Comments on: Rubin’s unhelpful fiscal exhortations A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: jnewman Wed, 03 Nov 2010 14:08:20 +0000 A well aimed blast at a charlatan from the past!

A quibble though about those “bond vigilantes”: as I understand it we have a fiat currency. This means that the government can set the rate on bonds wherever it chooses and can enforce through open market moves, as we are now watching, pretty good discipline on the secondary markets too. Japan’s experience for the last 20 years is a pretty good proof: underemployed Japanese are not purchasing government debt, Japanese banks are in order to get yield on the surplus reserves they’ve accumulated as a result of two decades of poorly targeted deficits.

This outs “bond vigilantes” as the well trained poodles of central bankers since Nixon took us off gold (gold is a money supply independent of the government that governments really do have to pay market rates for). The whole “bond vigilante” meme in a fiat environment is nothing but a tool to keep bald Democratic campaign advisors on the bankers reservation.

By: charlie6 Wed, 03 Nov 2010 13:52:28 +0000 Allowing the profiteers to control or government is destroying America. The average middle class American has no representation in government. Guys like Rubin, Summers and Bernake have sold this country down the river.

By: shayre Wed, 03 Nov 2010 11:08:05 +0000 Felix,

My thinking has been that, during the credit bubble, all the resulting profits flowed to a very small minority, and now that the bubble has popped, they want to keep all the profits that this bubble generated and not pay any tax on it, and leave the debt that must be taken on to deal with the popping of the bubble to the masses to clean up.

I guess this is what they mean by privatizing the bubble gains, and socializing the offsetting losses that occur when the bubble finally pops.