May jobs report U.S. added 390,000 new jobs. Bully.

[skews13]

Yeah, quite a bit more than was forecast. Fox News was all giddy this morning, forecasting a lot less.

Nice. Lots of work to do yet, supply chains are still snarled, but nice.

Yep, with Aprils numbers revised up. Along with wages up 5.2% for the year so far.

• Nonfarm payrolls increase 390,000 in May
• Unemployment rate steady at 3.6%; participation rate up
• Average hourly earnings rise 0.3%; up 5.2% year-on-year

Nothing but positive news for the US jobs market.

Now it’s time to put CEOs in jail for price gouging, and enact 90% windfall profits ax on their profits for the last year, and give it back to American consumers.

 

[DarthTrader]

You think ONLY helicopter money is inflationary. That's seriously retarded.

When the federal government deficit spends, where do you think they get the money?

They get a YUGE chunk from the Fed buying US Treasuries.

And where does the Fed get the money to buy those Treasuries, dumbass?

They CREATE IT, out of thin air. They INCREASE the money supply.

So when Trump added $8 trillion dollars to the federal debt, he was adding to the inflationary pressure we are experiencing today.

Also - you're wrong about how QE is or isn't inflationary.

The FED thinks that QE is not inflationary, but they are wrong. But it's because of how it manipulates the interest rate, not because of how it affects the money supply through deficit spending connections.

The FED buys treasuries, that is not connected to the US Government issuing treasuries. Treasuries are issued to subscribers who then sell them on the secondary market. The FED may or may not buy those treasuries from securities holders who could be anyone...China, Grandma, etc.

Those securities holders typically demand an interest rate, the FED entering the market manipulates the rate, on purpose.

If the market wanted higher rates they will get higher rates regardless what the FED does, which is why it is said that the FED just does whatever the 2year tells it to do.

But more accurately, the FED is just a market participant, so it's irrelevant what it does when the market has spoken. It's not big enough to move the market all the time, only sometimes.

Most of the time when the FED enters the market to buy treasuries, the rates actually increased, because supply increased faster than the FED's artificial demand.

It's only over some time that FED buying can bring rates down, but when people DEMAND higher rates, they'll get it, no matter how much the FED tries to dump treasuries on our heads.

 

[Mac1958]

Yep, with Aprils numbers revised up. Ali g with wages up 5.2% for the year so far.

• Nonfarm payrolls increase 390,000 in May
• Unemployment rate steady at 3.6%; participation rate up
• Average hourly earnings rise 0.3%; up 5.2% year-on-year

Nothing but positive news for the US jobs market.

Now it’s time to put CEOs in jail for price gouging, and enact 90% windfall profits ax on their profits for the last year, and give it back to American consumers.

Yeah, I'm looking forward to the postmortem on profits in certain sectors for this period.

I don't know how forgiving folks will be this time.

 

[g5000]

FED needs to stop holding rates down.

US probably needs to keep deficit spending high.

The Fed does need to raise interest rates. It's the only way to bring down inflation.

But what do you think happens when the government keeps high deficit spending in periods of high interest rates?

THINK!

 

[DarthTrader]

He pushed the Fed to keep the QE flood of dollars coming, and to keep rates low. Then the NY Fed tossed in another $2T to save his ass in 2019.

All this help for support, and he calls it "The Greatest Economy Ever". And the rubes repeat it like it's gospel.

The FED backed out because of more complex reasons than that. You have to realize that the FED aren't the only ones trying to sell Treasuries.

Everyone is whining about $100bil a month falling off the FED books.

China is actually selling treasuries. $1trillion worth. And in 2019 the world couldn't afford it.

Now we can't either but we are basically at war with China and Russia.

 

[DarthTrader]

The Fed does need to raise interest rates. It's the only way to bring down inflation.

But what do you think happens when the government keeps high deficit spending in periods of high interest rates?

THINK!

The US has accumulated fixed rate debt upwards of $30trillion at rates around 5% to 0.5%.

It can handle a few trillion more at 5% again. The idea that higher interest rates means our debt payments blow up is a bit ridiculously over blown.

What matters is how much debt is accumulated at what rates over time.

 

[DarthTrader]

Spoken like a true socialist.

The Federal Reserve is a for profit bank governed by Congress as its principal shareholders.

When you realize that...it becomes much more clear.

 

[initforme]

Supply chains aren't snarled because of lack of workers. There's an excess.

