Q&A
Hooverprintingpresses asks:
“People will be offering their possessions and their labor for sale to try and get the cards to pay the taxâ€ÂÂ
Says who? Thomas Paine? Didn’t he go to jail for awhile?
Warren, so ultimately I am being told that I will have some thug with a gun lock me up in a small room if I don’t play ball with the “rules†some other human being has made for me. Heck like my friend in prison said - three meals, free AC, TV, free medical, nice gym and library, no taxes. He encourages everyone to sit down and get arrested - since I know you are a big thinker - what percentage of the population can you “allow†to develop this mindset and be locked up before the model breaks down? You assume all your agents will WANT to pay taxes and sell their services/labor to avoid jail, but I know more and more people who are just choosing to sit down and are tired of the treadmill and jail is not a big enough deterrent to motivate them to run on your treadmill.
I went to the local court last year and watched the judge look at the 200 or so people that day who did not pay lots of things, taxes, child support, alimony and he told one of the non paying mothers who owed child support that she was going to jail, and she said Judge, you can’t lock us all up, there isn’t enough resources to imprison everyone.
You are correct.
The currency is only as good as the government’s ability to enforce tax payment.
Some taxes are easier to enforce than others, which is why I keep coming back to a real estate tax as the base case. If you don’t pay the tax, the government sells the house. They don’t even have to know who owns it.
I don’t like income tax because of the high compliance cost. I know it sounds high, but those costs might be 10-15% of GDP when you include all of the time spent in record keeping, laws, contracts, and enforcement.
And the fact that there is so much money in tax law means that the brightest and the best gravitate to those positions. So instead of having our brightest and best cure cancer, they are working in difference places in tax law and, of course, other places in the financial sector.
It is the biggest brain drain in human history, and it’s getting larger everyday.
Also to your question, if we legalize most of the drugs and take the money out of that sector, there should be plenty of room in the jails at least for the near future. But with the real estate tax, of course, there is not jail, apart from the odd case of fraud; the property just gets sold if the tax isn’t paid.
One last thing, we already have a national real estate tax at the local level. So, switching over from all the federal taxes to a federal real estate tax should be relatively simple and add substantially to our real standard of living.
Russel asks:
Any reason why the Saudi’s are allowing the price of oil to slide?
Just a guess. The futures liquidations were large enough such that holding spot prices up and letting futures free fall would have made it obvious the Saudis are price setter.
There also could be some liquidation of physical inventory going on in which case they would have to let inventories fall before resuming control of prices, or else actually buy in the spot markets which is out of the question of course.
It’s like if some pension fund had a hoard of NYC subway tokens and decided to sell them ‘at the market’. The price would go down from the current $2 price until that selling pressure abated. Then the price would go back to whatever NYC was charging.
So most likely they just let this inventory liquidation run its course, and then work prices higher again.
Much like happened in Aug 2006 with the massive Goldman liquidation and again in a smaller way at year end back then.
Jim Baird asks:
Hey Warren,
I noticed the crude spreads have slipped back into contango today. Are the ETFs up to their old tricks?
For sure inventory conditions have shifted, but they always seasonally shift up around this time. Could be ETFs to some degree.
More interesting, if the Fed is still up to their old ways, this would signal to them that markets are anticipating higher prices down the road, rather than elevated inventories, and may nudge them to hike sooner than otherwise.
Hi Warren,
Do you think there is any chance that the Fed ever puts us into a steeply inverted curve, say something like 10% short rates with 6% long rates? Hard to imagine that happening with the housing market weak, but what do you think?
Very high probability - I’d say 85% chance if, as I expect, crude stays here or goes higher. maybe a lot higher.
Hiking causes inflation to accelerate via the cost structure of business, so when they start hiking, inflation accelerates. Guaranteed!
Only a major supply response will break the inflation. Like pluggable hybrids in 5-10 years or cutting the national speed limit to 30mph, which is highly doubtful.
Why would shareholders approve the sale of Bear Stearns at $2 per share?
Answer, they may not. They may take their chances with getting more $ in bankruptcy.
Or a higher bid might surface.
