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Tag Archives: trillion

  • Daily Digest
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    Daily Digest 11/21 – Bitcoin-Rigging Criminal Probe Launched, Who’s Going to Pay for LA’s Pension Plans?

    by saxplayer00o1

    Wednesday, November 21, 2018, 3:04 PM

    1
    • Parks chief warns of 'massive cuts, huge layoffs' as soon as 2020 (Chicago)
    • No more excuses. Fix Pa. pension funds | Editorial
    • Who’s Going to Pay for LA’s Unsustainable Pension Plans?
    • ECB Official Warns QE Exit Could Spell Trouble for Italy's Debt
    • U.S. recession chances edge up, risk Fed delivers fewer hikes: Reuters poll
    • BOJ's Kuroda rules out early end of negative rate policy (Japan)
    • Unthinkable?
    • Bitcoin-Rigging Criminal Probe Focused on Tie to Tether
    • NY BitLicense Approval, Blockchain for Energy Commodities, CFTC Enforcement, Advertising Use Cases and More

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  • Insider
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    Prepare For The Great Global Contraction

    How hard will we hit the ground?
    by charleshughsmith

    Saturday, May 20, 2017, 12:01 AM

    3

    Executive Summary

    • The repercussions of the Fed's Free Money Machine
    • Why debt-funded state control stagnates productivity
    • The importance of the 8-year cycle
    • What should guide investors' focus and decisions

    If you have not yet read Part 1: How Long Can The Great Global Reflation Continue? available free to all readers, please click here to read it first.

    In Part 1, we asked these questions: can we just keep doubling and tripling the economy’s debt load every few years? What if household incomes continue declining? Are these trends sustainable?

    In the near-term, we asked: is this Great Reflation running out of steam, or is it poised for yet another leg higher? Which is more likely?

    Let’s start by looking at the mechanism that funds the government’s deficit spending, i.e. its ability to borrow and spend enormous sums of money year after year.

    The Free Money Machine

    The state can afford to continue or increase fiscal stimulus (deficit spending) because the central bank (the Federal Reserve) has created what amounts to a free money machine. Here’s how the machine works.

    The federal government issues $1 trillion in new bonds to fund another $1 trillion in deficit spending. The central bank (Federal Reserve) creates $1 trillion with a few keystrokes, and buys the $1 trillion in bonds with newly created money.

    The Federal Reserve earns interest on the $1 trillion in bonds it now owns, but it returns this income to the Treasury, minus the Federal Reserve’s relatively modest expenses of operation. Let’s say the bonds carry an interest rate of 2.5%.  The government pays the Federal Reserve $25 billion in annual interest, and the Federal Reserve returns $20 billion annually, so the net cost of borrowing and spending $1 trillion is an insignificant $5 billion.

    If this isn’t entirely free money, it’s extremely close to free money.

    So in ten years, the Federal Reserve owns $10 trillion more in federal bonds (assuming the bonds are long-term and didn’t mature).

    It's no wonder that some economist propose…

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  • Blog
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    How Long Can The Great Global Reflation Continue?

    And what will happen when it ends?
    by charleshughsmith

    Saturday, May 20, 2017, 12:01 AM

    17

    Given the extraordinary failure of both Keynesian stimulus and private-sector credit growth to create a self-sustaining cycle of expansion whose benefits flow to the entire workforce rather than to the top few percent, what can we expect going forward? Can we just keep doubling and tripling the economy’s debt load every few years? What if household incomes continue declining? Are these trends sustainable?

    In the near-term, is this Great Reflation running out of steam, or is it poised for yet another leg higher? Which is more likely?

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  • Blog

    If We’re Going To Borrow Against The Future, Let’s Borrow To Invest

    The are much better ways to spend the next $1 Trillion
    by cmartenson

    Thursday, April 2, 2015, 4:21 PM

    47

    We are at an important juncture as a global society: either we immediately prioritize a new trajectory focused on creating a positive, functional future or — by continuing the consumptive, extractive, exploitative status quo — we will default into a nasty nightmare.

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  • Blog
    Peak Prosperity

    How Much Is A Trillion? – Crash Course Chapter 12

    So big, humans really can't grasp it
    by Adam Taggart

    Friday, September 5, 2014, 3:45 PM

    10

    One trillion is a big number. In this short video, we try to help you get a sense for just how big; but the reality is simply that the human brain can't really suitably comprehend magnitudes this large.

    Which is why we should be concerned that the US' money supply has ballooned to over $12 trillion dollars over the past decade. And that its outstanding debts and liabilities are many multiples that amount.

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  • Blog
    Peak Prosperity

    Quantitative Easing – Crash Course Chapter 10

    What exactly is this process that the world is betting on?
    by Adam Taggart

    Saturday, August 23, 2014, 1:34 AM

    11

    At the exponential pace at which the Fed is increasing the money supply, and knowing the huge challenges the Fed – and most other world central banks  – face in trying to stop or even slow down their money printing, the potential for a disruptive global inflationary period is very real.

    So what exactly is quantitative easing

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  • Podcast

    David Stockman: We’ve Been Lied To, Robbed, and Misled

    And we're still at risk of it happening all over again
    by Adam Taggart

    Saturday, March 30, 2013, 4:42 PM

    19

    David Stockman, former director of the OMB under President Reagan, former US Representative, and veteran financier is an insider's insider. Few people understand the ways in which both Washington DC and Wall Street work and intersect better than he does.

    In his upcoming book, The Great Deformation, Stockman lays out how we have devolved from a free market economy into a managed one that operates for the benefit of a privileged few. And when trouble arises, these few are bailed out at the expense of the public good.

    By manipulating the price of money through sustained and historically low interest rates, Greenspan and Bernanke created an era of asset mis-pricing that inevitably would need to correct.  And when market forces attempted to do so in 2008, Paulsen et al hoodwinked the world into believing the repercussions would be so calamitous for all that the institutions responsible for the bad actions that instigated the problem needed to be rescued — in full — at all costs. 

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  • Blog
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    Say Goodbye to the Purchasing Power of the Dollar

    Mr. Bernanke goes to Crazytown
    by Adam Taggart

    Monday, March 25, 2013, 3:29 AM

    108

    On a long solo car trip this past weekend, I downloaded several podcasts to listen to as the miles passed. One was a classic: The Invention of Money, originally released by NPR's Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.

    The podcast is a great reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does.

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  • Blog
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    A Short Lesson in Bad Decision-Making

    Humans are simply bad at assessing risk
    by Adam Taggart

    Friday, January 11, 2013, 9:02 PM

    51

    In business school I had to take an introductory class in statistics that we colloquially called "D&D." The official course name was Data & Decision-making.

    In retrospect, it was a truly valuable class (one of very few I encountered in b-school). If you can figure out how to use statistics to determine the most probable outcome from a set of scenarios, or find predictive correlations from within a sea of data, that's real power. You can take a lot of the guesswork out of decision-making and consequently make the "right" call much more often.

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  • Insider
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    A Couple of Bad Ideas

    Practical thinking remains in short supply
    by cmartenson

    Monday, December 10, 2012, 12:46 AM

    58

    This week a couple of very bad ideas were floated, one having to do with U.S. natural gas (NG) supply, and the other a proposal for how the U.S. president could avoid having to deal with the pesky debt ceiling.

    Throughout the entire unfolding of the crisis, we have all been patiently waiting (if not agitating) for reality to gain a place at the table of ideas.  Instead, we still have the usual fare of the absurd and the ridiculous, indicating that we are not quite ready yet to entertain the serious business of negotiating the various predicaments that we face.

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