of understanding. Of course home depot could return their profits to employees, but then it wouldn't be a business. Home depot's sole reason for existing is to return money to sharehold…

Ahh the old "shareholders are the only thing that matters" argument. Buybacks and dividends are not equivalent, buybacks are tax advantaged in ways that dividends are not. We've allowed numerous companies to get to a size where they are "too big to fail". They know they are too big to fail, and they get to take advantage of this position. They get to go into near unlimited amounts of debt to finance buybacks to enric…

> Buybacks and dividends are not equivalent, buybacks are tax advantaged in ways that dividends are not.

[citation needed; location specific]

Here in Canada both capital gains and dividends of Canadian companies have special tax treatments.

Also remember: in both cases the money leaving the company are profits, which are (should be?) taxed at the corporate tax rate. So the government should be/is getting a cut already. The recipient of the money (either buyback or dividend) is then getting taxed again(?) potentially.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#144

Post by Fjolsvith »

touktouk wrote: post #139
Fjolsvith wrote: post #134

Earlier quoted context omitted.

Edit: The federal reserve is going to default, not the federal government. They are not the same. The central banks don't want the US to default. They want countries who are in debt to implement austerity programs and raise taxes on citizens. If the US defaults, other countries might just get the same idea. All these stimulus checks and forgivable small business loans are returning a little bit of the stolen money ba…

The liabilities of the Fed [0] are money in circulation, reserves accounts of banks (mainly to meet requirements) and the deposits of the Treasury. Besides the fact that it is not clear why the Fed may collapse when they can create money to pay back their liabilities, I am not sure what it would mean for the Fed to default on the bills and coins in circulation (?) or to wipe out the accounts of banks when those very…

Part of the restructure will be to perform an audit. When it is shown the fed has acted outside their purview, the federal government can legally argue the debt is null and void.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#145

Post by Fjolsvith »

_curious_ wrote: post #140
Fjolsvith wrote: post #136

Earlier quoted context omitted.

Don't you?

I do not, but could be persuaded

The Federal Reserve was created entirely by the Democrat party. [1] Why do you think the D's are opposing Trump?

1. https://www.senate.gov/artandhistory/history/minute/Senate_P...

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#146

Post by aeternum »

criddell wrote: post #116
aeternum wrote: post #109

Earlier quoted context omitted.

GDP is somewhat close to a nation's income. Those with higher incomes can typically safely afford larger loans.

So what would be different between two similar countries, one with a debt:GDP ration of 0.1 and the other with a ratio of 2? Is the only difference that the first country has more options in a time of crisis?

The country with the ratio of 0.1 can pay off its debt 20x more quickly/easily. Much less risky of that country defaulting.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#147

Post by touktouk »

Fjolsvith wrote: post #144
touktouk wrote: post #139

Earlier quoted context omitted.

The liabilities of the Fed [0] are money in circulation, reserves accounts of banks (mainly to meet requirements) and the deposits of the Treasury. Besides the fact that it is not clear why the Fed may collapse when they can create money to pay back their liabilities, I am not sure what it would mean for the Fed to default on the bills and coins in circulation (?) or to wipe out the accounts of banks when those very…

Part of the restructure will be to perform an audit. When it is shown the fed has acted outside their purview, the federal government can legally argue the debt is null and void.

This does not address my points.

- A large chunk of the Fed liabilities are coins and bills. What does it mean for the Fed to "default" on those coins and bills?

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#148

Post by Fjolsvith »

touktouk wrote: post #147
Fjolsvith wrote: post #144

Earlier quoted context omitted.

Part of the restructure will be to perform an audit. When it is shown the fed has acted outside their purview, the federal government can legally argue the debt is null and void.

This does not address my points. - A large chunk of the Fed liabilities are coins and bills. What does it mean for the Fed to "default" on those coins and bills?

You gotta find someone else who will take the bills. The coins you could probably sell to a scrap yard or someone who deals in precious metal.

Most Americans won't have to worry about this, as they usually have only enough bills to last them to next payday. Everyone else should have been smart enough to get their wealth into something else. I know I've been warning my rich relatives over the last year. I've also been telling HN to buy gold.

Will be interesting to see who all survives.

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#149

Post by IfIEverCatchYou »

Fjolsvith wrote: post #138
colechristensen wrote: post #45

Earlier quoted context omitted.

This is not how reserve banking works, doesn't reflect how much the US pays to service it's bonds, misses the fact that the fed creates new money and loans it out, it doesn't have obligations it can default on, misses the fact that the US would have to default on its debt to erase it, misses the fact that there isn't that much gold in the world (if the us stole every oz of gold on the planet it would have to devalue…

A finite supply of Bitcoin doesn't keep it from functioning. Why would a finite supply of gold hamper a financial instrument tied to it? Why does a private corporation not have the right to default on debt? The federal government doesn't owe any debt. The federal reserve does. The days of the petro-dollar are numbered. The massive printing of them right now is guaranteeing it. Why would you try to peg the most common…

This article supports OP's thesis:

https://news.ycombinator.com/item?id=22992348

Re: Fed Prints Another $205B This Week, M2 Growing at Fastest Pace on Record

#150

Post by aeternum »

blawson wrote: post #113
aeternum wrote: post #50

Earlier quoted context omitted.

Why is printing money a bad thing at this point in time? I see two strong reasons that printing money is the right move: 1) Wealth inequality is high relative to recent history. Printing money is a very effective way to even some of that out. Possibly the only form of 'wealth tax' that can actually be executed successfully. 2) The US debt / GDP fraction is still relatively low compared to many other countries.

Inflation hurts the poorer the most - they don't have assets that are being priced up due to inflation, while the cost of everyday life goes up.

This also may not actually cause inflation. The QE performed by the fed during the 2008 financial crisis did not create much inflation.
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