The Fed has turned Bear Stearns into a ‘free call’ with their non recourse financing,
And the Fed has moved spreads of agency and AAA paper back towards ‘fair value’ with their open-ended funding lines. This removes ‘liquidity risk’ and allows the securities to return to being priced on ‘default risk.’
This has dramatically increased the business value of Bear Stearns.
The large shareholders can now say no to the sale, maybe add a bit of capital or take on a ‘business partner,’ and outbid JPM for the remaining shares (if needed).
Might even start a bidding war.
There could still be well over $60 per share of value for the winner.
And there’s a reasonable amount of time for them to put something together.
And maybe this was Bear’s plan all along.
They knew they needed Fed funding to maximize shareholder value, and the JPM involvement to stabilize their client base and buy the time to find a real bid.
(CNBC now showing a chart showing $7.7 billion in breakup value.)
Seth asks:
For 2 a share is Chase getting a boat load of non prime paper that over time is worth a lot more than 2?
From what I’m hearing it’s already worth maybe 75 or more.
And the Fed gave JPM a free call.
The $2 is the least that it’s worth, as the fed is providing non recourse funding for the assets at prices that support the $2 price.
And at the same time the Fed took action to restore pricing of agency and AAA assets to more accurately reflect their actual default risk, which is near zero.
This is different. In this case the moral hazard is in not funding the primary dealers. It’s too easy for the predators (other dealers, hedge funds, etc.) to first get short the stock and then start a run on any broker that has to have any non tsy inventory financed and drive them out of business.
By funding the primary dealers who are in good standing (they report their finances to the fed) and regulating capital requirements and haircuts predators are kept at bay and shareholders continue to assume the business risk of the primary dealers.
Steve asks:
And the Fed has said in times of crisis they will not punish the many for the few.
Moral hazard is not a fixed doctrine. It requires flexibility and in times of crisis they accept that their action (the Fed’s) will not address the doctrine. On balance it is a price (overlooking moral hazard) they must pay for the greater good.
They have done it in the past so doing it again reflects a degree of consistency not a change in policy.
Paul asks:
How do you respond to the moral hazard argument of the Fed bailing out Bear Stearns?
I’ll let the word ‘bailout’ go for now, and begin by saying the liability side of banking is not the place for market discipline, and it’s also probably not the place for market discipline for the Fed’s appointed (anointed?) ‘primary dealers.’
(I will also not here question the idea of having primary dealers in the first place, but don’t take that mean i approve of that setup, thanks!)
So given the Fed wants primary dealers, it then follows there are specific securities they go along with this assigned role.
Presumably those would include the likes of tsy secs, maybe agency paper, maybe AAA rated mtg backed securities, etc.
Presumably also are functions the Fed wants its primary dealers to perform, like being market makers, providing some notion of liquidity, etc. etc.
And, presumably, the Fed has some notion of public purpose behind this entire creation.
So, given all that, to support this ‘institution of public purpose,’ it behooves the Fed to ensure the primary dealers themselves have the available lines of credit to perform this vital public function (almost hurts to write that…).
The bank primary dealers do have ‘guaranteed liquidity’ and so are safely able to function as primary dealers, knowing they can always finance their inventory positions. This can be done via raising fed ensured bank deposits, and borrowing from the fed by using their inventory as collateral, etc.
The non banks were at a disadvantage to the banks in that they relied on the banks to fund their inventories.
Bear Stearns got shut down when the banks said ‘no’ for non credit related reasons. Bear had perfectly good collateral that they held as part of their primary dealer function (as defined by the govt regulations), and the banks said no, perhaps because they had their own internal issues.
The same would happen to the banks, and the entire economy, if the Fed simply said no to the banking system and one morning and didn’t open the payments system.
It’s just one of countless flaws in the institutional structure that doesn’t get noticed until it’s a problem, no matter how many times I’ve pointed it out to ‘authorities.’
So to your question, while I do see a lot of other moral hazard issues, I don’t see this as one of them.
The Fed simply told JPM to deal with Bear in the normal course of business and lend vs qualifying collateral as has always been the case, and as is the case when the Fed lends to JPM.
Let me know if I’m missing something, thanks!
