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On October 27 2012 08:53 Flyingdutchman wrote:Show nested quote +On October 27 2012 08:44 coverpunch wrote:On October 27 2012 08:02 Flyingdutchman wrote:On October 27 2012 06:47 sam!zdat wrote:On October 27 2012 06:43 Brainling wrote:
I'm not sure how to convince you other than to say look at the pace technology moves. As the world digitizes more and more, and science crawls on, there will be horizons that open up that we can't even imagine yet. Maybe in 2050 we start needing "fusion engineers", because we've perfected fusion and now we need people to run the reactors. Maybe in 2030, we need "moon miners", trained engineers who can go mine the moon of minerals. There are nearly infinite possibilities of where we may need skilled workers in the future, and some we can't even imagine yet (no one could imagined we would need computer programmers 75 years ago, not even von Neumann himself, who said in 1948 that we had reached the logical limit of what the digital circuit could do for us....and he was a pretty smart dude).
But maybe none of them create jobs... We've only had information technology for half a century or so, very hard to make any extrapolation about future trends based on this. I think there's no compelling reason to be an optimist and think that there will always magically be something new. It's called creative destruction, and it has been happening even before the information age. There are enough compelling reasons to be an optimist, like every invention since fire... Really? You should re-examine the history of the last two centuries more closely. There are far more reasons to be frightened of this kind of situation than to be optimistic. We do NOT want the kind of "creative destruction" that came out in the late 1910s or the late 1930s. or you can re-examine what I exactly replied to. As far as I know the late 10's and 30's weren't caused by some new invention making other industries obsolete
or you could realize that I already used the words "creative destruction" and that simply throwing out this phrase is not a response to what I'm saying... In fact I am rather explicitly calling the liberal faith in this "phenomenon" into question
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On October 27 2012 09:34 sam!zdat wrote:Show nested quote +On October 27 2012 08:53 Flyingdutchman wrote:On October 27 2012 08:44 coverpunch wrote:On October 27 2012 08:02 Flyingdutchman wrote:On October 27 2012 06:47 sam!zdat wrote:On October 27 2012 06:43 Brainling wrote:
I'm not sure how to convince you other than to say look at the pace technology moves. As the world digitizes more and more, and science crawls on, there will be horizons that open up that we can't even imagine yet. Maybe in 2050 we start needing "fusion engineers", because we've perfected fusion and now we need people to run the reactors. Maybe in 2030, we need "moon miners", trained engineers who can go mine the moon of minerals. There are nearly infinite possibilities of where we may need skilled workers in the future, and some we can't even imagine yet (no one could imagined we would need computer programmers 75 years ago, not even von Neumann himself, who said in 1948 that we had reached the logical limit of what the digital circuit could do for us....and he was a pretty smart dude).
But maybe none of them create jobs... We've only had information technology for half a century or so, very hard to make any extrapolation about future trends based on this. I think there's no compelling reason to be an optimist and think that there will always magically be something new. It's called creative destruction, and it has been happening even before the information age. There are enough compelling reasons to be an optimist, like every invention since fire... Really? You should re-examine the history of the last two centuries more closely. There are far more reasons to be frightened of this kind of situation than to be optimistic. We do NOT want the kind of "creative destruction" that came out in the late 1910s or the late 1930s. or you can re-examine what I exactly replied to. As far as I know the late 10's and 30's weren't caused by some new invention making other industries obsolete or you could realize that I already used the words "creative destruction" and that simply throwing out this phrase is not a response to what I'm saying... In fact I am rather explicitly calling the liberal faith in this "phenomenon" into question
Creative destruction just a name, a result of the observing the real world. Just as tides is a name for something observed in the real world. Why use the word faith and keep "doing" "this"? Are you telling me people will stop having the drive to improve themselves relative to others? Because that is the driving force of innovation imho, and as long as you have innovation (in the economic sense, not marketing) you will have new products and technologies that will make things obsolete. Would you complain when a new technology made all fossil fuel obsolete? In the long run people adapt, but getting there might be painful to some and beneficial for others.
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sigh... yes, I understand the idea.
edit: one must make an attempt to theorize the structure of innovation space
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On October 27 2012 07:04 Blazinghand wrote:Show nested quote +On October 27 2012 07:03 TeCh)PsylO wrote:
I appreciate a good economics discussion, but ironically the answer to the question is in the picture, and is not that complicated. Reserves spiked because the Fed started paying interest on reserves, as an incentive to not over leverage, and increase reserves to bring some stability to the banking sector. In an uncertain economic climate these returns were low, but they were risk free so banks took it. This is 100% correct. It is rather straightforward.
