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Can anybody tell me how to configure IBM Httpserver 1.3.28 with IBM websphere 5.1
I'm doing this locally on my machine and when I acces my application I get to the home page and I can't access the other links in the page as the webserver is not communicating with the Application server
I searched in google and got few ideas but that didn't help..(like here:http://publib.boulder.ibm.com/infocenter/ws51help/index.jsp?topic=/com.ibm.websphere.base.doc/info/aes/ae/tins_manualWebIHS13.html)
I really don't have very good knowledge of configuring things .
Configuring IBM Httpserver 1.3.28 (1 messages)
- Posted by: ita jonnala
- Posted on: February 16 2005 15:11 EST
Threaded Messages (1)
- Configuring IBM Httpserver 1.3.28 by Bill Lasley on February 24 2005 11:27 EST
Configuring IBM Httpserver 1.3.28[ Go to top ]
See the WebSphere 5.1 InfoCenter at http://www-306.ibm.com/software/webservers/appserv/was/library/library51.html
- Posted by: Bill Lasley
- Posted on: February 24 2005 11:27 EST
- in response to ita jonnala
Without knowing your application structure and configuration it is difficult to determine the cause of your specific problem. You say that your home page displays, but that no other links are accessible, "as the webserver is not communicating with the Application server." Who served your home page then, the web server or the WebSphere HTTP transport? If you are you specifying a port number, other than 80, in your URL (e.g. http://localhost:9080/home.jsp), then the WebSphere internal HTTP server served the page, unless you added * 80 to the default virtual host. Did you install the plugin when you installed WebSphere and IHS? Did you regenerate the plug-in after installing your new application? If you didn't, the web server will not know about your new application.
Look at the following log files in for clues: <WAS_HOME>/logs/server1 (assuming that is your server name). Specifically, look at SystemOut.log, SystemErr.log. If the plugin is working, there likely will be a file named http_plugin.log in <WAS_HOME>/logs, as well. IHS also has a logs directory, so look in there as well.
Finally, look at <IHS_HOME>/conf/httpd.conf. At the end of the configuration file you should have a LoadModule entry that points to the plugin module, and a WebSpherePluginConfig entry that points to the plugin configuration file (plugin-cfg.xml). Look at this file and make sure there is a Uri name= entry in UriGroup for your application.
Bill Lasley
Versant Corp.


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I just want to say that many years ago I had the honor to work for Warren Mosler when he was a fixed income money manager in West Palm Beach. He was the most brilliant and successful fixed income money manager I ever met, and I met lots of them. He never cheated, or took unfair advantage, he succeeded through sheer mental acuity, he was simply smarter than everybody else. And he was totally a stand up guy. Unfortunately for me, he didn't suffer fools, so I didn't last very long. And I am not smart enough to understand all of his monetary theories, but I am smart enough to know never to take the other side of a Warren Mosler trade.
How can other governments and citizens of a net export economy with a currency pegged to the US Dollar learn from this?
WARREN MOSLER Reply:
October 28th, 2012 at 3:05 am
good question. most just suffer from lower real terms of trade
I'm trying to understand the 'impossibility' of future debt monetization. Here's where I'm confused…
"However, fear of debt monetization is unfounded, since the Federal Reserve does not even have the option to monetize any of the outstanding federal debt or newly issued federal debt. As long as the Fed has a mandate to maintain a target fed funds rate, the size of its purchases and sales of government debt are not discretionary. Once the Federal Reserve Board of Governors sets a fed funds rate, the Fed's portfolio of government securities changes only because of the transactions that are required to support the funds rate."
This seems to ignore quantitative easing and a zero interest rate policy.
"The Fed's lack of control over the quantity of reserves underscores the impossibility of debt monetization. The Fed is unable to monetize the federal debt by purchasing government securities at will because to do so would cause the funds rate to fall to zero."
Right. And now we have a fed funds rate that is effectively zero.
"If the Fed purchased securities directly from the Treasury and the Treasury then spent the money, it's expenditures would be excess reserves in the banking system."
Right, excess reserves have grown dramatically in the last 3 years.
The Fed would be forced to sell an equal amount of securities to support the fed funds target.The Fed would act only as an intermediary. The Fed would be buying securities from the Treasury and selling them to the public. No monetization would occur.
That is exactly what is NOT happening as the Fed increases its balance sheet.
WARREN MOSLER Reply:
October 10th, 2012 at 6:58 pm
that was in the context of an interest rate target above 0 and a fed that didn't have permission from congress to pay interest on reserves. i think that was specified in the paper somewhere?
Hi Warren,
Just got done reading SCE. One question that comes to mind is if we lived in a world run like you propose, could you see a situation where firms are operating at/near full capacity and need invest in additional capacity, but are restrained from doing so in the amount necessary by too high interest rates or too low equity valuations?
WARREN MOSLER Reply:
June 4th, 2012 at 10:09 am
not to worry, market prices work to ensure that investment 'crowds out' consumption.
If as you say – our FED and Govt both dont understand how a true fiat system works – does that truly mean that we can pay the debt off any time we want? Just by creating the asset? I never quite got the savings / investment equals debt issue. To much living in a asset backed world of yesteryear perhaps?
Seems if you are correct, all we need to concern ourselves with is inflation. Deflation should never be used as a tool.
WARREN MOSLER Reply:
June 3rd, 2012 at 10:18 pm
first, read the 7dif on this website?
second, funds spent and not taxed 'rest' in the economy as some combo of cash (Fed notes), reserves (balances in Fed accounts), and tsy securities (also balances in Fed accounts).
spending adds to one or more of those three, taxing results in a reduction.
Together these constitute 'net savings of dollar denominated financial assets in the economy'
That is, the 'debt' = the economy's savings of net dollar denominated financial assets.
To the penny.
So in that light, what does 'paying off the debt' actually mean?
After reading this, there are some questions about saving and investment that come to mind.
1) Do you view a GDP composed of more investment and less consumption as a good or bad development? (I believe productivity growth comes from investment so I would have to say good.)
2) If more investment is good, what policies get us moving in that direction if increased saving may actually decrease investment?
3) Does the cost of capital matter at all in this theory for the level of investment? Don't saving decisions, the tax code etc have an effect on the cost of debt and equity?
WARREN MOSLER Reply:
January 28th, 2012 at 7:24 am
the point of the economy is consumption directly or indirectly, so the decision of the nature of the desired output to at some point consume is the driver.
the real cost of real capital is the real goods and services that go into producing the capital goods.
So, the definitive difference is that relations between taxpayers and EMU nations, are horizontal relations, and relations between ECB and member nations, are vertical relations. I mean horizontal and vertical in the MMT/chartalist way of describe.
So pay taxes it's like to pay another person via banks, functionally. reserves are "shifted".
WARREN MOSLER Reply:
September 13th, 2011 at 8:13 am
however taxes also remain as coercive, non market events that 'distort' accordingly
Luigi Reply:
October 8th, 2011 at 8:19 am
Warren, deficit spending by member states in Europe, can create problem to ECB to set interest rates? I mean, excess reserves in the system that drive overnight rates below the central bank's target etc
WARREN MOSLER Reply:
October 8th, 2011 at 11:00 am
no, they set the overnight rate with the same tools all cb's have
Luigi Reply:
October 8th, 2011 at 3:07 pm
sorry, I haven't formulated very well my question.
Deficit spending by member states, add (or shift?) reserves in the system, so they are in excess and so could potentially be a problem for the CB. ECB set the overnight like all CB, but there is a potential problem? or there is not the same relation between deficit-reserves-interest rates, typical of USA and others?
WARREN MOSLER Reply:
October 8th, 2011 at 11:49 pm
same as when the us states borrow to spend. a non issue for monetary policy
"The difference is the state/euro member nation is not the issuer of the currency, so it's constrained by its ability to fund itself through taxing, borrowing, asset sales, etc."
Yes, I understand the difference, but technically it seems the same. I mean, taxes don't go nowhere also in EMU (reserves are destroyed, so technically they don't fund nothing, they are just bit), but the difference is that they are forced to have a positive account, while sovereign government choose to have a positive account, but it's only a congress choice.
I understand right?
"think of the issuer of anything of spending that thing first, and then collecting it via the likes of taxing and borrowing"
could you explain this point? I don't understand (probably I have problem to translate). Thanks a lot.
WARREN MOSLER Reply:
September 12th, 2011 at 9:21 pm
if a tax was paid to the ECB the reserve balance would be eliminated.
but if you pay a tax to a member nation, your bank's reserve account is debited and the gov's is credited.
and yes, net financial assets of the non gov sector are reduced by your payment, if you include that nat gov as 'government' which isn't wrong to do.
the issuer, the ecb, like the Fed, is best thought of as spending first, and then 'funding' itself/accounting for what it did in one form or another.
Warren, in Mundell-Fleming model there is a form of crowding out that act on exchange rates. In the example about a government's deficit they talk about a "raise in interest rates after a deficit spending, so a raise in interest rates persuades people to invest in national economy, so there is a great capital inflow, and the inflow makes the local currency stronger compared to foreign currencies. Strong exchange rate also makes foreign goods cheaper compared to local goods. This encourages greater import and discourages export and hence, lower net export."
So, in this model and in this view deficit spending is useless.
What I don't understand is the raise in interest rates after a deficit spending, why? it's the same model that see "deficit spending=raise in interest rates" or there is something? I mean, this model seems wrong.
