Before today I had not heard of Global Gaming Factory X, and since they are offering (not finalized) to spend 8mil for TPB, now I have.

If they have a way to monetize that awareness, they can probably make out on the deal, even if they just mothball the site.

This is a pure publicity stunt, if GGF thinks they are going to make money with TPB, they are smoking crack.

Sorry NetRunner, but Schiff is a brilliant libertarian and Keynesian economics is junk science. Krugman's belief that deficit spending is a solution, that we can administer new shots of heroine in perpetuity to avoid withdrawals, is the same as Madoff saying his scheme would never end at its height. It only lasts for as long as you can find new and larger investments. The Fed cannot control long-term interest rates, they can only price fix in the short term in exchange for higher long-term rates. His forecast of perma deflation is pure crap, that would require the Federal Reserve to raise rates higher than Volcker did in a far more dire situation than we were in then. No longer is the majority of our debt financed long-term or domestically. It's majority owned by foreigners in T-bills. There is no exit strategy for the money being pumped in today. This is going to turn into a currency crisis when the debt is monetized and productive foreigners refuse to keep throwing good money after bad into our bond market. "Free Lunch" guys like Krugman who put the cart before the horse, consumption before production, just don't get it in the endgame.

Mish's criticisms are even more laughable. Schiff is a long-term investor, not a trader like Mish. The dollar headfake in the last year where people ran toward the blast initially is not a sustainable trend and totally meaningless. When you know the Titanic is going to sink, you don't stick around because you think you can get one last dance in, and that seems to be what Mish thinks people should do. Decoupling is going to happen whether Mish likes it or not. Our treasury secretary is getting laughed at by Asian students when he tries to reassure them of dollar integrity.

(1) From the creditor's perspective, there's no point in loaning money to someone to consume your production. You don't devalue your currency to export for the sake of exporting, you export for imports or keep your currency strong so that you can consume your own production. Otherwise, you're exchanging products for stashes of paper IOUs that we show no intention of replacing with real products. When the Asian countries figure out how easy it would be to consume their own products, our economy is toast. The only problem for someone like a China is how to head for the exit without causing a stampede. The minute such a large holder of dollars starts spending them, their value relative to goods will diminish substantially. Avoiding a hit now is going to be impossible, but they know that continuing to accumulate dollars is simply creating a larger future hit.
(2) From our perspective, politicians will always do what is expedient in the short-term. Telling the truth and saying you have to cut spending and entitlements by massive amounts for the sake of future generations isn't politically profitable. Not just because of all the people expecting things like unlimited health care regardless of our productive capacity to finance it, but because such a high percentage of our voting population now have overpaid government positions that they don't want to lose. Someone like a Ron Paul tells the truth at the expense of having an chance of winning. Winning requires that you be a candyman.

Savings is underconsumption and required for loans to exist. Ideally, people borrow that finite capital to increase productive capacity, to turn a shovel into a bulldozer and pay the loan off with more production. That is the kind of borrowing that benefits the creditor, the debtor, and society. It's not supposed to be a tool for consumption and winning elections, and that's where this country derailed from the sustainable and healthy growth it had in the 19th century. Whatever "success" we had from things like Medicare and Social Security came at an equal or greater long term cost. It's generational theft in its purest form, borrow to consume in the present to leave each successive generation with a higher and higher interest burden that will have to be paid for with higher taxes or currency devaluation. I say this because it is the fundamental oversight of people like Steve Forbes and Art Laffer who try to cast off trade deficits as "meaningless because it's something we've always had" in debating the resiliency of the bond market without distinguishing how we spent our loans then vs now.

Defaulting on our debt through inflation is a certainty. If you listen to Financial Sense or Schiff's weekly radio show, you'll learn how obvious that conclusion is very quickly.

http://www.youtube.com/watch?v=JGdj3Gx4A8w
http://www.youtube.com/watch?v=EgMclXX5msc

Haha. The choggie shirt is priceless. No, seriously, it's priceless like a Monet.

