I have already demonstrated you are wrong, and provided citations (which you have not btw).
- I don't see the point of your citations. You are arguing MY point - that there is so little activity going on below the minimum wage even now, that there is no point regulating it, yes.
However it's worse than that - it kills economic activity by actively destroying valuable jobs that cannot produce more revenue per hour than the minimum wage allows, and the level at which the minimum is set is completely irrelevant. People who can get jobs at above minimum wage today are not interested in jobs that little paid, but people who cannot get any jobs are stuck without jobs.
minimum wage or not. NO ONE would take those jobs.
- FALSE. Flat out LIE.
People used to work for much lower hourly pay than the minimum wage allows today because there are legitimate services and jobs that are in that price range simply by their virtue of being very cheap for the consumer - grocery bagging comes to mind, where you now have to do it all by yourself, while it used to be done by people.
Phone attendants, people who checked your oil and tire pressure at gas pumps, etc.etc. There is plenty of opportunity to provide services that are VERY CHEAP to the end consumer but would still be viable if it was LEGAL to provide them.
You are arguing both sides of the table - you are saying: "nobody would take those jobs" and you are saying "it should be illegal to provide those jobs by law". You make no sense.
TWO percent man. Two. Who are these people that are willing to work for slave wages and where to they come from? THEY DO NOT EXIST.
- 20%. 20% MAN.
20% of people are EASILY unemployed RIGHT NOW.
Now, obviously with the EI that is perpetually extended with 'free money' that is being printed (and thus also adding to the inflation) and with minimum wage laws, none of those people will have jobs in this economy.
20% of people are unemployed and you are arguing AGAINST jobs. It's amazing.
The ONLY regulation that should be done at gov't level is NEGATIVE regulation - regulations must be killed, removed, obliterated, removed, abolished, gone, done, destroyed, undone, annihilated.
There must be no regulations of business at all if those 20% are to find ANY jobs.
Well unless you count children and refugees from other countries. So, suppose we did enslave them? The effect on the economy and real jobs created would be nil. And we'd have slaves. What's good about that? I'll tell you.
- prices must FALL.
My argument is always simple - prices must fall.
Prices must fall, but the government would not let them fall, because gov't wants inflation, it wants inflation because it is the biggest debtor and it does not want to and is incapable of paying back the debt.
As to 'slaves' - well, I suppose you think it's better for those people to be slaves to the circumstances, where they just cannot find any jobs and are forced into this vicious cycle, where they can't get work experience at all and can't use that experience to move on to better jobs.
20% of people are unemployed (they include those who gave up looking).
We'd be able to tell everyone on welfare or food stamps to fuck off and go check tire pressure. Yay, more slaves. And again, the effect on the economy and real living wage jobs created -nil.
- FIRST you must tell your government to fuck off.
You see, it won't work, just removing minimum wage and even income taxes, it's not enough anymore.
All government regulations must stop. All government subsidies, all monopolies, everything government does, from wars to SS and Medicare and Medicaid, to subsidies to any company and to any individual and most importantly - printing and borrowing money.
All of this must stop. The first people who must lose jobs are the 20 million people
1. There are plenty of opportunities for services that generate much less revenue than minimum wage, and thus these services go unfulfilled. This includes anything from answering phones, to store clerks, to people checking your tire pressure at gas stations, etc.
2. The reason for minimum wage is price inflation, which is always caused by government printing money. There is no reason to have inflating prices and labor costs if government does not print fiat.
3. Minimum wage is a scotch tape 'solution' to the problem that government creates by printing money.
4. Nobody argues that people must always make little money here, only that minimum wage necessarily destroys opportunities for services and for people who legitimately cannot exist above ANY minimum wage that you may set as a legal requirement.
5. Minimum wage regulation is a political one, not one based on economics, as it clearly destroys opportunities for certain people to enter work force and generate enough starting experience to progress to other opportunities.
6. Minimum wage regulations cause more welfare recipients and less economic activity.
You can go ahead and reject whatever you like, but you have no logical argument against any of my points.
Yes, absolutely, but your math is false in that it begins at the wrong end of the equation.
- which part of the equation do you find incorrect, please continue?
Is it the part there there are jobs that only can generate $4 worth of revenue?
Is it part that paying somebody $7.50 for a job that generates $4 is a losing proposition (losing $3.50 that must be added to the $4 in order to pay a minimum wage?)
Is it that people with skills to find jobs above $3 will not take the job at that level?
Is it that people who cannot find jobs at above minimum wage will be a burden for the society?
Is it that gov't will not see any taxes if the person is unemployed and is on welfare instead?
just to confirm, by your logic, the US enjoyed huge amounts of deflation between 81 and 99 as gold dropped from it's previous all time high to the lows you base your numbers off of?
- not from 81 to 99.
Gold went up from 35 to 850 after Nixon's gold shock to 81, when Paul Volcker did something courageous and pushed interest rates up to over 12%, at some point they reached over 20%, clearly this stopped the devaluing of US dollar.
However gold went down from 850 to about 300, which was around 8-9 times higher than when it was let go of by Nixon.