October 8th, 2008 at 9:45 am
I am trying to understand the Fed’s control (or lack thereof) over interbank lending rates. In that context, why would effective Fed Funds clear at 4.50%, if any bank (primary dealer or not) can now go to the Fed and borrow at the discount window for 2.00%?
Reply
October 8th, 2008 at 7:46 pm
didn’t notice that, but have noticed the ny fed has been struggling to do a fundamentally simple task. nuff said…
Reply
November 21st, 2008 at 12:26 pm
I just heard an interesting interview on Bloomberg radio with Steve Hanke from Johns Hopkins. I am interested in Warren’s toughts on his take on an impending inflationary step function.
http://media.bloomberg.com/bb/avfile/Economics/On_Economy/vsX6Ql1Ykhn4.mp3
Reply
November 21st, 2008 at 5:09 pm
his claim to fame is expertise on currency board arrangments, which he supports. we had a nice exchange and he agreed it cost the country with a currency board maybe 5% of gdp as they need to export to fund their domestic ‘money supply’/net financial assets, but thought it was worth it.
more recently he’s been leaning to a more ‘flexible’ currency board arrangement of some sort. If he lives long enough he’ll come around to floating fx, i think.
he says we should ‘hold the line on exanding the fed balance sheet’
what does that mean and why should anyone care? (apart from the foreign swap lines)
he said the federal govt had taken on too much debt
he’s totally confused.
misses the entire point of agg demand and fiscal policy.
Reply
September 25th, 2009 at 2:22 pm
Warren:
I’ve been catching up on your latest musings. I felt that instead of the stimulus package, a 5 year income tax holiday on families earning less than $100k per year would immediately stimulate the economy and put cash in the hands of those with the greatest propensity to consume and pay off their debt. Biggest problem solved! Of course, instead we received 8 years of pent up pork for every democratic congressman and senators districts to the tune of about $70 billion spent so far…not enough to move the economy or cause an Obamaboom!
I know you’ve always believed in deficit spending as a means of generating minimal unemployment and non-inflationary growth, as long as the government’s bid is being hit instead of the government lifting offers. That said, I can’t agree that your idea of a base wage for work in non inflationary. There is a value to the private sector of having an unemployed stock of labor where the gap in private wages so far exceeds unemployment wages that wages can be kept down. To the extent that you’re paying $8 per hour for government jobs, you effectively push up wages in the private sector and cause inflation because the gap has been reduced. The value to the private sector of having people suffering and starving means that the unemployed will take less just to stop the suffering and starvation. At $8 per hour (or whatever the number is), labor may not leave the government make work sector to go to the private sector for some small incremental increase. Perhaps they won’t like their boss. Perhaps they’d really have to work. Perhaps they’d not have the flexibility to get every government holiday off. Perhaps it’s a longer drive. Whatever the case, your employment program is lifting the offering and creating a competition with the private sector for labor. It is inflationary. Couple that with the insidious loss of wealth through printing the currency and creating bigger reserves in the banking system and you’ve reduced the standard of living in this country. If bigger budget deficits were always the answer, you’d be able to convince a far greater audience that your theories are correct. When you pay $8 per hour to do nothing, $8 per hours becomes worth nothing.
Reply
September 25th, 2009 at 9:27 pm
first,deficit spending doesn’t generate anything. its the lack of a sufficient sized deficit that’s restrictive and keeping millions in the unemployment lines. the currency is a simple public monopoly and as with any monopoly the monopolist restricting supply results in excess capacity (unemployment)
second, if the $8 job may indeed result in the gap you describe widening. But that’s a one time adjustment, and not inflation.
And $8 is my suggested starting point, and ultimately only a numeraire around which the rest of the prices structure fluctuates with changes in relative value, etc.
third, there should be no loss of wealth if the deficit goes up funding the elr pool. In fact, any increase in output adds to real wealth.
last, as long as you must show up for work to earn the $8 an hour you are at least selling your time which does have value. it’s very different from paying someone who doesn’t have to sell his time to get it.
