borodog's mistaken understanding of M3...don't listen to his drivel

[ianlippert]

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this is definitely a discussion we can have. arguably, for those that consume in US dollars, a weaker currency does little to alter their standard of living.

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Are you Bernake's staffwriter now?

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nope. wanna make a logical statement to the contrary and we'll see where it goes?

Barron

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Weaker currency means higher prices on imports like oil and consumer goods?

[Ineedaride2]

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I was considering the M3, but got the SC430. All the other yogis are jealous, but I tell 'em when you're Dharma Magazines 5 time Yogin of the Year (96-99, 03), you can get a red convertible Lexy, too. Then I peel out and say "Vipassana Biatches!".

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I'm out of material, this was pretty good. Read it again.

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I tried to like this, but no matter how many times I read it I just am not smart enough to get it.

I'm going to place this post on a shelf with all of Dennis Miller's One Night Stand appearances.

[DcifrThs]

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this is definitely a discussion we can have. arguably, for those that consume in US dollars, a weaker currency does little to alter their standard of living.

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Are you Bernake's staffwriter now?

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nope. wanna make a logical statement to the contrary and we'll see where it goes?

Barron

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Weaker currency means higher prices on imports like oil and consumer goods?

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and what % of the overall consumption (aka standard of living) are the combination of those two?

also, if it is a big change in prices, what is the likelihood that our dollar consuming individual substitutes away from those imported consumer goods and/or drives less?

further, how much does all those changes in the dollar consuming persons' life alter his/her standardd of living?

Barron

[DcifrThs]

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It seems they are arguing over whether Boro is miseducating less informed posters on economics. I'd say that has some meat. But word is Boro hit on DCFR's girl too. That make it way more interesting.

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he hasn't hit on my girl. but the first thing is definitely part of why he upsets me so.

i can't wait for him to respond to this though:

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you can't change the fact that you have used numerous times in the past the cessation of the printing of M3 as ammunition saying that "they just stopped doing it because it looks worse." well, if you took 3 seconds to look up what was actually contained in M3 you'd see there are things that are distortive, informationwise as the use of repos has exponentially increased, without increasing the value of the indicator....

...or maybe you did look up M3 and saw it contained things that you didn't understand or know the extent of (repos) and just assumed it was a govt conspiracy anyways.

now you want to say "well it doesn't matter M2, M3, who gives a sh*t," but you can't. why? simply because you've used the not publishing of M3, like i just said, as evidence against the fed.

NOTE: please reread that before continuing. i'm not delving into a fed interest rate debate here. i'm simply saying that evidence you've used in the past is that it is fishy that the fed chose to stop publication of M3. Ron Paul has used the same in his speaches, but none of the opposition understood what could have been the real reason. notice that ron paul DIDNT say that when ben bernanke was the one being questioned because he would have gotten it shoved down his throat while he DID delve into almost every other major issue he had while he had his time at the M&B committee testimony.


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I scoffed at the idea that the reason they stopped publishing it is cost




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ok, so you scoffed that they stopped the publication b/c of cost. but why? what was your alternative hypothesis?

you didn't possibly consider the reason they stopped publishing it is a combination of usefulness (repos distorting it) and cost...like they (the fed) said.


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No more, no less. Oh, but I forget! The government would never have any motives that aren't pure as the driven snow. No, it couldn't POSSIBLY be that M3 just looks worse than M2.




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well, a poster below me said it so i'll just quote his reply:


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Boro I don't think you can both at the same time say "No more, no less." and "No, it couldn't POSSIBLY be that M3 just looks worse than M2." I have yet to see something that the M3 numbers are more accurate then the m2 numbers. You have stated that the M3 number is the important one, and the only reason that you have given is that it's looks worse. Nor have you made a statement regarding the cost to the fed to acquire M3 versus extra knowledge that can gleamed above M2. I'll grant you motive that the fed might not want to publish numbers that make them look bad, but is there any other reason then a MO, that this is a conspiracy?




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so boro, call me crazy, keep belittling me and getting backing, it doesn't matter. the fact that you won't "let me get away with it" will only back you into a acorner until you will have to admit you are wrong...which is what i want.

you might even say something like "OK FINE, scoffing at the cost was a means i used to sell people on the conspiracy to stop printing it" or some other quick one liner to now discount this discussion without actually admitting being wrong. that won't fly and we'll keep at it until you have admitting your incorrectness here.

if that makes me crazy, so be it. but all the crazy insults, therapy cats, or other belittling words (no matter how funny...because therapy cat was not a 9/10, it was 10/10) won't distract from the goal i set out here of insulting you (may or may not be accomplished, but either way i'll concentrate more on the next goal) and to prove you wrong.

