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Are US Consumers Evil Hoarders?
Submitted by Pater Tenebrarum via Acting-Man blog,
Another Keynesian Meme Dragged Up
A recent Fed paper reports that the Fed's wild money printing orgy has failed to produce much CPI inflation because “consumers are hoarding money”. It is said that this explains why so-called “money velocity” is low.
The whole argument revolves around the Fisherian “equation of exchange”, as you can see here. Now, it may be true that the society-wide demand for money (i.e., for holding cash balances) has increased. Rising demand for money can indeed cancel some of the effects of an increasing money supply. However, it should be obvious that there is 1. no way of “measuring” the demand for money and 2. the “equation of exchange” is a useless tautology.
Consider for instance this part of the argument:
“Though American consumers might dispute the notion that inflation has been low, the indicators the Fed follows show it to be running well below the target rate of 2 percent that would have to come before interest rates would get pushed higher.
That has happened despite nearly six years of a zero interest rate policy and as the Fed has pushed its balance sheet to nearly $4.5 trillion.
Much of that liquidity, however, has sat fallow. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.15 trillion in savings-about a 50 percent increase over the past five years.”
(emphasis added)
First of all, banks have not “put away” $2.8 trillion in reserves; in reality, they have no control whatsoever over the level of excess reserves. They are solely a function of quantitative easing: when the Fed buys securities with money from thin air, bank reserves are invariably created as a side effect. Credit can be pyramided atop them, or for they can be used for interbank lending of reserves, or they can be paid out as cash currency when customers withdraw money from their accounts. That's basically it.
Now imagine that a consumer who holds $1,000 in a savings account spends this money. Would it disappear? No, it would most likely simply end up in someone else's account. So the aggregate amount of money held in accounts is per se definitely not indicative of the demand for money either – it wouldn't change even if people were spending like crazy. Someone would always end up holding the money. Money, in short, is not really “circulating” – it is always held by someone.
This also shows why so-called velocity is not really telling us anything: all we see when looking at a chart of money velocity is that the rate of money printing has exceeded the rate of GDP growth (given that money printing harms the economy, this should not be overly surprising).
In Fisher's “equation of exchange”, V is simply a fudge factor. As Rothbard noted with regard to the equation, it suffers from a significant flaw:
“Things, whether pieces of money or pieces of sugar or pieces of anything else, can never act; they cannot set prices or supply and demand schedules. All this can be done only by human action: only individual actors can decide whether or not to buy; only their value scales determine prices.
It is this profound mistake that lies at the root of the fallacies of the Fisher equation of exchange: human action is abstracted out of the picture, and things are assumed to be in control of economic life. Thus, either the equation of exchange is a trivial truism— in which case, it is no better than a million other such truistic equations, and has no place in science, which rests on simplicity and economy of methods—or else it is supposed to convey some important truths about economics and the determination of prices.
In that case, it makes the profound error of substituting for correct logical analysis of causes based on human action, misleading assumptions based on action by things. At best, the Fisher equation is superfluous and trivial; at worst, it is wrong and misleading, although Fisher himself believed that it conveyed important causal truths.”
(italics in original)
“Velocity” of M2 – click to enlarge.
It is of course true that prices in the economy adjust to the supply of and the demand for money. However, low consumer price inflation by itself does also not really mean that one can infer that the demand for money must be exceptionally high.
What if e.g. the supply of goods increases at a strong rate? Then we would ceteris paribus have to expect the prices of goods to decline – if they instead remain “stable”, it is actually indicative of inflationary effects making themselves felt.
Moreover, prices never rise or fall at uniform rates. In today's economy, some prices rise at astonishing rates of change, such as for instance securities prices. These are not part of the consumer price index, but they are nevertheless prices. Their huge rise in recent years is an effect of monetary inflation – and if we were to attempt to infer the demand for money solely from their rates of change, we would have to say that the demand for money cannot have increased a whole lot. So you can see that things are evidently not as simple as “MV=PT” would have it.
In fact, the most pernicious effect of monetary inflation is precisely that relative prices in the economy shift and in the process paint a distorted picture that falsifies economic calculation and leads to capital malinvestment. Money always enters the economy at discrete points, and therefore changes in prices are like the ripples in a pond after a stone has been thrown in. First the goods demanded by the earliest recipients of newly created money rise…then the prices of goods demanded by the receivers who are second in line, and so forth. The earlier in the chain of exchanges one resides, the more likely one is going to be a winner of the process, the later, the more likely one is going to lose out (as more and more prices rise before the late receivers get their hands on the new money). Needless to say, the number of losers tends to be much greater than the number of winners.
Lastly, a sharper rise consumer price inflation may yet strike with a large time lag. There is no way of knowing for certain, but it wouldn't be the first time it has happened.
Money TMS-2. Obviously, the rate of monetary inflation has been vast. Economic growth meanwhile hasn't been much to write home about (hence “decreasing velocity”) – click to enlarge.
Why Hoarding Isn't “Bad”
Such reports is however do as a rule not merely attempt to explain why consumer price inflation is apparently low in the face of huge money supply growth (let us leave aside here that the “general price level” is in any event a fiction and cannot be measured. Let us also leave aside that the calculation of CPI such as it is seems highly questionable on other grounds as well). We may for the sake of argument concede that the demand for money (i.e., for holding cash balances) has risen on a society-wide basis after the 2008 crisis. Indeed, it seems quite a reasonable supposition.