WARREN MOSLER Reply:
September 8th, 2011 at 11:21 am
yes, it's fixed exchange rate stuff. doesn't apply to current floating fx/non conv. currency policy
John O'Connell Reply:
September 8th, 2011 at 11:22 am
It could be explained as a simple supply/demand thing. Increased selling of bonds would drive down the price (= higher interest rate). There is an assumption that selling the bonds is required when there is a deficit, and that the selling by one branch of government (Treasury) is not offset by buying by another branch (Federal Reserve).
Luigi Reply:
September 11th, 2011 at 8:29 am
Two things:
Do you know about papers or document by MMT that confute/talk about some model like ohlin-heckscher or Stolper-Samuelson?
I've linked your documents and many other by Scott, Stephanie etc to my professor. He says "interesting, but there is no math. They make assumptions, but there isn't any mathematical demonstration".
I think that some documents don't need a mathematical demonstration, but they are only some facts. Anyway, what's your view? Why he asks about some "mathematical demonstration"?
Tom Hickey Reply:
September 11th, 2011 at 10:10 am
Ask him if he is familiar with Godley & Lavoie, Monetary Economics: An Integrated Approach to Credit, Money, Income, Production and Wealth (Palgrave Macmillan, 2007) on the basics of SFC modeling.
Hereis Bill Mitchell's short encapsulation of SFC modeling. Bill also has quite a bit of criticism of mainstream models.
You could also point him to Scott Fullwiler's "Interest Rates and Fiscal Sustainability," Working Paper No. 53, July 2006 here.
WARREN MOSLER Reply:
September 11th, 2011 at 6:57 pm
Pavlina's math model is at http://www.mosler.org
Luigi Reply:
September 11th, 2011 at 7:24 pm
Thanks Tom, and Warren. I don't think that he knows Godley, he has a general neoliberal view of economics. I know SFC and I have read many times billy blog on this matter. But it's difficult to persuade someone to study other documents.
When I linked him some MMT documents, he says something like "they write in economic journals that nobody read, you know, this heterodox economics is very strange.." etc etc.
anyway, thanks, I have a doubt that is not on topic, can you help me?
If government spending creates reserve balances, and taxes and bond sales destroy them, how europan nations can collect taxes in order to spend euro? I mean, the result of taxation is the same, no?
WARREN MOSLER Reply:
September 12th, 2011 at 11:26 am
good question. it's just like the US states.
When they spend, their account is debited, and the counter party's account is credited
This adds balances to the 'non govt' sector is you count the states as govt.
And the reverse happens when a state taxes.
The difference is the state/euro member nation is not the issuer of the currency, so it's constrained by its ability to fund itself through taxing, borrowing, asset sales, etc.
PJ Pierre Reply:
September 12th, 2011 at 1:50 am
Federal taxes destroy (uncreate) RB in the sense that RB are a Fed Govt liability. When an IOU is returned to the issuer it ceases to exist. An entity can not be liable to its self.
In contrast, the euro is not the issued liability of the euro zone governments. It is the issued liability of the ECB. In the sense the euro zone nations are users of the euro and must collect them to spend.
Luigi Reply:
September 12th, 2011 at 5:38 am
Thanks PJ, another doubt that I have is:
How rolling over to pay for the redemption of maturing securities, can be a way to have funds on the account (not because spending is constrained by revenues, but because they have to have a positive account), if new "revenues" are used to pay maturing debt? I mean, it's a sum 0, no?
So, how could this "finance" public spending? (I know that issuing debt is a monetary operation, not a fiscal)
And so, there is really some operational relation between Treasury that redeem its maturing debt and Treasury that issues new debt?
WARREN MOSLER Reply:
September 12th, 2011 at 11:44 am
think of the issuer of anything of spending that thing first, and then collecting it via the likes of taxing and borrowing
With respect to your statement that the government must spend "first" in order to create financial assets with which the people will pay their taxes:
Before there was a fiat system, there was money and the people were able to pay their taxes. When the government ran a surplus, the people were able to pay their taxes, even though the taxes exceeded government spending. Clearly there is money in the system that is there even when government does not spend.
I think the main point is that government deficits create (additional) financial assets in the private sector, but I don't see a chronological dependency. Because our experience tells us that there is no such dependency, I think it is confusing and distracting for you to say so, and detracts from the credibility of your message.
Is there another way to make the point without the chronological implication?
Matt Franko Reply:
September 7th, 2011 at 8:27 pm
@John O'Connell, "Before there was a fiat system, there was money "
Can you expand on that? Resp,
John O'Connell Reply:
September 8th, 2011 at 11:15 am
In 1970, before we went to fiat in 1971, there was money and people paid their taxes. Taxes were < 20% of GDP, so even with no government spending at all, we could have continued paying taxes for at least 5 more years before we ran out (assuming GDP dropped by 20% a year due to the recession).
Yes, it's eating our seed corn, but we did have seed corn. We did not create a fiat monetary system from zero, there was a functioning monetary system before fiat, and we inherited all the elements of it, including all its financial assets and ability to pay taxes (and, unfortunately, some of its economic "laws" that were no longer true).
WARREN MOSLER Reply:
September 8th, 2011 at 11:22 am
yes, on a gold standard you can dig up gold and pay taxes with it. same with other fixed fx policies.
not applicable to fiat
WARREN MOSLER Reply:
September 8th, 2011 at 7:51 am
when the gov is the unique issuer of its currency how else can anyone, from inception, get any to pay their taxes?
how can you get bus tokens until after the bus company issues them?
only if 'money' is something that can be had 'externally' can taxes be paid first?
John O'Connell Reply:
September 8th, 2011 at 11:17 am
All true, but we did have money, gotten externally, before fiat. The bus company was in existence and accepting gold nuggets in exchange for tokens, before they decided to accept only tokens and no longer convert gold nuggets. People already had a supply of tokens left over from the "old days".
John O'Connell Reply:
September 13th, 2011 at 12:16 pm
By "from inception", do you mean that a government arises and issues fiat currency in a society that previously had no government and no currency? Like the baby-sitting co-op? I agree that in such a case the government must spend "first", because the society had no currency at all prior to fiat.
But when has that happened? All primitive societies, as far as I know, devloped hard currencies before they had formal governments. If they transitioned to fiat currencies, they did it somewhat in the same way as the US, first issuing a convertible currency, and then eventually making it non-convertible (fiat). But when they went fiat, they already had a quite ample supply of currency in circulation, and that remained currency (money) and was accepted for tax payments.
Countries in the real world aren't like the baby-sitting co-op, which had to issue a supply of scrip before the first baby was sat for.
I think your insistence on the use of "first" implies a time relationship that clearly does not exist, and is confusing, when applied to the activity of any single time period. It would be better for you to focus on CHANGES in money coming about only by the relationship of government spending and taxation, and allowing that taxes in one period can be paid using money that existed from prior periods (i.e., tax in April, spend in December).
Tom Hickey Reply:
September 13th, 2011 at 12:46 pm
But when has that happened? All primitive societies, as far as I know, devloped hard currencies before they had formal governments.
David Graeber, Debt:The First 5000 Years
Book Description
Publication Date: July 12, 2011
Before there was money, there was debt
Every economics textbook says the same thing: Money was invented to replace onerous and complicated barter systems—to relieve ancient people from having to haul their goods to market. The problem with this version of history? There's not a shred of evidence to support it.
Here anthropologist David Graeber presents a stunning reversal of conventional wisdom. He shows that for more than 5,000 years, since the beginnings of the first agrarian empires, humans have used elaborate credit systems to buy and sell goods—that is, long before the invention of coins or cash. It is in this era, Graeber argues, that we also first encounter a society divided into debtors and creditors.
Graeber shows that arguments about debt and debt forgiveness have been at the center of political debates from Italy to China, as well as sparking innumerable insurrections. He also brilliantly demonstrates that the language of the ancient works of law and religion (words like "guilt," "sin," and "redemption") derive in large part from ancient debates about debt, and shape even our most basic ideas of right and wrong. We are still fighting these battles today without knowing it.
Debt: The First 5,000 Years is a fascinating chronicle of this little known history—as well as how it has defined human history, and what it means for the credit crisis of the present day and the future of our economy.
See also L. Randall Wray, Understanding Modern Money.
Warren, I am relatively new to this site, and I find your ideas quite thought-provoking. I have a few questions.
1. You state that "Insolvency is never an issue with inconvertible currency and floating exchange rates" ("7 Deadly…", p. 97), with which I agree. But why would it be an issue with a fiat currency that was "pegged" to the US dollar rather than floating? Secondly, I should think that in both cases an additional condition of no insolvency would be that there is no net foreign currency debt (that could not be paid off with money created in the domestic currency.)
2. You write that, in a deficit situation, the Fed need not sell exactly the amount of T-Bills necessary to mop up the excess funds, although selling less would mean an increase in money supply with the accompanying risk of inflation and a zero Fed funds rate due to excess reserves in the banking system. (Incidentally, would the zero Fed funds rate apply only at the margin or to all the Fed loans at a bank with an excess?). Do you have any examples of this actually being done to stimulate demand (i.e. government spending not fully covered by borrowing or taxation)? In the absence of such examples, it is difficult to demonstrate that the mainstream claim that it is necessary to have borrowing or taxation before we can spend is wrong. Instead we have just a difference of interpretation of the accounting, and frankly, their interpretation seems more credible in the absence of a "falsifying" example.
