US is not the only country with currency that's named 'dollar' or with '$' sign.
Also nobody got confused by silver and gold coins that have face of Ron Paul on them, give me a break. People knew they bought gold and silver, as they paid premium to get them.
Now, I am not saying Liberty dollars were terrific value, because one could buy bullion at half the price, but IRL, their value went up anyway, covered the costs and by now made profit to those, holding them.
In any case, the guy is not a 'terrorist', as gov't wants to portray him. He is no more a 'terrorist' for telling people to skip US dollars than anybody else, who says the same thing.
Or do you consider anybody, who says: buy gold, skip US dollar to be a terrorist?
As to 'counterfeiting' - if this is the charge, then the Fed fellas should be all imprisoned right now, they are counterfeiting dollars.
Japan should have deflation. Instead it prints money so quickly, that prices are not dropping, but what is falling is Japanese purchasing power, which is why they buy less - they are subsidizing the US consumer and US dollar by destroying their own currency. Now THAT is bad for their economy.
1927 money growth and inflation was created by joined efforts of Benjamin Strong and Montagu Norman, two heads of the reserve banks, one from USA, another from UK, they started collaborating at least a year before that though. But in 27 UK lowered interest rates from 5 to 4%, caused more weakened pound and US Fed stepped in to save UK from France selling off the UK debt, to get back the gold in exchange for UK pound.
The US Fed started buying tens of millions of British pounds, something like 60Million in 1927 alone.
The US Treasury refunded the 4% bonds for 3%, increasing inflation beyond the Fed printing.
In late 1927 the stock market in US rose by 20%, this SCARED the Fed, who did what YOU SAID: decreased the total reserves by 261million. That is certainly correct. However the demand deposits at banks fell by near half a billion in the summer, the banks overcompensated, raised the time deposits by over a billion and total money supply GREW by 1.5 Billion in the beginning of 1928, so you are WRONG on the total outcome as well as being right on very partial detail. Devil, you know, it's in small details like that.
Second part of 1928, the market realized that FRS was buying all offered acceptances and the market increased the output. This boom increased the reserves by over 120million and the money supply by 1.9billion, and by December the peak of monetary supply was reached, it was in total 73billion, the highest ever until that time.
Stock prices again went up by 20% in first half of 1928, again, thanks inflation.
For various political reasons from 28 to 29 the money supply staid the same but US Fed still bought more UK bonds.
In any case, saying that monetary supply was reduced before the GD struck is disingenuous at best, but I wonder who is hiding behind this particular AC handle right now.
As to your last sentence:
I'm really glad for my family that Austrian school economists weren't in charge in 2008.
- enjoy your dog food, once China stops buying your debt, subsidizing your consumers and giving you cheap goods.
-- You are still regurgitating the failed point that people stop buying during deflation, yet you cannot dismiss USA 19 century - USD was rising, prices were falling, people were buying and USA became the dominant producer and creditor of the world.
--
As to Noble Prizes - I spit in its eye ever since Krugman, and yes, Obama got theirs.
, any sane economist thinks deflation is a disaster.
- we know everything about your 'sane economists'. Those same people who thought that financial stocks were a 'great investment' just before the 2008 crash, those same people who thought that the housing bubble and the Internet bubble before that were healthy economic growth and who believe that CPI actually shows real inflation numbers.
What are your credentials, Roman
- I actually have enough on this very site, with plenty of comments left over the years that predicted this exact outcome - US dollar losing its status as a reserve currency, gold going up in value, while US economy spiraling down the hyper-inflationary drain.
Yes, this is why US government is treating this fella like a criminal, and even a 'terrorist', because he is proposing a competing currency, which is based on actual money - gold and silver.
The US Fed is the actual counterfeiter, yet this guy may go to jail for 15 years and be fined millions of dollars.
See every recession before the Federal Reserve was established.
- booms caused by misplaced wealth and then fixed by busts? Yeah, must have been a real disaster, since the actual wealth of the USA people has risen so drastically over the 19 century.
Wealth - production. Machines, clothing, food, shelter, quality of life, everything that was created in 19 century despite the local booms and busts.
And the Great Depression, for that matter, where the Fed acted to try to defend the dollar instead of expanding the money supply, causing banks to fail and deflation.
- you are high.
1. The 1920 recession was caused by quick expansion of monetary base starting in 1913. The recession was severe, the unemployment was huge. This recession was fixed by Harding, who cut gov't spending and credit misplacement by 70%.
