Its no secret Friedman wanted to replace the Fed with a computer that set inflation at 3%
But its not because of "lender of last resort" issue. Its because of his politics.
He preferred the clearing house system. But for sure he blamed the Fed for the Great Depression of not responding w QE in a timely
After all he is the founder of monetarism
Without a FED, he would argues that banks would have kept reserve to deposit higher. Sure, some banks would have failed. But the result of low reserve to deposit combined with the failure of the fed to provide liquidity made it catastrophic. Without FED, reserve to deposit would be higher, and would not have resulted in a whole forest burning, to come back to my analogy. Yes thats what I said. Friedman is not against QE. He has political preference for free markets. He wants controls on money supply. But he wants it from a computer rather than a chairman to make decisions Youre trying to bend Friedmans ideas to align w your beliefs. Friedman is a monetarist. He can be both hawkish and dovish on monetary policy. I don't know where he said "if there wasn't a Fed, the Great Depression wouldn't have happened". Can you link me where he said that? I all found is that he blamed the Fed for letting GP happen b/c they didn't do QE when things started to get bad. Bernanke quoted Friedman on this to justify his decision to my MBS off the banks. But regardless of Friedman. The idea that fractional reserve affects lending is not correct. Doesnt work like that in real life. Banks create loans then find reserves later. In essence there are no reserve restrictions as long as there is demand for loans I recommend you look into Minsky. His view is more consistent w how banking works in real life I already quoted 2 sentences from the monetary history of united state where he points finger at the FED that provoked low reserve-desposit ratio in banks. So when they failed to do a QE, banks had not enough liquidity to face the withdrawl of deposit. I am not bending him to my idea, and I don't even see where we disagree since, I never denied that he agrees on QE. And also, I can't understand how we could deny the idea that when banks count on a central authority to provide liquidity, and that central authority fails to do that, all the banks that depended on it will crash. As a developer I call that single point of failure. The point to which we disagree, to which I did not want to imply it came from Friedman, is that the FED incentivize big banks to take toxic loans. Why ? Because Bernanke will always tries to save them. Why ? Because it is the subject of its thesis. He is interested on non monetarism mechanism of the propagation and spreading of a crisis. So, in other word, he will prevent any big bank to fail to stop a crisis to propagate. He is right, and that's its job. But it also means that it gives no incentives for big banks to be careful about toxic loans. (Even more if such toxic loan are called AAA by Buffet) What if banks (potentially big) where allowed to take fire more often ? There would be more bank failure for sure, but local one. And then a recession would not spark a global economy crash. I'll look Minsky nevertheless. I think are interpreting what Friedman is saying differently from me because maybe you arent looking at the context of history of banking. Before 1914 instead of Federal Reserve System the big banks used a clearing house system. This system was an association of private NY banks. So member banks acted as "lender of last resort". In 1907, when there was a bank panic JP Morgan used this clearing house association to inject liquidity into the banking system. The Federal Reserve System can be seen as a nationalization of this NY Clearing House Assc.. There was political pressure to create a Central Bank b/c this NYCA only served member banks while letting regional banks go insolvent. So what Friedman is talking about is not single point of failure or fractional reserve. He thinks the role of lender of last resort is more effective if private than if govt. That clearing house works better than central bank. What he says is the Fed is supposed to expand credit in times of crisis but because they failed to do so, a recession became depression. In other words they failed their job. Here's a youtube video of him talking failed monetary policies of the Fed that resulted in Great Depression. www.youtube.com/watch?v=ObiIp8TKaLsHe is against the Fed. But not for the reasons you think. He is comparing a private vs govt clearing house system But I think he got it wrong since the NYCA still exist today. |
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Thanks for doing the backtest. I guess it doesn't work as well as the standard MACD long only
The slow/fast signals are on shorter periods so its expected to have more trades. I'm curious to why more drawdowns
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Its no secret Friedman wanted to replace the Fed with a computer that set inflation at 3%
But its not because of "lender of last resort" issue. Its because of his politics.