3. I find it difficult to get my brain around the discussions about savings and investment, both in mainstream discussions and in MMT discussions. It would seem to me that, in a fiat world as you describe, business investment is not dependent on savings at all, as it is financed primarily by bank loans that create new money by issuing credit. This would seem to be true even if all the "private and corporate" savings in a deficit situation went into T-Bills to satisfy the Fed's condition of no change in interest rates. The classical accounting balance states:
G-T = S-I (assuming the current account is in balance for simplicity of presentation). (G=government spending; T= taxes; S= Savings; I= Investment)
Assuming a deficit, (G-T) >0, this equation implies (incorrectly) that all investment comes out of savings, which was certainly true under a gold-based currency and an exogenous money supply. But when dealing with a fiat currency where banks can create new money as required, it is not so. It would help understanding if we defined a new variable, B, for net Bank-created new money, in every way equivalent functionally to government expenditures, and if we split savings into 2 components, STB +S1, where STB is the amount placed in T-Bills in order for the Fed to maintain interest rates at current levels (according to MMT theory) or necessary to "finance" the debt (according to Mainstream economists). Let us also split investment into two components, I1, which is real investment financed by S1, i.e. net savings after satisfying the T-Bill requirement, and IB as investment financed by new bank money. (IB=B).
Thus: G-T = STB + S1 –I1.
Under these assumptions, since STB = G-T, this leaves us with: S1 = I1, which is a tautology stating that the net savings remaining within the banking system (after satisfying any Fed open market operations, STB) equals the investment financed by the savings remaining within the system.
Note two things that are not intuitively obvious from the original equation.
(i) In the original equation, I does not represent total investment at all, as we are missing what may well be the major part, that part financed by new bank money, IB. We could, for example rewrite the original equation as follows:
G+B-T=STB+S1 –I1 +IB. (where IB =B and STB=G-T).
The total real investment is IB + I1.. Now, in the real world, when economists talk about savings, they are usually (but not always) referring to S1, the "amount available for real investment" (i.e. T-Bills are not real investment). Since S1 is, by the above accounting, independent of the size of the deficit or surplus, the mainstream has a point when they reject the MMT claim that an increased deficit means increased savings. Warren is, however, right if we define savings as S1 + STB, which increases with a deficit and decreases with a surplus. So, in a way, both sides are right. However, the mainstream is wrong if it claims S1 decreases in a deficit and increases in a surplus (as Rubin apparently claimed). What increases in a surplus is the cash from the public's sale of T-Bills that allows taxes to be paid. Confusion arises due to lack of clarity on whether we are talking about S1 + STB or S1.
(ii) S1 is not affected by a budget surplus or deficit under the assumption of Fed sterilization of deficits and surpluses.
Anyway, the above arguments help me to get my brain around "savings and investment". Does this way of looking at it make sense to others? I would be glad to hear any comments.
WARREN MOSLER Reply:
September 2nd, 2011 at 12:24 pm
You write that, in a deficit situation, the Fed need not sell exactly the amount of T-Bills necessary to mop up the excess funds, although selling less would mean an increase in money supply with the accompanying risk of inflation and a zero Fed funds rate due to excess reserves in the banking system.
If i said that last part i was mistaken. It just sits as reserve balances with no further effect on anything beyond a possible modest effect on the term structure of rates.
As for savings, you may be attempting to 'answer the question that isn't being asked'
real savings comes from real output not consumed.
Nominal savings is a measurement of financial assets, which are 'offset' by financial liabilities as a matter of accounting, so they grow endogenously.
Net financial assets for any given sector must originate from outside that sector, as a matter of the same accounting
I've read 7/frauds and lots of other stuff here, other blogs, Wikipedia, etc, and my head literally exploded with the simplicity and elegance of your ideas. Full force of logic indeed.
The thing i am having a hard time finding is how these ideas morph from theory to practice. Perhaps my ignorance about the mechanics of the fed and treasury and how they function in relation to spending approved by congress is to blame…for example, if Warren was head of the Fed, can these ideas be implemented without legislative approval/changes? Would the full employment plan be possible by decree?
Practically, the tax side of the equation appears the most difficult to change, given that our current tax policies are for the most part incomprehensible to the average person…and legislator. On that note, I don't believe I've read any position on changes to the tax code: does this operational model resonate most closely with, flat, consumption based, or other tax model? At brass tax level: how to divide the burden of taxes most equally? (or is the assumption that taxes are progressive in nature?) would a consumption based tax, similar to sales taxes paid at the tiller, retard spending if income, capital gains,etc were eliminated? Perhaps this to broad a brush to influence specific behaviors (eg buying solar panels–how to incent).
Lastly, suggestion for your campaign: you need a series of viral Internet videos to promote these ideas and gain mainstream exposure. An honest, elderly, retiree, tired of the chaos, politics, and bickering, who can explain in simple metaphors why sovereign currency nations are not like households re budgets and spending.
I explained all this to mom by explaining the economy is like a bathtub with a faucet and a drain. The goal is to fill the bathtub, then let the water drain at a rate such that water doesn't overflow (inflation). This bathtub is special in that it can grow if you get the faucet and drain to work in harmony. With this simple metaphor I also was able to convince a tea partier of the necessity to radically increase spending now!
Lastly, one of the appealing aspects of this model Is the apparent manageability of the system. Surely this is also a selling point…
Kindly, and good luck
WARREN MOSLER Reply:
August 10th, 2011 at 12:37 am
thanks, use the tub imagery myself, but i like the extension to the tub growing
Thanks, Mssrs Mosley and Hickey. I'll look through the other blog posts for more guidance on how best to augment the existing stabilizers.
Hello Mr. Mosler!
I love your work and your book. Your pithy aphorism "Taxes function to regulate aggregate demand, and not to raise revenue per se" works for me, but it also raise two concerns (if I am just muddled in my thinking please correct me).
One implication of this statement is that, at times, taxes will have to be raised to lower aggregate demand. Now, this to me seems to come close to traditional 1960s style "fine tuning", which is all very well in theory, but hard to effect politically. Does that not expose us to the danger of having policy makers resort to the "atom bomb" of high real interest rates, when fiscal policy is rendered ineffectual by politics?
Second, as a Canadian civil servant, I am aware that one of things that drove senior policy makers here away from policies of demand management in the mid-1980s was their skepticism, based on operational experience, of the capacity of government to time fiscal interventions appropriately (so that counter-cyclical policies often ended up having pro-cyclical effects). This was somewhat overstated as a concern, but a real one nonetheless. If I understand correctly, you and Randall Wray are not basing your arguments on theory, but on the accounting identity: Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0. But that said, can you offer an argument to allay the fears, say, of our Deputy Minister of Finance about the capacity of government to manage aggregate demand effectively through fiscal policy?
WARREN MOSLER Reply:
July 19th, 2011 at 3:41 pm
yes, most ofter the gov tries interest rate policy first. and, equally unfortunately, they have that backwards, and make things worse
there is no operational limit to nominal capacity of the Canadian govt. in $C.
as you stated, the limits are political.
Everything in Soft Currency Economics and the rest of the 'mandatory readings' applies to Canada, as do the 7 deadly innocent frauds.
thanks for tuning in!
Tom Hickey Reply:
July 19th, 2011 at 5:09 pm
As Randy Wray point out in his MMT Primer blogs at New Economic Perspectives, the domestic private balance and the external balance are non-discretionary and are the given. It is deficits that need to adjust to changes in these balance to offset domestic and external propensity to save.
As non-government saving increases, then the deficit rises to balance the equation. It must do this to offset changing saving desire, and if the offset is not large enough or fast enough, then contraction ensues and unemployment rises.
The way to structure the offset institutionally so that ad hoc political measures are reduced to the minimum, automatic stabilization must be put into place with respect to both taxes and expenditures.
There are already automatic stabilizers in place but they have proved to be insufficient and need augmentation. Tax policy is automatic in the revenue falls with falling incomes and rises with increasing incomes, but this can be adjusted to work more appropriately than it does now. There are a number of ways that have been proposed in the comments to various other blog posts.
The Figures referred to in the text aren't visible. Can you supply link(s) to them? Thanks
I have a doubt, when a bank sell bonds in order to have a reserve in BC, they have to refund the loan by the BC? if yes, when and how?
Warren, When I first read this years ago, there were mentions of "endogenous" and "exogenous" money. Am I mistaken or is there another version of this paper possibly for academia? If so, where can I find it.
WARREN MOSLER Reply:
April 15th, 2011 at 12:36 pm
Hi, this is the only version.
You might go back to Basil Moore's 1988 'horizontalists and verticalists' for more discussion on what used to be those two schools of thought.
what it now comes down to is exogenous money would apply with fixed exchange rates and endogenous to floating fx (non convertible currency)
and part of the old problem was trying to define 'money' as well.
I haven't heard it discussed in quite a while.
and have you seen this paper on this website?
A General Analytical Framework for the Analysis of Currencies and Other Commodities
jack Reply:
April 15th, 2011 at 1:44 pm
Yes I have read through that. It's probably time for a revisit and new visit to Basil Moore's ideas.
Thank you.
very well said mr. mosler. been a devotee ever since i read "the natural rate of interest is zero" via a an invite from mike norman. i try to read one of the mandatory reads per month. clears my head of all the frippery that clogs it due to too much MSM consumption.
WARREN MOSLER Reply:
October 17th, 2010 at 11:22 pm
The parent might decide to pay (support) a high rate of
interest to encourage saving. Conversely, a low rate may discourage
saving. In any case, the amount of cards lent to the parent each night
will generally equal the number of cards the parent has spent, but not
taxed — the parent's deficit. Notice that the parent is not borrowing
to fund expenditures, and that offering to pay interest (funding the
deficit) does not reduce the wealth (measured by the number of cards)
of each child.
