Digging for Treasure Notes like digging for Gold

[daenku32]

His Greatness the Krugman posted this to explain his "aliens" talk connection to traditional Keynesian explanation (by Keynes himself) of how to stimulate downtrotten economy even with a "useless" activity.
http://krugman.blogs.nytimes.com/2011/08/24/coalmines-and-aliens/

Keynes then goes on to explain that the actual business of gold mining — in which basically useless ore is mined and refined at great cost, then sent to sit idle in the basements of central banks — is for all practical purposes identical to his coalmine idea.

I think it's an interesting comparison between Treasury notes and Gold. While traditionally gold is considered that "always worth something" safe asset, I think the real world trading shows that treasury notes are at least as desirable at the moment as gold, and that they are considered one of the safest forms of investment (or is it savings, can't remember).

PS. Title should have been "treasury notes", but in a pirate fashion I like "treasure" as well.

 

[psionl0]

Burying treasury notes so that political cronies can be given a licence to dig them up again? thbbbbb!!!

Even SCRUT won't be bothered joking about this ridiculous idea.

 

[stevea]

Burying treasury notes so that political cronies can be given a licence to dig them up again? thbbbbb!!!

Even SCRUT won't be bothered joking about this ridiculous idea.

Kinda missed the point didn't you.
.

 

[MarkyX]

And this is why I don't take Krugman seriously.

It doesn't matter if the metal is useless or not. If there is someone, out there, willing to fund such a project and go to such measures to get it, then I fail to see the problem in doing it. It isn't like this type of operation isn't doing society harm, and it is providing jobs therefore economic growth.

The fact that he is against the idea makes me wonder how the hell did he get his Nobel Peace Prize. Even a college student like myself can point this out.

 

[Aepervius]

Kinda missed the point didn't you.
.

I have to be honest, I am , as a lay, completely and utterly missing the point too.

 

[psionl0]

Kinda missed the point didn't you.
.

There is a point?

 

[daenku32]

It doesn't matter if the metal is useless or not. If there is someone, out there, willing to fund such a project and go to such measures to get it, then I fail to see the problem in doing it. It isn't like this type of operation isn't doing society harm, and it is providing jobs therefore economic growth.

That's the entire point. If the government buried treasury bonds in coal mines people would go after them just like they go after gold. And the economic impact would be the same. In today's case it would mean more jobs.

 

[psionl0]

That's the entire point. If the government buried treasury bonds in coal mines people would go after them just like they go after gold. And the economic impact would be the same. In today's case it would mean more jobs.

Unbelievable!

Where are these treasury notes going to come from? Will the government print them, borrow them or pull them out of the economy?

 

[TubbaBlubba]

And this is why I don't take Krugman seriously.

It doesn't matter if the metal is useless or not. If there is someone, out there, willing to fund such a project and go to such measures to get it, then I fail to see the problem in doing it. It isn't like this type of operation isn't doing society harm, and it is providing jobs therefore economic growth.

The fact that he is against the idea makes me wonder how the hell did he get his Nobel Peace Prize. Even a college student like myself can point this out.

... That's Keynes' and Krugman's point.

Also he got the Nobel memorial price, not the peace price. Not even the same country.

 

[respect]

And this is why I don't take Krugman seriously.

It doesn't matter if the metal is useless or not. If there is someone, out there, willing to fund such a project and go to such measures to get it, then I fail to see the problem in doing it. It isn't like this type of operation isn't doing society harm, and it is providing jobs therefore economic growth.

The fact that he is against the idea makes me wonder how the hell did he get his Nobel Peace Prize. Even a college student like myself can point this out.

We could provide everyone jobs anytime we want if uselessness is no concern, of course jobs that don't produce anything useful are rather pointless. Why not just go with famous Friedman example then? We could print some money and hire people to dig ditches and then fill them back up. If simply creating jobs was all that was needed, this would work. Of course this won't actually work because no new goods and services are created.

 

[MarkyX]

We could provide everyone jobs anytime we want if uselessness is no concern, of course jobs that don't produce anything useful are rather pointless. Why not just go with famous Friedman example then? We could print some money and hire people to dig ditches and then fill them back up. If simply creating jobs was all that was needed, this would work. Of course this won't actually work because no new goods and services are created.

Depends, is someone willing to pay someone for digging a ditch? And by someone, I mean a private enterprise, not the government.

Whether you like or not, there are investors out there willing to invest their assets into these mining companies to take this metal. Maybe Krugman should buy some treasuries notes and bury them, and see if he can sell the land to a mining company. Chances are, no one will take it. Why? Treasury notes have been proven useless and a lousy investment as of late, since not many people respect the dollar anymore. As for the "useless" metal, plenty of folks in India and China are willing to spend quite a bit to get them. In fact, demand from both countries have increased since last year.

Big difference between the two. The metal is something the market wants, while the 'buried' notes aren't, otherwise they would've been a market for buried notes already.