2. The 1929 recession was caused by the huge increase in monetary supply shortly before that, when the Fed decided to prop up the UK Pound.
This recession was quickly turned into the Depression by government, which decided not to use the example of the 1921, but instead decided to spend its way out of that (thank Keynesian shamanism for that.)
In any case, that depression only ended once WWII ended and government stopped its spending and credit could be restored to the private sector. Of-course it helped plenty that USA was the pretty much the only country with mostly intact infrastructure.
The Fed was printing from the very beginning and it continues now and it does not stop. The notion that it is an 'independent' bank is BS., it's just to throw sand into your eyes, to pretend it will cut the Congress off and won't buy the T-Bills at the whim of the politicians. That is obviously BS as well. Their mandate is also BS - stable prices? My ass. The dollar last value by a factor of 100 since the Fed was established.
The USD lost 75% of value just since 2003, when gold was 350/ounce, cotton was 50/pound, now it's 1400/ounce and 200/pound. The ration of 1:7 stays, but in dollars you can only buy 1/4 of the stuff. So that's a 75% drop in just 8 years. It's ridiculous to say that the Fed is keeping with its mandate, it is clearly BS.
That's why we have a Federal Reserve and that's why we haven't seen real deflation since the Depression
- well, you can't have deflation in FIAT CURRENCY in an expansionary currency environment.
However in GOLD the prices of consumer goods are falling, which tells you that there is deflation in consumer goods, and it's good, and it's the reason there are now over 8 billion people on the planet - cheaper and cheaper everything (just not in fiat).
That's why Bernanke opened up the monetary flood gates during the 2008 monetary crisis. No inflation to speak of yet--why?
- because you are blind.
The inflation is expansion of monetary supply. You are talking about price increases, which is a later symptom of inflation (later for the consumer nations, not for producer nations, who see commodity prices rise immediately and thus have quick price hikes in their goods as well, thus China had 15-25% inflation in actual prices over the last year.)
USA is NOT a producer nation, it is a consumer nation, which by the status of US dollar being the 'reserve' (like gold actually is, US dollar is based on nothing, thus it's a flawed idea that it can be a reserve), so as a consumer nation, which keeps printing and borrowing and is subsidized by the world, where it exports its inflation, obviously the prices are not rising as quickly as they do elsewhere.
However you are saying you are not seeing price hikes? Really? You do not visit food stores, gas pumps? You don't buy clothing?
Well, just wait until this summer, you'll finally see it.
Because there were strong deflationary pressures threatening to cause economic collapse and these continue.
19 century USA had PLENTY of incentive for spending/investing, yet the money appreciated by a factor of 2.
Past 1913 the money value fell by a factor of 100.
Who is investing into US economy NOW? I certainly do not.
As to spending - it's not about spending, it's about your purchasing power. If you can buy more tomorrow with the same money, you are better off, but you do not stop spending today - you still need food and clothing and shelter and goods.
Who DOES NOT buy TV or a computer because it will cost less if they wait for 2 years? Yet things in real free market oriented industries do fall in price and people still do buy them.
This entire argument is nonsense, and it's taught to you in your useless economics classes and schools by government driven propaganda machine, because the ONLY entity that actually truly suffers from falling prices and appreciating currency is the biggest debtor - government, which can't stop taking credit but can't and doesn't want to pay it back in real money.
That's nonsense. Inflation means that your money will be worth less tomorrow, so you can't generate savings to start a new business - nobody WANTS your money for labor/tools/whatever.
You are completely disregarding the fact that USA had deflation throughout the 19 century and past WWII, when prices were falling naturally due to the currency that was gaining in value and people had higher and higher standards of living. However past WWII the problem was that government saw the increase in economic activity as an invitation for more inflation (money printing), while in 19 century they did not have fiat in the first place, so they couldn't devalue the currency.
In 19 century the bread people bought a year ago cost MORE than one they bought year from then, and it was good for general welfare (which is what USA Constitution promotes, not personal, but general welfare, and general welfare implies stronger currency).
Deflation is generally regarded by economists as an econonic disaster (which you would know if you actually studied economics).
- Keynesians to economics is what astrologists are to Astronomy, so shut up about 'economists' who are on the government/system payroll.
If you want to see a real economist, look no further than my sig.
Why buy today, when you can buy something cheaper tomorrow? or even cheaper the day after that?