The underlying theme of such studies is however invariably that this alleged hoarding somehow harms the economy, because economic growth is assumed to be the result of spending and consumption. This is a bit like arguing that the best way to stay warm is by burning one's furniture. In fact, this is a very good analogy, as burning the furniture will keep one warm for a while, just as people wasting their savings on consumption will for a while make aggregate economic statistics look better. That there might be a problem only becomes evident once all the furniture has been burned. Then it is cold, and there is nothing left to sit on.
Obviously, the argument that consumption drives economic growth is putting the cart before the horse: one can only consume what has been produced after all, so production must come first. If production must come before consumption, then investment must come before production and saving must come before investment. When people save money, nothing is miraculously “lost” to the economy. By saving more, people are merely indicating that their time preferences are lower – that they prefer consuming more later to consuming less in the present. Their savings can be employed to increase production, so as to enable this later, larger rate of consumption they desire. All that changes is the pattern of spending in the economy – more will tend to be spent on producer's goods and wages instead of on consumer goods.
What about genuine “hoarding” though? What if money is not kept in savings accounts, but instead stuffed under a mattress where nobody has access to it? Isn't that harming the economy?
The answer is actually no.
Let us assume a lone miser takes all the money he earns and stuffs it under his mattress. Given that this money is held in his cash balance and not being spent, prices in the economy must ceteris paribus adjust downward (assuming that no-one else's demand for money changes and that its supply remains fixed). However, all of this continues to fully agree with an expansion in production.
After all, our miser must have earned his money somehow, and he can only have earned it by producing a good or a service. The contribution he has made to the economy's pool of real funding remains “out there”. The fact that he subsequently hoards his money does not alter this fact. He could use his money to exercise a claim on other goods or services, and so consume the portion of the economy's pool of real funding he is entitled to on account of his preceding production. If he doesn't, then whatever he has contributed can be employed to expand production. The point here is: money is merely a medium of exchange. It is a sine qua non for the modern complex economy as there can be no economic calculation without money and money prices, but money is not what ultimately funds economic activity.
Just think about it: if one is stranded on an island without any real capital – i.e., without concrete capital goods – one can have suitcases full of money and will still be unable to fund even the tiniest bit of production with it.
Conclusion
In short, “hoarding” cannot possibly harm the economy. The same, alas and alack, cannot be said of money printing.

Nope, he doesn't harm the economy …
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Yes we are an evil horde.
No, just catching on to the game and not playing by the bankster rules. They now the future.
Hey FED RES...for one: FUCK YOU!!!
And secondly, you scumbag, foreign-owned by private banksters, counterfieting, evil filth...it's called Gresham's Law, bitchez, and your BAD fiat has driven out what was left of the GOOD fiat for even better and true MONEY: Silver and Gold
https://en.wikipedia.org/wiki/Gresham%27s_law
Damn right I'm not "consuming" all the bullshit up to your so-called "standards". And you fuck heads want to negatively label us as "hoarders" when we call it SAVING and PREPARING for the crash of your bullshit paper charade? Fuck you.
I won't buy Chinese bullshit at Ghetto-Mart like the rest of the sheeple. I will not save my worthless fiat in your criminal banking system. I will not watch TV and contribute to hideous, predatory advertising scams night and day.
What I will do...is trade your worthless, counterfiet, fiat, shit paper in for assets that are worth something and will never be worth zero like your shit dollars will. Thanks to the criminal cartel keeping the prices of precious metals at historically all-time undervalued lows, I'm doing just fine by not contributing to your fake and corrupt so-called "markets" and I'm not spending my hear-earned fiat in this pathetic excuse of an economy that you, the FED scumbags, have created and manipulated and centrally "planned" into utter shit.
I use your shit paper to stack real money instead, bitchez.
I won't play your games, and obviously enough other awake Americans aren't playing your fucking games either or else you wouldn't be crying about us being "hoarders". So again I say, FUCK YOU!
Thanks for keeping silver and gold cheap, bitchez. I'll be stacking more at these kick-ass on-sale back-up-the-mother-fucking-truck prices.
How about knocking phyzz Ag down into the 18's or 17's for a little, ay? Just for shits and giggles...you know...so us nasty "hoarders" can really stack the fuck out of it!!!
BTFD, bitchez :-)
So the problem is malinvestment...
Which is caused, in large part, by destructive policies from the Federal Reserve and Federal Gov't.
And also, record levels of wealth inequality, which means that the decision-making for investment is more CENTRALIZED than it ever has been before.
It's the rich who are hoarding the wealth.
Correct. 80% live paycheque to paycheque and if that's not enough, they request assistance and when that is not enough they resort to stealing. Buying shitty cars with 8 yr financing doesn't count as consumption.
Among the top 20% consumption is stalling at best.
Finally we have a solution.
GET THE SAVERS!! THEY DID IT!!
And I thought it was Putin and the Gazans.
problem is LACK of consumption
There isn't much to hoard
People are just holding on to what they already have
Get Buffett to spend his billions instead of passing it tax free to another billionare Bill Gates.
Ask yourself...WHY should society let old man hold on to millions and billions when all they can get is some ego boost?
Sure, we're hoarding real money; i.e. GOLD, SILVER.