 

[respect]

Depends, is someone willing to pay someone for digging a ditch? And by someone, I mean a private enterprise, not the government.

Whether you like or not, there are investors out there willing to invest their assets into these mining companies to take this metal. Maybe Krugman should buy some treasuries notes and bury them, and see if he can sell the land to a mining company. Chances are, no one will take it. Why? Treasury notes have been proven useless and a lousy investment as of late, since not many people respect the dollar anymore. As for the "useless" metal, plenty of folks in India and China are willing to spend quite a bit to get them. In fact, demand from both countries have increased since last year.

Big difference between the two. The metal is something the market wants, while the 'buried' notes aren't, otherwise they would've been a market for buried notes already.

People do want gold and Treasury Securities, they have value. Gold has to be mined and refined. Treasury Securities do not, having scavenger hunts for them would be useless like digging ditches and filling them back up.

 

[Tippit]

We could provide everyone jobs anytime we want if uselessness is no concern, of course jobs that don't produce anything useful are rather pointless. Why not just go with famous Friedman example then? We could print some money and hire people to dig ditches and then fill them back up. If simply creating jobs was all that was needed, this would work. Of course this won't actually work because no new goods and services are created.

That's one of the few non-retarded things I've seen you post.

Of course, if the idea is to hand out welfare, then we would be better off either printing or taxing (same thing) and then simply handing the proceeds out to be spent. Digging ditches is a supreme waste of time, and artificially lowers standard of living for those employed, even as it grants someone else's purchasing power.

The difference between mining for Treasury notes and mining for gold, is that in a couple thousand years when the US doesn't exist, gold will still be beautiful, women will still like to adorn themselves with it, and it will still have properties suitable for use as money, while treasury notes will be worthless, other than perhaps as collectibles.

Krugman's recent recycling of the broken window parable only makes him less relevant and wrong than ever. Reading him of late is akin to digging useless ditches, or mining for Treasury notes. Speaking of useless, where's drkitten these days?

 

[respect]

That's one of the few non-retarded things I've seen you post.

Of course, if the idea is to hand out welfare, then we would be better off either printing or taxing (same thing) and then simply handing the proceeds out to be spent. Digging ditches is a supreme waste of time, and artificially lowers standard of living for those employed, even as it grants someone else's purchasing power.

The difference between mining for Treasury notes and mining for gold, is that in a couple thousand years when the US doesn't exist, gold will still be beautiful, women will still like to adorn themselves with it, and it will still have properties suitable for use as money, while treasury notes will be worthless, other than perhaps as collectibles.

Krugman's recent recycling of the broken window parable only makes him less relevant and wrong than ever. Reading him of late is akin to digging useless ditches, or mining for Treasury notes. Speaking of useless, where's drkitten these days?

The difference is that adding completely unnecessary steps to obtaining Treasury Securities is useless.

Don't worry about a few thousand years from now, by then the Jews bankers will have taken over the world and everyone else will live in FEMA camps.

 

[Tippit]

Whether you like or not, there are investors out there willing to invest their assets into these mining companies to take this metal. Maybe Krugman should buy some treasuries notes and bury them, and see if he can sell the land to a mining company. Chances are, no one will take it. Why? Treasury notes have been proven useless and a lousy investment as of late, since not many people respect the dollar anymore. As for the "useless" metal, plenty of folks in India and China are willing to spend quite a bit to get them. In fact, demand from both countries have increased since last year.

What are you talking about? Treasury notes are at all-time highs, with yields at all-time lows. It's been a fantastic investment - so far. You can't go out far enough on the government yield curve to get a real return, people are paying the government in order to "safeguard" their money.

 

[daenku32]

Krugman's recent recycling of the broken window parable only makes him less relevant and wrong than ever. Reading him of late is akin to digging useless ditches, or mining for Treasury notes. Speaking of useless, where's drkitten these days?

So if bunch of windows break, the window business doesn't see a jump?

 

[Tippit]

So if bunch of windows break, the window business doesn't see a jump?

Yes indeed. Of course, absent the destruction of the old windows, the new windows could have been built instead for someone else who didn't have any windows to begin with, or wasn't that obvious?

 

[falkowsi]

In today's case it would mean more jobs.

Who wants jobs, if you can have the same benefits without them ?

 

[daenku32]

Yes indeed. Of course, absent the destruction of the old windows, the new windows could have been built instead for someone else who didn't have any windows to begin with, or wasn't that obvious?

But now you get to make windows for both, the new AND the old. I'm pretty sure the window suppliers are currently working well below capacity and would be happy to ramp the production.

 

[falkowsi]

But now you get to make windows for both, the new AND the old. I'm pretty sure the window suppliers are currently working well below capacity and would be happy to ramp the production.

If you just look at the window suppliers, they would be happy. For the economy as a whole, not so much. Somebody has to pay for the windows, and they'd rather spend the money on something else.