No amount of govt money will ever cause inflation again. The tools for govt intervention (the Fed rate, quantitative easing through the purchase of Tbills,etc) may have been effective in the time when the world was simpler (Remember 'It's a Wonderful Life' with James Stewart?). But loans from banks do not drive the economy any more. In fact many businesses look to VCs, and angels. Loans are for chumps. So what DO these tools do? Where does the money go? It goes to places that will generate the highest ROI - other financial opportunities and investments removed from the real world. In fact, I would interpret that skyrocketing stock market as evidence of too much money chasing too few equities. There may be 'inflation' of equities prices, bond prices, REIT prices, etc. But unless the money gets into the hands of the people who need a house or need a job or need food, it won't help the economy. Adam Smith's laws and the 'invisible hand' of the market assumes a continuous distribution of currency transacted by rational agents with equal access. Instead the world is quantized and now a large fraction of the population are below the threshold where these interventions are meaningful.
Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
81–90 of 98 posts
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#82No amount of govt money will ever cause inflation again. The tools for govt intervention (the Fed rate, quantitative easing through the purchase of Tbills,etc) may have been effective in the time when the world was simpler (Remember 'It's a Wonderful Life' with James Stewart?). But loans from banks do not drive the economy any more. In fact many businesses look to VCs, and angels. Loans are for chumps. So what DO the…
Exactly this. Just Fed/Treasury crediting $1B to every billionaire in the states won't help the economy; it just helps this rich to chase after financial assets (stocks), real estate (mega mansions), arts/paintings (picasso, van gough, etc), mega yachts, names on buildings, etc.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#83Earlier quoted context omitted.
> Sure, you might disagree that socialism is possible without big government, but that has nothing to do with the definition. My only point is that it doesn't inherently have anything to do with control. The problem with saying that socialism means big government is it associates it with decades of red-scare propaganda and makes all discussion impossible. I didn't say that at all. You can review my comments. But the…
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Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#84No amount of govt money will ever cause inflation again. The tools for govt intervention (the Fed rate, quantitative easing through the purchase of Tbills,etc) may have been effective in the time when the world was simpler (Remember 'It's a Wonderful Life' with James Stewart?). But loans from banks do not drive the economy any more. In fact many businesses look to VCs, and angels. Loans are for chumps. So what DO the…
Yes. The system is inherently unproductive. Pumping more money into it like giving a sedentary person more calories and expect their physique to end up like an athlete's.
But you can also pump that money into the hands of people and have the same problem. If you give everyone 10K you haven't change affordability. If you give everyone 10K you haven't changed relative food prices. There are more fundamental problems to be solved.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#85Earlier quoted context omitted.
You're coming at this from a "hedging" perspective-- Instead, think in terms of what the bond gives him-- a lot of Yen. That's opportunities to invest. The increased "risk" in this sense is miniscule-- since the cost of the oppurtunity is less than 1% Yen a year, even a 200% rise in Yen/USD only actually costs Berkshire 2%. And, my bet is Buffett knows of some companies he could deploy that Yen in right now to cover…
This doesn't make any sense. Issuers don't need to pre-fund acquisitions before making offers so BRK wouldn't need any JPY before acting and in the event of an acquisition closing, they would easily be able to issuer in any currency on earth. Don't know the name well at all but BRK issued in JPY last year as well so I'm guessing they have some recurring JPY liabilities.
What doesn't make sense to you? They're "buying" Yen and paying extraordinarily low long-term rates. Berkshire can't get USD that cheaply. If they had a cash crunch, they could exchange the Yen for USD. If things are well, they can buy Yen-denominated companies with an enormously low cost of capital and without factoring in the exchange rate.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#86Earlier quoted context omitted.
Malta has less than a million people. Is it not a country?
Well, that depends on what you mean by "country," I suppose. If your definition is "independent, sovereign state," then, of course it is. But, so is the Vatican, with its population of ~800 and land area of 0.17 square miles. For perspective, San Francisco has a land area of ~47 square miles.
There aren't many definition of a Country.
The Vatican is not in fact a country, but a city state (or a sovereign microstate) and it is an exception, not the norm.
It is anyway an independent state with sovereignty, it signs treatise with other states (like the Lateran treaty that binds it to Italy) has its own official language (Latin) its own calling code (+379) its own ISO 3166 code (VA) and its own Internet TLD (.va) so it more or less works as any other independent country out there.
And even though the actual resident population is very small, they have properties all over the World, they are in fact one of the most powerful countries in the World serving over 1.2 billions catholics (it's even 18th in the World for GDP per capita, even though the Vatican wealth is not really expressed by the GDP).
If you look at it that way, Vatican State is more of a country than Kansas will ever be.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#87Earlier quoted context omitted.
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Please don't post in the flamewar style to HN, regardless of how wrong someone is or you feel they are. It just makes the thread even worse.
Also, please stop posting smug putdowns of others. Those are usually examples of the thing they're complaining about, and unsurprisingly they evoke worse from the others, who take the unfairness in them as an excuse to lash back.
We've had to ask you this kind of thing several times before. If you'd please review https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#88Earlier quoted context omitted.
The whole idea that 'being social' equates to 'socialism', the bogeyman edition is what will stop for instance the United States from adopting a more social agenda. Free - or at least affordable - public healthcare, public transportation, internet access and access to things like clean water should be a basic standard of living for any country that does not want to be labelled 'third world'. Instead, that whole agend…
The 'ism' is about control, not about benefit. Philosophically I agree that we need a better system the benefits everyone, and I agree with the gist of your comment. However saying we need socialism skips over the most important part of it -- the mechanism to achieve that. That's the hard part that we haven't quite figured out and need to discuss. The current narrative assumes that simply funnelling the money through…
Please don't take HN threads into generic ideological arguments. They're all the same, therefore tedious, therefore off topic here.
They also get dumber and nastier as they go along, so we end up with https://news.ycombinator.com/item?id=22904776 and https://news.ycombinator.com/item?id=22904923.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#89Earlier quoted context omitted.
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We've asked you before to stop using HN for ideological battle. It destroys the curious conversation that this site is supposed to exist for.
It also routinely ends up with poison like "How obtuse are you?" and, god help us, "you're a bootlicking shit". Since you're participating regularly here, I assume this is not the kind of place you want HN to be, so please don't make it so. The GP comment shouldn't have posted that smug and supercilious putdown, and you shouldn't be responding with even worse.
I don't want to ban you because you've also posted good comments like https://news.ycombinator.com/item?id=22123132 and https://news.ycombinator.com/item?id=21818850. Unfortunately those are mixed in with personal attacks, petty swipes, and political boilerplate, and at this point the bad stuff grossly outweighs the good. You're doing a lot more damage than you're adding value at this point, so means we're going to have to ban you if you don't fix it. Please fix it.
Re: Charlie Munger: ‘The Phone Is Not Ringing Off the Hook’
#90Earlier quoted context omitted.
Sometimes I wish we could pick a US state and turn it into this vision. Social safety net for all, free healthcare for all, no loopholes for the rich. There are so many people who would like to see how this plays out. And more importantly, the expectation of the outcome varies WILDLY from smart person to smart person. Personally, I believe this state would be bankrupt in a matter of years, companies that produce tax…
Scandinavian countries didn't bankrupt. Rather the opposite.
Scandinavian countries are an interesting example. For example, they heavily tax their middle class, are quite business-friendly and have no required minimum wage. But as you are alluding to, they do get away with a high GDP per capita despite a higher tax burden. I think the Scandinavian-modeled state would not look like what pro-social safety net Americans would expect. But again, would love to see the experiment played out.