Comment hidden because you are ignoring dag. (show it anyway)

I hate car culture. Especially deep-throated, sound-enhancing mufflers used as mating calls. Please evolve.

The word "monetize" - I'm not convinced it's even a real word.

The company culture that thinks dialog boxes like this are OK.

Monday morning, people at work asking "Did you watch ..." and me repeating for the 20th time - I don't have a TV. (and then, them remembering that I'm some kind of freaky-deaky weirdo and shuffling off)

I understand the need to connect the sift more to other social web platforms but it should be done tastefully, right now it looks horrible and smells of feature bloat, why can't it be relegated to the bottom of the videos like all the other options? And that green? ugh.

Either way its hilarious how people develop a real identity because they communicate with others in solitude. I mean Twitter is another in the long line of pretentious web 2.0 apps that lionize peoples everyday mundane activities to a level of some interest mostly for the benefit of other people whose lives are even more boring then your own.

Too much?

On a separate note I don't think Twitter is going to last much longer, the recent astronomic growth its had is straining its ability to stay afloat with no real plan to monetize the service. How many folks would still twitter under a subscription based model? What price point would assure growth and stability at the same time?

I think I understand debt-monetization now.

Certainly his shenanigans are anathema to any professional standard of journalism, but his point in this video is at least poignant and scary. The Fed has recently monetized $300 billion in U.S. Treasuries, which they call "quantitative easing", but basically will ultimately result in inflation, and risk hyperinflation if it continues down this dangerous path.

I don't know if an innocent fish had to die for Glenn Beck to make this point apparent to his audience.

Depends on which economists you ask. There are a lot of economists who object on ethical grounds, in much the same way medical scientists object to certain human trials. That is, they dismiss the "how" because they answer no to the philosophical question, "should we permit copyright law?"

Copyrights, in effect, grant the holder partial control (ownership) of the property of other people. If I own a canvas and paint, and you own a copyright for an image, then you also own a part of my canvas and paint. You get to tell me what I can and can't do with it in the privacy of my own home.

If you can imagine an extreme case, where all images are copyrighted, then I could not legally paint on my own canvas.

In reply to this comment by MINK
The economists solution is to make copyright laws that try to give an artist some kind of mechanism to monetize his work... but i think if you do a survey among artists about copyright laws you will find some interesting, confusing, and puzzling responses.

>> ^cdominus:
MINK,
Boys make lemonade. Government takes small percentage. Government buys paint for artist down the road. Artist makes painting with a markup of 3000%. Lemonade stand starts to look like a waste of time.
How about this instead, "Boys make lemonade. One of the boys breaks off to pursue Art career with his percentage of profit. He makes 3000% mark up on first painting. Lemonade stand starts to look like a waste of time."
I don't think the force of government was necessary.



The problem with your distortion of my crap example is that you completely misunderstand the source and motivation of art.

The economists solution is to make copyright laws that try to give an artist some kind of mechanism to monetize his work... but i think if you do a survey among artists about copyright laws you will find some interesting, confusing, and puzzling responses.

Hehe. Yeah. It seems it's part of how they make it appear more like an actual painting than a photo. It's actually printed on canvas and will appear to have texture, so the virtual brush strokes and blur should look better on the finished product as the strongest blurring is mainly around the edges where the canvas will be wrapped around wood.

Interesting about Monet's eyesight. I admit I don't know much at all about art, but I'd be very interested to see the progression of work by famous artists from their youth to old age.

Gets a little Monet blurry there.

We had an exhibition of his lilypad paintings here in New Orleans back in 1995. The works documented what was happening to his eyesight.

>> ^blankfist:
Still, what would a bailout prove? I remember experiencing a lot of fellow industry people in the tech-industry losing everything after the dot-com bubble popped, and Congress didn't raise a finger to bail us out. And why should they? The market was unsustainable because people were throwing too much money at it without a system of monetizing it. Those who could work through that collapse, did. The industry survived even though a lot of the major companies did not.