Sure, if you bought at 850 and then the prices went down, you lost money, but whose problem is it that you bought at the peak? Gold didn't go back down to 35 though, did it?
How about we take another long term view, and instead of using gold, which no one uses for almost any useful purpose,
- go ahead, keep misunderstanding.
Nobody is using US dollars for anything useful in themselves either, or is somebody eating them for food or burning them for fuel? At least gold is used in jewelry and small amounts of it are used for industrial applications and dental.
The wheat, as well as cotton, soy, rice and some other foods are and were subsidized heavily to keep their prices down for political reasons, this also started with Nixon by the way.
I can take any commodity and drop random chart lines and say look, it's gotten cheaper! or look, it's gotten so much more expensive. Hell, in terms of housing, the dollar has strengthened something like 35% in the last 4 years! and housing, unlike gold, is a real product that we use.
- house prices should be going down by another 80-90%, but they are not dropping because of all the printing. The US gov't is dead set to keep the nominal house prices up, and this is what creates inflation.
Gold is just another random, speculative commodity. I can pick lots of commodities that counter your argument.
- Fiat currencies are also speculated in, what is the point of that argument?
As to gold being a 'speculative' commodity, sure, some of it is speculation, but it's a very small amount that's speculative. The major buyers are central banks and large funds right now. If gold was in a bubble, the gold stocks would have been soaring, but they are not much higher than they were in 2008, when gold lost some ground. So who is speculating in gold if the stocks are untouched? Not many at all. People are holding it.
But as cotton has started to tumble severely, I'll take that bet that food won't be 3x as expensive and clothing won't be 3x as expensive by the summer.
- hell, it's very little time left now, either you'll be proven right, or I will, just wait a few months. Good luck.
As to 'charts', etc., 60 US cents cold buy 1 CAD in 1996. 1 Swiss Frank was about 25cents then. All those are fiat and thus flawed currencies, but look how things changed since then even in that.
Whatever you get paid as interest in a bank doesn't cover inflation, don't kid yourself. If you are holding fiat then it is being printed every day by governments, yours and others and it is losing value.
If the money you hold is tangible, then government can't print it.
Now, I am not saying you should always hold gold and do nothing else, that is not my point. It makes no sense to hold all your savings in gold if your economy is productive. It makes much more sense to invest into something that brings income - dividend paying stock for example. However holding fiat makes no sense at all.
Basically here is the problem: for some amount of time it may seem that you are doing well in a system that allows government to print fiat not backed by anything, but what actually is happening is that your government is growing all the time due to this ability (and also due to taxing income), and as it grows it kills the economic activity by more and more regulations, taxes, subsidies to preferred monopolies, etc.
Fiat money can work only if the government is NOT allowed to print it, but instead the fiat is backed by something real - production capacity, gold reserves, whatever, anything that is actually worth something and cannot be simply produced with a printer, anything that can be exchanged for that fiat at a request from whoever is the authority behind the money.
If on the other hand the government can print it all and there is no backing, then eventually your economy folds, as gov't pushes investment capital out with inflation and regulations and its own spending and growth and destruction of competition, etc.
I am arguing against an unsound economic system that kills economies, that always killed economies without exception in people's history.
SS doesn't steal your money. It forces you to invest it in the safest available investment, US debt, that returns about 50% interest. That also invests in running your country, which keeps all your investments safe.
SS does steal your money, because it was never a fund in the first place. The money is taken in, spent and never invested. SS and other things like Medicare/Medicaid rely on constant inflow of new money, but there is no investment, there is no capital fund, there is nothing but US bonds. Those must be sold on the market to get money from them, but they are also DEBT even if you manage to sell them somehow (which is becoming less and less possible with every new day, as the Fed is now buying 30% of T-bills and the rest is bought by foreign national banks, who are just scared of the consequences of letting US drown and they do not care about the investment income.)
US debt is worthless, would you loan US government any money? Really, think about it, have they ever paid back the principal? They are refinancing the thing in short term bonds (thanks Clinton and Rubin,) and they are admitting to everybody that if the debt ceiling is not raised, they are done. Well that means they are done now. Imagine if it wasn't the Congress voting against the ceiling - but whatever market that is left for US bonds not buying? Then the Fed would buy it all, because it just will not let the US to default honestly, so it will hyper inflate.
Next QE is coming you know, and then another and another, it's all QEs all the way down now.
But it did stop ME from investing, and it stopped plenty of companies from investing into US.
I stopped investing, I dumped all of my US holdings, I don't own any US denominated assets and I moved out of America.
I do not like the 'orderly' decline any more than I like 'disorderly' one. I do not like the decline in principle, you see? I rather participate in something that appreciates in value, not the other way around.
If you believe that inflation is great and that falling value of fiat is a good economic policy, because you can debase your money and export more, than why don't you follow your own advice, and export more of your own services by devaluing the rate at which you are selling them?
Do you understand what I am saying? If you believe that falling value of your currency serves you well, then you should follow that same principle for all other activities - reduce value of everything, dump value in fact, this way you'll be able to work so much more, because so many more people will be able to afford your services.