Reply
Igor Rasmussin Reply:
September 29th, 2009 at 8:54 am
Warren:
In the real world, their time isn’t worth anything to anyone other than themselves. Also, once this program goes into effect in the real world (unless you continue your run for President and win and end term limits!), it won’t be long before that $8 per hour moves higher, pushing up wages in the private sector. After all, these are voters and the more people you have eating at the government trough, the more votes you keep. In theory, it might be a great program. In reality, it would be abused by politicians.
As to the budget deficit, I laugh every time I hear that we’re borrowing money from China to fund our deficit. They obviously have our dollars because we buy their products and they buy our “debt” with those dollars. They could sell the dollars and weaken our currency but that might be mutually assured destruction as they peg their currency and need us to buy their formaldehyde laced drywall to avoid social unrest in their own country. That said, the idea that we haven’t run large enough deficits seems a bit of a stretch. Yes…under Clinton we patted ourselves on the back for generating a surplus which ultimately contributed to a recession and a meltdown in stocks from 01-03 but after that, we were running sufficiently large deficits. In fact, if inflation is the measure of whether or not the deficits are large enough, our inflation rate if measured properly using true housing cost up to 2005 instead of owners equivalent rent was probably north of 5%.
Reply
September 29th, 2009 at 10:52 am
yes, there can and likely will be political opportunism as there has always been. But at least we’ll get a few good years while I’m in charge and set an example of how things can be. And also release the knowledge of how it all works, for whatever that’s worth.
and with inflation a function of prices paid by govt when it spends (and collateral demanded when it lends) we can have full employment (as currently defined) and price stability. See ‘Full Employment and Price Stability’ on this site, thanks.
Reply
October 1st, 2009 at 8:55 am
Speaking of your statement “I swear to tell the truth, the whole truth, and nothing but the truth so help me god” in your campaign appearances, you indicate that you ran a hedge fund for 15 years and never lost any money? I recall hearing in the investment community about two funds you did manage that lost significant value. One was your original fund and one was investment in Russian debt. Any truth?
Reply
October 1st, 2009 at 10:16 am
that was after i turned over control to my other partners at the end of 1997. my only contribution to the Russian fund was the name-
The High Risk Opportunities Fund
And it was the name that saved them from any subsequent legal action.
Reply
October 1st, 2009 at 12:23 pm
What about your original fund called Triple I? I’ve heard from families in the Chicago area that they lost a huge chunk of money in that fund on auto loans including during the period before you turned over the funds. If you’re going to really run for president, you need to document that your partners were responsible for the loss and they’ll need to accept the blame or you might have some problems! That would be really unfortunate since I believe you have a great take on monetary and fiscal policy…although I still don’t 100% believe that the government jobs program won’t be inflationary!
Reply
October 1st, 2009 at 1:04 pm
I think that came later, if I recall correctly, and it’s a long story but it wasn’t my doing. In fact, after one of my partners agreed on funding plan I pointed out a major flaw in what he did.
Also, the losses for those loans- the company was named Aegis- were mainly lost income, especially after we sold the servicing arm for a pretty good profit. It was unpleasant but not material, and, again, not my doing.
Find out what year they claim to have lost money. I’m pretty sure you have that part of the story wrong.
Then again, at age 60, I don’t fully trust my memory without looking things up!
Reply
Igor Rasmussin Reply:
October 1st, 2009 at 1:56 pm
OK. All that notwithstanding, why would Russia default on its debt if it was only a data entry at its own central bank?
Also, is it true that the IRS shreds money if you pay them in cash?
Reply
zanon Reply:
October 1st, 2009 at 5:28 pm
Russia was trying to run a fixed-fx regime in 1998. Therefore, it was not only a data entry problem.