I have a problems with this analogy, and by implication the view that
deficits do not reduce our wealth. In this example, the ostensible
reason the parents issue cards is to get their kids to do chores, and
the cards obtain value in the eyes of the children to get things back
from the parent (food, shelter, punishment avoidance). Essentially,
the parents can compel the kids to use the cards by the control over
resources and power they have, and in the case of the government the
argument is that the government can coerce the services it needs from
the populace (eg, armed service) by requiring the use of dollars to
pay taxes. This begs the question of why the parents need cards in
the first place — they can just compel the services from the kids —
but that is not my central problem.
Rather, if we save those business cards from our parents, and loan
them back to the parents with interest, and plan to use them later so
we don't have to do our chores, then the parents will not have anyone
doing the chores later (unless they have more kids). The only way the
government can use the cards to get the kids (in the absence of new
kids) to do the required chores in the future is to raise the tax,
requiring more of our business cards each month for the services we
need from the parent. So while it is true that the parent's borrowing
is not reducing our wealth measured by the number of cards, it
does seem that the card savings and interest are reducing our
expected real wealth, because we know the parents are going to
have to tax us more heavily to get the services they need. Or else
they are going need to have some kids, and presumably there are going
to be even more chores to do since they are now feeding a larger family,
which makes more dirty dishes and laundry, and the older kids aren't doing many chores
because they've saved up those excess cards the parents issued, and
are getting them back with interest.
WARREN MOSLER Reply:
September 28th, 2010 at 10:40 am
and I also support not paying interest on the cards or on dollars
Thanks for putting this site together.
You mention figures a few times in this article, but there are no figures up on the page. I think it would be very helpful to take a look at those figures.
I also think just a simple flowchart of the transactions you describe would often be helpful. I find myself scribbling them down as I go, and I doubt I'm alone (at least when considering the lay people reading this page).
what happened to the thread?
Thanks for the kind words about being rational!
I more than agree getting the nomination is a long shot at the moment.
Hopefully, how the monetary system actually works gets into the public debate.
In the early 70's I was told I was the first or at least one of the first to recognize implied yields of calendar spreads in GNMA's, and one of the first to make spread markets while at Banker's Trust.
I was perhaps the first to recognize the options embedded in the delivery rules for the Tsy bond contract when it first came out, as well as the dynamics of the 10 year note future.
The 'mtg' swap was my creation in the mid 80's.
Probably a few more along the way.
since this thread has been already hijacked… (feel free to delete/move my post)
Warren, you are a rational man. What, in your opinion, is the likelihood that the Democrats will nominate you in 2012 over Mr. B. Obama, who will surely seek reelection?
On a separate issue, your bio here http://seekingalpha.com/author/warren-mosler talks about your pioneering efforts in the investment world. Can you share some insight or detail on what those were?
Hey Scott,
Great stuff. Thanks. I used to poke around for Japanese data and it was always a major headache. On a similar note, I'm wondering if you know of any good sources for lending data by the Japanese private banks?
Seems to me that if we could demonstrate that lending didn't budge in Japan despite extraordinary and sustained "quantitative easing," — i.e., demonstrate your statement, then we could really make a dent in the claim that "quantitative easing" somehow drives loan expansion in a money multiplier way. Would certainly help in my attempts to convert the great unwashed!
An aside: The Bank of Canada is actively contemplating "quantitative easing" in the near future (target for the overnight rate is currently 0.5% so we'll be at zero probably by May). It'll be interesting to see how they describe the purpose and effects of this policy in their next Monetary Policy Update (due April 23 I believe), although every indication is that they see the policy like everyone else (merely using the term "quantitative easing" is suggestive).
Keynes on How to Create a Liquidity Trap
March 10, 2009
by Mario Rizzo
"What is particularly interesting to me about this is that illustrates once again that policy regularity and predictability – in this case permanently low long-term interest rates – are key to Keynes's mature analysis of the macroeconomy. Discretionary countercyclical monetary policy can be ineffective, not because it is monetary policy, but because it generates uncertainty."
full post here: http://thinkmarkets.wordpress.com/2009/03/10/keynes-on-how-to-create-a-liquidity-trap/#more-1151
Thanks, Arun (BTW, I'm a fan of PEF–it's a nice coincidence to hear you watch this site). Didn't realize people actually read that research . . . generally puts me to sleep when the time comes to edit it for publication and I haven't looked at it for a while, so I don't know how others make it through!
Regarding Japan, I've seen this statistic several times. I recall a BOJ member giving a speech in 2003ish when the ratio was about 17%. I've probably cited it somewhere. Anyway, so I thought I'd look to geth the real data. Well, unlike getting such data in the US, the BOJ's website is much less user friendly. I was able to find the following after a bit of a search:
In 2005, the last full year of quantitative easing (so called),
Monetary base: 113,046,600,000,000 Yen (from BOJ's long-term time series … again, not user friendly)
GDP: 498,328,400,000,000 Yen (from econstats)
Monetary base / GDP = 22.69%
Also, you probably knew this, but my quote in your post was referencing US monetary base at about 4% of GDP last fall (typo there when I wrote USE instead of US).
Scott Fullwiler Reply:
March 11th, 2009 at 12:51 pm
Misspoke a bit there. MB in US reached about 10% of GDP last fall. US reserve balances were about 4% of GDP.
First off, love your posts (and your academic work, esp. your JEI stuff). Always lucid, enlightening and respectful. In one of your posts here, you wrote:
IN JAPAN UNDER "QUANTITATIVE EASING,†RESERVES GREW TO ALMOST 20% OF GDP (IN USE, THEY ONLY GOT TO ABOUT 4% LAST FALL), AND STILL LITTLE TO NO GROWTH IN BANK LENDING.
Sounds about right to me — intuitively — but I'd like to back that up with something more detailed and/or academic. Can you point me to a source? This would help me tremendously in my ongoing conversations with the unwashed.
Txs kindly,
"Looks like running as a Democrat"
You being a white male, I realize now how out of touch with many voters you are if you think running democrat is going to work for you. Many americans I talk too are tired of both parties.
With our concept of majority rule, it makes it nearly impossible for a viable third party to last for long. The only way you will get a multi-party system is if you move away from our Presidential system and adopt a Parliamentary system with proportionate representation. Good luck convincing 2/3 of Congress and 3/4 of the states this is a great idea.
Thanks, all.
Looks like running as a Democrat makes the most operational sense- it's a lot less restrictive regarding running in the primaries and getting on the ballots.
And no doubt I'll be redefining the party views on many of the issues.
re: Randall Wray. I've written the host suggesting he would be an excellent guest to have back and help people understand deficit spending and govt debt. Also provided a link to Warren's site.
Of course Scott could easily swing up from Iowa for a visit ;-)
Warren, you have my vote too!
Congrats on Mosler 2012…You've repositioned yourself from an "economist" with some ideas to a presidential candidate with a Platform that should get a completely different kind of reception from media, politicians and citizens. Likewise greater fund raising potential for communication of your ideas. You'll build your Team….Your vision, "The Return to Public Purpose" is something to which I can relate. Visions are interesting things. They allow you to enroll teammates and must be BIG ENOUGH to devote the rest of our lives to achieve!
At any rate congrats again on Mosler 2012, I'll be contributing and getting your information in front of my community….tell me when your website is set to go..
Warren, are you going to have any kind of party affiliation?
Scott–Okay, that makes sense on the equity versus reserves that make up the $1.
What about "mark-to-market"? I've read that mark to market was put in place so that banks could "lever up" based on the asset prices in the loans they were providing. Mark to market made great sense for the bank when real estate was bubbling up which allowed banks to make more and more loans. Now the banks want to suspend mark to market so they don't have to write down these loans. Where does that increase in asset price in regard to an existing loan on the book fit in relation to the leverage of "30 to 1"? (Assuming I understand that mark to market works that way.)
just started working to get on the state ballots
"Do I have your vote? http://www.mosler2012.com"
Yep! And my first campaign contribution will be in the mail tomorrow!
Another point. You cannot have capital =0, because then you're insolvent. But you can have reserves = 0 (again, as in Canada), because that just means that you have a very efficient method of achieving an interest rate target set above the remuneration rate (again, as in Canada).
No. Fractional reserve banking (which doesn't apply to the US or any other non-gold standard or non-currency board monetary system) is where you have $X in reserves for $Y in deposits, and X<Y. Reserves are on the asset side of the bank's balance sheet, equity is on the liability/equity side. Completely different things . . . reserves are balances held in the bank's account at the central bank, equity is money invested in the bank by its shareholders + retained earnings (and long-term debt, in some instances).
FRB=fractional reserve banking. The "30-to-1" where $1 is equity and $30 is loans. Isn't that fractional reserve banking?
Was the "30 to 1″, that say Fannie Mae was dealing with in regard to lending, a reference to having 1 dollar in the vault and 30 dollars in loans?
Sorry, I'm confused and need to go back to the mandatory readings I'm sure.
Was the "30 to 1", that say Fannie Mae was dealing with in regard to lending, a reference to having 1 dollar in the vault and 30 dollars in loans?