Of-course then the question becomes - what do you get out of it, but that was my question from the start.
Had over 50 comments, so can't reply as myself anymore,/. rules.
-- For sure, the commentators in this thread like inflation and hate deflation so much, I wonder why don't they then suppress their own salaries, after all, that way they'll be able to sell more of their services, which they believe is the greatest thing since sliced bread.
So why don't they cut their salaries by 75%, equal to the amount of value US dollar lost since 2003? This way they'll be able to export more of their work for less.
They are geniuses after all, why don't they do it?
Japan MUST have deflation, the prices are not dropping the way they should be because Japan is constantly printing currency.
You are wrong in every single comment you make as a response to my posts, I wonder if you are just basically wrong in every step of your life completely the same way or is it just/. that affects you this way?
Of-course that is until they decided to repay the 3.2billion UK pounds that was put upon the tax payers by their stupid government, in order to save behinds of the bankers again. Oh well.
As to credibility - all the credibility I need is in the bank.
Real money and real credit is not printed out of thin air.
Money MUST be expensive, so that plenty of attention is paid to how it's spent, to the business plan, to the competition for it.
You get a loan only if you have a sound business that will make more return than somebody else's idea, that's the point. But you can't print fiat without any backing, without any reserves, without anything real behind it and call it money - it's not.
People viewing money as a way of storing value is very bad for the economy.
- nonsense.
Money must be storing value, you have to be able to save capital in order to use it for production either as a credit or as direct investment.
The actual reason why the gold was abandoned was not that people 'held on to the money', no, of-course not. People wanted to deal in real money, but government wanted to be able to buy votes, give favors to their preferred monopolies, get rich quick, promise everything under the Sun and deliver in fake money.
The only reason for government counterfeiting money (that's what it is - money without reserve is counterfeit) is to be able to print it without working for it, without any production value behind it.
Money must be accepted as means of exchange and as store of value and as a unit of accounting - those are properties of real money, and that's why gold is real money, has been for thousands of years across many cultures and is returned to now, when the fiat fiasco is blowing up right in front of our eyes.
As to people not wanting to invest - BS. Everybody always invests their money to grow it. 19 century USA showed the most growth, while money was appreciating in value quite rapidly.
You post a lot in stories about economics, but you seem to have completely missed the point of money.
- did I? Do you hold fiat or something else for your savings?
Through most of the 1930s and 1940s, the US government implemented Keynesian economics, and by 1945 had basically recovered from the greatest financial disaster since we've started really keeping track.
- non-sequitur. The END of Keynesian economics (end of war time spending) allowed USA to become a major private goods producer again, but of-course it didn't hurt that the competition was wiped out during the war, and thus USA had a basic monopoly on labor just past the WWII.
In fact, Keynesians failed to understand this and predicted that the end of WWII will throw USA into a deeper depression, as more people would enter the workforce (the soldiers that would come back from war).
They could not understand that huge drop in government spending would free up the credit and resources and that women would exit the work force in droves, once the men came home as well.
As to 37 GDP growth - what is the point of indicating some growth in an accounting spreadsheet if the wealth is not going anywhere and standard of living is shit? It's like they are talking about 'jobless recovery' today, but what about people without actual jobs - are they recovering?
Compare this to 2008, when policymakers responded with mostly supply-side and monetarist policies. It's been showing results, but not as good results as the Keynesian policies of the 1930s.
- no question, you can put economy on a huge dose of morphine to hide the pain, but it does not fix the problem that exists in the organism - the actual sickness of easy money and lack of investment capital and jobs and production and huge government spending.
Spending free money is great in the short term, too bad you have to suffer even more when you get cut off from it and have to pay it back somehow, but you see, there are no jobs of any value that gov't can create, that produce anything that market needs and would buy for REAL money.
Keynesians came up with something that appears to correctly describe and predict reality at least as well as any of the competing theories. So to call them astrologers is at best unfair.
- they failed to predict anything, from post-WWII boom to effects of monetary expansion on investment capital flight and inflation of asset bubbles, they are dead wrong on everything, and have been since the beginning, so you may want to stop with that nonsense.
Bread was cheaper in dollars year to year, and so were other things that appeared on the market that never even existed as goods/services prior to 19 century - electrical power and lightbulbs, radio and phones, telegraph and cars, washing machines and indoor plumbing, refrigeration and abundant safe food, medical procedures, like surgeries, that didn't actually kill you.
Nobody was complaining to be able to buy more for less then, and nobody wants to pay more for less now. Nobody was complaining to be able to buy things that didn't even exist prior to then, and now there were huge line ups for iPads as well.
Dollars SHOULD be harder to get - this creates competition and more sound business practices.
- recovering? The word must mean something to you, so explain that please.
In fact in USA the prices must be dropping like hell, specifically prices on housing. Instead, the government bought all the toxic mortgage shit, propped up the failing banks that sold that shit, put it on Fed books and transferred the debt to the Treasury, all while propping up the home prices further with near zero discount interest rates and the Fed buying 30% of the T-Bills found on the market with printed cash.
