It is not possible for a country that issues its own currency to default. It is possible for Congress to refuse to honor the country's obligations. Dollars are certified IOUs; not gold certificates. Republican Richard Nixon severed the connection between the currency and gold stored in Fort Knox, but Republicans have been perpetrating the myth ever since to please their financial supporters, people who speculate in currency whose supply is limited so they can charge borrowers more. Just consider, after the establishment of the Federal Reserve Bank about a hundred years ago, bankers were able to get currency from the Treasury and lend it out to collect interest. At the same time the Treasury issued bonds to cover the difference between what Congress allocated and collected as revenue. And those bonds (issued for 30years) promised an annual profit of 8.1% in 1991. So, those bonds matured in 2021 and what were people going to do with the principal? A less than 1% interest rate was not going to be attractive. So, the Fed raised rates, ostensibly to counter inflation. Baloney. Now Republicans are trying to argue that inflation is the result of Congressional appropriations for the pandemic, infrastructure and expanded social programs. Historically, inflation is only a problem when working people get more wages. Hoarders getting 8% for doing nothing just registers as the 1% getting richer.
76 years old today; we are ordering restaurant lunch to go, I have a carrot cake, and I dressed up in my blue plaid summer pajamas. Blood tests yesterday disgustingly normal. I plan to eradicate and extirpate some weeds in the front yard this afternoon; predicted high temperature a relatively balmy 93F.
We are in the high sixties today and I am sure the cld air chased Ian away. Swept up some leaf clusters and pine needles on the back porch and determined it will have to be replaced this fall before I break through rotting boards. The carpenter used treated lumber, but the durability is variable. Fortunately we now have a grandson who can be put to work. If you like your birthday commemorated, Alan, consider it done. Your contributions here are appreciated. :)
I got so busy outside today that I just "crashed" all evening. Then I set photos for the blog through October 11th (so far). Finally, I came by to READ the blog and discovered I had all but missed Alan's Birthday! ALAN! Who keeps the blog informed day after day!?!! Mea culpa! But, I managed to get a notice up out front at three minutes to October, California time! 🥳 HAPPY BIRTHDAY, ALAN!! 🎂
“The Russian economy is going to die by winter, I wrote in early March. Now I think I was right. The mobilization announced on Sept. 21 was a milestone that really divided Russian history into ‘before’ and ‘after’—an event that began the final countdown of Putin’s era,” the economist wrote on Sunday for Russian publication The Insider. . . .
The “financial effects of mobilization—in the medium-term—will be significantly greater than the consequences of…the war in Ukraine,” Inozemtsev said.
In Russia’s poorer regions like Buryatia, the economic consequences will be disastrous, as “thousands of families will be left without income, and local medium and small businesses will simply die out,” Inozemtsev wrote.
Russia will also lose at minimum hundreds of thousands of men to the war’s frontline, and 3 to 4 million more will “disappear” from the labor market,” he wrote. In Russia’s wealthier cities like Moscow and St. Petersburg, residents generally have more resources to leave the country. But Inozemtsev predicts that army officers in the next few days will start serving recruitment papers at people’s workplaces, leading many to quit, or simply not show up at their offices, to avoid getting a summons.
“This will be the strongest blow to the economy. Several million people will prefer to quit their jobs so as not to [serve] in the army. Meanwhile in large cities… the loss of even a few employees can cause disproportionate damage to the economy. Russia is the economy of large cities and companies,” he said.
Biden denounces Kremlin’s ‘phony’ move to annex Ukrainian territory [Click] “. . . Several former diplomats and historians likened Putin’s strategy to Nazi leader Adolf Hitler in the 1930s, when he seized German-speaking regions of Czechoslovakia and Poland and similarly held predetermined plebiscites.
“The parallels are eerie and, after decades of over-using the Hitler analogies, we finally have a case where they are apt,” said Daniel Fried, a former ambassador to Poland who is now a researcher at the Atlantic Council, a Washington think tank. “Putin is escalating and the future is uncertain and fraught.”
{listener}
ReplyDeleteHeather Cox Richardson on what it means if Republicans force the default of the US
Ukraine, Brexit, Arab spring have one source – prices, says sociologist [Click] “Following his 2022 book Price Wars, the sociologist and documentarian Rupert Russell speaks about how financial speculators have sown a new era of chaos”
ReplyDeleteIt is not possible for a country that issues its own currency to default. It is possible for Congress to refuse to honor the country's obligations.