Reply
Rubin Reply:
October 2nd, 2009 at 5:31 pm
Igor, Rubin said the entire financial crisis that happened then broke down to one key point. The nobel prize winning economists involved and many others assumed the world banking system would not let a NUCLEAR armed power fail financially. Now Igor I would like your thoughts, why would these really smart people think it would NEVER be allowed for a NUCLEAR armed power to go into financial ruin? My thoughts are they thought well - if the country descends into chaos - nukes will fall into bad hands and bad things will happen in other parts of the world. In fact some bankers may have a nuke go off in one of thier yacht clubs where all thier super yachts are docked - for example. I can relate to this line of thinking and agree if I were in their shoes I would also think the same way - cause it looks like to me that is EXACTLY what has happened in Russia - nukes and nuke knowledge has left that failed state into terrorist hands and look at the resources that is being spent now to keep these guys at bay. So what I don’t get, is that it seems those people who made those bets were RIGHT, letting a nuclear armed power fall into financial ruin could be the death knell for us all, so now I want to know - why didn’t those dumbazz bankers and financial types DO MORE to keep that financial crisis from transpiring? I don’t feel as safe as I did in 1996, and the stress is killing me. Certainly some guys somewhere could have changed some zeroes somewhere and kept things together no? Who was the geniuses who said NO, damned be the nuclear problems from a failed russian state, we need to be honest on our accounting or whatever.
October 1st, 2009 at 2:26 pm
russia had a fixed fx rate and shut down when they ran out of $ reserves. they had the option to float and keep things going from there but didn’t understand how to do that.
I think it’s a different part of Treasury that does that.
http://www.bigsiteofamazingfacts.com/what-does-the-government-do-with-old-money
Reply
October 1st, 2009 at 2:28 pm
russia had a fixed exchange rate policy. they shut down when they ran out of dollars and didn’t know to simply switch to a floating fx policy until maybe 6 months later when they reopened the CB.
http://www.bigsiteofamazingfacts.com/what-does-the-government-do-with-old-money
Reply
October 1st, 2009 at 5:29 pm
Question for you guys:
When the Government buys something from the private sector (spends) how is that accounted for?
Private sector deposit account gets credited, as does the reserve account at the Fed. But what does the Treasury debit? Its reserve account at the Fed?!
Reply
Matt Franko Reply:
October 1st, 2009 at 8:07 pm
Zanon,
I dont know if it is technically a “debit” (suggest email to Scott Fullwiler), but it does show up on the Treasury’s
Daily Statement as a “withdrawal” (right hand column) from the Treasury’s Fed. Reserve account yes.
BTW that link is to the last daily of the Govts fiscal year (Govts 2009 is now over), matt
Reply
October 1st, 2009 at 10:06 pm
yes, the tsy has an account at the fed, and one our self imposed constraints is that the tsy account can’t run an over draft at the fed
Reply
zanon Reply:
October 2nd, 2009 at 12:09 pm
So what happens when the Treasury’s reserve account hits zero?
My question is, since the Treasury prints money whenever it spends, you get a credit in deposits (on the liability side), how is this balanced on the asset side? Does the Treasury credit its own reserve account?
Reply
October 2nd, 2009 at 12:43 pm
if the balance in the tsy reserve account at the fed is 0, and the tsy writes a check to someone anyway, the fed is supposed to bounce it.
the tsy reserve account at the fed is just like the reserve accounts for the banks and foreign govts. except the banks can run overdrafts and the tsy can’t.
Reply
zanon Reply:
October 2nd, 2009 at 2:01 pm
OK, completely bizarre, but OK. Spending time on this site has shown to me that completely bizarre is normal.
How close is the Treasury account to zero now — where can you look that up? How does the Treasury reserve account get money to begin with — via taxes?
Reply
October 2nd, 2009 at 3:26 pm
tsy funds its account with borrowing and taxes, and also uses private bank accounts called tax and loan accounts
should be on fed statements
always a few billion or so in the tsy account
more on settlement days when securities are delivered
Reply
October 2nd, 2009 at 4:51 pm
Igor says: In the real world, their time isn’t worth anything to anyone other than themselves.
Igor I have some american girlfriends who believe you should pay them to go shopping with you, buy them gucci bags and shoes and dinners and houses and cars just for gracing you with thier time, the sad thing is many of them are fat over 50 slob women who still think they are 20 year old small tiny hotties, you have HIT THE NAIL on the head my man, these idiots think they still have VALUE to anyone else, a fantasy in thier own peter pan make believe. Our government actually implements laws and social customs to cater to this peter pan make believe of this INSANE people, thereby ruining our entire nation.