Everything else is just... toilet paper debt.
great post... i was gonna say if what they mean by hording, is that im buying. And if what they mean by money is silver and gold then im guitly as charged. Last two years ive spent about 10-20% of every paycheck on silver and gold and im shocked at what i was able to accomplish.
I'm not really an 'Evil hoarder'...
My sailing skills just really suck.
i am prudent
you stock up
they hoard
It doesn't make a bit of difference to me what impact hoarding may or may not have on the economy. The economy will take care of itself. Money will flow to the paths of least resistance. I'm not going to blow my nest egg and put myself at a disadvantage just because it might increase 0.0000000000000000000000000000000001% GDP.
As it is, hoarding is a result of inflationary monetary policy. The solution is simple. Raise interest rates, if you dare.
Further in the bitchezing spirit:
"And as much as possible I'll buy stuff that I need as used and as off-your eFkng-books transactions."
targeted inflation policy is THEFT by design. fuck them and their fiat system.
Using Core CPI for anything ls like making decisions based on everything but the nasty parts.
hoarder = terrorist
saver = terrorist
whistleblower = terrorist
Terrorist = military supplies and training
In a sound monetary system all money is eventually spent by someone, some time, for some thing. It's just a matter of when, for what, and by whom. The more you rush it with fiat tricks the more distorted you make it and the worse the choices are.
What you say is, of course, true, but only in a fiat/fractional reserve empire can saving be considered bad for the economy.
fiat/fractional reserve empire reduces itself to the more appropriately named fictional reserve empire...
households are sitting on $2.15 trillion in savings
Most people spend vastly more than they make. This statement is just a ration of sh*t.
Which comes out to a whole $6,723 per person. Wow, such fucking hoarders.
Math to the rescue. Idiots.
Considering recent studies showing how little savings most people have, if any... the savings is more concentrated in the upper 10% and skewed towards the top 1%. The number of people here who are "hoarding" is actually a quite smaller group of people.
I believe when George Soros, Bill Gates and Warren Buffet have many billions then there might be some amount of agrument about hoarding. For the vast majority of Americans mentioning them as possible hoarders is simply bull shit.
That's the beauty of aggregates. One-percenters get to hide within the herd of the impoverished.
$2.15 Trillion paying a total of $100K in interest. Thanks Ben.
TL;DR: Hoarding cash is not bad.
Hoarding stuff is mark of insanity.
Stuff is just a wonderful word.
TPTB want you to hoard Debt, not Cash.
How pathetic of an analysis. Gummint: ctrl-alt-del
hey folks, read the fed article from st louis fed--it also says we have flat gdp this year and we are in a recession, It also says that for 33% compounded printing the last 5 years they expected a kick up in inflation (if they published the real inflation rate they would have it) and econ recovery--or both.
they are getting neither and blaming it on the consumer for hoarding.
they missed their own charts where disposable income is down, part time up and any growth is in poor quality jobs.
other than that, how was the play Mrs. Lincoln
any comments on how seniors are faring with 1.5% soc security increases when food energy and healthcare inflating a lot, and then their CD's pay nothing thanks to Ben and Janet.
boy have they screwed up this society.
lets hear it for corporations that are not patriotic for going offshore.
Whore ding?
goose egg from pissed off whore...
Of course hoarding can harm the economy, but only when the cirulating currency/money is taken out of circulation. Hoarding in a bank is technically not hoarding at all.
This is the age old problem of using gold as the circulating medium, every person , trader , and country wanted to hoard it, and so economic growth was slow and unpredictable.
With inflating paper money, hoarding in theory should be low, and the velocity of the paper very high, thus, economy strong.
I wish I had some money to hoard.
Soon enough we will receive visits from the thought police reminding us that it is our patriotic duty not only to spend all we 'make', but to spend moar via those credit cards we have refused to use lately.
Remember.......savers = terrorists.
So get with the program or just plain get ye to a re-education camp. The choice is yours 'citizen'.
<See...you still have plenty of free choice. Now choose carefully pleb.>
Exactly.
Citizens can own "assault weapons" which are semi-automatic
Government agents, police, etc. own "personal defense weapons" which are select fire or automatic.
And they get to shoot on sight!
As the Ponzi begins to unravel and the mobs gather in righteous indignation 'they' will shoot indiscriminately, sighted or not.
And they've used tax payer dollars, or borrowed dollars the Chineeze to buy up billions of rounds of hollow point ammunition to use against us.
And some total fucking scumbag Dem out of California is trying to introduce a bill to outlaw sale, purchase, and current ownership of any bullet proof vests or other gear for civilians.
We're just supposed to walk around unprotected while these scum shoot at us with hollow points? Fuck that.
Motherfuckers...I've got hollow points too, bitchez!!!
Just wait for it... the ammo will be stored at the wrong place, and be the wrong calibre.
This is the government we're talking about.,
I think they meant 'Whording'.
If you don't charge as much debt as your income will support, the terrorists will have won!
Hoarding - Making the decision to keep your own private property
Oh, you so silly. All property belongs to the banks and the gov't. If you doubt me, try not paying your property tax on your fully paid off home.
http://www.ptcc.us/arc090314.htm
Excellent bill that zero chance of passing
Well, if you won't spend your money, you dirty kulak, the government will take it and spend it for you!
Silly person! Everyone knowns slaves can't own property!
This is like the rich employer who tells his minimum wage earners who can't pay the electric bill this month to just simply put more into their savings accounts or 401k.
Try the real world Fed, not the academic one.