I'm trying to figure out where this disconnect is in the idea that FRB isn't supposed to still exists, but yet it sounds to me like it does when people refer to the 30-to-1 talk.
leverage in the sense of "30 to 1" or "80 to 1" always refers to liabilities vs. capital (or equity), not liabilites vs. reserves (which are an asset for banks).
You can thus have leverage without any reserves, which is actually the case in Canada (though, the banks there do hold vault cash, but nothing in their reserve accounts overnight).
When you say Today, however, banks make loans independent of their position, what does that mean in relation to the buzz of the 30-to-1 or 80-to-1 leverage that commentators and other economists refer to in regard to bank lending for mortgages and other products? If there are no reserve requirements then how can there be any "leverage" in the system? Or is the reserve at the bank different then the reserves you are referring to?
My goodness, that guy on the radio from George Mason is clueless. Appears he learned nothing but free market cliches in grad school. Randy was great, as always.
Will archive it.
Entirely unsure where I could post this, but Randall Wray was on my local public radio station (Minneapolis) this morning discussing our current economic situation. Sadly, the time was too short and I don't think the "host" really understood many of his points.
Here's a link. Randall starts half way through.
As with anything that affects AD, what matters is AD in comparison to capacity.
What type of deficit you run can have as much affect as size, too. As Warren says, govt spending to build the Panama Canal reduced prices, while govt spending to destroy the Panama Canal would increase prices. This is why the focus on this site is on employment . . . offer a govt financed job to anyone willing/able to work at a minimum wage + benefits and you will end involuntary unemployment as defined and not raise inflation (aside from an initial increase in the price level, possibly). The deficit will rise as private sector AD falls and unemployment there rises, and vice versa . . . which will have a stabilizing effect on inflation (see full employment and price stability in mandatory readings). The appropriate "size" of the deficit is then set automatically, as long as institutionally you have set up an appropriately flexible "buffer stock" of workers in the program. Again, the focus on "hiring off the bottom" is far better for creating jobs and keeping inflation low and stable than traditional "pump priming" expenditures; as Randy Wray once put it, "how many bombs would you have to build before you created 1 job in Harlem?"
Of course, this isn't to say there aren't supply effects on inflation (strength of labor, etc.), but we're just looking at demand side here.
One more question if I may.
Scott said: "Bottom line . . . whether a deficit results in NFA held as deposits or Treasuries is irrelevant to whether the deficit is inflationary or not. The only thing that matters is the size of the deficit."
At what size starts deficit spending be inflationary and why not at less than that?
Thanks Scott, re your point 2.
I read the Deficit spending for dummies, which appears to revert the order of government's actions. The government has to spend first, before it can borrow, not the other way around, no?
And spending that is not followed by borrowing increases reserves. Reserves (the vertical component of money) + loans (the horizontal component of money) = total money chasing after all goods and services.
So increasing reserves without subsequent government borrowing will cause the total amount of money to grow larger (inflation), no?
Also, could you give more detail on this please?:
"….even with a bond sale, the deposit is the NFA if the bond is purchased by a bank…..â€ÂÂ
Why is a bond sale to a bank not a simple asset exchange (reserves for treasuries). How does it affect deposits?
Thanks Scott, re your point 2.
I read the Deficit spending for dummies, which appears to revert the order of government's actions. The government has to spend first, before it can borrow, not the other way around, no?
And spending that is not followed by borrowing increases reserves. Reserves (the vertical component of money) + loans (the horizontal component of money) = total money chasing after all goods and services.
So increasing reserves without subsequent government borrowing will cause the total amount of money to grow larger (inflation), no?
Also, could you give more detail on this please?:
"….even with a bond sale, the deposit is the NFA if the bond is purchased by a bank….."
Why is a bond sale to a bank not a simple asset exchange (reserves for treasuries). How does it affect deposits?
Mike S
Sorry . . . didn't see your post till now. The one I did about 4 years ago on fiscal sustainability is on the EPIC site (PP are posted) and the working paper is on the cfeps site. There's one on cb operations on the valance site (PP) from the conference last year. You may also be thinking of a speech by Cliff Viner that Warren posted several months ago (???).
Agree with Warren.
2 more points.
1. The Fed wasn't able to hit the target rate even with interest payment for 2 reasons. First, it set the remuneration rate too low to start, which as Warren says shows their lack of understanding of operations. Second, Congress doesn't allow some non-banks (like GSEs) with Fed accounts to earn interest (showing their lack of understanding, too), so the effective rate quotes for, say, November 2008 that are well below the target reflect these institutions trying to find a place to invest their overnight funds. In the context of the crisis, not many banks were willing to offer much return (flexibility for banks was at a premium, according the NY Fed's report). I think there will be some research in the future on whether the rate falling below the target during this period has any real economic significance, since banks were so awash in excess balances they had little use for a fed funds mkt anyway (as shown by the fact that non-banks couldn't find anyone willing to take their excess balances).
2. Curious questions whether selling bonds reduces inflation. The answer is "no." ANY deficit raises net financial assets (NFA) for the private sector whether there is an accompanying bond sale or not (see deficits for dummies in the mandatory readings). If there is no bond sale, then the NFA created are deposits. If there are bonds sold to banks, then the bonds drain reserve balances–which don't funds bank lending anyway–and the NFA created are deposits for the non-bank private sector. If there are bonds sold to the non-bank private sector, then the bond sale drains both deposits and reserve balances. Banks still can lend as much as previously, since reserve balances don't fund loans, and the NFA created are Treasuries held by the non-bank private sector. Two things here. First, note that with bond sales whether Treasuries or deposits are the NFA depends on who buys the bonds, not whether a bond is sold; that is, Curious's point about inflation is suggesting that with deficits bonds are less inflationary than deposits, but even with a bond sale, the deposit is the NFA if the bond is purchased by a bank (almost nobody recognizes this). Second, NOBODY was ever financially constrained by the fact that they held a Treasury . . . ever heard of the repo market? These are the most liquid, most sought after assets for safety and for collateral, and therefore not really different from having a deposit. Bottom line . . . whether a deficit results in NFA held as deposits or Treasuries is irrelevant to whether the deficit is inflationary or not. The only thing that matters is the size of the deficit.
Good points.
The Treasury continues to issue debt for the same reason we have a debt ceiling- self imposed constraints by a govt. that doesn't fully understand its own monetary arrangements.
It's always possible the Treasury won't find buyers for its securities, but operationally that should not be a constraint on spending unless Congress decides it's a constraint.
The Fed started asking Congress for the authority to pay interest on reserves maybe 6 years ago. (I'd like to think it was in response to my urgings back then, but probably not.) After the 'financial crisis' started the Fed probably became concerned about 'running out of Treasury securities' used to offsetting the operating effects of buying/funding financial assets other than Treasury securities. By paying interest on reserves the Fed could buy any financial assets it wanted to and not have to 'offset' the buildup in reserves with reverse repurchase agreements or security sales to (attempt to- Geithner never figured this out either) hit their fed funds targets.
This is what happens with leadership that doesn't know how their own monetary arrangements work.
Do I have your vote? http://www.mosler2012.com
"The government spends money and then borrows what it does not tax, because deficit spending, not offset by borrowing, would cause the fed funds rate to fall."
Since 10/6/2008 the government pays interest on reserve balances, so the fed funds rate is not going to fall. Yet the government continues to borrow. Why? (To prevent inflation would be my answer, but someone please correct me if I'm wrong)
"Fear the government will be unable to sell securities overlooks the mechanics of the process itself. The imperative of borrowing is interest rate support."
Since the banks can now earn interest on reserve balances, is it possible that the government will not attract any lenders in the future?
Finally, can I have anyone's opinion on the reason why did the Fed started to pay interest on the reserve balances?
Gregg Reply:
September 25th, 2009 at 8:31 pm
So they (the banks) would take the (TARP) money.
— TARP in the case of the USA.
I remember there being another mandatory reading where you were giving a speech, but I cannot find it now. Do you still have a link or copy of this somewhere?
"Nevertheless, as the funds rate rises higher and higher above the discount rate more banks will go to the window"
Why does the funds rate rise higher and higher? Once it is above the discount rate, wouldn't the banks immediately start borrowing at the cheaper discount rate, thus bringing the funds rate down to equal the discount rate?
Scott Fullwiler Reply:
February 26th, 2009 at 10:36 pm
This was written when the Fed had the discount rate set below the fed funds rate target, but also "frowned" on borrowing at the discount window, which is essentially a "non-monetary" cost . . .since you'd prefer that your regulator not "frown" at you. So, if banks were in danger of ending the day in overdraft because the net balances supplied were insufficient in the aggregate, then the fed funds rate could be bid up well above the fed funds rate until banks would eventually go to the window to replace the overdraft with a collateralized loan. Regarding current practice, you're right, fed funds rate usually won't go above the rate the Fed lends at (now set above the target rate) since the "frown" costs were eliminated in 2003 (though many say they're still there to some degree).
Scott,Warren, Question on the "The Myth of Debt Monetization"
Why does the fed need to buy treasuries securities from the treasury department in the first place?
jcmccutcheon Reply:
February 25th, 2009 at 1:43 pm
I think I figured it out. When the fed holds treasury securities on its balance sheet and they expire, the fed "purchases" a new one from the treasury to roll-over the expiring one.
yes, they might accept other things, but valued in the local currency, right? So in a sense that's the govt purchasing those things with local currency for their determined values.
second. legal tender laws have nothing to do with value. the euro dropped any mention of legal tender after determining same, for example.
third. yes, even with a tiny gov a tax driven currency will still function to transfer real resources from private to public domain.
