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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: rich evans who wrote (13980)	5/24/2009 11:38:28 AM
From: elmatador	Read Replies (1) \| Respond to of 24758

there two economics: one for countries that do not have the world reserve currency and one for the US, that issues the world reserve currency. Therefore academics make statements that apply only to the ordinary country, if that is applied to the US economy, obviously it is not going to make sense. Any normal country that would go into deficit, is battered by rating agencies, capital is pulled out, its risk go up, and it has to pay extortionary rates to get capital. If the US it has just to print money and foreigners buy it as foreign reserves.

To: rich evans who wrote (13980)	5/24/2009 12:07:06 PM
From: ahhaha	Respond to of 24758

What has that attempt at explaining the trade finance mechanism have to do with #13910? Bernanke says, "In general, the perspective one takes depends on the particular analysis at hand". What he is actually saying : One starts with a particular conception and sees every perspective as a nuance of it. You should realize that if one thinks one can understand how alien spacecraft work, doesn't mean one can use the device to travel to other planets. I want to emphasize the words above "if one thinks". The model Bernanke presented is gedanken. It's an abstract formulation that assumes the various quantities discussed are determinate to a sufficient degree that an argument about how the mechanism works can hold. They aren't so determinate. For example, savings can't be determined. It is hypothesized that S = I, but some big proportion of S isn't I. It's only potential I and that makes all the difference. One last point that anyone involved with financial markets should know. Foreign governments don't lend the US the net dollars they accumulate. They temporarily park them in US Tpaper. A Fed economist can't look at that parking as a borrowing. Borrowing has time terms. The parked money has none. It is as though one takes out a home mortgage and the bank later forecloses even though the borrower supplies required service. A bank can't do that because it violates the terms of the loan, but those who park money in Tpaper are under no such term. Now, please tell me what's important. Bernanke's misleading characterization widely held among the academic effete, or the simple fact that lenders aren't compelled to "lend" to the US? And please tell me, would you continue to park money in or do business with a nation that is becoming ever more socialist?