Theorycraft is more fun, and can be placed on bumper stickers for the brain washed dumb fucks we call citizens.
I saw one last week, "What if the hokey pokey IS what it's all about?"
Hoarding credit (money) is most definitely harmful. Money (credit) is for spending! LDO
Hoard useless physical assets instead that do no harm and don't take liquidity out of the money (credit).
Let me print like the government, and I'll spend freely too!
I agree.
I prefer to hold all my wealth in real physical items of worth.
Of course, if every one shares my preference, then everyone will be trading dollars for anything and everything.
This is called HYPERINFLATION.
And so you have your new "upwardly Black" movement in 'merica.
The repressed blacks will now be gifted with all the wealth that they can stand because the years of financial repression will manifest into unchecked spending. Black loves to appear "flossy" it is a cultural trait, engrained.
But now the white in 'merica will not stand for this and they also will indulge in unchecked spending to out do the flossy black.
And the circus continues as your FED ringmaster chuckles from the sideline....
In disbelief? Turn on your thought molding appliance(teeeveeee).
No, a lot of people are bored and don't know what to do with themselves when they're not shopping.
Let's make economics simple:
1. If production > consumption, wealth is created.
2. If the amount of currency in circulation rises relative to the level of production, inflation is created.
Any questions? Bueller? Bueller?
Actually, production IS wealth. Production > consumption produces savings which can be invested in expanding current production and boosting productivity. The later boosts production, wealth, per capita.
The bankster's printing first "eats," steals, production and productivity gains and then shows up as price increases, and impoverishes an economy and people over time. I.e. price, "inflation," increases are only the visible part of their theft, the rest is hidden below the waterline.
The second point is why Friedman advocated about 3% "printing" (monetary) goals, as he knew that the theft would steal production and productivity gains and remain hidden from the public. He also knew that the resulting poverty would not manifest itself until long after he and they were gone.
An American, not US subject.
"Boost the economy, guillotine a bankster."
In other words, supply side economics.
HaHaHa....that joke was on us.
You need to take the seasonal adjustment into account.
/s/
The text of the CNBC article that cites this FedRes nonsense is hilarious.
Just another propaganda piece defending the thieving banksters from that which they wrought.
An American, not US subject.
"Save the Humans. Guillotine a Bankster."
The USSA has exported inflation via the Petrodollar.
When it all comes back home, watch out.
It is called the paradox of thrift. And in the context of the current economic paradigm it is harmful. Duh.
Seems to me that the key to increasing velocity is to increase interest rates.
Back in the Volker days, with Treasuries in double digit territory, banks and businesses couldn't turn the cash over fast enough.
Velocity was thru the roof if I remembr correctly.
But then was then, and we are in the now, which is so different.
Increase the rates enough to solve one problem and another is created... as millions and millions of debts implode creating a deflationary shit storm which at least temporarily supresses velocity anyhow.
Concept of purging the system of bad debts? Clearly no going to happen. The whole damn system is propped up on those debts - which have sunsequently been collateralized, rehypothicated, securtized, fornicated, rolled up and smoked in a worldwide, circular chain of couterparty exposure that is new MAD.
Oh, and it doesn't do anything to deal with the REAL problem. Scarcity.
Why is scarcity a problem?
All economics are based on scarcity. Scarcity and added values is what gives goods their price.
High demand scarce items simply rise in price and demand will drop at the higher price points.
Prices will rise until the resource is depleted and a substitute must be found.
Haven't burned any whale oil lately, have you?
It used to be pretty cheap.
Bill Gates could take a whale oil bath with a spotted owl loofah, but I can't.
Volcker raised interest rates to curb inflation. The money velocity was there, driving inflation; raising the interest rates knocked the money velocity down through 1982.
Low interest rates typically lead to higher borrowing and thus higher money velocity. All the "cheap" money being created now is simply going to the stock market via the banksters. 'Cuz average joe has nothing left with which to collateralize a loan.
If Barry & Co. would stop changing the rules of the game, I'll bet more money each hand.
ROFL. Dumb asses, all my money goes to the ammo, rice and beans I'm hoarding.
You forgot the silver. Oh yea, that boat accident last month. Forgot about that.
The reason why CPI has not (yet) taken off is that the price inflation effects of the Fed's evil monetary inflation have been channeled to financial assets. That is now changing, with "trickle down" showing up in such things as food and energy costs. End the Fed.
Noah was a hoarder.
Look where it got him.
They are so out of touch. Many of the people I see on a daily basis do not have any money to spend. Most are in debt up to their ears and their credit limits have been contracted by the Banks as they are poor risks.
The "hoarders" are the few and extremely wealthy. Just how many pairs of shoes do they need? There is nothing more to spend their wealth on that they do not have already.
And those rich hoarders will put all their gains(sell overfking valued stocks) into CDs once (if ever) rates are 3%,-4% again!
Hoarding money = savings. Remember that? It's the only way to get capital formation that will lead to proper risk/reward decisions by entrepreneurs/; which creates jobs; which helps expand the economy in a real sustainable measure.
I thought savings = leverage. Well, that explains alot.
/s
It's just NOT happening. You can pick any chart to make a point but it doesn't always PROVE the point.
I'm fascinated by inflation/deflation both current and historical. What I track is INFLATION ADJUSTED CURRENCY PER PERSON. Isn't this the only thing that matters? Who cares if currency goes up and population goes up? What matters is the amount over time in each of our pockets (or mattresses)
My gauge is just not going up in any meaningful way
purchasing power relative to your own productivity.