He preferred the clearing house system. But for sure he blamed the Fed for the Great Depression of not responding w QE in a timely
After all he is the founder of monetarism
Without a FED, he would argues that banks would have kept reserve to deposit higher. Sure, some banks would have failed. But the result of low reserve to deposit combined with the failure of the fed to provide liquidity made it catastrophic. Without FED, reserve to deposit would be higher, and would not have resulted in a whole forest burning, to come back to my analogy. Yes thats what I said. Friedman is not against QE. He has political preference for free markets. He wants controls on money supply. But he wants it from a computer rather than a chairman to make decisions Youre trying to bend Friedmans ideas to align w your beliefs. Friedman is a monetarist. He can be both hawkish and dovish on monetary policy. I don't know where he said "if there wasn't a Fed, the Great Depression wouldn't have happened". Can you link me where he said that? I all found is that he blamed the Fed for letting GP happen b/c they didn't do QE when things started to get bad. Bernanke quoted Friedman on this to justify his decision to my MBS off the banks. But regardless of Friedman. The idea that fractional reserve affects lending is not correct. Doesnt work like that in real life. Banks create loans then find reserves later. In essence there are no reserve restrictions as long as there is demand for loans I recommend you look into Minsky. His view is more consistent w how banking works in real life |
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What happened when ideological youth become rich and powerful?
Steve Jobs was a hippie
The Clintons were hippies
Id say you elite gentlemen would become part of the part of the status quo you bitch about so much
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Ozzie, you fail to prove how the banker adding 9% to the money supply makes baker Joe 9% poorer. That math wouldn't even work (let alone the fact that you don't provide the explanation to link the logic).
It's great that you're thinking about and questioning how capitalism works!
One thing I think you're missing is that when baker Joe borrows that $100,000 to go into business and subsequently sell his loaves he creates a new need for goods and services from other businesses in the community. He's helped the bank make money, he helps materials and ingredient suppliers make money, he helps the neighboring stores make money, etc. And all of this extra business is created because he's established his business in the first place.
It is true that it takes money to make money. The best part about capitalism, though, is that no matter how much little money you have you can always make money on it, and then make money on those gains, etc. until you've reached a level of wealth you aspire to. And the motivation for all of us should be that the more money we have working for us the more money we can make...it's like a snowball rolling down a hill.
Ok, please explain to us all why when you or I run a money printing press, the fed police will arrest us immediately. Thanks. Then I'll answer you. The Fed doesn't have printing presses. You're thinking of the Treasury. What do mean you can't create money like a bank? What the hell is an ozziecoin then? |
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First off, Oda, he said it beats buy and hold and I intend to make him prove it more than his simple statements. He brought it up, he should have expected criticism.
My point: Buy and Hold is easier to perform perfectly than ADX. So I have the following questions:
How do you perform all these trades?
How do you perform all these trades perfectly?
Do you ever sleep?
Do you program a bot to do them for you?
Do you leave your money on an exchange such as Mt. Gox? If so, your carefully traded stash just went to zero. If you say Bitstamp, how do you know Bitstamp isn't the next Mt. Gox?
All of these questions must be answered adequately in order to beat buy and hold in a cold storage wallet, which takes zero effort and gives 93% of the same result (by the numbers given).
Mistakes can easily lose you that 7%.
I am fine with criticism. I should note that I said it outperforms buy/hold on a risk adjusted basis. In other words, you get a higher net profit and less of a drawdown. I should also remind everyone that I did note that it underperformed for a significant amount of time. I am not trying to promote the MACD as some holy grail. Now to your question about trading? Where and how do you perform these trades? Well, I set it up for daily trading, so one could do this manually merely by trading at the opening of each bar UTC time. You can also create automatic trading strategies. I am using NinjaTrader for both backtesting and automated strategy execution. However, I want to emphasize AGAIN....that this is only backtested research and not a complete trading strategy. People can draw their own inferences as to its value. Thats pretty cool. Can I ask which software you use to backtest? Did you automate yourself? I use an indicator called 3-10 oscillator for trading stocks. Its a MACD set to 3/10/16 Works pretty well but I'm manually doing the trades and sometimes I miss the signals. I'd be interested to backtest this and also automate my trading system |
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The world will become awesome that's what
A bunch of rich anarchists leading the world towards a libertarian free state with strong innovation and minimum government and strong internet freedom ^_^.
Basically the same cryto anarchists that created Bitcoin building more stuff in reality.
For a minute there I thought you were serious I was kidding ^_^ but yah it did sound a bit serious not really sure what a bunch of rich anarchists would do http://en.wikipedia.org/wiki/Crypto-anarchismhttp://en.wikipedia.org/wiki/Anarcho-capitalistWiki says this though In an anarcho-capitalist society, law enforcement, courts, and all other security services would be operated by privately funded competitors rather than centrally through compulsory taxation. Money, along with all other goods and services, would be privately and competitively provided in an open market. Therefore, personal and economic activities under anarcho-capitalism would be regulated by victim-based dispute resolution organizations under tort and contract law, rather than by statute through centrally determined punishment under political monopolies. Riiight. So who enforces these contracts if there is no govt and police are private? |
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Red clay courts. Sweet. I wanna live there |
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When some technology reaches a critical threshold of adoption, it becomes too big to fail. Internet is too big to fail and potentially the same can be said for Bitcoin.