Yeah, prices are 'recovering' alright. They are recovering to their real value against US dollar.
Good luck this summer, food is going to become 2-3 times as expensive as it is now. Clothing will go up in price by 3-5 times. Energy will rise by another 20-30%.
-- As to 'eating gold' - you can. You just have to exchange it for something edible.
On the other hand US dollars - now that you really cannot eat.
And you see, as dollar fell in value by 75% since 2003 and gold kept steady, the prices in gold actually even went down for food and energy, it just means that if you used real money instead of fiat, you'd be eating better.
You missed the point entirely. We will sell the products to OURSELVES. While at the same time enjoying the income from manufacturing them, too.
- you have to have investment capital for that. USA does not have hot stand by factories ready to start production with a snap of the fingers. The production capacity does not exist, it has to be rebuilt, but this takes money, and I mean real money. The kind of money that will buy the tools and labor, and since the tools are now mostly manufactured in China, you must have their money if they decide they don't want yours, which means you have to give them something they want first, but what do you have, and what about all the debt to foreign countries/debt holders and all the domestic social obligations (SS, Medicare, Medicaid, etc) and all the spending (war, financial, etc.)?
"Bringing home" our base of manufacturing -- even for just domestic goods, not exports -- would do wonders for our economy.
- nobody wants to invest in US economy though, that's why the investment capital left and is now producing in China.
First USA has to take a huge step forward, cut government spending by 99.9%, abolish IRS, Fed, FDIC, all government agencies, FHA, Freddie/Fannie. USA must start restructuring its debt and it must stop printing money.
If the money continues being printed, then there is no reason to invest into USA - it's impossible to keep value of money that is constantly being debased.
So 'Bringing home" - is a good idea, but the implementation will be very painful. Necessary, but painful. It's not going to happen until US dollar crashes and US economy burns and US people have no choice left.
And as a nice side effect, out children's toys will no longer contain lead or zinc and arsenic... our children's formulas will no longer contain melamine.
- to have businesses return you will have to abolish all business regulations, at least in the first years, otherwise there will be no incentive to return.
Of-course to prevent abuses you speak of, the USA will have to reinvent its justice system, to be able to deal with such calamities quickly and efficiently, and not the way it's dealing with them now. BTW., didn't you hear? over 50% of US meat on the market is contaminated with Staph bacteria, so whatever FDA is doing is shit anyway.
If they want to order the US around, I say let them do completely without the US for a while, and see how far they get. I predict it won't be very damned far.
- you are way off base.
China is now the major producer that the world buys from, they get to call the shots. USA borrows over 40% of what it spends from bond sales, 70% of those sales come from foreign banks.
USA has 50Billion/month trade deficit mostly with China. Yes, China imports a lot of stuff into USA. No, it does not need USA to buy its products.
All it has to do is let its own currency appreciate and Chinese 1.5 billion people will all of a sudden become a viable market with lots of purchasing power, that Chinese (and other) companies would be selling to.
Your ideas on production are correct, but your understanding on economy and politics are..... lacking.
I'd say fanatical was the more correct word over "politically correct".
- don't know WTH you are talking about.
Sadly, as I'm not a robot and am prone to human social behavior, I would be hard pressed to have my opinion changed on United States economic policy if I actually cared to have an opinion on the topic.
- my point exactly, nobody changes their 'opinion', because it's mostly not theirs to change, they are indoctrinated with it, thus logic does not work.
Also, my cat is probably fed better than I am and you have no idea how expensive that food is!
- why would I not know? I have a cat in the next room, and 2 more are in another country that I was visiting for 2 months prior to last week.
I apologize ahead of time for failing to open your eyes to your own behavior.
How someone so fanatical and rude has any karma at all amazes me.
- maybe not all moderators are stupid after all.
It doesn't even matter if your arguments are correct or not because, after going through your comment history, your presentation is so abrasive as to cause immediate emotional response.
- What am I, not politically correct enough for you? Maybe you should go to CNN instead.
If you actually want to change opinions then I advise some introspection and considering your target audience.
- No. I am not going to change any opinions, that is certain. I am presenting mine, you don't have to like it.
Must add to the previous comment: however in a healthy economy deflation is an indicator of strength and of health of economy.
You see, deflation means that money is appreciating in value compared to the produced goods, cost of labor and prices on things.
So deflation means that prices are falling, and in a working economy it only indicates that the market is becoming more and more efficient at distributing wealth (goods and services) among the population, which in turn is becoming more and more wealthy and affluent, because as value of money is rising and prices are falling, the purchasing power is increasing and there is more competition for the investment credit.
Deflation has been turned into a boogeyman by the government, which is scared of appreciating currency, because government wants to live beyond its means always, and always causes monetary inflation, which allows it to pay its debt in fake money.
Slashdot Mirror
golden shower?
ping and traceroute commands could come in handy, while port scanning may turn up interesting information....
I have already demonstrated you are wrong, and provided citations (which you have not btw).
- I don't see the point of your citations. You are arguing MY point - that there is so little activity going on below the minimum wage even now, that there is no point regulating it, yes.
