Gyroscopic Investing

Kshartle wrote:You cannot trade the "goodwill" on the balance sheet for anything.

Mdraf wrote:

Gumby wrote:

Mdraf wrote:Exactly. And the $100K in Accounts Receivable has no value without knowing who the debtor is and how good they are for payment. What if it's Solyndra?

This is why if your business has $100K in accounts receivable and you go to the bank and ask for it in cash they will double up laughing.

And yet, if your business has $100K in Treasury Bonds, suddenly the story is very different.

How come my T-Bonds are more valuable today than they were yesterday ? If they are the same as cash they should always be worth the same.. Yet my balance sheet just miraculously increased!

Gumby wrote:

Mdraf wrote:

Gumby wrote: And yet, if your business has $100K in Treasury Bonds, suddenly the story is very different.

How come my T-Bonds are more valuable today than they were yesterday ? If they are the same as cash they should always be worth the same.. Yet my balance sheet just miraculously increased!

Who said that your T-Bonds are more valuable today than they were yesterday? All I'm saying is that T-Bonds are highly liquid and easily tradable for cash. You don't seem to understand that.

Gumby wrote: Look, Mdraf, you are a Monetarist that believes in Metallism.

I just happen to understand that Credit Theory or Money, and you don't.

That wouldn't normally be a problem if it weren't for the fact that our monetary system is a credit-based monetary system — our current system isn't based on metal and our current system wouldn't exist without the Credit Theory of Money.

If you want to play ball, you're going to have to learn about the Credit Theory or Money. Can't help you if you won't take the time to understand it.

Mdraf wrote: Bond prices went up today.  Why do you think that is? Oh wait. In your universe they didn't.

Gumby wrote: Look, Mdraf, you are a Monetarist that believes in Metallism.

Kshartle wrote:

Gumby wrote: Look, Mdraf, you are a Monetarist that believes in Metallism.

He's also a doo-doo head.

Kshartle wrote:

Gumby wrote: Look, Mdraf, you are a Monetarist that believes in Metallism.

He's also a doo-doo head.

Gumby wrote:

Mdraf wrote: Bond prices went up today.  Why do you think that is? Oh wait. In your universe they didn't.

Sigh... You still don't understand what "broad liquidity" is. Broad liquidity generally means "short term" debt (T-Bills and Money Market Funds) whose face value is highly liquid and with short maturities that rarely change much in value and are easily converted into cash. Broad liquidity is the accepted measure of the private sector's purchasing power.

The concept of the purchasing power behind broad liquidity can still apply to long term debt (in theory), but it's generally a moot point since most of the government's debt is short term debt.

Mdraf wrote:In other words: they are worth more than yesterday and people will trade more cash for them today than yesterday.

Gumby wrote:

Mdraf wrote:In other words: they are worth more than yesterday and people will trade more cash for them today than yesterday.

Exactly how much more are $100,000 of 4-week or even 90-day T-Bills worth than yesterday?

Mdraf wrote:

Gumby wrote:

Mdraf wrote:In other words: they are worth more than yesterday and people will trade more cash for them today than yesterday.

Exactly how much more are $100,000 of 4-week or even 90-day T-Bills worth than yesterday?

Who cares how much. Red herring.  Are you denying that a T-Bill changes price?

MediumTex wrote: Please be courteous and civil.

Thanks.

TennPaGa wrote: If I may jump ahead/back...

We are here, yes?

Mdraf wrote:

MediumTex wrote: Okay, but the mechanics are all that I'm talking about.

The distinction between currency and debt is, I assume, only relevant when trying to figure out what the inflation risk is (why else would it matter in the first place?).  That's not a mechanical issue.

I don't think so. The purported "sameness" of currency and debt lies at the heart of your MR theory. You are using accounting jargon but ignore the fact that not all assets are the same thing and not all liabilities are the same thing.

To bring it back...

Mdraf wrote: This is why if your business has $100K in accounts receivable and you go to the bank and ask for it in cash they will double up laughing.

How does this fit into the discussion of the monetary system?  Or the distinction between currency and debt?  Again, I have a guess, but I think it would be advantageous if you were explicit.

Gumby wrote:

Mdraf wrote:

Gumby wrote: Exactly how much more are $100,000 of 4-week or even 90-day T-Bills worth than yesterday?

Who cares how much. Red herring.  Are you denying that a T-Bill changes price?

Short term debt doesn't change enough to make a difference in our highly liquid purchasing power. It just doesn't. That's why HB has us store our cash as T-Bills.

Please learn the Credit Theory of Money and stop wasting our time.

Mdraf wrote:"Doesn't change enough" ? But it changes.
And a T-bond? why does it change? It is also debt. That was my original question. You changed it from T-bond to T-bill to help your point of view since T-bill variation is smaller.

doodle wrote: So here's a scenario....I'm trying to figure out who has been robbed here. Since there is so much talk of theft with regards to money printing.