Who cares if currency goes up and population goes up?
Everyone should. Whomever brings currency into existance to make up for population growth gets unerned value of someone elses production(theft), with the consequences masked by population growth (fraud). This skimming operation is amoral at it's core even if a spreadsheet implys I'm no worse off then before.
The FED models are unable to take into consideration that the people not participating in the labor force cause a drag on the economy. They are consumers because the government hands them money through various programs but they are not contributors.
As the article states, money is supposed to be a medium so that it is easy to exchange labor for goods. In a barter economy, the government would have to provide those on government assistance with a tangible good, taken from someone else, so that they could exchange it for another good. The model is simple when reduced to barter but can be made to seem complex (I stress seem complex) when money, banking, and central banking are added to the "economy."
spend less than you make, avoid debt, you will have less "things" but your freedoms will expand, the sellers on wall st the banks and .gov will hate you, the thrifty savers are now economic terrorists.
Stay out of the 'system' as much as possible. 'Custodian' means owner when the music stops.
"Are US Consumers Evil Hoarders?"
I 'member back in my day we used to call it "Saving".
The banks used to pay you money to keep yours there. Heck, you might even get a free coffee pot or set of glasses out of it.
We used to have this wise saying that a penny saved was a penny earned. I guess now that's another one of them "Hate Crimes" we keep hearin' about.
Pretty soon, Orwell and Huxley will enter the real live Farenhiet 451, 'cept the digital versions will all have a modern day Winston ghost writing "corrected" versions that are good for us.
this was an excellent read. thanks for posting.
It is good to see other people who understand that velocity drops due to money printing. Trying to explain velocity to people who can't understand it is a math equation that divides by the money supply as the last step is difficult. Most people just want to be spoonfed memes.
The fact is, if you did the velocity equation using constant year 2000 money quantity, you would be shitting your pants about inflation.
Spot on!
You get math or you don't but either way it doesn't change the facts -- no matter how loudly or how often you hear people telling you otherwise. Of course it's a whole lot easier to listen to the cute lady with the nice tits beamed into your living room who tells you everything is ok, and it would be even more ok if your family, friends and neighbors would just get with the program.
For dog and country! Rah!
Given the the average consumer has no money this must be code for "the slaves refuse to take on more debt."
BINGO.
I hear the sound of helicopters in the distance.
Could be that there is nothing worth buying.
I was looking at my own expenses the other day. I've bought food and gas for the past month. My wife pays the mortgage, electric bills, and water bill. We've not gone out to eat since the kids went back to college in August.
I bought a few ounces of silver.
That's it.
There is nothing else I need or want.
That creates demand destruction and hence why things we dont need are dropping in price. there are also currency and trade aspects to this which can muddy the waters of course. But, the general idea is that the consumer is retracting and that hurts velocity.
On current course, the FED is only creating more pain... which will lead to more demand destruction.
How many people have already cut cable? About to? Reduce cell phone bills? Start shopping smarter for food? Stopped or reduced eating out? Making cars last longer? Etc. - all financial terrorists in the context of the current system. On the other side it is survival. In the grander scheme, it is the system cannabalizing itself. Deflation.
A printer costing $200 lasts 1 year.
A printer costing $200 is then built to last 5 years. (in some fantastic future world, where planned obsolescence does not exist, due to scarcity)
OMG, deflation!!!!!!!!!!!!!!
Can't have that now! Things that are made well which inherently use less resources overall, can be maintained, etc. Got to keep velocity up ya know!
(Think I will go home and break a window in my house and then replace it out of patriotic duty! - God save the Bankers).
Feeling the PLEASURE of the s i m p l e life !!! Gotta L O V E it.
Yea what if just don't feel like buying anything right now, I guess that makes me a terrorist now?
If a sale goes unrecorded and untaxed, was it really a sale?
Ammo?
It must have taken a lot of work to get your wife on board that ship.
Evil hoarder, huh? I might be don't know for sure, since nobody has really tested me.
Some of this article bothers me, but I don't know why. In several places after I read a sentence or several I went to my self "that wasn't right."
I'm usually pretty quick to pick up on bullshit, even if it's not intended to be bullshit. That's just how I am.
So while I appreciate the effort, I'm calling bullshit.
You read the headline. You did not read the article.
What is bullshit is that you claim to have read it.
Or perhaps your reading comprehension is not anywhere near up to par.
(The article is very critical of the Federal Reserve's claim.)
And is wrong at the same time in it's conclusion.
I read it. Lots of it was fine, even insightful, but then the writing would turn some important corner on some given assumption and I would go "backup a second that does not follow"
Too much of that and I start to pay close attention. Too much of my brand of attention is usually a bad thing.
Get what you want out of it. It don't matter. A lot bigger fish in the sea than this one.
And so it is, I would like to take this opertunity to thank the helpful persons on this web destination that have taken the time to acist me while I learn more about the proper 'merican version of English.
And as it was, as a youth I grew to maturity in the State of Punjabai in India my primary dialect was and is Majhi. This extremely graceful dialect gave way to the awkwardness of American English as I made my way to my first job in Research Triangle Park, USA. My colleagues would be very helpful in my transition but there are gaps in spelling and articulation of thought so I must say, may Budda be with those who guide me.