 

[g5000]

I wrote this topic back in 2013: The Fed's Bond Bubble Doomsday Machine

The bubble has lasted a lot longer than I thought it would, but it is catching up to us.

But as John Maynard Keynes said, "Markets can stay irrational longer than you can stay solvent."

 

[g5000]

Barriers to competition are also driving down wages for workers. When there are only a few employers in town, workers have less opportunity to bargain for a higher wage and to demand dignity and respect in the workplace. In fact, research shows that industry consolidation is decreasing advertised wages by as much as 17%. Tens of millions of Americans—including those working in construction and retail—are required to sign non-compete agreements as a condition of getting a job, which makes it harder for them to switch to better-paying options.

[snip]

Today President Biden is taking decisive action to reduce the trend of corporate consolidation, increase competition, and deliver concrete benefits to America’s consumers, workers, farmers, and small businesses. Today’s historic Executive Order established a whole-of-government effort to promote competition in the American economy. The Order includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition problems across our economy. Once implemented, these initiatives will result in concrete improvements to people’s lives.


[snip]

Overly burdensome occupational licensing requirements also restrict competition. In certain occupations, such as skilled construction trades, licensing is critical to protecting public health and safety and increasing wages for workers who acquire in-demand skills and knowledge. In other occupations, however, it can impede worker mobility without countervailing benefits. Today, almost 30% of jobs in the United States require a license, up from less than 5% in the 1950s. Fewer than 5% of occupations that require licensing in at least one state are treated consistently across all 50 states. That locks some people out of jobs, and it makes it harder for people to move between states—particularly burdening military spouses, 34% of whom work in a field requiring a license and are subject to military-directed moves every few years.

[snip]

Shipping: In maritime shipping, the global marketplace has rapidly consolidated. In 2000, the largest 10 shipping companies controlled 51% of the market. Today, it is more than 80%, leaving domestic manufacturers who need to export goods at these large foreign companies’ mercy. This has let powerful container shippers charge exporters exorbitant fees for time their freight was sitting waiting to be loaded or unloaded. These fees, called “detention and demurrage charges,” can add up to hundreds of thousands of dollars.

FACT SHEET: Executive Order on Promoting Competition in the American Economy | The White House

The economy is booming under President Biden’s leadership. The economy has gained more than three million jobs since the President took office—the most

www.whitehouse.gov

 

[g5000]

I've been reading some interesting articles about shipping which is contributing to inflation and supply chain snarls.

Giant container ships are ruining everything

Megaships are helping cause our current supply chain chaos. Big container boats have hampered competition and clogged up ports.

www.freightwaves.com

The White House is taking aim at 'the cartel of shipping companies' that control global trade amid supply chain chaos

"Price-gouging by the ocean shipping cartel" is behind the inconvenience and inflation slamming holiday-season shopping, the White House said.

www.businessinsider.com

They are well worth reading in full.

 

[JusticeHammer]

People returning to their jobs cannot honestly be called job growth. But the lying libs will run with it.

 

[rightwinger]

People returning to their jobs cannot honestly be called job growth. But the lying libs will run with it.

You are either working or you are not
If more people are working than last month, that is job growth

 

[Mac1958]

But what do you think happens when the government keeps high deficit spending in periods of high interest rates?

This has been the 800 pound gorilla, just sitting there, all along. If people thought our debt service was too high BEFORE...

But hey, we just love borrowing money. It keeps the donors happy.

 

[g5000]

So long as the tards in one corner think the tards in the other corner are the ones responsible for our federal debt, then our politicians will continue to spend us into oblivion in full confidence of never being held accountable by their constituents.

We get the politicians we deserve.

"Those Congresscritters spend too much on PORK, but my guy brings home the BACON!"

 

[DarthTrader]

I wrote this topic back in 2013: The Fed's Bond Bubble Doomsday Machine

The bubble has lasted a lot longer than I thought it would, but it is catching up to us.

But as John Maynard Keynes said, "Markets can stay irrational longer than you can stay solvent."

The immediate problem in your thread is you're double counting where the money goes. (The 'monetization of the debt').

If the FED were to buy bonds directly from the Treasury (subscribe), then yes. But that's not how they do it. They buy from the secondary market.

So when you think that the FED buys bonds from the Treasury you're "double counting".

The FED creates money the same way any bank does. A history of money would be useful here: basically banks create money, not kings or countries. Banks.