Difference is, with the dot bomb crash, the industry wasn't a monolithic triopoly, there were thousands upon thousands of fresh upstarts that turned to dust as quickly as they rose up. If we were talking about a similar situation with the auto industry, where most of the companies/products were new and non-essential, I don't think there'd be any talk of a bailout...or a union.

Conservatives (or at least people in Republican jersies, and self-identified conservative Democrats) helped them get too big by never exercising the FTC and having them actually stave off companies from getting "too big to fail" as GM, Ford and Chrysler have.

The same group also prevented government helping these companies take a long view of the global situation -- yes Virginia, I mean environmental issues, fuel efficiency standards, and alternative fuels.

GM, Chrysler and Ford are not sustainable. I'm sorry, but let's try not to make this a party issue. This is about private companies not being able to sustain themselves, and I'm sorry if those of us against the bailout oppose your party position for labor, but that doesn't make those of us against it "republicans". That makes us against nationalizing private debt. And, if you were smart, you'd be against that too.
Economy be damned when industries are falsely propped up.


Why are Ford, GM and Chrysler not sustainable? Could it be that we have bad trade agreements, allowing companies like Hyundai to sell 500,000 cars in the US, while limiting us to 5000 in Korea?

Could it be that every other country with an auto industry gives their companies government support, including both national healthcare as well as protectionist trade policies, and government subsidies?

Could it be that in pursuit of the conservative ideal of "free trade", we're forcing our employees to try to compete with countries with no worker safety or labor laws?

Then there's this little matter about the banks not being willing to give anyone loans for anything, including cars, which makes it a tiny bit hard for these guys to sell anything.

I know you'd rather it not be a "party issue", and that's fine. I just figured I'd lay the blame at the Republican party's feet, rather than saying "conservative ideology" where it probably rightfully belongs, because I always hear that Republicans aren't conservative, and they've been the ones pushing these failed government practices since the 1980's.

But hey, if you want to take the blame for making the environment impossible for the big three to operate as a non-sweatshop employer, who am I to stop you.

If you were smart, you'd be on the side of this argument that's looking to keep people employed, and fix the big three, rather than clinging to the same ideology that got us into this mess in the first place.

You've got a good point about propping up failing businesses, and I think that there should be serious, serious strings attached to any money we loan these guys, and that we ensure these are loans to be paid back with interest, not a big gift basket, like TARP is. Problem is those pesky conservatives (or Republicans as they call themselves) have fought to keep Democrats from adding environmental restrictions and management paycuts/restructuring, while at the same time trying to insert legislation that requires the unions to agree to salaries and benefits below the foreign auto makers. I suppose that's because under their reading of the conservative ideology, telling businesses how to operate is okay if it's to put the screws to unions, but not when management is being made accountable.

These are going to be party issues, and generally speaking, blankfist, I categorize you as being a 3rd party -- neither progressive nor "Republican", the former because it's accurate, and the second because you're as frustrated with that group of howler monkeys as I am.

However, don't try to tell me that Republicans are now high-minded conservatives, because it's a little suspect that they seemed to only remember those principles on Nov 5th, 2008, and they just so happen to lead them to the conclusion that the right course of action is to filibuster everything the Democrats try to do.

I will agree with volumptuous that without bailing out this industry we could experience a major loss for unions in this country. I, personally, am a fan of right to work instead of unions, but I would hate to see A) such a large number of workers without employment and B) the deterioration of the auto industry in the country that invented it.

Still, what would a bailout prove? I remember experiencing a lot of fellow industry people in the tech-industry losing everything after the dot-com bubble popped, and Congress didn't raise a finger to bail us out. And why should they? The market was unsustainable because people were throwing too much money at it without a system of monetizing it. Those who could work through that collapse, did. The industry survived even though a lot of the major companies did not.

GM, Chrysler and Ford are not sustainable. I'm sorry, but let's try not to make this a party issue. This is about private companies not being able to sustain themselves, and I'm sorry if those of us against the bailout oppose your party position for labor, but that doesn't make those of us against it "republicans". That makes us against nationalizing private debt. And, if you were smart, you'd be against that too.

