Comments
Transcript
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RdGreat Interview and perspective. Would investment real estate be considered real assets or is it really a financial asset? Cap Rates would go way up causing values to drop, but could rents go up enough to counterbalance this? Also, interest rates on refinancing the property every 5 to 10 years will be going up as well? Will there be financing available or will lenders shy away knowing rates are only going up, will this cause lenders to want higher percentage down 25% or more? Some who see much higher rates coming have suggested paying off all debt against the property, but if rates go way up the prices of real estate could fall dramatically so would it not be better to sell now while real estate is currently at a high and put you equity into cash and/or gold and buy later on? The key is rents can the market in a inflationary enviorment withstand rents that keep up with rates. Would be ironic if Wework turned out to be a great investment for Softbank having those long fixed rents.
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ISGreat interview!
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AMSimon is smart and I’d love to hear his views on MMT when he isn’t mischaracterising it. He makes several claims about MMT which just aren’t an accurate description of what the school of thought actually describes.
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RHHow can government "create demand"? Impossible. Japan failed. EU 10 years failing. QE in one way has taken costs of non-growth (inflation) and piled them into a closet. Here's $5 go into business? It doesn't work that way. Lenders don't lend just because money is cheap.
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TWIt is interesting that he quoted Reinhart and Rogoff paper because I am pretty sure it was later discovered that there research had data entry errors and the results were actually found to be inconclusive. But I could be wrong. In addition, I am not confident that deficits matter with respect to the American economy, mainly due to the fact that other countries are purchasing US debt in order to gain access to the American consumer. Therefore the US doesn’t have the same borrowing constraints as a Jamaica, Bolivia, or Estonia. In fact if you look at the US share of the World deficit, over the last 10 year it ranges from 40 to 50 percent. Another way to think of it is that the US consumes about half of the worlds excess production. Again, this is only done if the rest of the world is willing to hold US denominated assets which usually comes in the form of US treasury (ie debt.)
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dbSilver
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MSHas the assumptions of GDP Threshold and Central Bank self financing ever taken place on a global reserve currency? I truly get the point for a non-reserve and I believe this also can happen anywhere, but I al just trying to understand the history with a global reserve currency...
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JHExcellent. Please have Simon on for a longer form interview with Raoul / Grant. He is a great thinker and offers some different views in places.
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EKSo what will be the answer to the end of the 60/40 portfolio which all insurance companies seem to use to guarantee their pension obligations?
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CLI'm not sure I get that governments are inherently inflationary because they borrow "with no limits". I get that they would benefit from inflation since they are borrowers but how does borrowing by the government contribute to inflationary pressures? I get further present spending through borrowed moeny increases present demand for goods and services but you also have a larger debt burden limiting your cashflows. Would love to hear anyone's thoughts on this.
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LHGreat!!!
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SSThis was great! Very clear and sounds about right. Thank you!
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FLThe government's inherent inflationary bias is what is commonly known as Argentina.
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JEVery well presented, agree with Simon's summation.
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RMA bit of a bummer that the white paper is only available with a corporate email address. Milton, can it get posted on RV?
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NvBrilliant. No one else is watching Velocity of Money with anything other than extreme recency bias. In fact, 20 years of recency bias. Thanks Simon and RV
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DSWell done. Great summary and insights. DLS
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DSCan the Fed manage MMT and the Congress spend what is supplied? Just trying to have some control of the money supply. I agree that Congress and the Executive branches would be buying votes with MMT as fast as possible. DLS
Chapters
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HOW IS CURRENT MONETARY POLICY FAILING?
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HOW HAS QE BEEN INEFFECTIVE?
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WHAT ARE THE ALTERNATIVES TO MONETARY POLICY?
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WHAT ARE THE DIFFERENCES BETWEEN MMT & QE?
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WHAT ARE SOME EXAMPLES OF INFLATION DUE TO MMT?
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WHAT ARE THE MARKET IMPLICATIONS OF THESE POLICIES?
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WHAT HAPPENS TO BANKS UNDER THIS NEW REGIME?
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WHAT HAPPENS TO GOLD?
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HOW DOES THIS ALL END?