Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!









Show your support for what this community means to you:
Choose a Donation Amount
Username
(required for credit)
Welcome to the Hardcore Husky Forums. Folks who are well-known in Cyberland and not that dumb.

Apparently 30% of existing US dollars were created in 2020...

2»

Comments

  • TequillaTequilla Posts: 16,710
    10,000 Awesomes 10,000 Up Votes 10000 Comments Seventh Anniversary

    So i'm curious what your background is Doog Bot... interesting comments and you sound like a knowledgeable industry professional ~ it nice to know where people are coming from a perspective standpoint so if its not too personal, do you mind me asking?

    Doog Bots grand career, the short version(yes really, I have a lot of stories).

    Trained in econometrics/computational finance at UW, BS in Economics(BA in Philo). Had planned on being an analyst and was already doing interesting work in that regard. Graduated in 2009 soooooooo senior Prof walked in and told us that he hoped we all had a plan B for after graduation.

    Spent time globe trotting as a jr. consultant monkey since the US labor market was shit. I got to put in my edits for a major white paper on the global mining market once upon a tim. Came back after getting kicked out of Chile(shady politics) and did a lot of Business certification; Pmp, Six Sigma, Lean, etc. Started prepping for econ grad school or an MBA. Got so far as to do sit down interviews and tours of campus with some swinging dicks. Ended up hired into a major consulting firm as a PM instead and started making so much money it made no sense to go back to school. Work as a program manager doing capital construction now and pretend to be an engineer a lot.

    Love economics, was exposed to it through academic decathlon at a much higher and earlier level than most. I've been watching youtube interviews with Hayek and friends since they were uploaded and still do just for fun. I follow, listen, and read the work of a lot of much smarter people than me. Still invest, though mostly in aggregate and passive index stuff. It's hard to beat the market long term if you believe in market efficiency *shrug.
    Disagree
    UW_Doog_BotFireCohenGreenRiverGatorz
  • TequillaTequilla Posts: 16,710
    10,000 Awesomes 10,000 Up Votes 10000 Comments Seventh Anniversary
    Derek,

    I think you make a lot of interesting points and many of which I think are directionally accurate. I'll address each in turn ...

    People view China as a growing superpower gobbling up nations and ready to challenge the USA.

    I think the question is what do you define as "challenging" the USA. I think the premise of "challenging" the USA in the traditional sense (i.e. from a military standpoint) is something that really everybody knows that they aren't going to win unless we SIGNIFICANTLY reduce strength. The closest was the USSR and there was a lot of posturing and blinking during the Cold War but ultimately they couldn't keep up economically and went broke as a result.

    If I'm building a strategy to "overtake" the US, trying to do what we do better isn't a good strategy. Trying to be Bama isn't a good strategy for really anybody in CFB. There was a time where Bama had some holes with areas to exploit and they were. To counter Bama addressed those areas and now everybody is searching for the next area to exploit.

    Point being that anybody looking to challenge the US as the world's biggest superpower will do not through traditional means, but by trying to find an area where we are weak and exploiting it accordingly. It's always important to keep in mind that in many respects one's biggest strength is their biggest weakness.

    In reality, China has its wealth concentrated on the coast but 80-90% of its population is living in abject third world poverty. China's investments have been wasteful and unproductive, and as of five years ago it was 1 out of 7 shipments leaving China was bound for Wal-Mart. So they are massively dependent on the American consumer. They don't have the ability to produce items that their own citizens will buy on a similar scale. So if the USA's economy contracts, the effects on Chinese business would be staggering.

    So this brings a really important point to the discussion. You're correct in that on a per person basis, the wealth of China is living in poverty and they don't give a shit about them. They care enough to make sure that they have enough to relatively survive and are careful to make sure that they monitor/control the population to not allow any opportunities for gathering, uprising, questioning of power/authority, etc. Where China is actively working is to control the overall quantity of wealth. Think about them not from the standpoint of trying to maximize margins (i.e. the US trying to maximize median income) but instead trying to maximize top line revenue. If you are large enough, you can punish your competition through the margins. From a financial/economic sense, that's where I see the biggest threat from China is that they're going to look to gobble up the countries to increase their sphere of influence. The more they control, the more they get to call the shots. The more they call shots, the more they're able to marginalize the US on a global basis. This is particularly important when you think about the balance of the countries and areas that China is looking to gobble up influence are in areas where they are incredibly poor.