- yeah, because this is such a terrible thing that a TV or a computer that you are buying today will be worth half of the price a year from now.
But that is EXACTLY what happens, yet people buy things anyway, because you only have ONE LIFE, you do not wait to buy food, clothing, energy, rent and consumer goods for the next life, because it might be cheaper that time.
Modern day Japan is a case study in the stagnation that arises from slowly falling prices
- WTF? Japan SHOULD have deflation, instead it prints so many yen, that they counterbalance the effect of the necessarily falling prices by ever increasing monetary supply.
Japanese government, just like any other government on this planet right now is in the same Keynesian trap. Too bad for them.
no one wants to spend because everything is cheaper tomorrow
- this is nonsense. People are buying less only because they have less purchasing power.
Japanese would be buying PLENTY if they didn't collectively decide to subsidize the US consumer by printing its own currency to match the US dollar. -
This place (/.) is filled with economic ignorance, it's discouraging.
Yes, deflation is the best thing that happens to economy. You have never observed deflation - which is literally contraction of monetary supply.
Money must be valuable, otherwise it drives investment capital out and with that go the jobs. Yes, deflation is the best thing for economy from point of view of consumers as well - they get the benefit of saying: today I bought some bread. It was CHEAPER than a year ago.
Deflation is only the enemy of the state officials who rely on inflation to wipe out their ever increasing debts, because they can't stop consuming and they like to give free money to corporations and to voters for obvious reasons.
With an over valued currency, It's simply cheaper to import something than to produce it locally.
Ignorance is a bliss.
If a worthless currency was such a great thing for economy, Zimbabwe would have ruled the world, Argentina would have been up there with it, USSR would have dominated, Weimar Republic of Germany would have drowned the world in its currency.
NO. It's not the 'overvalued' currency that drives manufacturing jobs overseas. It's WEAK currency coupled with government regulations that destroy incentive to save capital and invest it in local economy, it's all the shit that drives prices up - printing and borrowing and rules that create asset bubbles and minimum wage laws (yes, even that), and all the social obligations that destroy jobs.
If you are from USA, you should freaking know that the biggest growth years for it were in 19 century, beginning of 20th and just after WWII, and it was when the currency was the strongest, not the weakest, it was when the country had money that was APPRECIATING in value, not devaluing.
The Japanese have taken to heart Bernanke's ideas that inflating currency is good for economy - too bad for them, they lost the nineties and it's still not over for them.
Strong currency is preferable when you must buy natural resources to churn out consumer goods. It's preferable if you want stable prices (even prices that are falling, like USA had in 19 century). With falling prices you also have falling wages, which is what production prefers.
With falling prices you have cheaper costs of production, so you can produce more. And it is great for the internal economy and it works for the manufacturer as well, as he gets the benefit of a good exchange rate.
Race to the lowest currency value is a race to the bottom - when nobody can afford anything, because of inflation and worse yet, because in such an environment it is impossible to generate savings and thus capital in order to have any increase in new production capacity.
-- One good thing that will come out of this financial and economic disaster will be a return to a sound currency. It will be backed by gold probably, but most importantly nobody will want to accept fiat that is just being printed at a whim of a politician, who is just buying votes with 'free money'.
1. Self sufficient people are already doing quite enough, and if you sent them to 'colonize Mars', all of a sudden you'd be mostly out of jobs.
2. Lucerne, Switzerland. Singapore. Hong Kong. Just to name a few places where things are structured in much more business oriented ways and do promote 'my ideology', and this is just a short list of places I personally prefer.
3. I would never be getting 'elected'. One reason is I am not interested. Another - I do not like the connotation of quid pro quo - I do not see myself buying off votes from the general population to destroy the economy further. I do not like liars and thieves, and that's what politics is about, and unfortunately that's how I see most 'constituency', who'd be voting for those, who promise them ever more free bread and circuses.
- yeah, it's been tried and it worked for thousands of years
Hm, no, at least not nearly as well as since the gold standard was abolished.
Aaaah, so I am talking about gold being used as money for thousands of years throughout the world, while you are saying: gold standard hasn't been used successfully since it was abolished (you are referring to Nixon's gold shock, aren't you?) So you are comparing the last 40 years without gold standard because it was artificially abolished, while still being used as real money of choice, with thousands of years when it was actively used as actual money, you are deriving a conclusion that since gold was abolished it hasn't been used successfully as money, and you are calling me an idiot?
