"strict monetary and fiscal policy"

Hugh:
Come on, we're talking PELOSI, REID, and OBAMA here. They've never seen a dollar they will not spend!

This morning on the "shamefully conservative" network Fox's "Bulls and Bears" and the following Cavuto, Obamalala apologists called everyone else "complainers". This is the new mantra of the liberal believers. If you don't like what the President and Congress are doing you are complaining. How dare you. Then, when the policy defender is asked "where has what Obamalala wants to do to the economy worked before?" Their eyes glaze over and they spew the pathetic nonsense the President does. I know the longer they put off doing what will work the economy suffers but, the longer they do the more liberals will get the boot from the W.H. and congress for a long time.

Why is always Dimo president's who give us inflation?

it's not about spending but about printing as well. They are soon going to reach the point where they can't sell enough debt to cover the spending so they will just start printing dollars.

They already started last January in fact. That's why the Chinese and others are now looking for a different currency to tie international debts to. Once Obama destroys the value of the dollar either by printing or by outright devaluation nobody will want debt denominated in dollars the way it is today.

Frankly if we can keep inflation under 100% we'll be doing well.

HughS: props for citing Denninger -- he's one of a very small group of talented bloggers pointing out that the emperor is not only stark naked but growing increasingly desperate to try and keep that fact hidden from the peasants who still haven't caught on.

As mish seems to point out at least once a day, inflationary (and deflationary) effects of money supply tweaking are dwarfed by credit supply changes -- and destruction of available credit has far, far surpassed even the insane monetary base expansion that the Greenspan/Bernanke Fed has wrought. Inflation requires growth of money supply and credit, yes, but it also requires velocity: that new money and credit must be changing hands, else there is no transmission of inflationary effects. In our current situation, all of the new hot money created by the Fed's printing (excuse me, forgot my newspeak: through "quantitative easing") isn't going anywhere but into our own crop of massive zombie banks. Yet even that massive injection of dollars doesn't currently stand a chance of causing inflation, even if it does find some traction and start making it's way into the economy -- the losses in available credit far, far surpass the Fed's new money.

Unfortunately, this probably means that the Keynesian clowns in DC will continue to print ...and print... and print, never figuring out why they can't cause inflation. Which leads to several outcomes, none of which are pleasant, and the worst of which involve massive contraction of federal spending in a matter of days or weeks. Which may even seem like a positive outcome, until you consider the Main Street effects of a virtual overnight shutdown of all the New Deal/Great Society social support programs: Social Security, Medicare/Medicaid, food stamps...

But...but...but...Barry's been to Harvard, he knows all about Obamanomics. I want a 'free' car and 'free' health care' and a 'free' house and 'free' spending money. Just tax all them millionaires and gimme some of their money. 'Cause you know, that's "fair". Barry said so, and Barry wouldn't lie to the people. Just as good ol' Vic!

I read today that Zero was going to visit China in November. I hope he rembers to pack his tin cup--

With the printing press running full tilt, and all the ARRA money kicking in in 2010 things could get really dicey. Runaway inflation seems possible, and inflation inevitable.

Combine that with the housing recovery not convincing enough yet, the unemployment rate still over 9% and you may just have the perfect storm for another Carter stagflation scenario.

My tires are!..............thanks for the
reminder. Obama, and his tire gauge thank
you, also.

Seriously,

Where are Vic and Adrian?

Alright, well look. Call me a kook but I have said even back to GW that it feels like someone is trying to ruin the Dollar! I know I know, I think it sounds stupid and tinfoil hatish but seriously. Make the dollar worthless and join with Mehico and Candia (seriously candians are from canadia right?) to form the Amero!

I no longer think it sounds so crazy, though I still think the idea of a CanAmerMex Superhighway is far fetched and conspiracy theoretic.

Has anyone here read Left Behind? I know I know, now I sound like a religious nut...but seriously? P.B.O. is NOT the antichrist as described in that series but the events described leading up to the end times are eerily similar to whats going on today.

Then you throw in the whole "2012" end of the world crazyness and its suddenly alot scarier out there.

I feel like an idiot for mentioning any of this, but I didn't get my quota of leftist idiocy to tide me over today.

Vic! Adrian! Where are you? Help!

Yeah well, The dems Me first way of selfishly stealing away from everyone to feed there power hungry fantasy is a little scary and crazy.

Let me help you Just Russ. It's still Bush, Bush, Bush. He left Obamalala a horrible economy and forced him to spend, spend, spend! You conservatives are racist selfish and complain, complain, complain! You just can't stand it when somebody tries to move the country forward. You have no ideas. Just No, No, No!............
That's all I can do, sorry I'm nauseated now and I've given myself a headache. Geez, I forgot how rotten it feels to be a whinnin' liberal.

$9.1 Trillion in 7 months. Before another $1.5 Trillion for ObamaliniCare. Before adding in the enormous economic costs of Cap and Trade, if the Senate is stupid enough to pass it.

Stimulus? What America needs is another round of STIMULUS! Another Trillion.