Glad to help. Now go buy something!
Head Start: On Surround & Drown
I can give you a head start, but what you do with it is up to you. It may sound counterintuitive, but always begin in the basement, regardless of birth. The empire is psychological, and the majority cannot, nor will ever be able to, swim against the current, of false assumptions embedded in DNA. The trigger and the cliff are one and the same.
Does Putin’s seven point plan sound familiar? Where may you expect the twist?
You are a lifeguard, and a distribution is caught in the current, afraid of drowning. Who do you save?
Hint: Not all are quite so stupid as the role they play in the empire makes them appear.
Baby yoga, early childhood education, and prep schooling are all obvious extensions of public education, peer pressure immersion, normalization, further embedding false assumptions, before psychological maturity, all of which depends upon natural resource exploitation.
If the consumers see you producing, they will surround and drown you, on the assumption that there will always be another automaton producer, because that is the case, in a closed system built for the purpose, until it isn’t. Don’t be stupid, unless you want to be surrounded.
Feeding people is not a miracle. The planet does it everyday, with no public education required. Planetary processes do not depend upon fiat, gold, or digital QE, artificial extensions of gravity, but the majority does, saying one thing and doing another, not seeing the contradiction, because it’s normal. You are expected to know it’s all a lie, and when you act on the lie, you are to blame.
There is no such thing as a trust and savings bank, sorry.
Putin cannot afford to care about external transaction fiat in transition. America made the move, with gas, because its mythology unraveled, as everyone, but most Americans, expected, and war is always the outcome. Now, the critters are swapping contracts faster than they can run away from them(selves). Everyone is a friend and everyone is an enemy, within the empire, which is still expecting a motor to present itself, by process of elimination.
In this episode of empire, America is spy headquarters, assuming that it will not be carpet bombed, because the wave of war has begun on the other side of the planet and it has always done the bombing, while its collectivist conscience fears the unknown, creating a positive feedback loop of increasing gravity, currently burning with busy work to ignore the obvious. And the chauvinists have dropped the weight on the feminists, like they always do, many of whom do not realize that they are feminists.
Choose a spouse outside the Bell Curve, a compliment, which appears to the majority as your opposite. Respect your parents, but do not let them drown you, and vice versa. Time is a perception of the majority, a derivative in the past, and it’s going to speed up, within the empire, as the empire subjects itself to pressure and heat beyond threshold.
Rest the timing, before you go to all the trouble of troubleshooting, an arbitrary software algorithm in an arbitrary computer chip, running the lives of those that designed it, seeking privilege without responsibility, and demanding equal rights at the end of the FILO bankruptcy queue, like they always do.
The tide is always turning. The majority simply changes its focus, to ignore the obvious, and prints, until it can’t. There is no exit, for tl/dr and the misogynists, and mom is always on the edge of the cliff. “Suspicion builds confidence.” “Consumers for Christ,” “delivering organic change…” crack me up.
“delivering organic change…”
+1
Delivering organic change?
Is that what Whole Foods calls it when they deliver food to your house and give you some money back from your $100 bill?
Organic Change is when the BK’d City of Detroit subsidizes a Whole Foods and the WSJ calls the move by Whole Food ‘a gamble’.
Yeah, 50 million debt slaves hoarding their EBT card balances, LOL
Should have given it to the consumer directly if S P E N D I N G ' S what they wanted.. THAT SAID..
Give me MOOOOAR $$$MMMMooooLAH$$$ NOW and I'll Hoard S I L V E R + G O L D you morons!!!
This article doesn’t make sense in context to how the world’s monetary system is currently functioning.
Currently malfunctioning.
Of course you can measure the demand for money.
The demand for money is called a market driven interest rate.
Unfortunately the Fed has banished them to outer darkness.
The Fed has gone full-on Rain Man.
" In short, “hoarding” cannot possibly harm the economy. "
But Hoarding US $, is probably harmful to the hoarders, in the long term.
How about this for hoarding? In Argentina, farmers are starting to hoard seeds, grains, and beans because they have a value in USD (it's all relative). So they aren't selling as much as they used to - which reduces supply against constant demand. That's gonna leave a mark in the inflation underwear.
This may have implications for those who hold any Argentinian financial asset priced in USD as the country may be earning less and less of those things. And that's how you wind up with a shortage of USD when the FED is printing them faster than the metaphorical trees can be cut down to make the paper.
Hey yellen, heard the story about the pot and kettle?
asshole!!!!!!!!!!!
off topic:
Smoothed new case rate (does not include DRC outbreak data):
04 Sep 14 - 75/day
28 Aug 14 - 69/day
22 Aug 14 - 59/day
20 Aug 14 - 54/day
19 Aug 14 - 46/day
15 Aug 14 - 54/day
13 Aug 14 - 40/day
11 Aug 14 - 37/day
08 Aug 14 - 54/day
06 Aug 14 - 55/day
04 Aug 14 - 57/day
02 Aug 14 - 43/day
29 Jul 14 - 38/day
27 Jul 14 - 23/day
23 Jul 14 - 12/day
17 Jul 14 - 10/day
Morbidity: 50%
Partial: 5.4% per day
(4 Sep release contains data through 31 Aug)
http://www.who.int/csr/don/2014_09_04_ebola/en/
http://rocs.hu-berlin.de/D3/ebola/
http://currents.plos.org/outbreaks/article/estimating-the-reproduction-n...
http://www.livescience.com/47685-ebola-outbreak-duration-prediction.html
Love the data, but when you type "morbidity" I'm pretty sure you mean "mortality".