Well, at least one of us is hopeless, and from this thread it's clear that I am not the one.
The individuals will always be corrupted by the government system, as all government system are susceptible to corruption, this is tried and true and has been shown for millennia, there is a reason Socrates wrote about it with such conviction, it's because it has happened enough times for people to observe the same exact phenomena - democracies eventually turn into 'rule-by-the-mob' types of systems, that later turn dictatorial. This has happened before and is happening now - people expect to be taken care of in empires, that start with great productivity and wealth and then turn into welfare 'bread and circuses' states, which fall into decadence, inability to provide for ones own needs, dependence on the government for everything and eventual crash of the society, which inevitably leads to acceptance of some 'strong' parent figure in place of the former democratic government body and this turns dictatorial and eventually violent for the 'common good'.
There is no such thing as 'common good'. What's good for me is not good for you, etc. We can never agree on what that 'common good' is and we shouldn't be preoccupied with it. What we should do is produce and trade the fruits of our labor and that's the way to a strong economy and a wealthy society.
Too bad, really, that we are now going through the inevitable observation of the collapse of the Western civilizations, but they have entered their final stage of post-production and decadent 'bread and circuses' age, with a totally predictable outcome of a hyper-inflationary depression, a dictatorial post-government and a possible violent military conflict.
You think for-profit prison lobbyists pushing for harder terms is bad now? If the police were to be for-profit, it would benefit from catching "criminals" - and from redefining what a criminal is, and squeezing as much labor out of them as they could manage, and if possible, encouraging criminals to commit greater offenses.
- this is not the problem of private prisons, this is a failure of the gov't 'justice system'. If it can't effectively sort out the criminals from the rest, then it has no merit or purpose. As to private prisons, cops, etc., of-course they all should be private. But the point is there should be no government money in it, to provide such skewed incentives that you speak of.
Cut the federal government spending by 99.9%, get it to do only military for protection and justice system, and have the states/municipalities implement their own local charity programs and compete on outcomes between the states/municipalities.
At least this way those who really do not want to participate in your idea of government structured 'society' can move to places that do not promote such ideology. Is that fair enough? Without this option, the only other option is to skip the country altogether, which is going to be the more and more chosen option, especially for motivated US youth, who should not have to pay for their predecessors 'social obligations'.
The 94% that there used to exist was never paid, because ppl modify their behavior, and the actual effective rate for income taxes never goes outside of the 18-20% box for the federal gov't.
However I am not going to start there, my starting point is simple - income taxes and payroll taxes all must be 0%. There is no other percentage that is correct and I hope that's what you are paying for your sake.
You cannot run an economy on gold or even cotton as a monetary base. It has been tried and it was a mess
- yeah, it's been tried and it worked for thousands of years, and every time the gov't started a counterfeiting operation it was the beginning of its end, and nothing has changed since the last time, it's still going to be the same outcome. There is a reason why JP Morgan now accepts gold as counterparty collateral, why the central banks are no longer sellers but are massive buyers and why the price in all fiat currencies keeps going up.
Well, actually, they got what they wanted, didn't they? Once the gov't gave itself the power to tax income and to print fiat notes, it has been steadily buying the votes of those very people with handouts, promised with printed fiat, while at the same time the gov't grew itself in size throughout all times. Look at/., it's filled with people who expect government to take care of everything, economically speaking - take the money from those who can make it and give it to those who for some reason decided that they cannot.
Of-course there is a huge gov't agenda going on, with the dep't of education and all the SS and Medicaid/Medicare having plenty to do with it, ppl are bought hook line and sinker.
As to being 'slaves to the bank' - again, thank the gov't, which promotes the culture of living on credit and loans for everything, from buying houses and cars, to now buying smallest things on credit. All gov't sponsored.
It's not that some gov't "caved to the wealthy's demands" to turn the lower income people into credit junkies, it's that the gov't itself turned the country into a huge credit junkie, living on borrowed time and dime. Thank the Chinese, well, don't thank them, they are not doing you any favors by providing both: the credit and the goods, and gobbling up insane amounts of worthless printed green pieces of paper.
Actually thank Rubin, who during Clinton's administration figured out how to refinance the then debt with short term obligations, I mean really short term - 3 months, 6 months and maybe a year bonds. If US tried to finance its debt with anything real - like 10-30 year bonds, the interest rates would have been in high double digits right now.