    You note that China's really been dependent on US products and leverage WalMart as a great example. What China brings to market is relatively inexpensive products. They lure you in with cheap cheap cheap and people gobble it up. Only when you realize that in the long run it costs you more because the quality is poor and you're constantly trying to replace a crumbling environment do you realize the error in your way. So in the US, we bought the line hook line and sinker for a while and now there's a significant % that understand what China's doing. A large amount aren't. Europe is in some financial mess right now and their COVID policies are leaving them vulnerable going forward. Areas like Africa have vulnerabilities. Most of Asia have significant vulnerabilities. In a lot of ways, it's why the Western World having strong relations with India is so important because it's important to have an alternative in the region to combat what China's doing.

    When you see Kim Grinolds feeling threatened or insecure, what does he do? He begins threatening posters, issuing time outs and banning people out of existence. That's the equivalent of what China is doing. This includes the desperate power grabs with Hong Kong and bullying they've done of late with some smaller SE Asian countries.

    Kim isn't 0.000000001% as smart as the Chinese Government. Whether you want to talk about China, Russia, etc., the way that they conduct their business is through effective PR and playing an information game. The biggest threat to China is losing the PR game and having people call BS on them. It's why they censor EVERYTHING. They have to control the message. So in that sense, you're right in that there are comparisons but the big difference is that China knows what they are doing. Kim's actions are because his ego is hurt. China's got a plan/playbook of what they are trying to do and it's vital for them to stay on schedule.

    Militarily, the Chinese don't even control the South China Sea, the USA holds the greatest influence there. The Chinese don't even have aircraft carriers I believe. They are a long ways away from being militarily dominant.

    China's got no interest in taking on the US in a military battle. Intelligence, espionage, etc. they're cool playing that. But not direct military. Where the US's military matters is if we NEED to do something. We can do it quickly and efficiently. There's two issues with that. You're following comment regarding infiltration of the US is important to consider. Second, it's critical for the PR game that China plays for any military actions that occur between the US and China that the US is seen as the aggressor. Again, it comes back to the PR game. For those around the world that do not like the US, China being able to play the victim card is just flat out good business for them.

    My biggest concern about China is the degree to which they have infiltrated and influence American institutions.

    This is really the biggest concern when it comes to China and it's indicative of how they will look to "win the war" against the US. You see it with the spies getting close to government officials. It's in the businesses. It's in the lobbying of government officials. All of that allows China to have a good understanding of what it is that we're doing ... think about it like we're playing a heads up poker game with China and our cards are turned faced up because of our relative transparency and we rarely see their cards because of how much they control the information. The other side of the equation is that if we wise up (which will take significant time), what China is effectively trying to do is gobble up enough power in the world that we, and the remainder of the Western World, are effectively isolated to our own devices. It allows China to eventually call the shots or for the Western powers to do something about it. The bet is that the Western world will never be the aggressors so China can go about doing what they want to do, accumulate power, and effectively strengthen themselves for any eventual face to face.

    And that's the real risk, that the US and Western Europe won't realize what is going on until it's too late.

    Taking down the US is going to come in 2 forms: 1) our rotting from the inside and 2) our negligence in understanding what is going on around us
    DerekJohnsonDawgsCanDance
  • godawgstgodawgst Posts: 1,456
    Swaye's Wigwam 1,500 Up Votes 1,000 Awesomes 250 Answers

    godawgst said:

    We don't b/c the Govt will

    a) take out any metric that is inflationary to show that there is none keeping the "core rate" low. They will also "encourage" the banks to keep interest rates low as well
    b) At some point declare the debt null and void and the treasuries you bought (hi China) will be worthless (or you will get 5-10% on the dollar) and your just sol

    Lol this is a terrible take.
    The Gov't doesn't use food, rent, or medical to mearure the core rate.
    They do use items such as desktop PC's (one step above typewriters) to do so.