No, it's absolutely not. Run rate inflation is at about 2.00% right now, and the Fed pays 0.25% interest on excess reserves. That means banks earn a real interest rate of -1.75%. In other words, the banks are actually paying interest to leave their money with the Fed.
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Blazinghand
United States25553 Posts
On October 28 2012 02:23 contraSol wrote:Show nested quote +On October 27 2012 07:04 Blazinghand wrote:On October 27 2012 07:03 TeCh)PsylO wrote:
I appreciate a good economics discussion, but ironically the answer to the question is in the picture, and is not that complicated. Reserves spiked because the Fed started paying interest on reserves, as an incentive to not over leverage, and increase reserves to bring some stability to the banking sector. In an uncertain economic climate these returns were low, but they were risk free so banks took it. This is 100% correct. It is rather straightforward. No, it's absolutely not. Run rate inflation is at about 2.00% right now, and the Fed pays 0.25% interest on excess reserves. That means banks earn a real interest rate of -1.75%. In other words, the banks are actually paying interest to leave their money with the Fed.
Current rate of inflation isn't relevant, it's a matter of opportunity cost. Typically the opportunity cost of an investment with X risk and Y interest is very small, because excess reserves provide no interest. Now, there is an opportunity cost of an investment with X risk and Y interest, and that is the interest on reserves which has a very small risk. Is the real interest rate negative? Sure, but that doesn't mean there isn't an opportunity cost. Any time you increase the interest on excess reserves, even by a small amount, and even by an amount that's still less than the rate of inflation, it increases the incentive to hold excess reserves. basic economics.
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On October 28 2012 03:05 Blazinghand wrote:Show nested quote +On October 28 2012 02:23 contraSol wrote:On October 27 2012 07:04 Blazinghand wrote:On October 27 2012 07:03 TeCh)PsylO wrote:
I appreciate a good economics discussion, but ironically the answer to the question is in the picture, and is not that complicated. Reserves spiked because the Fed started paying interest on reserves, as an incentive to not over leverage, and increase reserves to bring some stability to the banking sector. In an uncertain economic climate these returns were low, but they were risk free so banks took it. This is 100% correct. It is rather straightforward. No, it's absolutely not. Run rate inflation is at about 2.00% right now, and the Fed pays 0.25% interest on excess reserves. That means banks earn a real interest rate of -1.75%. In other words, the banks are actually paying interest to leave their money with the Fed. Current rate of inflation isn't relevant, it's a matter of opportunity cost. Typically the opportunity cost of an investment with X risk and Y interest is very small, because excess reserves provide no interest. Now, there is an opportunity cost of an investment with X risk and Y interest, and that is the interest on reserves which has a very small risk. Is the real interest rate negative? Sure, but that doesn't mean there isn't an opportunity cost. Any time you increase the interest on excess reserves, even by a small amount, and even by an amount that's still less than the rate of inflation, it increases the incentive to hold excess reserves. basic economics.
The fed funds rate has been decreasing, not increasing, and is at a record low since its inception in 1954. The graph in question shows reserves increasing from about 2008, which is the approximate time the Fed dropped it 75bps to 25 basis points.
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On October 27 2012 05:15 Sub40APM wrote:Show nested quote +On October 27 2012 04:40 sam!zdat wrote:On October 27 2012 04:36 Sub40APM wrote:On October 27 2012 04:15 sam!zdat wrote:
Rockefeller was a baptist...
edit: look at you, antisemite, thinking all bankers are jewish.. jeez man :O Some Jews are very nice people and are not bankers at all! If you are ignorant of the long and rich history of antisemitism under the banner of "Rothschild bankers control all the money" then you should address that. let's not start this. You're the one brought up anti-semitism without any real reason, the financial class does in fact control a large amount of the world's wealth, yes the Rothschilds are some of them, and yes it's possible to be concerned about this without being an anti-semite. Oh okay. Lets not start this, but go ahead and continue to inserting an antisemitic trope in here anyway. The Rothschild family today has less assets than George Soros or John Paulson. They have one bank, and that bank is primarily an M&A shop that generates respectable but not particular large returns.They have literally no impact on the way any of the major banks run. Neither the Rothschild nor the Rockefellers have anything to do with the current financial crisis, and to bring them into a discussion out of the blue cannot be understood outside of the context of conspiracy theory laden with antisemitism.
Well then I suggest you go learn about our world's economy.
Gonna stop here because mods are gonna ban me again if I say basicly anything that could possibly somehow offense 1 person on this website.
Have a good day
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EPT