However it's worse than that - it kills economic activity by actively destroying valuable jobs that cannot produce more revenue per hour than the minimum wage allows, and the level at which the minimum is set is completely irrelevant. People who can get jobs at above minimum wage today are not interested in jobs that little paid, but people who cannot get any jobs are stuck without jobs.
minimum wage or not. NO ONE would take those jobs.
- FALSE. Flat out LIE.
People used to work for much lower hourly pay than the minimum wage allows today because there are legitimate services and jobs that are in that price range simply by their virtue of being very cheap for the consumer - grocery bagging comes to mind, where you now have to do it all by yourself, while it used to be done by people.
Phone attendants, people who checked your oil and tire pressure at gas pumps, etc.etc. There is plenty of opportunity to provide services that are VERY CHEAP to the end consumer but would still be viable if it was LEGAL to provide them.
You are arguing both sides of the table - you are saying: "nobody would take those jobs" and you are saying "it should be illegal to provide those jobs by law". You make no sense.
TWO percent man. Two. Who are these people that are willing to work for slave wages and where to they come from? THEY DO NOT EXIST.
- 20%. 20% MAN.
20% of people are EASILY unemployed RIGHT NOW.
Now, obviously with the EI that is perpetually extended with 'free money' that is being printed (and thus also adding to the inflation) and with minimum wage laws, none of those people will have jobs in this economy.
20% of people are unemployed and you are arguing AGAINST jobs. It's amazing.
The ONLY regulation that should be done at gov't level is NEGATIVE regulation - regulations must be killed, removed, obliterated, removed, abolished, gone, done, destroyed, undone, annihilated.
There must be no regulations of business at all if those 20% are to find ANY jobs.
Well unless you count children and refugees from other countries. So, suppose we did enslave them? The effect on the economy and real jobs created would be nil. And we'd have slaves. What's good about that? I'll tell you.
- prices must FALL.
My argument is always simple - prices must fall.
Prices must fall, but the government would not let them fall, because gov't wants inflation, it wants inflation because it is the biggest debtor and it does not want to and is incapable of paying back the debt.
As to 'slaves' - well, I suppose you think it's better for those people to be slaves to the circumstances, where they just cannot find any jobs and are forced into this vicious cycle, where they can't get work experience at all and can't use that experience to move on to better jobs.
20% of people are unemployed (they include those who gave up looking).
We'd be able to tell everyone on welfare or food stamps to fuck off and go check tire pressure. Yay, more slaves. And again, the effect on the economy and real living wage jobs created -nil.
- FIRST you must tell your government to fuck off.
You see, it won't work, just removing minimum wage and even income taxes, it's not enough anymore.
All government regulations must stop. All government subsidies, all monopolies, everything government does, from wars to SS and Medicare and Medicaid, to subsidies to any company and to any individual and most importantly - printing and borrowing money.
All of this must stop. The first people who must lose jobs are the 20 million people
If it does not have its own "I" "P" address, I am not interested.
and you are simply wrong on all counts.
1. There are plenty of opportunities for services that generate much less revenue than minimum wage, and thus these services go unfulfilled. This includes anything from answering phones, to store clerks, to people checking your tire pressure at gas stations, etc.
2. The reason for minimum wage is price inflation, which is always caused by government printing money. There is no reason to have inflating prices and labor costs if government does not print fiat.
3. Minimum wage is a scotch tape 'solution' to the problem that government creates by printing money.
4. Nobody argues that people must always make little money here, only that minimum wage necessarily destroys opportunities for services and for people who legitimately cannot exist above ANY minimum wage that you may set as a legal requirement.
5. Minimum wage regulation is a political one, not one based on economics, as it clearly destroys opportunities for certain people to enter work force and generate enough starting experience to progress to other opportunities.
6. Minimum wage regulations cause more welfare recipients and less economic activity.
You can go ahead and reject whatever you like, but you have no logical argument against any of my points.
Yes, absolutely, but your math is false in that it begins at the wrong end of the equation.
- which part of the equation do you find incorrect, please continue?
Is it the part there there are jobs that only can generate $4 worth of revenue?
Is it part that paying somebody $7.50 for a job that generates $4 is a losing proposition (losing $3.50 that must be added to the $4 in order to pay a minimum wage?)
Is it that people with skills to find jobs above $3 will not take the job at that level?
Is it that people who cannot find jobs at above minimum wage will be a burden for the society?
Is it that gov't will not see any taxes if the person is unemployed and is on welfare instead?
Do, respond.
just to confirm, by your logic, the US enjoyed huge amounts of deflation between 81 and 99 as gold dropped from it's previous all time high to the lows you base your numbers off of?
- not from 81 to 99.
Gold went up from 35 to 850 after Nixon's gold shock to 81, when Paul Volcker did something courageous and pushed interest rates up to over 12%, at some point they reached over 20%, clearly this stopped the devaluing of US dollar.
However gold went down from 850 to about 300, which was around 8-9 times higher than when it was let go of by Nixon.
Sure, if you bought at 850 and then the prices went down, you lost money, but whose problem is it that you bought at the peak? Gold didn't go back down to 35 though, did it?