Seems the interesting part about the Z currency is that it indeed still does purchase goods and services to the degree it does.
Those pesky dictionaries! If everyone agrees that's the definition of 'fiat money' I'll have to find another word to describe the US currency.
I agree that the value of the currency is a very weak and indirect function of interest rates at best. That would better read they determine the 'price' rather than the 'value.' In 1993 I seemed to have given more weight to the theoretical possibility that savings desires were functions of interest rates. I still think they are to some degree, taken in isolation.
Yes, the kids don't need the parent to set an interest rate. In which case the 'risk free' rate would be 0, and what they charged each other would reflect a risk premium.
This is in the various writings on the website as well from time to time.
Re the "Introduction†section of Soft Currency Economics, I agree, plus there is an article by Samuel Brittan in the Financial Times making similar points. See http://www.samuelbrittan.co.uk/text321_p.html
Now for the "Fiat Money†section. I don't agree that fiat money derives its value from the fact that governments demand said money in payment of tax (though doubtless this enhances its value).
First, in the UK, people do not need to pay tax with the UK's fiat money, i.e. the pound sterling. The tax authorities will accept anything in payment of taxes: land, houses, valuable paintings, etc. Shows how desperate the tax authorities are! The latter form of payment is unusual because of the sheer inconvenience, but it occurs from time to time.
Second, is it not more accurate to say that fiat money derives value, first, from the fact that the law states that such money is legal tender, and second the general view that government will administer the currency in a responsible way, e.g not expand the supply of such money in a totally reckless manner? To illustrate the validity of the "government declares†point, imagine a country where government spending was a negligible proportion of GNP, i.e. where there was precious little tax. Would fiat currency be impossible? I don't think so. As long as the government was regarded by citizens as reasonably responsible, it should work.
Re the "general view of citizens†point, the Zimbabwe dollar may be required for payment of taxes in Z, but the general view of citizens is that Z dollar notes are little more than useless scraps of paper. So that's what they are: useless scraps of paper.
AFTER writing the above, I looked up the definition of fiat money in "A Dictionary of Economics and Commerce†by J.L.Hanson. This confirmed my above two points, i.e. 1, the state declares something to be legal tender, 2, this declaration by the state will not work unless generally accepted by citizens.
Para starting "In the U. S., the 12 members…..†I don't agree that "overnight interest rates……determine the value of the moneyâ€ÂÂ. If interest rates drop to zero, what of it? Interest rates have been pretty well zero in Japan for some time.
I like the hypothetical "parents, children and bank card†economy. But I don't agree that "The reason for the borrowing (by parents) is to support a minimum overnight lending rate by giving the holders of the business cards a place to earn interest.†The children don't need the parents in order to engage in borrowing and lending: they can do that amongst themselves if they want. For example one child might be too busy to perform services for parents during a particular month and might borrow from another child who had plenty of surplus time in the same month to perform services for parents. The children would sort out the interest rate amongst themselves.
Is that still in there? Need to modify it and/or take it out, thanks!
I edited Mark McNary's writing when he was at Laffer as part of the arrangements for them to publish it.
Let me try to sort it out:
Buy spending govt or anyone else supports prices.
One way to increase consumer spending is to encourage borrowing
to spend. In the late 90's consumer spending was sustained by the private sector increasing its debt annually by something like 7% of gdp. While ordinarily unsustainable, it works to support output and prices while its happening.
govt can do other things to encourage borrowing, like the housing agencies offering low rates to increase mortgage borrowing which, at the micro level, does 'work' to do this. (the idea that lower rates lower income to savers is a separate matter)
As for 'indirectly by lowering interest rates' that's as above as well.
While it's not wrong, I agree it's not written the way i'd write it today.
"Inflation is the process whereby the government causes higher prices by creating more money …. indirectly by lowering interest rates or otherwise encouraging borrowing."
Every loan is a real wealth. It is a present value of real wealth to be created in the future. Whether I built a house yesterday and put it on the market today or whether I will build it tomorrow and put it on the market today is not important, is it?
Every loan is a new asset and a new liability. So it seems to me that inflation cannot be created by new borrowing, only by government deficit spending. Am I way off on this?
William Reply:
January 7th, 2012 at 2:13 am
I think this depends to what purpose the loan is put. If it is spent on productive purposes, inflation will not be a problem. But if it is spent on unproductive purposes or gambled away then I would think inflation could be a serious risk.

subset: commoncrawl


text:
Cottage Grove's Renewal by Andersen creates a room with views
A new showroom at Renewal by Andersen gives customers two views.
They can look at replacement window models and get a glimpse of the manufacturing process in the background.
The window manufacturing facility in Cottage Grove's Business Park recently celebrated the remodeling of a new showroom. The converted lobby area features a number of residential and light-commercial windows. Others are mounted on the showroom walls.
The revamped showroom opens as Renewal also is extending its walk-in customer hours.
Renewal President Paul Delahunt said they decided to create a more expansive showroom and use the factory as a backdrop.
"People are interested in seeing what's still made in America," he said.
Andersen's Renewal division manufactures replacement windows that are installed by professionals, not do-it-yourself homeowners. They include traditional double-hung residential windows as well as decorative and shaped windows. All frames and sashes are made from a wood and vinyl material.
All of the Renewal windows are made to order. Stock windows, such as those sold at big-box home retail centers are part of other Andersen divisions.
Window manufacturers saw business plummet during the recession and housing construction crash a few years ago. Delahunt said the replacement window sector also saw business fall off, but not as badly as the new construction.
"During that time frame we've always grown," he said.
Renewal has over 100 affiliates or dealers across the country. It doesn't do much business in hurricane-prone southeast states because homes there use a different type of window.
The Renewal division of Andersen Window Corp. employs about 550 people. There are about 350 jobs at the Cottage Grove plant, but that number fluctuates due to the seasonal production schedule.
Renewal's new showroom is open 8 a.m. to 5 p.m. Monday and Tuesday; 9 a.m. to 7 p.m. Wednesday; 10 a.m. to 6 p.m. Thursday and Friday; 9 a.m. to 4 p.m. Saturday; and 11 a.m. to 4 p.m. Sunday.
Renewal is at 9900 Jamaica Avenue. For more information, call 866-736-3925.


text:
Spoilers ahead!
A few not-so-shocking giveaways about this week's new movie releases, including Justice League and Frank Serpico
Matthew Lickona 6 p.m., Nov. 17
Division III
(1) Cathedral Catholic (11-1) vs (3) Point Loma (9-3) Friday 1 p.m. at Qualcomm Stadium
In this re-match of the Division III title game from two years ago, Point Loma will try to slow down a Cathedral Catholic juggernaut playing its most complete football of the season. Since losing to Lincoln in October, the Dons have won six straight by a combined score of 223-51. What is most impressive about Cathedral Catholic is that it's hard to pinpoint what is the best part about their team: their defense allowing 9.5 points per game, their ground game with Jonny Martin (1,682 yards, 23 TDs) running behind a massive offensive line, or the Max Brewer-Chance Early connection through the air. It will no doubt take a complete game to dethrone the Dons.
Point Loma comes in winners of six straight and has simply found a way to win in their playoff games, with a seven-point win against Mount Miguel and four-point win over Steele Canyon. And the neutral site shouldn't bother the Pointers, who have played away from home in each of their two postseason games. Point Loma has big play capability on offense, and quarterback Keegan Fitzgerald has a plethora of weapons at his disposal, including backs Leslie Rogers and Stephan Jackson, receiver Davis Callejon and tight end Jordan Sparkman. Defensively, Point Loma relies on defensive linemen Christian Hayward and Anthony Joyner to set the tone up front. The Pointers are athletic enough to challenge Cathedral Catholic, but recent history is not on their side – the Dons have won each of the teams' four meetings in the last two seasons.


text:
Gerald 'Jerry' Calhoun
June 28, 1937 - Nov. 5, 2013
Jamestown resident Gerald "Jerry" Calhoun died Tuesday in Fremont. He was 76.
Mr. Calhoun was born in Illinois, the son of Dorothy and Raymond Calhoun.
He was a food broker for 35 years and owned his own company, Calhoun and Howell, in Los Angeles.
He settled in Tuolumne County 25 years ago.
He enjoyed fishing and golfing and was a founding member of Mountain Springs Golf Course.
Mr. Calhoun was preceded in death by his parents.
He is survived by his wife, Karyn Calhoun, of Jamestown; sister, Pauline Mangold, of Lipstick, Ohio; his children and their spouses, Greg and Mary Calhoun, of Fremont, Kelli and Jim McCarthy, of San Francisco; and Rob Calhoun and Jessica Bradley, of Hayward.
A private family prayer hour has been held.
Berge Pappas Smith Chapel of the Angels in Fremont is handling arrangements.
Richard 'Rich'Peter Juarez
May 2, 1939 - Nov. 1, 2013
Columbia resident Richard "Rich" Peter Juarez died Nov. 1 at his home. He was 74.
Mr. Juarez was born in Merced and raised in Livingston, the son of Pedro and Connie Juarez.
He was an athlete and participated in football, baseball, basketball and track.
He was named Northern California Athlete of the Year in 1958.
Mr. Juarez received scholarship offers from 18 colleges and was drafted by the Chicago Cubs and San Francisco 49ers.
His athletic career was ended, however, due to a knee injury in football during his freshman year at University of California, Berkeley.
He earned a bachelor's degree in physical education from Fresno State University and a master's degree in education from Cal Poly, San Luis Obispo.