In the US, it is still legal to print private money, which is one of the strongest arguments for "bitcoin". I won't go into the constitutional parts of this question, but when the constitution was far more new, banks still printed their own bank notes, and they were discounted based on the likelihood of ever being able to cash them in. Trading a South Carolina bank note at a discount in New York was common.

So the FED simply took over THAT role from the banks, requiring all banks to deposit reserves with the FED. Nowadays instead of the Banks issuing notes, they just loan dollars on a double-entry accounting ledger.

Basically what the ancient romans did. Not much has changed since then.

https://dspace.mit.edu/bitstream/handle/1721.1/63609/financialinterme00temi.pdf;sequence=1

MIT has a good discussion, it's called "financial intermediation".

The reason why the "debt bomb" just won't blow-up in everyone's face like we all expect it to is two-fold.

1. The Romans didn't have an inflation problem, they had a deflation problem. They couldn't "print enough money" to keep their economy running. Like Japan today. Modern Central Banks understand this - and so - have avoided it somewhat well.
2. We have a deflation problem. The reason the bubble won't burst is because it's not bursting with debt, it's imploding by too little debt. The problem of "filling that bubble" is thus:
3. Debt can't just be printed and snorted up with cocaine. It has to be productively invested to "inflate the bubble". And the problem the US has is free-market participants are less and less willing to productively invest their money.

Almost all of the US money is invested in the top 8 companies on S&P. That's pretty piss poor.

And because of the trade deficit, huge amounts of that money doesn't even make it to invest in the US productively. It goes to China etc.

This is why I think we are confronting a serious deflation challenge, not an inflation challenge. We aren't having a debt crisis, we are having a liquidity crisis.

 

[g5000]

The immediate problem in your thread is you're double counting where the money goes. (The 'monetization of the debt').

If the FED were to buy bonds directly from the Treasury (subscribe), then yes. But that's not how they do it. They buy from the secondary market.

So when you think that the FED buys bonds from the Treasury you're "double counting".

The FED creates money the same way any bank does. A history of money would be useful here: basically banks create money, not kings or countries. Banks.

In the US, it is still legal to print private money, which is one of the strongest arguments for "bitcoin". I won't go into the constitutional parts of this question, but when the constitution was far more new, banks still printed their own bank notes, and they were discounted based on the likelihood of ever being able to cash them in. Trading a South Carolina bank note at a discount in New York was common.

So the FED simply took over THAT role from the banks, requiring all banks to deposit reserves with the FED. Nowadays instead of the Banks issuing notes, they just loan dollars on a double-entry accounting ledger.

Basically what the ancient romans did. Not much has changed since then.

https://dspace.mit.edu/bitstream/handle/1721.1/63609/financialinterme00temi.pdf;sequence=1

MIT has a good discussion, it's called "financial intermediation".

The reason why the "debt bomb" just won't blow-up in everyone's face like we all expect it to is two-fold.

1. The Romans didn't have an inflation problem, they had a deflation problem. They couldn't "print enough money" to keep their economy running. Like Japan today. Modern Central Banks understand this - and so - have avoided it somewhat well.
2. We have a deflation problem. The reason the bubble won't burst is because it's not bursting with debt, it's imploding by too little debt. The problem of "filling that bubble" is thus:
3. Debt can't just be printed and snorted up with cocaine. It has to be productively invested to "inflate the bubble". And the problem the US has is free-market participants are less and less willing to productively invest their money.

Almost all of the US money is invested in the top 8 companies on S&P. That's pretty piss poor.

And because of the trade deficit, huge amounts of that money doesn't even make it to invest in the US productively. It goes to China etc.

This is why I think we are confronting a serious deflation challenge, not an inflation challenge. We aren't having a debt crisis, we are having a liquidity crisis.

I think I acknowledge later in that topic that the Fed buys securities in the secondary market, but it does not matter as the point is that the Fed prints money. It monetizes the debt.

And yes, under the fractional reserve system, your local bank prints money. But what the anti-Fed goons never tell you is that the bank destroys that money when the principal is paid back.

If you think Bitcoin is the answer, you're even crazier than I thought. Crypto is magnitudes more volatile than our fiat money.

 

[Lesh]

And yes, under the fractional reserve system, your local bank prints money. But what the anti-Fed goons never tell you is that the bank destroys that money when the principal is paid back.

And that's the part they always miss

If you think Bitcoin is the answer, you're even crazier than I thought. Crypto is magnitudes more volatile than our fiat money.

Yup

 

[Lesh]

This was an outstanding jobs report

 

[BluesLegend]