Love the data, but when you type "morbidity" I'm pretty sure you mean "mortality".
Believe you are referring to the case fatality rate/risk/ratio. 'Morbidity' is a just a simplistic estimate of the lower bound of the case fatality risk for this outbreak given data to date. There is significant variance in CFR for Ebola outbreaks dependent upon level of care received. Also, while the epidemic is accelerating, 'morbidity' will drop as the number of active cases grows faster than the number of deaths (presuming active cases are actually getting counted as accurately as deaths).
https://en.wikipedia.org/wiki/List_of_human_disease_case_fatality_rates
And although the data, as reported, does not seem to imply parabolic behavior in transmission, I was hoping for higher mortality than 50%......
Disclosure: roughly 1/16 of AUM's invested in http://www.mappbio.com
And although the data, as reported, does not seem to imply parabolic behavior in transmission, I was hoping for higher mortality than 50%......
Disclosure: roughly 1/16 of AUM's invested in http://www.mappbio.com
Come'on! Africa. Make pappa some cash!
Hey, what was that? I tried to update my comment and it forked???? Did I do something wrong?
Anyhow, what's up with this timeline?
http://www.mappbio.com/news.html
What they're actually so worried about is the shift away from CONNEDsumers buying on credit, the banksters get all the free cash they want so they're not worried about what goes on with physical currency.
“hoarders are evil”
It’s an ominous sign. Historically, when hoarders are depicted as evil, it’s a sign that governments are preparing to create food shortages and blame them on hoarders.
What follows next is quite normal. Tyrants give their storm troopers lists of hoarders (aka preppers today), they hunt such hoarders, seize their supplies, and make a very bad example of such hoarders.
It is, as noted, quite historical. During the French Terror (1792-4), such hoarders (peasants/farmers, shop keepers, and individuals) had their supplies seized, were arrested and paraded thru a Revolutionary Tribunal before being carted off to the guillotine.
During the Judeo-Bolshevik slaughter in Russia, an improvement of terminology resulted in such hoarders as speculators, obstructionists, hooligans, anti-socialists, malcontents, among other terms. Their supplies were seized, they arrested and led thru a Revolutionary Tribunal before receiving a shot in the nape of the neck. This last was an invention of Judeo-Bolsheviks; it caused less writhing on the pavement, smaller puddles of blood, and increased the usefulness of assassins. See Building an American Schutzstaffel.
When the slaughter begins here, the work will be done by the American Schutzstaffel, er, DHS; and its operatives (disguised tax collectors) won’t be native residents; but rather members of the ALLIANCE (Mexican and Columbian drug cartels, Chinese Triads, Red Army et cetera) cobbled together by Chinese Communists; at least, that’s what testimony before a congressional subcommittee tells us.
Why, just the other day, the Red Scarfs in Venezuala went after the TP hoarders!
Socialism needs a constant stream of villains in order to take more and more, because it is incapable of producing anything. When it finally runs out of goodies to confiscate, the system collapses in an orgy of violence, but the Socialist leaders and their buddies get out with theirs (actually ours), and enjoy the high life while complaining about some other batch of villains.
Every generation has to learn the hard way that there is no free lunch, and the clown promising you one is simply a liar who is going to steal that lunch from someone else. Sooner or later, that liar is going to come after your stuff, but, "Hey, as long as I get a free lunch today, who cares, right?" And that is the first step to national poverty and slavery.
Let's see how much of the Fed's off-balance sheet debt is. Bet it's a lot more than the the $4 trillion they report. They have been QEing and buying up treasuries, overseas debt and securities.
The Fed is one huge Ponzi scheme.
As Jim Grant says "people are looking for riskless return, but what they are getting is returnless risk.". Might as well stay in cash.
Another word for hoarding is saving. Saving is a rational response to risk. Interest rates no longer relate to risk.
I will continue to hoard until Fractional Bankstering is no more.
By vilifying hoarding they are preparing you for the next step, confiscation of hoarders via negative interest rates and bail-ins.
I would spend more, but I don't like the prices of anything these last few years.
Except physical Gold and Silver. And that hasn't changed.
Even if there were a grain of truth to the accusation, the "savers" out there have just assessed the risk to reward of parking fiat in a zero interest environment, seems like one of the elite could have noticed cause and the predictable effect a long time ago.. maybe it wasn't covered in economics 101 at Haavad..
This is just another pawn positioning announcement designed to loosen up the masses beachhead for the unavoidable confiscation legislation that is sure to come.
Buy the physical metals and take the money out of the bank. It for all practical purposes disappears.
Anyone care to explain this one to me?
"First of all, banks have not “put away” $2.8 trillion in reserves; in reality, they have no control whatsoever over the level of excess reserves. They are solely a function of quantitative easing: when the Fed buys securities with money from thin air, bank reserves are invariably created as a side effect."
When Fed policy fails, blame the American people.
If anyone has elderly neighbors or relatives who were alive during the Last Depression, I would recommend that one take the time to listen to their tales.
The main theme I heard from everyone I talked to was the same.
