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Banks, QE, and Money-Printing

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Re: Banks, QE, and Money-Printing

#111

Post by newdude116 »

JumpCrisscross wrote: post #68
HourglassFR wrote: post #60

Earlier quoted context omitted.

> (Growth does not have to mean resource intensity.) That would be wonderful, alas the data we have suggest otherwise. But if you have ideas of how that decoupling between ressource extraction and growth could work I would glad to hear/read them (for real, I would like to be more positive on those matters).

> the data we have suggest otherwise No [1]. They don’t [2]. > if you have ideas of how that decoupling between ressource extraction and growth could work The universe of digital goods and services, for one. A few grams of metal and silicon producing as much value today as a car’s worth of steel did a century ago. [1] https://www.eia.gov/todayinenergy/detail.php?id=10191 [2] https://www.wri.org/blog/2020/07/decouplin…

1st, check this link: https://www.sciencealert.com/computers-will-require-more-ene...

2nd, check this link: https://ourfiniteworld.com/2011/11/30/thoughts-on-why-energy...

"3. Rest of the World. This group is the only group showing a favorable trend in energy growth relative to GDP growth, even in the last decade, although the pace of improvement has slowed. Two reasons for this favorable trend seem to be (a) continued growth of services, such as financial service, healthcare, and education, which use relatively little energy and (b) outsourcing of a major portion of heavy industry to Southeast Asia."

iPhones are produced in China. But the profits appear at Apple Inc.

Re: Banks, QE, and Money-Printing

#112

Post by HourglassFR »

JumpCrisscross wrote: post #68
HourglassFR wrote: post #60

Earlier quoted context omitted.

> (Growth does not have to mean resource intensity.) That would be wonderful, alas the data we have suggest otherwise. But if you have ideas of how that decoupling between ressource extraction and growth could work I would glad to hear/read them (for real, I would like to be more positive on those matters).

> the data we have suggest otherwise No [1]. They don’t [2]. > if you have ideas of how that decoupling between ressource extraction and growth could work The universe of digital goods and services, for one. A few grams of metal and silicon producing as much value today as a car’s worth of steel did a century ago. [1] https://www.eia.gov/todayinenergy/detail.php?id=10191 [2] https://www.wri.org/blog/2020/07/decouplin…

You are right, I had misunderstood you. We can be more efficient with our ressources, what I had in mind was the total ressource consumption/extraction. Any efficiency we gain is largely offset by the rebound effect in our current system of production, i.e the GDP grows faster than the ressource intensity can catch up with.

And of course, the data has to be world-wide since the economy is globalized [1].

[1]: https://yearbook.enerdata.net/total-energy/world-consumption...

> The universe of digital goods and services, for one.

Digital goods consume energy, more and more of it. For now gain in efficiency almost (not quite though) offset the growth [2], and that is discarding all the energy and ressources needed to build the servers and chips in the first place.

[2]: https://www.iea.org/reports/digitalisation-and-energy#energy...

Re: Banks, QE, and Money-Printing

#113

Post by JumpCrisscross »

newdude116 wrote: post #108
JumpCrisscross wrote: post #45

Earlier quoted context omitted.

> Capitalism can't survive without growth by definition Capitalism prefers growth. It causes growth, which is good. (Growth does not have to mean resource intensity.) It does not require growth. Zero-grow and shrinking economies can allocate resources well through markets.

You mistake a market economy for capitalism. We had a market economy for a very long time, even in the middle ages. Actually Ludwig von Mises describes this barter based market economies perfect (but fails to understand capitalism). Capitalism, that we have have since more or less 150 years requires the pre financing on a huge scale of industrial production. This requires debt that can only be, due to interest, paid…

> to pay back debt with interest, it is necessary to have economic growth, and financial growth

This toy model ignores defaults and fiscal spending.

Defaults destroy debt in the absence of growth (in the process transferring wealth from creditors to debtors). Fiscal spending crates money with no debt (in the process transferring wealth from savers to borrowers). These counter-currents let the system stay stable while credit flows from savers (via equity) and creditors (via debt) to investments and borrowers.

Leveraged systems have a multitude of steady states in a zero-sum environment. Even more when tastes and preferences change as human tastes and preferences do.

> growth in fossil fuel use are very closely tied

I have debunked this in another comment [1]. Energy intensity of GDP has been falling for decades. The carbon intensity of our economy is falling faster.

[1] https://news.ycombinator.com/item?id=24979345

Re: Banks, QE, and Money-Printing

#114

Post by afrojack123 »

kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

Spot on. The inflation number is based on a basket of goods and apparently they count an iPad as a necessary good. Then there are things like packaging staying the same size and less food in each package. If the old counting methodology was used inflation would be 10%.

Its more important how the numbers are generated than numbers itself.

Re: Banks, QE, and Money-Printing

#115

Post by neilwilson »

ChrisMarshallNY wrote: post #6
siwatanejo wrote: post #3

Earlier quoted context omitted.

The point of that woman is simply: let the deficit go up ad infinitum (in USD value), it doesn't matter because as the central bank keeps printing money, the value of the deficit actually goes down (because the USD value goes down), so the value of the deficit is stable even if we don't perceive it to be this way. Quite BS imo

Printing money is a bad idea. You think we had it bad, check out what happened here: https://alphahistory.com/weimarrepublic/great-depression/ I seem to remember something else, rather alarming, that happened after that...