How about we take another long term view, and instead of using gold, which no one uses for almost any useful purpose,
- go ahead, keep misunderstanding.
Nobody is using US dollars for anything useful in themselves either, or is somebody eating them for food or burning them for fuel? At least gold is used in jewelry and small amounts of it are used for industrial applications and dental.
The wheat, as well as cotton, soy, rice and some other foods are and were subsidized heavily to keep their prices down for political reasons, this also started with Nixon by the way.
I can take any commodity and drop random chart lines and say look, it's gotten cheaper! or look, it's gotten so much more expensive. Hell, in terms of housing, the dollar has strengthened something like 35% in the last 4 years! and housing, unlike gold, is a real product that we use.
- house prices should be going down by another 80-90%, but they are not dropping because of all the printing. The US gov't is dead set to keep the nominal house prices up, and this is what creates inflation.
Gold is just another random, speculative commodity. I can pick lots of commodities that counter your argument.
- Fiat currencies are also speculated in, what is the point of that argument?
As to gold being a 'speculative' commodity, sure, some of it is speculation, but it's a very small amount that's speculative. The major buyers are central banks and large funds right now. If gold was in a bubble, the gold stocks would have been soaring, but they are not much higher than they were in 2008, when gold lost some ground. So who is speculating in gold if the stocks are untouched? Not many at all. People are holding it.
But as cotton has started to tumble severely, I'll take that bet that food won't be 3x as expensive and clothing won't be 3x as expensive by the summer.
- hell, it's very little time left now, either you'll be proven right, or I will, just wait a few months. Good luck.
As to 'charts', etc., 60 US cents cold buy 1 CAD in 1996. 1 Swiss Frank was about 25cents then. All those are fiat and thus flawed currencies, but look how things changed since then even in that.
Cheers.
Whatever you get paid as interest in a bank doesn't cover inflation, don't kid yourself. If you are holding fiat then it is being printed every day by governments, yours and others and it is losing value.
If the money you hold is tangible, then government can't print it.
Now, I am not saying you should always hold gold and do nothing else, that is not my point. It makes no sense to hold all your savings in gold if your economy is productive. It makes much more sense to invest into something that brings income - dividend paying stock for example. However holding fiat makes no sense at all.
Basically here is the problem: for some amount of time it may seem that you are doing well in a system that allows government to print fiat not backed by anything, but what actually is happening is that your government is growing all the time due to this ability (and also due to taxing income), and as it grows it kills the economic activity by more and more regulations, taxes, subsidies to preferred monopolies, etc.
Fiat money can work only if the government is NOT allowed to print it, but instead the fiat is backed by something real - production capacity, gold reserves, whatever, anything that is actually worth something and cannot be simply produced with a printer, anything that can be exchanged for that fiat at a request from whoever is the authority behind the money.
If on the other hand the government can print it all and there is no backing, then eventually your economy folds, as gov't pushes investment capital out with inflation and regulations and its own spending and growth and destruction of competition, etc.
I am arguing against an unsound economic system that kills economies, that always killed economies without exception in people's history.
You are simply wrong on this. I actually do not even believe that Obama was born.
SS doesn't steal your money. It forces you to invest it in the safest available investment, US debt, that returns about 50% interest. That also invests in running your country, which keeps all your investments safe.
- time to rethink that
SS does steal your money, because it was never a fund in the first place. The money is taken in, spent and never invested. SS and other things like Medicare/Medicaid rely on constant inflow of new money, but there is no investment, there is no capital fund, there is nothing but US bonds. Those must be sold on the market to get money from them, but they are also DEBT even if you manage to sell them somehow (which is becoming less and less possible with every new day, as the Fed is now buying 30% of T-bills and the rest is bought by foreign national banks, who are just scared of the consequences of letting US drown and they do not care about the investment income.)
US debt is worthless, would you loan US government any money? Really, think about it, have they ever paid back the principal? They are refinancing the thing in short term bonds (thanks Clinton and Rubin,) and they are admitting to everybody that if the debt ceiling is not raised, they are done. Well that means they are done now. Imagine if it wasn't the Congress voting against the ceiling - but whatever market that is left for US bonds not buying? Then the Fed would buy it all, because it just will not let the US to default honestly, so it will hyper inflate.
Next QE is coming you know, and then another and another, it's all QEs all the way down now.
But it did stop ME from investing, and it stopped plenty of companies from investing into US.
I stopped investing, I dumped all of my US holdings, I don't own any US denominated assets and I moved out of America.
I do not like the 'orderly' decline any more than I like 'disorderly' one. I do not like the decline in principle, you see? I rather participate in something that appreciates in value, not the other way around.
If you believe that inflation is great and that falling value of fiat is a good economic policy, because you can debase your money and export more, than why don't you follow your own advice, and export more of your own services by devaluing the rate at which you are selling them?
Do you understand what I am saying? If you believe that falling value of your currency serves you well, then you should follow that same principle for all other activities - reduce value of everything, dump value in fact, this way you'll be able to work so much more, because so many more people will be able to afford your services.