This is how terms are coined. Idiot once meant a person with a neutral opinion on something but not any more because someone like me decided to start using it in other context. There are no patents for coined terms and their meanings. I am free to mutate any term I want if I find the new definition more proper. "Too big to fail" should be a much broader term and without the stench of government bailouts.
Many people, especially uptight "scientists", would hate me for that but the feelings are mutual as some branches of science are grotesquely inbreeding themselves. Informally speaking, I'd ask them: "Do you guys fuck all your cousins or just the ones you find attractive?"
Dude, everyone who uses the term "too big too fail" means "too big to be allowed to fail" NOT "its so big that it can't possibly fail" If you don't like it then too bad Not true. Only people with the proper background knowledge will see too big to fail as something that will be bailed out by governments. Most people don't have the proper background and they will rely on the literal meaning of the term. Literal meaning of too big to fail has nothing to do with bailouts. Nobody thinks that if they watched TV in the past 8 years. So many stories on Nightline, 20/20, 60 mins, PBS, etc.. about "too big to fail" 2008 crisis is the biggest financial event of the 21st century so far |
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The world will become awesome that's what
A bunch of rich anarchists leading the world towards a libertarian free state with strong innovation and minimum government and strong internet freedom ^_^.
Basically the same cryto anarchists that created Bitcoin building more stuff in reality.
For a minute there I thought you were serious |
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Its no secret Friedman wanted to replace the Fed with a computer that set inflation at 3%
But its not because of "lender of last resort" issue. Its because of his politics.
He preferred the clearing house system. But for sure he blamed the Fed for the Great Depression of not responding w QE in a timely
After all he is the founder of monetarism
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You say what you think people should do. But I say what actually happens and has happened many times in the past. This may seem counterintuitive and working against logic, but human psychology is not about logic. And it is surely not what you think it should be. Do you buy less when the price goes down? Give me exemples of when YOU buy less when the price goes down! You seem to be missing the whole point. It is not a question of buying less, it is a question of saving more! When prices go down, people (me included) don't necessarily buy less, but they do save more shrinking from additional expenditures and consumption that you would expect from the fallen prices. And this has been known since long ago (and written in the textbooks, by the way).  And this is enough to cause negative or even devastating effects on the economy. Read your message twice but am still not sure if it's a joke or not : if you buy as much and you save more it is a bad thing? If you think it a joke, I don't think we're going anywhere, sorry. Additional savings due to prices falling reduce producers' profits. This can only be compensated by expanded consumption (provided all other things being equal), but as I said before, increased saving evidently holds back this. And consumption is an investment by itself, but saving postpones it, so that you can't have it both ways, whether you like it or not. Consumption is not an investment and do you prefer a nation of consumers and borrowers with a weak economy or a nation of producers and savers? Saving didn't hold the States of becoming the first economy; going into debt to consume will make them fall of the most wanted first place Prefer the latter; the USA was the latter, enjoyed many liberties, low taxes and small government and that is what made this nation so great; now they have consumers, debts, unfunded liabilities and they produce less and less; it will only be justice when the hard workers and savers of this world like chinese will enjoy wealth, consumption and a strong currency I see the problem here. You are looking at it from a micro point of view. But we are talking about macro |
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Was that what you were getting at or did I miss your query?