Bad pilots crash planes. That doesn't mean that heavier than air flight is impossible. It means you need better informed and trained pilots.

See http://bilbo.economicoutlook.net/blog/?p=3773 for the true story about Weimar.

Re: Banks, QE, and Money-Printing

#116

Post by newdude116 »

HourglassFR wrote: post #60
JumpCrisscross wrote: post #45

Earlier quoted context omitted.

> Capitalism can't survive without growth by definition Capitalism prefers growth. It causes growth, which is good. (Growth does not have to mean resource intensity.) It does not require growth. Zero-grow and shrinking economies can allocate resources well through markets.

> (Growth does not have to mean resource intensity.) That would be wonderful, alas the data we have suggest otherwise. But if you have ideas of how that decoupling between ressource extraction and growth could work I would glad to hear/read them (for real, I would like to be more positive on those matters).

This reminds me of this guy:

"The planet has a fever, and the cure is more capitalism, a prominent researcher argues" "This “decoupling” of growth from environmental degradation is showing up in other major economies as well, and even in some developing ones, MIT scientist Andrew McAfee argues in what’s bound to be a controversial new book. He asserts that the phenomenon represents a critical turning point in economic history—and an essential one if we hope to sustain a growing global population without decimating the planet."

https://www.technologyreview.com/2019/06/20/134845/the-plane...

I emailed him that his data is correct but how does his conclusion fit with the fact that the west just outsources energy heavy industries to China and pointed to some statistics supporting my question. He never replied. I think he may have fucked the chicken (as my professor always said, if you did a major f. up in science).

Re: Banks, QE, and Money-Printing

#117

Post by beamatronic »

donmcronald wrote: post #89
kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

It definitely seems like BS to me. At 3% it's 258% over 32 years (1.03^32). Most people are barely getting 1% annual raises which means income increases by 138% over the same period. From 1984 to 2016 housing prices in the Greater Vancouver area have gone up 800% [1]. Assuming I got the math right, it doesn't take much to see current young people are getting screwed. In the last 4 decades wages have barely increased,…

You can escape from this trap by learning in-demand tech skills at a community college.

Re: Banks, QE, and Money-Printing

#118

Post by jrs235 »

ghastmaster wrote: post #102
synnejye wrote: post #75

Earlier quoted context omitted.

Disagree. :-) Printing money does not automatically lead to inflation. Since inflation is just the price of stuff rising, the question becomes, when do prices rise? The price can rise for multiple reasons: The price can rise because the company just wants to charge more, like Apple. The price can rise because a company's underlying cost rises. Maybe some type of metal became more expensive. Either way, the only way t…

> Since inflation is just the price of stuff rising... Inflation literally is money printing. Price increases is not inflation. Price increases can be caused by inflation. Prices can remain nominally the same while money supply has increased. > So, do prices rise just because a certain amount of dollars were added to an economy ? No, certainly not. Which is why the money printing should only happen when the economy i…

This is the definition of inflation that I was taught too. However it seems that people now days mean for inflation to be about price increases rather than money supply inflation (increases). The money supply inflates and deflates. Prices increase and decrease.

I think it would be best if we all start being more clear and specific when talking about "inflation".

Printing money DOES automatically lead to inflation. It leads to inflating the money supply or MONEY SUPPLY inflation. However printing money and inflating the money supply does not necessarily lead to price increases or price inflation. Most of us care about price increases, which are a symptom, but not allows present, of money supply inflation/printing money.

Re: Banks, QE, and Money-Printing

#119

Post by afrojack123 »

kqvamxurcagg wrote: post #26

The fundamental issue with this article is that the inflation number is a lie. Housing costs are the key cost for every consumer but are excluded from CPI. Western countries have been running fiscal deficits consistently for decades, QE and low interest rates for 10 years. Yet for academics and central bankers the only answer to growth is more debt. Low interest rates benefit only the asset rich. They deprive everyon…

If you want a more accurate CPI, this is it. He even states some problems like not counting prices in cities.

https://chapwoodindex.com/

Re: Banks, QE, and Money-Printing

#120

Post by [deleted] »

newdude116 wrote: post #111
JumpCrisscross wrote: post #68

Earlier quoted context omitted.

> the data we have suggest otherwise No [1]. They don’t [2]. > if you have ideas of how that decoupling between ressource extraction and growth could work The universe of digital goods and services, for one. A few grams of metal and silicon producing as much value today as a car’s worth of steel did a century ago. [1] https://www.eia.gov/todayinenergy/detail.php?id=10191 [2] https://www.wri.org/blog/2020/07/decouplin…

1st, check this link: https://www.sciencealert.com/computers-will-require-more-ene... 2nd, check this link: https://ourfiniteworld.com/2011/11/30/thoughts-on-why-energy... "3. Rest of the World. This group is the only group showing a favorable trend in energy growth relative to GDP growth, even in the last decade, although the pace of improvement has slowed. Two reasons for this favorable trend seem to be (a) continu…

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