Anyway, I have no sympathy for anybody in this situation - it is completely self created, it will crash and everybody will have to restart from scratch in the West. I really hope that the smarter ones do get their capital into save heaven before that happens, because they will be needed for real new credit and investments.
False analogy. Slavery and relative poverty are clearly not in the same league.
As to 'wealth disparity' - thank the government, which destroys the competition and promotes monopolies and drives prices up with government subsidies.
Slashdot Mirror
Deflation is not even a symptom of a disaster.
Deflation is a symptom of a bust, which is a FIX for a preceding disaster, which is what a boom normally is - resource mis-allocation disaster.
US is not the only country with currency that's named 'dollar' or with '$' sign.
Also nobody got confused by silver and gold coins that have face of Ron Paul on them, give me a break. People knew they bought gold and silver, as they paid premium to get them.
Now, I am not saying Liberty dollars were terrific value, because one could buy bullion at half the price, but IRL, their value went up anyway, covered the costs and by now made profit to those, holding them.
In any case, the guy is not a 'terrorist', as gov't wants to portray him. He is no more a 'terrorist' for telling people to skip US dollars than anybody else, who says the same thing.
Or do you consider anybody, who says: buy gold, skip US dollar to be a terrorist?
As to 'counterfeiting' - if this is the charge, then the Fed fellas should be all imprisoned right now, they are counterfeiting dollars.
Japan should have deflation. Instead it prints money so quickly, that prices are not dropping, but what is falling is Japanese purchasing power, which is why they buy less - they are subsidizing the US consumer and US dollar by destroying their own currency. Now THAT is bad for their economy.
Ha ha, you may want to revisit that.
1927 money growth and inflation was created by joined efforts of Benjamin Strong and Montagu Norman, two heads of the reserve banks, one from USA, another from UK, they started collaborating at least a year before that though. But in 27 UK lowered interest rates from 5 to 4%, caused more weakened pound and US Fed stepped in to save UK from France selling off the UK debt, to get back the gold in exchange for UK pound.
The US Fed started buying tens of millions of British pounds, something like 60Million in 1927 alone.
The US Treasury refunded the 4% bonds for 3%, increasing inflation beyond the Fed printing.
In late 1927 the stock market in US rose by 20%, this SCARED the Fed, who did what YOU SAID: decreased the total reserves by 261million. That is certainly correct. However the demand deposits at banks fell by near half a billion in the summer, the banks overcompensated, raised the time deposits by over a billion and total money supply GREW by 1.5 Billion in the beginning of 1928, so you are WRONG on the total outcome as well as being right on very partial detail. Devil, you know, it's in small details like that.
Second part of 1928, the market realized that FRS was buying all offered acceptances and the market increased the output. This boom increased the reserves by over 120million and the money supply by 1.9billion, and by December the peak of monetary supply was reached, it was in total 73billion, the highest ever until that time.
Stock prices again went up by 20% in first half of 1928, again, thanks inflation.
For various political reasons from 28 to 29 the money supply staid the same but US Fed still bought more UK bonds.
In any case, saying that monetary supply was reduced before the GD struck is disingenuous at best, but I wonder who is hiding behind this particular AC handle right now.
As to your last sentence:
I'm really glad for my family that Austrian school economists weren't in charge in 2008.
- enjoy your dog food, once China stops buying your debt, subsidizing your consumers and giving you cheap goods.
Cheers.
Last time I checked, economics wasn't a settled field, and the deflation was still a bad thing
- who is "I", Anonymous Coward, who is "I"?
You just sound like a fundamentalist with an axe to grind.
- I hope I do. It does not make me wrong.
2003: gold USD350/ounce
2011: gold USD1400/ounce
2003: cotton USD50/pound
2011: cotton: USD200/pound
2003: gold/pound = 1/7
2011: gold/pound = 1/7
2003 - 2011: US dollar losing 75% of its value.
--
You are still regurgitating the failed point that people stop buying during deflation, yet you cannot dismiss USA 19 century - USD was rising, prices were falling, people were buying and USA became the dominant producer and creditor of the world.
--
As to Noble Prizes - I spit in its eye ever since Krugman, and yes, Obama got theirs.
, any sane economist thinks deflation is a disaster.
- we know everything about your 'sane economists'. Those same people who thought that financial stocks were a 'great investment' just before the 2008 crash, those same people who thought that the housing bubble and the Internet bubble before that were healthy economic growth and who believe that CPI actually shows real inflation numbers.