I'm not sure if I am going in circles half of the time  Anyways, many people were saying how a deflationary model is superior. I was simply asking for precedence or hypothetical examples. The computers one seemed sensible from my perspective , didn't realize that deflationary couldn't be applied to only a specific field. Computer prices is not "deflation" -- its scale of manufacturing. Please don't listen to these uneducated people who learn economics from youtube & fringe lunatics like Molyneux and Adropolous First, deflation is the increasing purchase value of the currency (yes, we all know it is not that simple, and it has many angles/subtext etc. We here are talking about bitcoin as a currency vs. fiat as a currency, and the inflation/deflation about these two. We do not care about CPI core rate, consumer price index vs. PPE...). It does not matter, why computers are cheaper/better, if i can by a better for the same money as 1 year ago, my currency have more purchasing power relative to a past date FOR computers (and this was only an example, we all know, that one segment doesn't make the WHOLE currency higher in value..) About the personal and insulting remarks. You do not even know me, and you call me (and others) uneducated. And you CAN watch MIT lectures on youtube, does that make them "fringe lunatics" as well? You call Antonopoulos (you couldn't even spell hes name correctly) a lunatic in a Bitcoin forum. Do you know who that man is? How he is one of the core developers, and researcher of the blockchain? How he is involved in the betterment and education about bitcoin, and leading speaker in every great bitcoin conference? Which i guess you never were, troll. By the way, who are you? How many code you wrote to the protocol? Do you have a successful crypto start-up? Have you have written a new economic theory book? If no, than you should not throwing poo on everyone you can just see. Let me assume something about your knowledge as well: you are one of those autoriter professor fatishist, who only cares about who says thing, and not what they say. Your post is full of irony. LOL |
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The idea is when you have recession the interest is lowered to encourage lending and when economy recovers the debts are paid down.
BTW so far the QE doesn't have the effect its intended to have so you can say the theory is flawed. The problem is you can't force someone to borrow money even if you make it cheap to do so.
As for why The Treasury don't print paper money? The short answer is that's not how it works. They're not allowed to.
The Treasury issues bonds and the Fed buys them off the open market. They do this to affect interest rate. If they just printed a truckload of bills what are they gonna do with it?
I wouldn't say there is any deception there. If you go to the federal reserve website, its all explained.
As Milton Friedman would say, the root of the problem is that banks are relying on the central bank to provide liquidity if there is any crisis. The net effect is that any mismanagement on the central bank part will crash the whole system. (It is a single point of failure) Most of the bank run of the past (1907) were quickly resolved after short suspension of payment. Some bank failed, but most survived, because they knew they would not count on the money printer to save them. It is similar to the analogy of forest and underbrush in thieves emporium. It is maintaining a forest by preventing any fire to catch. The net result is that the underbrush will expand so much, that the odd of the first fire to consume the entire forest go very high. Another way of maintaining the forest is to regulary light fire when the underbrush is not big enough to spread. The small stuff get cleared away, preventing a fire to consume the whole forest afterward. The central banks are preventing any fire to catch, but the underbush grew so much that a spark can now consume the forest. Where does Friedman say that? Heres a quote from an interview where he recommends QE to the BOJ "Now, the Bank of Japan's argument is, "Oh well, we've got the interest rate down to zero; what more can we do?" It's very simple. They can buy long-term government securities, and they can keep buying them and providing high-powered money until the high-powered money starts getting the economy in an expansion." Its true he wanted to abolish the Fed but not for the reason you state |
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People don't buy things just because the prices go down. They buy things when they have more money.
Its psychological. Japan experienced deflation in 90s with falling prices. But when people are worried about their future they tend so save not spend
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Wait, so did no-one REALLY not say that all 21 million coins haven't been minted? Yeesh.
A rare sighting of the mythical triple negative in the wild. I really want to read what you're writing, but come on man. Yes take a photo before he disappears |
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During the 70's and the oil crisis the Fed did a very poor job handling inflation.
Not after Volcker took over |
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When some technology reaches a critical threshold of adoption, it becomes too big to fail. Internet is too big to fail and potentially the same can be said for Bitcoin.
This is how terms are coined. Idiot once meant a person with a neutral opinion on something but not any more because someone like me decided to start using it in other context. There are no patents for coined terms and their meanings. I am free to mutate any term I want if I find the new definition more proper. "Too big to fail" should be a much broader term and without the stench of government bailouts.
Many people, especially uptight "scientists", would hate me for that but the feelings are mutual as some branches of science are grotesquely inbreeding themselves. Informally speaking, I'd ask them: "Do you guys fuck all your cousins or just the ones you find attractive?"
Dude, everyone who uses the term "too big too fail" means "too big to be allowed to fail" NOT "its so big that it can't possibly fail" If you don't like it then too bad |
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The idea is when you have recession the interest is lowered to encourage lending and when economy recovers the debts are paid down.
BTW so far the QE doesn't have the effect its intended to have so you can say the theory is flawed. The problem is you can't force someone to borrow money even if you make it cheap to do so.
As for why The Treasury don't print paper money? The short answer is that's not how it works. They're not allowed to.
The Treasury issues bonds and the Fed buys them off the open market. They do this to affect interest rate. If they just printed a truckload of bills what are they gonna do with it?
I wouldn't say there is any deception there. If you go to the federal reserve website, its all explained.
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