Igor says: Also, once this program goes into effect in the real world (unless you continue your run for President and win and end term limits!), it won’t be long before that $8 per hour moves higher, pushing up wages in the private sector. After all, these are voters and the more people you have eating at the government trough, the more votes you keep. In theory, it might be a great program. In reality, it would be abused by politicians.
Yes, once the voters get comfy with the idea of voting in people who will raid the public treasury for them, well history is full of examples going back 2000 years where nations fall after that point. All my friends who kept buying houses to flip, I said hold up, where is the wage inflation to sustain these prices, they laughed. I said with global wage arbitrage sending jobs away from USA, why do you think a moldy shack on the beach should be worth 1 million. Then I found out IGOR, I went to some foreign countries and they won’t even take US dollars anymore, so yes, shopping machine princess can get paid thousands a day for her TIME, and millions for her worthless shack, because US dollars are turning into worthless monopoly money anyways that some foreign banks won’t accept anymore.
Reply
October 5th, 2009 at 2:20 pm
Warren:
Back to the “I swear to tell the truth, the whole truth and nothing but the truth so help me God” as your campaign suggestion requiring truth in your statements, I ask you this:
I remember speaking to you regularly in 1998 while you were running your fund company. I would also guess, if I’m correct, that your name was on the offering circular for the funds you claim you weren’t running. And, I just went on this website http://www.iiioffshore.com/about/leadership.php and you’re prominently featured as still being involved with this company. So…are you telling the truth, the whole truth, and nothing but the truth so help you God that you had nothing to do with the failure of High Risk Opportunities? Did you allow your name to be used in a document for that fund? Were you paid by that entity? Are you telling the truth now or were you telling the truth then because it doesn’t seem you could be telling the truth both times.
Reply
October 6th, 2009 at 8:44 am
Warren,
You have some real solutions here that most people in the US are not hearing (in fact, as you must know, they are hearing a lot of nonsense from nearly all the major media outlets). I would recommend that you seriously consider hiring a communications consultant or a media firm to help take your proposals and craft messages that would be more easily received, understood, and spread by average Americans.
There is a tendency — especially among academics — to dismiss the importance of crafting messages to one’s audience. They think that all such “crafting” is “dumbing down.” That’s not what I’m talking about. You can communicate accurately while still getting better reception and understanding with well-crafted messages.
Anyway, I look forward to hearing more.
Thanks,
Phil
Reply
October 12th, 2009 at 4:48 pm
Mr. Mosler, can you please clarify a few things? First, if you managed a fund that was based upon your deficit premise, the fund shouldn’t have failed. If it did fail, there had to be other circumstances. It seems you and others have referenced the fixed fx policy of Russia. What is to say that the dollar wouldn’t be the victim of your policies? If the government runs a large enough deficit and increases reserves in the system, scarcity value of the currency is diminished. The dollar would become weaker and inflation would be the price we’d pay for your policies. If not, why?
Also, while elements of your policies and statements on your home page make sense, it is a little hard to believe that nobody in the world of economics or at the fed can possibly understand what you’re saying. Let’s say you’re right. Why haven’t you developed a bigger following and why hasn’t it been accepted in the mainstream. Surely these people just can’t be stupid? Finally, if you’re really running for president, accepting donations, and want to be fully forthcoming, why don’t you address the issue that you’re still listed as part of a fund company that had failed funds but you claim you never lost any money in videos posted to your own website? The “I’m 60 and don’t remember” routine when you’re dealing with a complete fund failure seems a bit hard to swallow.
Reply
October 22nd, 2009 at 3:35 pm
In countries that debase their currencies by spending too much and taxing too little, the end result seems to be high or hyper inflation. Normally, for there to be hyper inflation, a country usually owes debt denominated in another currency that they can’t service. While the US need for oil is not a debt per se, it is a somewhat inelastic need that, for all practical purposes, is an external debt to keep this country going. If that’s the case, isn’t the US exposed to hyper inflation should the oil producing countries decide to reject dollars for oil? While we may have a monopoly on our own currency, we certainly don’t have a monopoly on oil!