Let's say you are sick and in the hospital but you don't have any money for a nurse.So the government prints 40000 dollars and hires a nurse who before that was just sitting on her couch doing nothing because no one had money to pay for her services. Now you have someone to heal you and she has a job.

She then takes the money from the job and goes out and wants to buy a new car. So the factory has to hire another worker to make that car. Now another person has a job and the economy has a health care worker and a car.

The car worker needs some new clothes for work and so he takes his salary and buys a bunch of uniforms. The uniform company has to hire another worker to make those uniforms. Now the economy has a health care worker, a car, and uniforms and three people have employment.

It seems to me that if the economy is functioning below capacity, which it is in my example...then printing money only leads to more goods and services and no inflation. If there is no inflation, then no one has been robbed and instead we just have more things in the economy than we did before.

It is only when the economy is running at full capacity that printing extra money could truly lead to inflation. Even if the government were to bypass the first step of hiring someone and just give the money out, it would be used to purchase goods and services and lead to an increase in employment and production.

So where is the theft?

Gumby wrote:

Mdraf wrote:"Doesn't change enough" ? But it changes.
And a T-bond? why does it change? It is also debt. That was my original question. You changed it from T-bond to T-bill to help your point of view since T-bill variation is smaller.

So the value of a highly liquid cash-like financial asset changes ever so slightly. Big deal. Welcome to our world.

Now please learn the Credit Theory of Money.

Mdraf wrote:

Gumby wrote:

Mdraf wrote:"Doesn't change enough" ? But it changes.
And a T-bond? why does it change? It is also debt. That was my original question. You changed it from T-bond to T-bill to help your point of view since T-bill variation is smaller.

So the value of a highly liquid cash-like financial asset changes ever so slightly. Big deal. Welcome to our world.

Now please learn the Credit Theory of Money.

I detect a clever subtle change...from "same as cash" to "cash-like". And throwing me off to some external link since you can't seem to make any progress?

Kshartle wrote:

doodle wrote: So here's a scenario....I'm trying to figure out who has been robbed here. Since there is so much talk of theft with regards to money printing.

Let's say you are sick and in the hospital but you don't have any money for a nurse.So the government prints 40000 dollars and hires a nurse who before that was just sitting on her couch doing nothing because no one had money to pay for her services. Now you have someone to heal you and she has a job.

She then takes the money from the job and goes out and wants to buy a new car. So the factory has to hire another worker to make that car. Now another person has a job and the economy has a health care worker and a car.

The car worker needs some new clothes for work and so he takes his salary and buys a bunch of uniforms. The uniform company has to hire another worker to make those uniforms. Now the economy has a health care worker, a car, and uniforms and three people have employment.

It seems to me that if the economy is functioning below capacity, which it is in my example...then printing money only leads to more goods and services and no inflation. If there is no inflation, then no one has been robbed and instead we just have more things in the economy than we did before.

It is only when the economy is running at full capacity that printing extra money could truly lead to inflation. Even if the government were to bypass the first step of hiring someone and just give the money out, it would be used to purchase goods and services and lead to an increase in employment and production.

So where is the theft?

The theft is the stolen purchasing power from everyone else. The government stole it. It claimed the right to buy something without offereing anything in return. It did this because it has guns and dungeons to put people in if they refuse to trade stuff for paper.

In this case it bought my vote or sympathy or something by giving me money to buy stuff that I didn't earn but other people had to produce.

Kshartle wrote:

doodle wrote: So here's a scenario....I'm trying to figure out who has been robbed here. Since there is so much talk of theft with regards to money printing.

Let's say you are sick and in the hospital but you don't have any money for a nurse.So the government prints 40000 dollars and hires a nurse who before that was just sitting on her couch doing nothing because no one had money to pay for her services. Now you have someone to heal you and she has a job.

She then takes the money from the job and goes out and wants to buy a new car. So the factory has to hire another worker to make that car. Now another person has a job and the economy has a health care worker and a car.

The car worker needs some new clothes for work and so he takes his salary and buys a bunch of uniforms. The uniform company has to hire another worker to make those uniforms. Now the economy has a health care worker, a car, and uniforms and three people have employment.

It seems to me that if the economy is functioning below capacity, which it is in my example...then printing money only leads to more goods and services and no inflation. If there is no inflation, then no one has been robbed and instead we just have more things in the economy than we did before.

It is only when the economy is running at full capacity that printing extra money could truly lead to inflation. Even if the government were to bypass the first step of hiring someone and just give the money out, it would be used to purchase goods and services and lead to an increase in employment and production.

So where is the theft?

The theft is the stolen purchasing power from everyone else. The government stole it. It claimed the right to buy something without offereing anything in return. It did this because it has guns and dungeons to put people in if they refuse to trade stuff for paper.

In this case it bought my vote or sympathy or something by giving me money to buy stuff that I didn't earn but other people had to produce.