If I'm counting right, that's $11 Trillion, give or take. With tax revenues down 35%, 10% unemployment, massive numbers of mortgage foreclosures and upside-down mortgages, a major collapse in commercial real estate looming, an auto industry on short burst adrenaline, and up to 20 million non-contributing illegal aliens soaking up free social services.

But that's just me. I'm just an optimist, I guess.

Seems to me tat what our legislators need is a crash course in economics and a 2 by 4 of common sense.

Bobdog -

Economics doesn't mean anything to them - there's an old joke about a kid asking a politician what 2+2 equaled.

The politician looked around, asked for a quarter.

The kid handed him the quarter, and the politician said "What do you want it to equal?"

Reality's been a variable for so long inside the beltway that they've got no idea at all about what their policies have produced...

While I don't feel qualified to pronounce expert opinions on monetary policy, I do remember living through the 1979-82 and the 1981-83 periods.

I think Hugh is mistaken when he says that Reagan's tax cut consistently put money in tax payers' pockets. I believe he said "every payday a stimulus check arrived..."

Actually, I don't remember any significant difference in what was WITHHELD. And the removal of the deduction for interest on consumer loans meant a tax INCREASE on everyone who carried a balance on their credit cards (mostly lower-middle-class folks like me and my family).

The "gas lines that stretched for miles" happened during the Arab Oil Embargo of 1973, during the Yom Kippur War, when Nixon was President. There was some rationing and lines for a short time in 1979-80 during the Iran crisis, but mostly it was just a huge psychological shock to see gas go up past the $1.00 mark.

If you're going to appeal to historical memory in your argument, you ought to remember the chronology and the facts correctly, is all I'm sayin'.

I agree with Bruce Henry, HughS. If you can't be 100% correct you shouldn't post at all. Also, drop some g's dammit; it's just so affectin'.

Bruce, it might be more correct when referring to overlapping periods of time to combine them into a single time period, for clarity and conciseness. Just saying, ya'll.

So Bruce, cutting through your most recent dissertation on Hugh's posting: We headed for INFLATION or not? That was the thrust of the article.

"If you can't be 100% correct you shouldn't post at all."

Guess we might as well close down all web sites. Or am I missing something? I thought the 'comments' section was where you could agree, disagree or challenge.

Bruce, I remember the Reagan tax cuts quite well (being an old fart has some advantages I suppose). If you were making less than $10K per year you may not have seen much change but most folks did see a pretty good bump.

It's odd how policies that reward hard work and fiscal responsibility are now "bad things".

Bruce

From what I remember in the late 70s there were plenty of gas lines to go around. I also found this clip talking about it as I doublechecked my memory (30 years ago is a while back).

http://www.youtube.com/watch?v=L2KrxmpPJ-o

Of course I think Carter did more to increase the problem than to solve it. Govt imposed limits generally lead to shortages.

As far as the tax cuts go. I dont know how it affected the folks with credit cards, we were too poor for that. But I do remember the job situation being better and any money in the pocket was better than nothing especially when you were scrimping by on a few hundred dollars per month.

"If you can't be 100% correct you shouldn't post at all."

The comments section is where you can agree, disagree, challenge or be sarcastic.

FIFY

The point was made that "losses in available credit far, far surpass the Fed's new money" and this will prevent inflation. Yet when we see any sort of recovery, the big banks will use taxpayer dollars to speculate on crude futures. The price already spikes on any good news--real or imagined.

When everyone is paying $6 gallon for gas it may not be inflation, but it sure will feel like it.

Hey, Mr kirtz1:

Sheesh, everyone's a critic.

Hugh referred to two periods, 1979-82, and also 1981-83. Therefore, so did I.

He was incorrect both in his "gas lines that stretched for miles" bit and in his "every payday was a stimulus" bit. I'll leave it to you as to figuring out percentages.

I'll accept the snark on the dropped g's. But just so you know what we in the South always have, it's "y'all" not "ya'll."

Mr Garandfan, what I'm doing here is called a "challenge" to a factual assertion. Is that permitted? In other words, yes, you were missing something.

Mr Verde, what I should have said is that the lack of a deduction for consumer interest caused a net tax INCREASE for everyone who had CCs or a car loan and who itemized.

Mr RM, I don't get the point of your clips. Where were the gas lines? The funniest part was the Republican Hayakawa saying it didn't matter if gas went to $2/gal (IN 1979 DOLLARS!!!) because poor people didn't need gas since they didn't work anyway!

He was incorrect both in his "gas lines that stretched for miles" bit and
in his "every payday was a stimulus" bit. I'll leave it to you as to
figuring out percentages.

I was not wrong on those points. I was in the gas lines in Dallas TX that were over a mile long. Greenville Ave, to be precise.

After the Reagan tax cuts my "take home pay" was higher. The stimulus worked then because I bought a house with the extra cash.

Seems to me we shouldn't be arguing about who said what in the past - and does what happened in the '70s and '80s give us a good idea about what's going to happen in the next few years?

I'm thinking not...

Back then, China and other countries weren't actively searching for a currency to replace the dollar. We were still drilling here in the US - and working on industrial growth.