What are your credentials, Roman
- I actually have enough on this very site, with plenty of comments left over the years that predicted this exact outcome - US dollar losing its status as a reserve currency, gold going up in value, while US economy spiraling down the hyper-inflationary drain.
What are YOUR credentials, Anonymous Coward?
Yes, this is why US government is treating this fella like a criminal, and even a 'terrorist', because he is proposing a competing currency, which is based on actual money - gold and silver.
The US Fed is the actual counterfeiter, yet this guy may go to jail for 15 years and be fined millions of dollars.
See every recession before the Federal Reserve was established.
- booms caused by misplaced wealth and then fixed by busts? Yeah, must have been a real disaster, since the actual wealth of the USA people has risen so drastically over the 19 century.
Wealth - production. Machines, clothing, food, shelter, quality of life, everything that was created in 19 century despite the local booms and busts.
And the Great Depression, for that matter, where the Fed acted to try to defend the dollar instead of expanding the money supply, causing banks to fail and deflation.
- you are high.
1. The 1920 recession was caused by quick expansion of monetary base starting in 1913. The recession was severe, the unemployment was huge. This recession was fixed by Harding, who cut gov't spending and credit misplacement by 70%.
2. The 1929 recession was caused by the huge increase in monetary supply shortly before that, when the Fed decided to prop up the UK Pound.
This recession was quickly turned into the Depression by government, which decided not to use the example of the 1921, but instead decided to spend its way out of that (thank Keynesian shamanism for that.)
In any case, that depression only ended once WWII ended and government stopped its spending and credit could be restored to the private sector. Of-course it helped plenty that USA was the pretty much the only country with mostly intact infrastructure.
The Fed was printing from the very beginning and it continues now and it does not stop. The notion that it is an 'independent' bank is BS., it's just to throw sand into your eyes, to pretend it will cut the Congress off and won't buy the T-Bills at the whim of the politicians. That is obviously BS as well. Their mandate is also BS - stable prices? My ass. The dollar last value by a factor of 100 since the Fed was established.
The USD lost 75% of value just since 2003, when gold was 350/ounce, cotton was 50/pound, now it's 1400/ounce and 200/pound. The ration of 1:7 stays, but in dollars you can only buy 1/4 of the stuff. So that's a 75% drop in just 8 years. It's ridiculous to say that the Fed is keeping with its mandate, it is clearly BS.
That's why we have a Federal Reserve and that's why we haven't seen real deflation since the Depression
- well, you can't have deflation in FIAT CURRENCY in an expansionary currency environment.
However in GOLD the prices of consumer goods are falling, which tells you that there is deflation in consumer goods, and it's good, and it's the reason there are now over 8 billion people on the planet - cheaper and cheaper everything (just not in fiat).
That's why Bernanke opened up the monetary flood gates during the 2008 monetary crisis. No inflation to speak of yet--why?
- because you are blind.
The inflation is expansion of monetary supply.
You are talking about price increases, which is a later symptom of inflation (later for the consumer nations, not for producer nations, who see commodity prices rise immediately and thus have quick price hikes in their goods as well, thus China had 15-25% inflation in actual prices over the last year.)
USA is NOT a producer nation, it is a consumer nation, which by the status of US dollar being the 'reserve' (like gold actually is, US dollar is based on nothing, thus it's a flawed idea that it can be a reserve), so as a consumer nation, which keeps printing and borrowing and is subsidized by the world, where it exports its inflation, obviously the prices are not rising as quickly as they do elsewhere.
However you are saying you are not seeing price hikes? Really? You do not visit food stores, gas pumps? You don't buy clothing?
Well, just wait until this summer, you'll finally see it.
Because there were strong deflationary pressures threatening to cause economic collapse and these continue.
- y
What the hell are you all smoking?
19 century USA had PLENTY of incentive for spending/investing, yet the money appreciated by a factor of 2.
Past 1913 the money value fell by a factor of 100.
Who is investing into US economy NOW? I certainly do not.
As to spending - it's not about spending, it's about your purchasing power. If you can buy more tomorrow with the same money, you are better off, but you do not stop spending today - you still need food and clothing and shelter and goods.
Who DOES NOT buy TV or a computer because it will cost less if they wait for 2 years? Yet things in real free market oriented industries do fall in price and people still do buy them.