Of-course then the question becomes - what do you get out of it, but that was my question from the start.
Had over 50 comments, so can't reply as myself anymore, /. rules.
--
For sure, the commentators in this thread like inflation and hate deflation so much, I wonder why don't they then suppress their own salaries, after all, that way they'll be able to sell more of their services, which they believe is the greatest thing since sliced bread.
So why don't they cut their salaries by 75%, equal to the amount of value US dollar lost since 2003? This way they'll be able to export more of their work for less.
They are geniuses after all, why don't they do it?
Japan MUST have deflation, the prices are not dropping the way they should be because Japan is constantly printing currency.
You are wrong in every single comment you make as a response to my posts, I wonder if you are just basically wrong in every step of your life completely the same way or is it just /. that affects you this way?
Of top of my head: Iceland austerity measures.
Of-course that is until they decided to repay the 3.2billion UK pounds that was put upon the tax payers by their stupid government, in order to save behinds of the bankers again. Oh well.
As to credibility - all the credibility I need is in the bank.
But SOMEBODY must SAVE that money.
Real money and real credit is not printed out of thin air.
Money MUST be expensive, so that plenty of attention is paid to how it's spent, to the business plan, to the competition for it.
You get a loan only if you have a sound business that will make more return than somebody else's idea, that's the point. But you can't print fiat without any backing, without any reserves, without anything real behind it and call it money - it's not.
People viewing money as a way of storing value is very bad for the economy.
- nonsense.
Money must be storing value, you have to be able to save capital in order to use it for production either as a credit or as direct investment.
The actual reason why the gold was abandoned was not that people 'held on to the money', no, of-course not. People wanted to deal in real money, but government wanted to be able to buy votes, give favors to their preferred monopolies, get rich quick, promise everything under the Sun and deliver in fake money.
The only reason for government counterfeiting money (that's what it is - money without reserve is counterfeit) is to be able to print it without working for it, without any production value behind it.
Money must be accepted as means of exchange and as store of value and as a unit of accounting - those are properties of real money, and that's why gold is real money, has been for thousands of years across many cultures and is returned to now, when the fiat fiasco is blowing up right in front of our eyes.
As to people not wanting to invest - BS. Everybody always invests their money to grow it. 19 century USA showed the most growth, while money was appreciating in value quite rapidly.
You post a lot in stories about economics, but you seem to have completely missed the point of money.
- did I? Do you hold fiat or something else for your savings?
Through most of the 1930s and 1940s, the US government implemented Keynesian economics, and by 1945 had basically recovered from the greatest financial disaster since we've started really keeping track.
- non-sequitur. The END of Keynesian economics (end of war time spending) allowed USA to become a major private goods producer again, but of-course it didn't hurt that the competition was wiped out during the war, and thus USA had a basic monopoly on labor just past the WWII.
In fact, Keynesians failed to understand this and predicted that the end of WWII will throw USA into a deeper depression, as more people would enter the workforce (the soldiers that would come back from war).
They could not understand that huge drop in government spending would free up the credit and resources and that women would exit the work force in droves, once the men came home as well.
As to 37 GDP growth - what is the point of indicating some growth in an accounting spreadsheet if the wealth is not going anywhere and standard of living is shit? It's like they are talking about 'jobless recovery' today, but what about people without actual jobs - are they recovering?
Compare this to 2008, when policymakers responded with mostly supply-side and monetarist policies. It's been showing results, but not as good results as the Keynesian policies of the 1930s.
- no question, you can put economy on a huge dose of morphine to hide the pain, but it does not fix the problem that exists in the organism - the actual sickness of easy money and lack of investment capital and jobs and production and huge government spending.
Spending free money is great in the short term, too bad you have to suffer even more when you get cut off from it and have to pay it back somehow, but you see, there are no jobs of any value that gov't can create, that produce anything that market needs and would buy for REAL money.
Keynesians came up with something that appears to correctly describe and predict reality at least as well as any of the competing theories. So to call them astrologers is at best unfair.
- they failed to predict anything, from post-WWII boom to effects of monetary expansion on investment capital flight and inflation of asset bubbles, they are dead wrong on everything, and have been since the beginning, so you may want to stop with that nonsense.
Bread was cheaper in dollars year to year, and so were other things that appeared on the market that never even existed as goods/services prior to 19 century - electrical power and lightbulbs, radio and phones, telegraph and cars, washing machines and indoor plumbing, refrigeration and abundant safe food, medical procedures, like surgeries, that didn't actually kill you.
Nobody was complaining to be able to buy more for less then, and nobody wants to pay more for less now. Nobody was complaining to be able to buy things that didn't even exist prior to then, and now there were huge line ups for iPads as well.
Dollars SHOULD be harder to get - this creates competition and more sound business practices.
Prices aren't rising, they are recovering
- recovering? The word must mean something to you, so explain that please.
In fact in USA the prices must be dropping like hell, specifically prices on housing. Instead, the government bought all the toxic mortgage shit, propped up the failing banks that sold that shit, put it on Fed books and transferred the debt to the Treasury, all while propping up the home prices further with near zero discount interest rates and the Fed buying 30% of the T-Bills found on the market with printed cash.