Now? We've got the BANANAs in charge in CA, the House and the Senate, we've got vast swaths of the US coastline off limits to drilling, we've got environmental lobbies doing everything they can to stall new power plants. The unions have pretty much destroyed the steel industry in PA, Detroit's essentially gone as far as industrial activity goes, our government looks like someone who's lost their job running up one last binge on the credit cards before they're cancelled - what indications does the rest of the world have that we're actually serious about having a functioning economy?

Bruce:

I lived in suburban Philly during the 79-80 gas lines. I waited in lines that stretched for 8 blocks or more to get my rationed amount. We had two cars and both had even-numbered plates, which made it a family affair to wait in line. I think your supercilious "correction" about gas lines is in error.

As I was a sole proprietor during the Reagan Era, I did not have withholding from my paycheck, but I had to figure and withhold for my employees. I don't remember any big increase in net pay with each paycheck for them even though rates dropped 3%, but I do remember that most of my own tax savings were eaten up by MI taxes and insurance costs.

Not only is Brucie a moronic lib, he is a masochist too...he keep coming here to get his ass kicked?

bh - "He was incorrect both in his "gas lines that stretched for miles" bit

Jesus H. Christ on a PoGo Stick, bh what are you 10 years old?

Richard Nixon had imposed price controls on domestic oil, which had helped cause shortages that led to gasoline lines during the 1973 Oil Crisis. Gasoline controls were repealed, but controls on domestic US oil remained.

As the average vehicle of the time consumed between 0.5-0.8 gallons of gasoline an hour while idling, it was estimated that Americans wasted up to 150,000 barrels of oil per day idling their engines in the lines at gas stations.

Six years later, things were worse, MUCH worse.

Here, read it and weep you nitwit.

Bruce

The clip was talking about the gas shortages in California and steps taken to try to aleviate it.

As I stated I also remember the gas shortages of 78 and 79 along with the lines that went with them.

BH,
Just because you say there were no gas lines,
does not make it true.
I was there, and in the gas lines.
One place was on Holland Drive, Houston Texas.

Well, if you geniuses will re-read my original comment, I believe I did say "there was some rationing AND LINES in 1979-80 due to the Iran crisis."

See, readers, I never said there were NO lines. I said the "gas lines that stretched for miles" were a feature of the 1973-74 Arab Oil Embargo. And that is true.

Now, is it possible that during that time, 1979-80, that a gas line "stretched for miles?" Yeah, I guess. However, I was 25 years old in 1979, and I never sat in one. Oh, and maggie? Eight blocks might be a mile, but I don't think eight blocks is "miles."

And marc, I appreciate being promoted again to "nitwit" as opposed to your usual proctological names. Have I ever mentioned how much namecalling helps your arguments? Especially when you confirm what I was saying, then call me a nitwit for saying it. That's gold.

In light of all this, Michael, I really don't feel much like I "got my ass kicked." But whatever makes you feel more manly, dude.

BH,
You're so likeable in your fallacy.
I don't think I referred to eight blocks being
miles. I think I posted one of the places where
I sat waiting for gas was at a specific location.
Silly silly boy. ;)

You are right, Maggie, I got your comment and Epador's mixed up. Sorry.

I don't think Reagan "instructed" Volcker to tighten the money supply, he merely supported what Volcker had already begun to do and didn't apply political pressure to keep money easy, as had been typically the (effective) practice until Volcker's appointment under duress by Carter.

~~~~~~~

The gas lines in the '70s weren't caused by the Arab Oil Embargo, which failed miserably, but by the self-inflicted wound of the Windfall Profits Tax passed by the Democratic Congress, who could not abide the fact that domestic wells previously abandoned as unprofitable might be reopened when the market price spiked.

Bruce Henry disrespected my regional dialect. Where I live it's spelled ya'll. Why do liberals talk diversity and never practice it?

Stop oppressing me, Democrat. Stop trying to force my round peg into your government issue square hole.

Bruce, there's a difference in city blocks and rural/suburban blocks. The lines were more than a mile long where I lived in PA. Maybe I should cut my hair so you don't mistake me for maggie?

We need to intentionally devalue the Dollar in order to stabalize the entire world economy. Sweden has done this in the past and it worked.

It would be much easier to intentionally do something like this by reducing the amount of paper money in circulation. Unfortunately wages and salary do not increase with inflation otherwise nobody would care.

The problem with government interfering with wages is that when Minimum Wage goes up, it only goes up for the new guy. When I worked at McDonalds and had been there for three years; I finally had gotten my pay up to 75c above the starting wage. Then minimum wage was increased by fifty cents and I didn't get a raise along with it. Suddenly the guy who just started was making almost what I was! I call Shenanigans.

Get the government out of private business and back to the Constitution! Of course govt doesnt like that idea, they want as much power as they can sneak by us.

Go here for a different perspective about the possibiliy of massive U.S. inflation in the short and intermediate term.

From Wells Capital Management. James W.Paulson PhD.

https://www.wellscap.com/docs/ecomonic_and_market_perspective/EMP_0709.pdf

Brucie you did get your big'ole fat liberal ass kicked!

Inflate away! I'm investing in gold. That's what g gordon Liddy told me to do during a "Price is Right" commercial