Economy be damned when industries are falsely propped up.

>> ^chilaxe:
When Asian countries send us products, we give them currency that has a known conversion rate to other currencies. Currency represents labor. There's nothing special about it.


What kind of labor is it backed by? A haircut for another American? A consultation session for the government? An insurance policy? How many service jobs are we going to create before the world demands more basic things like soap, cars, televisions, fuel, food, and washing machines. They're not going to be able to meet future demand of these things if they keep throwing their products and legitimate money into our economy in exchange for our services and illegitimate money.

We aren't legitimately competing with the Yuan either, the Yuan is linked to the dollar. That means other countries inflate in sync with us to artificially suppress the value of their currency. They do so because they follow the Keynesian myth that a weak currency is good for exports. But why would you want to export something you make instead of consume it yourself, unless you felt you were getting something more valuable? Why would you INTENTIONALLY devalue your own currency to obtain a currency whose value wouldn't be high against it unless you did so? It's a paradox, but one that Chinese people were willing to make as wall street convinced them that tech stocks and home growth were legitimate. Now they've been burned twice by demand bubbles that they helped fuel by loaning towards consumption. That's why they're suffering now, not because their economy is unsound, but because they took the money we paid them with and recycled it into ours.

If they ever flooded the world with their 2 trillion dollar reserves, it's game over for the dollar. We don't have 2 trillion worth of their currency sitting in a vault to counteract it. Our labor services would become dirt cheap for us and others, but foreign imports would skyrocket in dollar terms. Domestic products would all get exported to richer countries, our standard of living would disappear overnight.


One of the reasons the US economy maintains the highest GDP per capita PPP in the world for nations above 5 million people is because it has a highly skilled workforce. Denigrating that workforce as "non-factory-working" or "paper" is meaningless as long as the rest of the world needs skilled labor.


GDP numbers are worthless, they're adjusted for the CPI. If the government lies about how much inflation they're creating, which I've already explained to you, they can remarkably overstate GDP. That's how despite this horrific mess last year, you still had dumbass economists coming on tv saying that we're not in a recession because GDP was still above 0%. But if inflation was calculated more honestly like it was 30 years ago, we'd have negative GDP every quarter. Instead, we claim to be growing a fraction of a percent despite being the epicenter of the problem.

If you think that we can deficit spend 100x more on military than anyone else, 50x more on entitlements than anyone else, and perpetually convince foreign savers to finance it in exchange for a negative inflation-adjusted yield, then you are sadly mistaken. Unless the Fed hyperinflates, we are going to have to set interest rates higher than they've ever been, possibly 30%, to lure in foreign buyers. Interest rates that high would make the correction of excesses unfold quicker, but hyperinflation is worse because we never recover from that. It looks like we're going that route, and that's what has Peter concerned. Foreigners have stopped buying bonds at these low interest rates, so the Fed has to buy them with pure inflation, new illegitimate dollars unbacked by labor. This is what's called "monetizing the debt," and it fails in every country that tries it. That picture in the video of the lady stuffing her oven with paper money worth less than firewood is from Weimar Republic Germany, a hyperinflationary episode in the 1920s that made people desperate and willing to follow Hitler.

So the rest of the world will forever depend on US innovation because they aren't smart enough to design software, CPU's and anti-terrorism advise? What I mean by service economy is retail, restaurants, and other middleman businesses. When Asian countries send us products we give them dollars ("paper") the value of those dollars depend on the scarcity of dollars. We will monetize our debt because China won't lend in the long term because it's totally out of control now. If you had a printing press in your house and you gave me a million dollars for a truck load of TV's that I produced, then a year later the government comes to you with 1 trillion in bonds to be turned into dollars, I'm going to be pretty pissed that my earlier money isn't worth shit anymore because you're diluting it every time somebody comes to you for money. I'd be more reluctant to sell you anything I produced unless you pay me in something that can't be easily diluted.