NO ONE HAD ANY MONEY
With that in mind, enjoy how history is repeating:
https://mises.org/daily/3707/The-Virtue-of-Hoarding
and households are sitting on $2.15 trillion in savings-about a 50 percent increase over the past five years.”
yeah, uh huh
"Saving money continues to be a losing battle for many Americans. Twenty-six percent of Americans do not have any money placed aside for emergencies, according to a new survey from Bankrate. In fact, 67% have saved less than six months' worth of expenses, and 50% have saved less than three months' expenses. Over the past year, the number of Americans with at least three months' expenses in savings declined from 45% to 40%.
Furthermore, the savings conundrum is not limited to only lower-income households. "Americans continue to show a stunning lack of progress in accumulating sufficient emergency savings," explains Greg McBride, CFA, Bankrate's Chief Financial Analyst, in a press release. "Even among the highest income households — those with annual income of $75,000 or above — fewer than half (46%) currently have a six-month savings cushion."
http://www.usatoday.com/story/money/business/2014/08/17/why-americans-br...
All this is just laying groundwork for the Fed to go to negative nominal rates. (We're already at negative real rates.)
The irony of this is that it's the banks holding the Fed reserves that are killing velocity, not consumers.
How about the evil Federal Reserve and their forcing of real inflation while denying it? As everything becomes more expensive due to their policies people buy less.
From Chocolate to Beer, Shrinkflation Hits the Supermarket
http://www.bloomberg.com/news/2014-09-03/from-chocolate-to-beer-shrinkfl...
I don't hoard my fiat I exchange it for base metal so I couldn't be blamed for this mess. Since they don't smell their own hole first they are not as smart as a Fox.
The Corps (Corpse) have been hoarding vast amounts of cash for years now waiting to save themselves from the collapse first and profit from it on the corpses of society second
They were leading the way for evil and setting the example before the slaves had a clue
Consumers face a constant battle to hold onto their money.........because ther are so many CROOKS out thier trying to take it. Ever try to buy almost anything at the 'advertised' price (take cars for instance)..... no way do you get out the door without paying more somehow.
"By saving more, people are merely indicating that their time preferences are lower – that they prefer consuming more later to consuming less in the present."
And if the "cost" of time (the money value of time) has been driven to zero by ZIRP, there is nothing lost in waiting.
Banks are balance sheet deadbeets.
Consumers are overleveraged.
What consumers earn (long term downtrend in real wages) goes to non-discretionary spending, taxes, and debt payments.
Only the non-discretionary spending really registers as monetary velocity.
They aren't hoarding.
They're broke because of rising cost of living, falling real wages, and existing debt servicing.
Fed has gone full retard. Given their statements on the labor situation, it is obvious that they know people aren't stuffing money in their matresses.
Don't these people count paying down debt as "saving?" I seem to recall that they do. So in practical terms, someone who makes regular payments on existing debt without taking on more debt, is an evil "hoarder," despite possibly not having a penny in savings of any kind.
You have got to have it before you can horde it.
"Hoarding cannot possibly hurt the economy"
Come on man... Like I get your point but there's no need to be ridiculous about it. Any time you are talking in economic absolutes you should rethink your argument.
Also, that's not how ceteris paribus works. You can't ceteris paribus over known cause and effect.
They are Hoarding because the are Scared Shitless.. i saw this days ago from the Fed, and thought those lying bastards...
The new Survey of Consumer Finances is out: http://www.federalreserve.gov/econresdata/scf/scfindex.htm … median family income fell by 5% from 2010-2013
LOL suckers!
I love the fact these assholes who make 10-20x's than I do in a year at the Fed can't figure out why consumers aren't spending.
It's called: "being in ad-hoc". Consumers have been under self imposed austerity for 8+ years now. Their wages have not paced past actual inflation, not the one reported by the government. Younger consumers are in debt from the average price of college, up 12x THIS DECADE. Most of us barrow to by cars, houses, high end consumer goods. A good portion of us also pay rent. That means any money we do make, we shuttle to a rentier. So of course if we have any little left over after all of the greedy pigs in this failed economy have their turn at the wallet trough.........we are going to hold on to it with the kung-fu fucking grip.
These assholes do not seem to understand just how HARD it is to get a hold of that green for 80% of us. But I guess if you are printing dollars until you run out of trees, I can see the disconnect.
RE:
AND the deflation of wages. Back in the 1970s, Fed Chairman Volcker carried around a card of labor wages that he would bring out in meetings to get the message across to the unions and corporations to "keep the water cool" as he was raising interest rates and was very concerned about inflation going to escape speed. The Fed has always worried more about the cost of exports and not the cost of living thanks to this thought.
Dan Kervick, an MMTer who I don't always agree with, said this today:
Wages will be the cow that gets slaughtered here. Why? Because "reducing debt" is essentially government-ese for "cutting defense contracts" (entitlements, despite what is told to you on here or in propaganda, does not have NEARLY the strain on the US budgets as the Pentagon/CIA/NSA and its 3rd party corporations has).
It's easier for the government and the crony pols who work in it to cut down the average American worker than it is the defense contractor. The former has no money, is aloof, and for the most part, scared of change. The latter has all the money in the world, and of course, if you don't comply in the end: they'll just fucking kill your career (or you: ask JFK).
I agree!! And I don't believe it is a big 'Oooops' moment either... These people know exactly what they are doing...
Must have hit a nerve with someone today. Serial junker on the loose! lol.
... iiiiiiiinnnnncoooommmmiiiiing!...