ReplyDeleteDollars are certified IOUs; not gold certificates. Republican Richard Nixon severed the connection between the currency and gold stored in Fort Knox, but Republicans have been perpetrating the myth ever since to please their financial supporters, people who speculate in currency whose supply is limited so they can charge borrowers more.
Just consider, after the establishment of the Federal Reserve Bank about a hundred years ago, bankers were able to get currency from the Treasury and lend it out to collect interest. At the same time the Treasury issued bonds to cover the difference between what Congress allocated and collected as revenue. And those bonds (issued for 30years) promised an annual profit of 8.1% in 1991.
So, those bonds matured in 2021 and what were people going to do with the principal? A less than 1% interest rate was not going to be attractive. So, the Fed raised rates, ostensibly to counter inflation. Baloney. Now Republicans are trying to argue that inflation is the result of Congressional appropriations for the pandemic, infrastructure and expanded social programs.
Historically, inflation is only a problem when working people get more wages. Hoarders getting 8% for doing nothing just registers as the 1% getting richer.
76 years old today; we are ordering restaurant lunch to go, I have a carrot cake, and I dressed up in my blue plaid summer pajamas. Blood tests yesterday disgustingly normal. I plan to eradicate and extirpate some weeds in the front yard this afternoon; predicted high temperature a relatively balmy 93F.
ReplyDeleteWe are in the high sixties today and I am sure the cld air chased Ian away. Swept up some leaf clusters and pine needles on the back porch and determined it will have to be replaced this fall before I break through rotting boards. The carpenter used treated lumber, but the durability is variable. Fortunately we now have a grandson who can be put to work.
DeleteIf you like your birthday commemorated, Alan, consider it done. Your contributions here are appreciated. :)
Congratulations! Only 24 more years to the magic century mark!
DeleteI figure that in another four years I can be utterly outrageous and everyone will be too polite to object.
Delete[BIG GRIN] Thanks from this 86-year-old. I'll remember that.
DeleteHappy Birthday, Alan.
ReplyDeleteThanks to all.
DeleteI got so busy outside today that I just "crashed" all evening. Then I set photos for the blog through October 11th (so far). Finally, I came by to READ the blog and discovered I had all but missed Alan's Birthday! ALAN! Who keeps the blog informed day after day!?!! Mea culpa! But, I managed to get a notice up out front at three minutes to October, California time! 🥳 HAPPY BIRTHDAY, ALAN!! 🎂
DeleteThe Russian economy will ‘die by winter’ because of the ‘catastrophic consequences’ of the military mobilization, a top Russian economist warns [Click] . . . Russian economist Vladislav Inozemtsev, the director of Moscow-based think tank the Center for Research on Post-Industrial Studies, is warning that Putin’s mobilization will have “truly catastrophic consequences,” including the death of the Russian economy and the downfall of Putin’s regime.
ReplyDelete“The Russian economy is going to die by winter, I wrote in early March. Now I think I was right. The mobilization announced on Sept. 21 was a milestone that really divided Russian history into ‘before’ and ‘after’—an event that began the final countdown of Putin’s era,” the economist wrote on Sunday for Russian publication The Insider. . . .
The “financial effects of mobilization—in the medium-term—will be significantly greater than the consequences of…the war in Ukraine,” Inozemtsev said.
In Russia’s poorer regions like Buryatia, the economic consequences will be disastrous, as “thousands of families will be left without income, and local medium and small businesses will simply die out,” Inozemtsev wrote.
Russia will also lose at minimum hundreds of thousands of men to the war’s frontline, and 3 to 4 million more will “disappear” from the labor market,” he wrote. In Russia’s wealthier cities like Moscow and St. Petersburg, residents generally have more resources to leave the country. But Inozemtsev predicts that army officers in the next few days will start serving recruitment papers at people’s workplaces, leading many to quit, or simply not show up at their offices, to avoid getting a summons.
“This will be the strongest blow to the economy. Several million people will prefer to quit their jobs so as not to [serve] in the army. Meanwhile in large cities… the loss of even a few employees can cause disproportionate damage to the economy. Russia is the economy of large cities and companies,” he said.
Biden denounces Kremlin’s ‘phony’ move to annex Ukrainian territory [Click] “. . . Several former diplomats and historians likened Putin’s strategy to Nazi leader Adolf Hitler in the 1930s, when he seized German-speaking regions of Czechoslovakia and Poland and similarly held predetermined plebiscites.
ReplyDelete“The parallels are eerie and, after decades of over-using the Hitler analogies, we finally have a case where they are apt,” said Daniel Fried, a former ambassador to Poland who is now a researcher at the Atlantic Council, a Washington think tank. “Putin is escalating and the future is uncertain and fraught.”