    How does America ever begin to pay back 20T in debt and growing? Add in Social Security and Medicaid/Medicare debt/iou's and I've read it could be as high as 75T

    godawgst said:

    godawgst said:

    We are a long ways off from hyperinflation across a commodity basket.

    You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.

    Good time to own a house in a desirable area and have a 401k diversified in the market.

    I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.

    The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.


    Drafting off of you, of course, but that's my amateur take because it makes sense. If the US dollar fails, where you gonna go? Where's the safe haven? Shiny yellow heavy bricks? Maybe in the short term because of the psychology of history. But it goes on for any length of tim, who wants stuff that can't feed, house or protect you?
    What about Chinese Yuan of Indian Ruple?

    Eventually even for Countries, budgets matter.

    What happens when the US Govt finally has to admit they can/never be able to payback the 2-3 T in treasuries China owns?

    I guess. I have no crystal ballz, but I assume that if the US is in the gutter, other places are on life support themselves. Or is it your position that China and India are stand-alone economies?

    Where is China's market? Where do they dump on the shit they make if not here? Europe?

    I'm not being rhetorical here. I'm asking.
    Both China and India population is 1.4B or almost 5 times the US with growing GDP's of at least 4% iirc. So I believe they both can and/or will be stand alone economies.

    I also believe that the world's currency when only paying out 1% for 10 years and every 1% rise in interest rate adds another nearly 1T dollars more to the debt is not sustainable and there will be another country to fill that void.
    China's population is demographically old, imbalanced, and shrinking. India's demographics are far more favorable.

    The world's currency is the world's currency because it's the only government in the world that hasn't ever defaulted on it's debts. It's got a low return because it's inherent risk is essentially zero.

    The EU is in shambles, Russia is hilariously unreliable, the CCP won't let you transfer capital out of China, so who exactly are you going to call Daddy? Go buy more yellow bricks I guess.

    Any other CCP talking points?
    Do you believe the US has any chance of ever paying back it's obligations?

    If no, then it's not a matter of if, just when that the rest of the world moves away from the current world's currency.
  • godawgstgodawgst Posts: 1,456
    Swaye's Wigwam 1,500 Up Votes 1,000 Awesomes 250 Answers

    godawgst said:

    godawgst said:

    We don't b/c the Govt will

    a) take out any metric that is inflationary to show that there is none keeping the "core rate" low. They will also "encourage" the banks to keep interest rates low as well
    b) At some point declare the debt null and void and the treasuries you bought (hi China) will be worthless (or you will get 5-10% on the dollar) and your just sol

    Lol this is a terrible take.
    The Gov't doesn't use food, rent, or medical to mearure the core rate.
    They do use items such as desktop PC's (one step above typewriters) to do so.


    How does America ever begin to pay back 20T in debt and growing? Add in Social Security and Medicaid/Medicare debt/iou's and I've read it could be as high as 75T

    godawgst said:

    godawgst said:

    We are a long ways off from hyperinflation across a commodity basket.

    You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.

    Good time to own a house in a desirable area and have a 401k diversified in the market.

    I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.

    The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.


    Drafting off of you, of course, but that's my amateur take because it makes sense. If the US dollar fails, where you gonna go? Where's the safe haven? Shiny yellow heavy bricks? Maybe in the short term because of the psychology of history. But it goes on for any length of tim, who wants stuff that can't feed, house or protect you?
    What about Chinese Yuan of Indian Ruple?

    Eventually even for Countries, budgets matter.

    What happens when the US Govt finally has to admit they can/never be able to payback the 2-3 T in treasuries China owns?

    I guess. I have no crystal ballz, but I assume that if the US is in the gutter, other places are on life support themselves. Or is it your position that China and India are stand-alone economies?

    Where is China's market? Where do they dump on the shit they make if not here? Europe?

    I'm not being rhetorical here. I'm asking.
    Both China and India population is 1.4B or almost 5 times the US with growing GDP's of at least 4% iirc. So I believe they both can and/or will be stand alone economies.