He married Sharon Nye in 1962.
Mr. Juarez spent most of his career as a physical education teacher and varsity baseball coach at Merced High School. During 22 seasons, he led the MHS Bears to 10 Central California Championships and one Sac-Joaquin Section Championship, which also earned him the title of Central California Conference Coach of the Year each of those seasons. The 1978 team broke school and state records with a 29-1 season.
In 1968, he was inducted as the youngest member of the Merced County Hall of Fame for his athletic accomplishments in high school.
Mr. Juarez was honored as the first inductee to the Merced Bears Baseball Hall of Fame in March.
He and his wife enjoyed traveling as part of their involvement in the Amway business. He also enjoyed hunting and fishing.
He moved to Sonora in 2005 to be closer to family.
Mr. Juarez was preceded in death by his parents; and daughter Kim Juarez, who died of leukemia at 14.
He is survived by his wife 51 years, Sharon Juarez, of Columbia; his children, Richard Juarez Jr., of Sonora, Kathy Juarez, of Columbia; and Liz Dickson, of Columbia; and five grandchildren, Katie, Karlee, Mikiah, Delaney and Matthias.
In lieu of flowers, contributions can be made to the Kim Juarez Memorial Scholarship Fund, c/o Merced School Employees Federal Credit Union, member No. 14967001, P.O. Box 1349, Merced, CA 95341.
Visitation will be held from 4 to 7 p.m. Friday at Terzich and Wilson Funeral Home, 225 E. Rose St., Sonora. A Rosary will follow at 7 p.m. A memorial service will be held at 1:30 pm Saturday at St. Patrick's Catholic Church in Sonora, followed by a reception at the Mother Lode Fairgrounds.
Terzich and Wilson Funeral Home is handling arrangements.
Ray Eugene Markham Jr.
June 29, 1925 - Nov. 2, 2013
Burson resident Ray Eugene Markham Jr. died Nov. 2 at Mark Twain Convalescent Hospital. He was 88.
Mr. Markham was born in Oklahoma, the son of Ray and Lola Markham.
He worked as a pressman primarily for the Modesto Bee and also for the Stockton Record for 48 years before retiring.
He settled in Burson 17 years ago.
Mr. Markham enjoyed woodworking, including building cabinets and houses. He also cared for animals.
Mr. Markham was preceded in death by his first wife, Louise Markham.
He is survived by his wife of 17 years, Coty Markham, of Burson; daughter, Karen Sousa, of Atherton; stepdaughter, Jamie Keller, of Stockton; four grandchildren; and ex-wife, Roberta Markham, of Lathrop.
No services are planned.
Neptune Society of Central California is handling arrangements.


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Stock market sets record after Fed keeps stimulus
NEW YORK — The stock market hit a record high Wednesday as investors cheered the Federal Reserve's surprise decision to keep its economic stimulus program in place.
Stocks traded slightly lower throughout the morning, but took off after the Fed's decision in the early afternoon. Bond yields fell sharply — their biggest move in nearly two years. The price of gold had its biggest one-day jump in four years as traders anticipated that the Fed's decision might cause inflation.
Fed policymakers decided to maintain the central bank's $85 billion in monthly bond purchases, a program that has been in place since December 2012. The bond purchases encouraged borrowing by keeping interest rates low and encouraging investors to buy stocks by making bonds more expensive in comparison.
The S&P 500 surged 20.76 points, or 1.2 percent, to 1,725.52, slicing through its previous all-time high of 1,709.67 set on Aug. 2.
The Dow Jones industrial average jumped 147.21 points, or 1 percent, to 15,676.94, also above its previous record high of 15,658.36 from Aug. 2.
The Nasdaq composite rose 37.94 points, 1 percent, to 3,783.64.
The fate of the Fed's economic stimulus program has been the biggest question on Wall Street for months. It was widely expected that the Fed would cut back on its bond buying at the September meeting.
In June, Fed Chairman Ben Bernanke laid out a possible timetable for easing up on the bond purchases, and pledged to end them by the middle of 2014, if the economy continued to improve.
The Fed's next meeting is October 29 and 30, another opportunity for the central bank to start reducing the program.
Bernanke probably kept the stimulus in place because he wanted to be certain the economy was ready to function without the Fed's help, said Matt Tom, head of public fixed income at ING U.S. Investment Management.
Cutting back before the economy was ready would have been much more destabilizing to the market, he said.


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Archive for Wednesday, October 1, 2008
Winning Wildcats
De Soto doubles last year's win total
October 1, 2008
The celebration seemed fitting.
After De Soto freshman Brittany Brewer scored the wining point on a powerful right-handed kill against Sumner Academy last Thursday at De Soto, the Wildcats jumped and shouted around the court in a way they hadn't all season.
The Wildcats had just won their 10th game of the year by defeating Sumner (25-22, 25-18). With the win, De Soto has already won twice as many games as it did last year. De Soto could have had win No. 10 a game earlier but lost to Jefferson County North (18-25, 25-21, 23-25) in a game where De Soto had the lead late in two matches but couldn't close it out.
After the opening game loss, De Soto coach Jenny Barnhart had a message for her team.
"I just talked to the girls about making sure they play their own level of play because it was going to be a change in level from Jeff North to Sumner," Barnhart said.
Barnhart said that Sumner was a very scrappy opponent and De Soto had to serve well and make minimal unforced errors to win the game.
"And that's what we did," she said. "They got the lead and rolled with it."
A year ago, De Soto rarely played with a lead. Last year De Soto went just 5-29 for the season.
But Barnhart said this year's success began taking shape early last year. And she said the future could be even better for De Soto volleyball.
Barnhart said that despite the wins, this year there were some growing pains for the team.
"Last year we started off and they were learning all about me and all about my expectations for offense and defense," Barnhart said. "Now they've got that in their foundation and from here it's building blocks.
"The foundation has been laid with our last season and now we can work on other things that have already been in place like running certain plays. And our transition from defense to offense is really key for us this year."
Helping make that quick transition has been the additions of freshman Becca Massen in the middle and sophomores Laura Lambert and Brittany Brewer on the outside.
All three youngsters have played well in their first season playing varsity for the Wildcats.
While Barnhart acknowledged the quality play from her three youngsters, she credited the team's three seniors of Tami Crow, Amber Laudick and Carlie Burnett in helping with that transition to varsity competition.
Burnett said she took it upon herself to be a leader and help the three underclassmen adjust.
"Seeing that they haven't played varsity, just bringing them in and keeping their heads up was key," Burnett said. "And then giving them the confidence to go ahead and swing has really helped give us energy and momentum to get as many wins as we've already had this year."
De Soto's (10-9) next game is Senior Night on Tuesday. De Soto is hosting a triangular against Louisburg and Spring Hill.
And for Burnett, this season has been one she won't soon forget.
"This being my senior year, it's so much more fun to come out and be doing so much better," Burnett said. "That just makes the game so much more fun than it already is."
Burnett said her personal goal was to help the team win more games than last year.
With that goal already accomplished, she now has a new goal for the team.
"It would be amazing to win league," she said.
De Soto is 1-2 in league play, and Barnhart said it was crucial for her team to perform well in league the next few weeks.
"Getting those wins in league, that's important now and when we start to get into seeding at the league tournament and after that sub-state," she said. "We're very capable of finishing at the top of the Frontier League."
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SHERIDAN — Wyoming's city and county governments recently called on the Legislature to accept Gov. Matt Mead's request for local government funding in the next biennium, which will be considered in the upcoming legislative budget session to begin Feb. 10.
Mead's $175 million request is $20 million more than was granted to local governments in the 2013-2014 biennium budget and supplemental budget combined.
It will bring total state funding for Wyoming's local governments for the 2015-2016 biennium to $105 million for direct distribution, which is used for operations, and $70 million for the county consensus block grant, which is split between counties and cities and must be used for capital improvement projects.
The projected increase will add $16 million to consensus funds and $4 million to direct distributions.
When $10 million per year is dispersed among Wyoming's 23 counties, it doesn't add up to a substantial increase for Sheridan County and its incorporated cities, but local officials say it will help with operation costs and capital improvement projects.
"When you shake it through the system, you have to throw a lot of money in to see a little change at the local level. Yes, it makes a big difference, but it doesn't go quite as far as you would think," Sheridan Clerk Scott Badley said.
The Wyoming County Commissioners Association and the Wyoming Association of Municipalities sent a letter to the co-chairs of the Joint Appropriations Committee on Dec. 23 expressing full support of Mead's recommendation for local government funding. WCCA President Bob Rolston, a Sheridan county commissioner, said the money will be used to support essential government services.
"Of course, the Legislature takes any of those recommendations from the governor and there can be a rearranging of money, but it's been pretty consistent," Rolston said. "In the past couple years, WAM and WCCA have been at the table on several issues that make our success rate better. It's better to complement each other rather than fight."
The letter to the Joint Appropriations Committee stated WAM and WCCA support Mead's recommended split of 60 percent for operations and 40 percent for capital projects and urged the committee to not shy away from providing state funds for local government operating expenses.
"…we recognize the Legislature's historic concern regarding expending state funds for operating expenses. However, we ask you to be mindful of the fact that counties and municipalities face similar operating and staffing challenges as the state," the letter said.
Mead has recommended a 2-2.5 percent raise for state employees in the 2015-2016 budget. However, in 2013 the Legislature added a footnote to the budget that said state funds could only be used by cities and counties for one-time needs and not to give raises or hire additional staff. In 2014, the footnote was "softened," Badley said, to allow for ongoing expenses like utilities but not for salaries.