Reply
November 22nd, 2009 at 12:57 pm
As far as I can tell, every premise on your website is based on the US being able to print its own currency and under those circumstances, perhaps your theories make sense. However, with the price of gold rising on a daily basis, perhaps the U.S.(and other printers) are being told enough is enough! We no longer believe your wampum will be worth anything in ten years. If a run out of the dollar (and into gold) continues, your theories become moot, no?
Reply
Scott Fullwiler Reply:
November 22nd, 2009 at 1:42 pm
Run on the dollar means the dollar’s value falls, exports increase, trade balance improves, jobs created in export industries, GDP rises. Where’s the need to abandon issuing the currency? Did the US govt suddenly become unable to collect taxes? Indeed, this is PRECISELY what the US govt wants, apparently, when they complain about other countries manipulating exchange markets to keep their currencies undervalued vs. the dollar.
Reply
warren mosler Reply:
November 22nd, 2009 at 4:27 pm
with very rare exception,they aren’t theories or philosphy, just accounting reality.
so far the rise in the price of gold has been a shift in relative value, and not ‘inflation’
it does reflect views of those who believe inflation is coming, but that’s another story
Reply
Matt Franko Reply:
November 22nd, 2009 at 8:22 pm
Jason,
WRT gold vs other assets, I think in a similar fashion chicken wings (fatty skin & bones) are currently going for $3.99 per lb. and there are shortages reported (football?), while chicken thighs (more meat) are going for $1.50 per pound.
I dont think we should be making public policy due to a (to me somewhat irrational) increase in the price for wings or in a similar fashion a precious metal. Put the citizens first and look at utilization & employment instead.
WRT oil, you perhaps can get methanol for $3.00 per gallon here which is not much more than we are paying at the pump for gas now.
Reply
December 14th, 2009 at 9:29 am
Mr. President,
You’re running for the highest office in the land. You’ve got videos posted to this website where you say that candidates who are dishonest should be put in jail. You claim that you had nothing to do with your old firm that blew up one or more funds. In fact, you said you turned over that firm to your partners before it had problems in 1998! Then I saw this posting:
James River’s Start-up Hedge Fund Raises $5.3M - CBL
By Citybizlist Staff
MANAKIN-SABOT , Va. — James River Capital Corp.’s start-up hedge fund III Futures Neural Network LP has raised $5.28 million in pooled investment fund interests from four investors, according to a Reg D filing with the U.S. Securities and Exchange Commission.
James River Financial Corp. in Manakin-Sabot , Va. , and general partner III Associates, by Boca Raton, Fla.-based III Offshore Advisors, also are named as principals of the uncapped fund.
Others are executive officers Kevin Brandt, Paul Saunders, Garth Friesen, William McCauley, Warren Mosler, Michael Reger, Clifford Viner, Scott Wyler, Sanjiv Sharma, Robert Printz, Francis Feeney and Laura McGrath.
Why don’t you tell someone (anyone) the truth. You’re either involved as a hedge fund manager and being dishonest in some of your earlier replies or you’re not involved with a hedge fund and you (or your former partners) have a posting with the SEC that is dishonest. Which one is it, President Mosler?
Reply
WARREN MOSLER Reply:
December 15th, 2009 at 3:19 pm
“In fact, you said you turned over that firm to your partners before it had problems in 1998!”
Yes, I turned over control to them. I still have a 13% interest.
“Why don’t you tell someone (anyone) the truth. You’re either involved as a hedge fund manager and being dishonest in some of your earlier replies or you’re not involved with a hedge fund and you (or your former partners) have a posting with the SEC that is dishonest. Which one is it, President Mosler?”
As i’ve said all along, i’m a 13% partner. I have no trading authority, I live and work in St. Croix, and i’m not involved in the partner meetings in Florida.
Reply
January 13th, 2010 at 1:29 pm
As a keen student of your views (7 Deadly Frauds), I wonder how they apply to government OUTSIDE of federal, cf, financial crises in states like Calif, et al.
These entities don’t/can’t create their own money. (or can they, as in Bank of North Dakota?) http://www.counterpunch.org/brown01052010.html
jcl
Reply