Barron


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Barron

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Borodog,

you can't possibly expect the mayor of crazytown to go through all the trouble of making this thread and then have you get away with not addressing the above issue.

please to be addressing it now, thanks,

Barron

[anatta]

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I was considering the M3, but got the SC430. All the other yogis are jealous, but I tell 'em when you're Dharma Magazines 5 time Yogin of the Year (96-99, 03), you can get a red convertible Lexy, too. Then I peel out and say "Vipassana Biatches!".

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I'm out of material, this was pretty good. Read it again.

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I tried to like this, but no matter how many times I read it I just am not smart enough to get it.

I'm going to place this post on a shelf with all of Dennis Miller's One Night Stand appearances.

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Ouch, painful sensations have arisen, Dennis Miller grrr. Hey, I played poker with his replacement at a home game, dude is funny Norm. I know I just like attention, but this guy was a total riot like you can't even look at him and not crack up. Holy [censored], i just realized I played poker with the weatherman John Coleman from the global warming post, and now it comes up here. That's kinda funny, I think?

[Copernicus]

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This thread rules. Barron, can you post in politics more often? You are [b]right, as always, and a breath of fresh air in a world infested with borodog sycophants. [b]

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[Mark1808]

I like econ but this thread makes me want to bang my head in to the wall. It appears to me that Barron and Borro are both very well versed in economics so I would like to ask a couple of simple questions.

Money Supply as measured by M2 has grown rapidly but CPI figures have not, some have speculated that the excess liquidity has bid up real estate and stocks resulting in asset inflation rather than price inflation as measured by the CPI. How do you feel about that explanation?

Repos are a source of financing and add liquidity to the system, it would therefore seem that M3 levels are meaningful. I think I remember in Greenspan's book he talked about the FED being in the repo market but I am not 100% certain. What are the consequences of the rapid growth in M3? Inflation? Not meaningful?

Finally, do both of you feel that CPI numbers will eventually go up dramatically based on the rapid growth of M2 and / or M3?

[Zygote]

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some have speculated that the excess liquidity has bid up real estate and stocks resulting in asset inflation rather than price inflation as measured by the CPI. How do you feel about that explanation?

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This is a partial explanation and not entirely true. For one, money expansion has initial effects on output and later effects on prices. We expect price rises to be lagged.

For example, if you goto Apple.ca (canadian apple site) and Apple.com and compare prices you'll see that goods are between 10-30% cheaper on the US site even though the canadian dollar is worth more than the USD.

This type of situation will not remain like this. In general, more efficient markets are the ones where price rises occur first. Retail prices dont adjust as quickly as something like a foreign exchange or the price of oil.

Price inflation will likey enter consumption goods through people leveraging their overstated home equity and all other forms of credit followed by bidding up prices, foreign countries consuming US resources as their purchasing power rises, rising food and energy prices and other means of dissemination.

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Finally, do both of you feel that CPI numbers will eventually go up

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yes... even though my opinion wasn't asked [img]/images/graemlins/wink.gif[/img]

[Zygote]

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the main reason M3 departs from M2 from 1995-2007 is the increasing use of repurchase agreements by hedge funds and financial institutions as a means to generate leverage.


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What i didnt see you address is the use of repos by the fed to buy things like mortgage backed securities. This can prop up the housing market and allow for further expansion of credit through home equity leveraging while offsetting the eventualy downturn. This is good reason to make this info public.

Anyway, any exposure that is taken by the holding of the security, even if temporary, must have a long run effect on the money supply at least in a marginal way since markets aren't perfectly stable over time. Lastly, if the fed pays a repo rate that should add to the money supply too, no? If the fed receives a repo rate this should deplete from the commerical bank reserves?

[adios]

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Money Supply as measured by M2 has grown rapidly but CPI figures have not, some have speculated that the excess liquidity has bid up real estate and stocks resulting in asset inflation rather than price inflation as measured by the CPI. How do you feel about that explanation?



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M2 Data Seasonably adjusted.

Looks to me like the increase in M2 from 2006-2007 is more or less the same as nominal GDP growth. What one would expect.