Both Badley and County Administrative Director Renee Obermueller said local governments would like to give raises to employees, but that the slight bump in state funds could not be used to do so, especially since state funds are not guaranteed and can be pulled.
"Seventy-five percent or more of our budgets are people. It's hard to operate without people," Obermueller said.
In the 2013-2014 biennium, Sheridan County received $2.85 million in consensus funding, which was split between the County, the city of Sheridan and the towns of Ranchester, Dayton and Clearmont. With the recommended increase, that figure could increase by almost $1 million up to $3.9 million, Obermueller said.
Consensus block grant money must be used for capital improvement projects. Badley said it is often used as matches for grants to leverage as much funding as possible.
Direct distributions for the county in the previous biennium were $1,211,865, or nearly $606,000 per year. Mead's recommended funding would add $358,000 for approximately $179,000 more per year, Obermueller said.
For the city, direct distribution was $981,602 in fiscal year 2013 and was increased to $1.45 million in fiscal year 2014. If Mead's recommended budget passes, the city will receive approximately $1.3 million for fiscal year 2015, which is down approximately $150,000 from 2014 but is an overall increase if the amount remains the same in fiscal year 2016.
Mayor Dave Kinskey said there are several items that could impact the city financially in the future, some of which will be decided by the Legislature soon. He said the city will keep a close watch on how the legislative budget session develops.
"The other thing that is looming very large on the horizon in terms of our fiscal picture is the continuing public employee pension crisis, which dogs all governments, local and state and nationally," Kinskey said. "Wyoming is not immune from that."
At this point, the firefighter pension plan A, which covers firefighters employed before 1981, is underfunded 34 percent, Badley said. The Legislature will discuss how to get the plan fully funded, which will likely involve the city paying $120,000-$300,000 per year into the fund through 2023. Other pension plans are also underfunded and need to be addressed.
Furthermore, Badley said, health insurance costs increase about 11 percent per year. The city also continues to pay approximately $151,000 per year back to the state to repay sales and use tax funds that were improperly credited to Sheridan County in 2006-2007.
The funds should have gone to Johnson County. Unfortunately, Badley said, the total of $800,000 is money that has already been spent, so repayment is putting a dent in the city's finances.


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RTÉ News has seen details of radical new measures under consideration by Government to help tackle the housing debt crisis.
People facing repossession may be able to rent their homes from the State after they have lost ownership of the properties.
Consideration is also being given to measures to allow people who are already in negative equity to trade up if they can sustain a larger debt.
A Government committee chaired by the Department of Finance has been working on a number of measures to deal with mortgage debt.
It is considering using the social housing machinery of the State to help.
This could allow people stay in their homes after the houses or apartments were repossessed. As they would no longer own their home, they then would rent it - possibly from the State itself.
Another issue under consideration are steps to help people who are in negative equity but want to move home.
Under this option people who sell a house or apartment and owe the bank money would be able to take out a second mortgage.
That would only happen if they could sustain the full amount of debt.
This would allow people to trade upwards who until now had not been able to trade up, to buy a new home.
However, they would be in negative equity from the moment they purchase.
The committee is due to announce final measures at the end of September.
Latest figures from the Central Bank show that there are more than 55,000 mortgages in arrears around the country.
Permanent TSB sees surge in mortgage arrears
Permanent TSB results show it has experienced a significant surge in mortgage arrears in the first six months of the year.
Homeloans in arrears of over 90 days rose from 6.8% to 8.8%.
Earlier, Minister for Finance Michael Noonan reiterated that banks have enough capital to write off some mortgage debt.
He said that Ireland did not have a culture of repossessions and that the Government would do all it could to ease the burden of mortgage repayments on families.


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Eugen Culea0000-0003-3025-8304
Eugen Culea was born in 1951 in Dej, Romania. He received a Ph.D. degree in physics from Babes-Bolyai University, Cluj-Napoca, Romania, in 1987, and has been a Ph.D. Advisor in Materials Physics in the same university since 2001. He has been Head of the Physics Department at UTC-N since 1997, and was Scientific Secretary of the Faculty of Material Science & Engineering, UTC-N (1997?2006) and Member of the Senate of UTC-N (2001?2012). He has also been a Member of the Committee of the Romanian Ministry of Education for Validation of Academic Positions (Physics) from 2006 to 2010. He is Director of the Research Centre for Materials Physics & Environmental Physics from UTC-N (http://www.phys.utcluj.ro/resurse/Laboratoare/ResearchCentre/Index/Meniu.html). Culea?s research fields of interest include amorphous materials, glasses, semiconducting materials, magnetic materials, and sensors. He has published 10 books, 1 monograph, 119 articles in ISI journals, and 101 papers in conference proceedings. His visibility according to the Scopus h-index is 10, and he has a total number of citations of 322 (excluding self-citations), and 133 articles in the publication list. Culea is a Member of the Romanian Physical Society and the Romanian Materials Science Society. He can be contacted at email@example.com
Biography Updated on 12 September 2012


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1850 Losol Ware Keeling and Co Wash Basin and Pitcher
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What your bidding on. Up for sale today is a very nice pieces. It is a 1850 Losol Ware Keeling and Co Wash Basin and Pitcher. It has pink rose swag as a design on it. The name on the bottom says Losol ware with a crown and the name Kensington and the name Keeling and co Burslem England. With red numbers. The glaze is cracking and the is some brown spot. It was got at a estate many years ago. The size is 4 1/2'' tall x 16 1/2'' wash baskin - 13'' tall x 10'' widest point pitcher. My home is a smoke free home. It is in Great condition.
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Item Condition
Items are classified in 5 categories:Mint - Never used. As if bought today. Great - Used, but with no signs of wear or defects. Good - Used, with signs of wear but no major defects Fair - Defects present but item is still usable Restore - Item is in need of restoring
I will always list the condition of the item in bold and underlined in the top paragraph. Please bid accordingly< P>
Payment is expected in no more than 7 days.I accept all forms of Paypal including credit cards. < P>
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Allow me to thank you for looking today. If you have any questions, please email me. I can combine shipping, give additional info, or anything else I can to help you. Thank you very much .


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A 46-year-old Branford man has been arrested in connection with the burglary of a Madison auto service center last December.
Denis Schoendorf, of Branford, is accused of burglarizing the North Madison Service Center at 1276 Durham Road on Dec. 26, 2013.
He was arrested July 3 and charged with third-degree burglary, fourth-degree larceny, second-degree criminal trespassing and third-degree criminal mischief.
Schoendorf appeared in court Thursday morning.
Published at 3:43 PM EDT on Jul 3, 2014


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Cara Delevingne in a White Suit
Has a Suit Ever Looked This Sexy?
Has a Suit Ever Looked This Sexy?
When you're sexy, you're sexy — no thigh-high minis or body-con dresses required. Model-of-the-moment Cara Delevingne proved this point to perfection on a recent night out in London, wearing a white suit layered over a black shirt buttoned down nearly to her navel.
In our eyes, the real joy of having a crisp white suit in your closet is how many different ways you can style it. Copy Cara's outfit and trot this out on your next sexy date night or pair with a silky blouse and walk it into the office. And the bride-to-be has extra reason to pay attention: we found five different occasions surrounding your big day that'd look chic in a tailored two-piece.
Scroll down to see a similar look from Zara you can shop right now!
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Chip provides port density, advanced classification for oversubscription, guaranteed QoS
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The Barcelona IC for Ethernet network systems is designed especially for enterprise switch and router vendors. Developed by Cortina Systems, Barcelona uses advanced classification, deep buffers, and flexible scheduling to enable increased port counts on switches without compromising on service quality. All of Barcelona's 24 multirate Ethernet ports support strict service guarantees, which have become increasingly critical in enterprise networks as voice over IP and other new services are deployed.
As voice over IP and other new services become common in enterprise networks, switches must be upgraded to support new performance requirements. Even in a congested network, Barcelona can identify and prioritize critical flows and mark them as high priority with guaranteed bandwidth while storing bulk traffic to prevent packet loss. In addition, with its support for new policing and shaping policies coupled with IPv6 and MPLS functionality, it is also ideal for metro applications where strict service level agreements must be enforced.
Barcelona connects directly to GE optical modules or serially to copper PHYs, and interfaces with existing packet processors through an industry standard SPI port, which makes it ideally suited for Ethernet switches, routers and transport platforms. The IC is implemented in .13 micron CMOS and combines Cortina's industry-leading expertise in programmable port processing with advanced manufacturing techniques to enhance services in enterprise and service provider networks. Barcelona is currently sampling.
For more information visit www.cortina-systems.com.


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CAIRO, Nov. 20 (UPI) -- An Egyptian activist group calling itself Eg-TeAm-R1z hacked the Web site of Egypt's state television, officials say.
The Web site has been replaced with a picture of the Egyptian flag on a wall, captioned in L337 speak, an online symbolic language also known as H4XX0R, Bikyamasr.com reported.
The message left on the television's site is "a simple response to your hypocrisy, all we ask is that you transmit the truth."
Egyptian media is ranked 143 of 167 in terms of media freedom, a 2005 report from Reporters Without Borders said.
The Saturday hack came after protest erupted in Cairo's Tahrir Square Friday. Thousands of demonstrators packed the square Friday, Saturday and Sunday to protest the military's involvement in government.