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Ceo: No Need To Invest Right Now

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"I could borrow $2 billion tomorrow for 3 1/2 percent. But what am I going to do with it?"

David Speer, CEO of Illinois Tool Works which has 60,000 employees worldwide in more than 800 business units and $14 billion in sales.

The above quote is from an article by Neil Irwin in the WaPo: With consumers slow to spend, businesses are slow to hire

There is no reason to invest when there is excess capacity in most industries (and excess supply in housing). This excess capacity or lack of demand - and therefore lack of new investment - is a key reason why the recovery is sluggish.

http://www.calculatedriskblog.com/2010/08/ceo-no-need-to-invest-right-now.html

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Finally, finally people online are figuring it out. I am heartened when I go to calculated risk, or nakedcapitalism or random blogs and the few the brave are in the comments arguing now it is a demand led problem.

Instead of a rare voice in the wilderness, everywhere you go people are making the demand argument.. even if they still are in the minority. They are also starting to realize the only way out is massive government deficit spending.

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Finally, finally people online are figuring it out. I am heartened when I go to calculated risk, or nakedcapitalism or random blogs and the few the brave are in the comments arguing now it is a demand led problem.

Instead of a rare voice in the wilderness, everywhere you go people are making the demand argument.. even if they still are in the minority. They are also starting to realize the only way out is massive government deficit spending.

Wrong.

the guy is saying there is plenty of demand for his products.

Why does he need a banker to lend more? he has his demand...he has his profit. he can probably grow without borrowing.

Course, if you are a banker, then demand for YOUR product is reducing....except you are just a trader in money. I guess the answer, is, there are just too many bankers.

Edited by Bloo Loo

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Yep, just as the only way out of my imminent bankruptcy is borrowing more money, and the only way of avoiding cold turkey is shooting up one more time.

The government and its central bank have no fear of going bankrupt. The only limitation on QE is inflation.

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The government and its central bank have no fear of going bankrupt. The only limitation on QE is inflation.

no, but they'll certainly take you out while avoiding it.

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The government and its central bank have no fear of going bankrupt.

What happens when no other country will deal for their currency? What happens when Germany/Russia/China switch to a gold backed currency?

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Is it? Surely another answer to the chronic over capacity that has developed is destruction.

Some say it was the Second World War that finally cured the Great Depression.

One big factor in getting out of the depression was the deficit and printing spending for the war. The USA was running a yearly deficit of 30% of gdp during the war. Right now they are worried about a deficit of 12% of gdp last year and on pace for about 9% of gdp this year.

Also like now there was no inflation caused by all that printing and spending.

I believe the output gap is that large now that the USA could run a deficit of 30% of gdp and still not face inflation.

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What happens when no other country will deal for their currency? What happens when Germany/Russia/China switch to a gold backed currency?

Liquidity is a big reason the US dollar became the global currency. Now in a world where the USA is only 4.5% of the global population with so much of the world developing rapidly.. there is seemingly limitless demand for more dollars. Look at the astonishing fall on the 10 year yields since QE has ended.

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The government and its central bank have no fear of going bankrupt. The only limitation on QE is inflation.

QE IS inflation.

Demand is when people want something for their own internal reasons, it's not when a handful of loons in suits buy it for them and then send them a tax bill.

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That CEO must be a right dipstick. If I could borrow $2 billion at 3.5% I'd borrow it, start a credit card, and lend it out at 10%.

with a 6.5% default rate for US SECURED LENDING? unsecured falls behind second and third charges.....

course, the banks would do exactly the same IF they could.

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One big factor in getting out of the depression was the deficit and printing spending for the war. The USA was running a yearly deficit of 30% of gdp during the war. Right now they are worried about a deficit of 12% of gdp last year and on pace for about 9% of gdp this year.

Also like now there was no inflation caused by all that printing and spending.

I believe the output gap is that large now that the USA could run a deficit of 30% of gdp and still not face inflation.

Well, 1million dead US, 20 million dead Russians, 500 thousand Dead UK....yeah thats destruction of capacity.

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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