    I also believe that the world's currency when only paying out 1% for 10 years and every 1% rise in interest rate adds another nearly 1T dollars more to the debt is not sustainable and there will be another country to fill that void.
    China's population is demographically old, imbalanced, and shrinking. India's demographics are far more favorable.

    The world's currency is the world's currency because it's the only government in the world that hasn't ever defaulted on it's debts. It's got a low return because it's inherent risk is essentially zero.

    The EU is in shambles, Russia is hilariously unreliable, the CCP won't let you transfer capital out of China, so who exactly are you going to call Daddy? Go buy more yellow bricks I guess.

    Any other CCP talking points?
    Do you believe the US has any chance of ever paying back it's obligations?

    If no, then it's not a matter of if, just when that the rest of the world moves away from the current world's currency.
    US gdp is about 20 trillion per year. We're a doctor with $100k in student loans making $100k.

    Also interest on that debt is essentially zero. If the US averages even a pitiful 2% growth in gdp what happens? Are you the type of person that thinks it's bad to have a mortgage at 2.5%?

    In recent memory we had a surplus and people worried what would happen if we paid down our debt too fast. I don't think that will ever happen with the swamp in place but I'm also not particularly worried until our debt/gdp ratio gets considerably higher. I DO worry about where that money goes though.

    And again, lol pick what country is in position to become the next reserve currency. It sure as shit isn't China.
    The last recent surplus we had was 25 years ago under Clinton with a tech boom that exploded productivity that lasted a couple years iirc

    You obviously know your stuff. How do you see this playing out for America long term with it's current debt/deficit situation. Is there any way you could ever see us paying it off, or in your model does that even matter?

    Do you believe true inflation in America is only 2% ish?

  • UW_Doog_BotUW_Doog_Bot Posts: 8,940
    Swaye's Wigwam 10,000 Awesomes 5,000 Up Votes 5000 Comments
    godawgst said:

    godawgst said:

    godawgst said:

    We don't b/c the Govt will

    a) take out any metric that is inflationary to show that there is none keeping the "core rate" low. They will also "encourage" the banks to keep interest rates low as well
    b) At some point declare the debt null and void and the treasuries you bought (hi China) will be worthless (or you will get 5-10% on the dollar) and your just sol

    Lol this is a terrible take.
    The Gov't doesn't use food, rent, or medical to mearure the core rate.
    They do use items such as desktop PC's (one step above typewriters) to do so.


    How does America ever begin to pay back 20T in debt and growing? Add in Social Security and Medicaid/Medicare debt/iou's and I've read it could be as high as 75T

    godawgst said:

    godawgst said:

    We are a long ways off from hyperinflation across a commodity basket.

    You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.

    Good time to own a house in a desirable area and have a 401k diversified in the market.

    I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.

    The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.


    Drafting off of you, of course, but that's my amateur take because it makes sense. If the US dollar fails, where you gonna go? Where's the safe haven? Shiny yellow heavy bricks? Maybe in the short term because of the psychology of history. But it goes on for any length of tim, who wants stuff that can't feed, house or protect you?
    What about Chinese Yuan of Indian Ruple?

    Eventually even for Countries, budgets matter.

    What happens when the US Govt finally has to admit they can/never be able to payback the 2-3 T in treasuries China owns?

    I guess. I have no crystal ballz, but I assume that if the US is in the gutter, other places are on life support themselves. Or is it your position that China and India are stand-alone economies?

    Where is China's market? Where do they dump on the shit they make if not here? Europe?

    I'm not being rhetorical here. I'm asking.
    Both China and India population is 1.4B or almost 5 times the US with growing GDP's of at least 4% iirc. So I believe they both can and/or will be stand alone economies.

    I also believe that the world's currency when only paying out 1% for 10 years and every 1% rise in interest rate adds another nearly 1T dollars more to the debt is not sustainable and there will be another country to fill that void.
    China's population is demographically old, imbalanced, and shrinking. India's demographics are far more favorable.

    The world's currency is the world's currency because it's the only government in the world that hasn't ever defaulted on it's debts. It's got a low return because it's inherent risk is essentially zero.