Yeah, prices are 'recovering' alright. They are recovering to their real value against US dollar.
Good luck this summer, food is going to become 2-3 times as expensive as it is now. Clothing will go up in price by 3-5 times. Energy will rise by another 20-30%.
--
As to 'eating gold' - you can. You just have to exchange it for something edible.
On the other hand US dollars - now that you really cannot eat.
And you see, as dollar fell in value by 75% since 2003 and gold kept steady, the prices in gold actually even went down for food and energy, it just means that if you used real money instead of fiat, you'd be eating better.
Says an AC in the story that talks exactly about that - a move to more stable currencies backed by production/reserves.
Do you really believe USA has "functioning property rights"?
You missed the point entirely. We will sell the products to OURSELVES. While at the same time enjoying the income from manufacturing them, too.
- you have to have investment capital for that. USA does not have hot stand by factories ready to start production with a snap of the fingers. The production capacity does not exist, it has to be rebuilt, but this takes money, and I mean real money. The kind of money that will buy the tools and labor, and since the tools are now mostly manufactured in China, you must have their money if they decide they don't want yours, which means you have to give them something they want first, but what do you have, and what about all the debt to foreign countries/debt holders and all the domestic social obligations (SS, Medicare, Medicaid, etc) and all the spending (war, financial, etc.)?
"Bringing home" our base of manufacturing -- even for just domestic goods, not exports -- would do wonders for our economy.
- nobody wants to invest in US economy though, that's why the investment capital left and is now producing in China.
First USA has to take a huge step forward, cut government spending by 99.9%, abolish IRS, Fed, FDIC, all government agencies, FHA, Freddie/Fannie. USA must start restructuring its debt and it must stop printing money.
If the money continues being printed, then there is no reason to invest into USA - it's impossible to keep value of money that is constantly being debased.
So 'Bringing home" - is a good idea, but the implementation will be very painful. Necessary, but painful. It's not going to happen until US dollar crashes and US economy burns and US people have no choice left.
And as a nice side effect, out children's toys will no longer contain lead or zinc and arsenic... our children's formulas will no longer contain melamine.
- to have businesses return you will have to abolish all business regulations, at least in the first years, otherwise there will be no incentive to return.
Of-course to prevent abuses you speak of, the USA will have to reinvent its justice system, to be able to deal with such calamities quickly and efficiently, and not the way it's dealing with them now. BTW., didn't you hear? over 50% of US meat on the market is contaminated with Staph bacteria, so whatever FDA is doing is shit anyway.
If they want to order the US around, I say let them do completely without the US for a while, and see how far they get. I predict it won't be very damned far.
- you are way off base.
China is now the major producer that the world buys from, they get to call the shots. USA borrows over 40% of what it spends from bond sales, 70% of those sales come from foreign banks.
USA has 50Billion/month trade deficit mostly with China. Yes, China imports a lot of stuff into USA. No, it does not need USA to buy its products.
All it has to do is let its own currency appreciate and Chinese 1.5 billion people will all of a sudden become a viable market with lots of purchasing power, that Chinese (and other) companies would be selling to.
Your ideas on production are correct, but your understanding on economy and politics are ..... lacking.
I'd say fanatical was the more correct word over "politically correct".
- don't know WTH you are talking about.
Sadly, as I'm not a robot and am prone to human social behavior, I would be hard pressed to have my opinion changed on United States economic policy if I actually cared to have an opinion on the topic.
- my point exactly, nobody changes their 'opinion', because it's mostly not theirs to change, they are indoctrinated with it, thus logic does not work.
Also, my cat is probably fed better than I am and you have no idea how expensive that food is!
- why would I not know? I have a cat in the next room, and 2 more are in another country that I was visiting for 2 months prior to last week.
I apologize ahead of time for failing to open your eyes to your own behavior.
- behavior? Get outta here.
How someone so fanatical and rude has any karma at all amazes me.
- maybe not all moderators are stupid after all.
It doesn't even matter if your arguments are correct or not because, after going through your comment history, your presentation is so abrasive as to cause immediate emotional response.
- What am I, not politically correct enough for you? Maybe you should go to CNN instead.
If you actually want to change opinions then I advise some introspection and considering your target audience.
- No. I am not going to change any opinions, that is certain. I am presenting mine, you don't have to like it.
Must add to the previous comment: however in a healthy economy deflation is an indicator of strength and of health of economy.
You see, deflation means that money is appreciating in value compared to the produced goods, cost of labor and prices on things.
So deflation means that prices are falling, and in a working economy it only indicates that the market is becoming more and more efficient at distributing wealth (goods and services) among the population, which in turn is becoming more and more wealthy and affluent, because as value of money is rising and prices are falling, the purchasing power is increasing and there is more competition for the investment credit.
Deflation has been turned into a boogeyman by the government, which is scared of appreciating currency, because government wants to live beyond its means always, and always causes monetary inflation, which allows it to pay its debt in fake money.