    The EU is in shambles, Russia is hilariously unreliable, the CCP won't let you transfer capital out of China, so who exactly are you going to call Daddy? Go buy more yellow bricks I guess.

    Any other CCP talking points?
    Do you believe the US has any chance of ever paying back it's obligations?

    If no, then it's not a matter of if, just when that the rest of the world moves away from the current world's currency.
    US gdp is about 20 trillion per year. We're a doctor with $100k in student loans making $100k.

    Also interest on that debt is essentially zero. If the US averages even a pitiful 2% growth in gdp what happens? Are you the type of person that thinks it's bad to have a mortgage at 2.5%?

    In recent memory we had a surplus and people worried what would happen if we paid down our debt too fast. I don't think that will ever happen with the swamp in place but I'm also not particularly worried until our debt/gdp ratio gets considerably higher. I DO worry about where that money goes though.

    And again, lol pick what country is in position to become the next reserve currency. It sure as shit isn't China.
    The last recent surplus we had was 25 years ago under Clinton with a tech boom that exploded productivity that lasted a couple years iirc

    You obviously know your stuff. How do you see this playing out for America long term with it's current debt/deficit situation. Is there any way you could ever see us paying it off, or in your model does that even matter?

    Do you believe true inflation in America is only 2% ish?

    "In the long term we are all dead." but seriously, I do expect some shift but as to what will trigger it, how rapidly, etc. who knows? It could be WW3 or it could be a natural catastrophe or the singularity *shrug

    In our lifetimes maybe it will shift but current economic indicators say otherwise so in the medium term I don't expect it unless Biden dies, Kamala goes full socialismo, and we are all fucked anyways. US debt and treasuries are the heart of the entire house of cards of the world. If it comes down the whole thing comes down. Hold guns and ammo at that point. It's "inherent risk" built into every other financial device.

    Governments don't necessarily need to pay off their debt burden per say, just keep paying off the debts they issue and creating new ones. The US does that. Don't let the debt/income level become unmanageable is all. If you are borrowing at net zero then leverage investments into sectors that will take you ahead of your competition.

    There's plenty of evidence that being a debt issuer as a nation comes with it's own challenges. Where do you put the money and who is in charge of where it goes? Why are you collecting taxes if you don't have any need to?

    Inflation is a complex subject. I don't think we will see across the board inflation but when you talk 25% of GDP stimulus of course you will see inflation. Inflation in sectors where that stimulus is directed. Meanwhile, we have deflationary pressure in lots of other areas. That's kind of the point of stimulus though isn't it? The government will be ham handed, it always is.

    I'll stand up and cheer if Donald pulls off giving $2k checks without stupid pork attached. 100% better than going to political rat holes. Much better for the entire economy. Still wouldn't expect much inflation.
    Pitchfork51
  • FireCohenFireCohen Posts: 17,172
    10,000 Awesomes 10,000 Up Votes 10000 Comments 250 Answers
    godawgst said:

    We are a long ways off from hyperinflation across a commodity basket.

    You will see inflation in assets and equities since that's where the lions share of bail out and stimulus went.

    Good time to own a house in a desirable area and have a 401k diversified in the market.

    I WOULD divest of Chinese exposure both in China and those listed in the US sometime in the near future. Biden will extend their bubble but it's going to pop none the less at some point.

    The only things valuable if US treasuries fail are guns and ammo. That said they are a shit investment atm bc of rates. Lots of other opportunities as well in all the chaos.


    Drafting off of you, of course, but that's my amateur take because it makes sense. If the US dollar fails, where you gonna go? Where's the safe haven? Shiny yellow heavy bricks? Maybe in the short term because of the psychology of history. But it goes on for any length of tim, who wants stuff that can't feed, house or protect you?
    What about Chinese Yuan of Indian Ruple?

    Eventually even for Countries, budgets matter.

    What happens when the US Govt finally has to admit they can/never be able to payback the 2-3 T in treasuries China owns?

    us has the ability to print money dude it will fucking things up but it will never default.
Sign In or Register to comment.