This entire argument is nonsense, and it's taught to you in your useless economics classes and schools by government driven propaganda machine, because the ONLY entity that actually truly suffers from falling prices and appreciating currency is the biggest debtor - government, which can't stop taking credit but can't and doesn't want to pay it back in real money.
That's nonsense. Inflation means that your money will be worth less tomorrow, so you can't generate savings to start a new business - nobody WANTS your money for labor/tools/whatever.
You are completely disregarding the fact that USA had deflation throughout the 19 century and past WWII, when prices were falling naturally due to the currency that was gaining in value and people had higher and higher standards of living. However past WWII the problem was that government saw the increase in economic activity as an invitation for more inflation (money printing), while in 19 century they did not have fiat in the first place, so they couldn't devalue the currency.
In 19 century the bread people bought a year ago cost MORE than one they bought year from then, and it was good for general welfare (which is what USA Constitution promotes, not personal, but general welfare, and general welfare implies stronger currency).
Deflation is generally regarded by economists as an econonic disaster (which you would know if you actually studied economics).
- Keynesians to economics is what astrologists are to Astronomy, so shut up about 'economists' who are on the government/system payroll.
If you want to see a real economist, look no further than my sig.
Why buy today, when you can buy something cheaper tomorrow? or even cheaper the day after that?
- yeah, because this is such a terrible thing that a TV or a computer that you are buying today will be worth half of the price a year from now.
But that is EXACTLY what happens, yet people buy things anyway, because you only have ONE LIFE, you do not wait to buy food, clothing, energy, rent and consumer goods for the next life, because it might be cheaper that time.
Modern day Japan is a case study in the stagnation that arises from slowly falling prices
- WTF? Japan SHOULD have deflation, instead it prints so many yen, that they counterbalance the effect of the necessarily falling prices by ever increasing monetary supply.
Japanese government, just like any other government on this planet right now is in the same Keynesian trap. Too bad for them.
no one wants to spend because everything is cheaper tomorrow
- this is nonsense. People are buying less only because they have less purchasing power.
Japanese would be buying PLENTY if they didn't collectively decide to subsidize the US consumer by printing its own currency to match the US dollar.
-
This place (/.) is filled with economic ignorance, it's discouraging.
Yes, deflation is the best thing that happens to economy. You have never observed deflation - which is literally contraction of monetary supply.
Money must be valuable, otherwise it drives investment capital out and with that go the jobs. Yes, deflation is the best thing for economy from point of view of consumers as well - they get the benefit of saying: today I bought some bread. It was CHEAPER than a year ago.
Deflation is only the enemy of the state officials who rely on inflation to wipe out their ever increasing debts, because they can't stop consuming and they like to give free money to corporations and to voters for obvious reasons.
Welcome to the economics.
With an over valued currency, It's simply cheaper to import something than to produce it locally.
Ignorance is a bliss.
If a worthless currency was such a great thing for economy, Zimbabwe would have ruled the world, Argentina would have been up there with it, USSR would have dominated, Weimar Republic of Germany would have drowned the world in its currency.
NO. It's not the 'overvalued' currency that drives manufacturing jobs overseas. It's WEAK currency coupled with government regulations that destroy incentive to save capital and invest it in local economy, it's all the shit that drives prices up - printing and borrowing and rules that create asset bubbles and minimum wage laws (yes, even that), and all the social obligations that destroy jobs.
If you are from USA, you should freaking know that the biggest growth years for it were in 19 century, beginning of 20th and just after WWII, and it was when the currency was the strongest, not the weakest, it was when the country had money that was APPRECIATING in value, not devaluing.
The Japanese have taken to heart Bernanke's ideas that inflating currency is good for economy - too bad for them, they lost the nineties and it's still not over for them.
Strong currency is preferable when you must buy natural resources to churn out consumer goods. It's preferable if you want stable prices (even prices that are falling, like USA had in 19 century). With falling prices you also have falling wages, which is what production prefers.
With falling prices you have cheaper costs of production, so you can produce more. And it is great for the internal economy and it works for the manufacturer as well, as he gets the benefit of a good exchange rate.
Race to the lowest currency value is a race to the bottom - when nobody can afford anything, because of inflation and worse yet, because in such an environment it is impossible to generate savings and thus capital in order to have any increase in new production capacity.
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One good thing that will come out of this financial and economic disaster will be a return to a sound currency. It will be backed by gold probably, but most importantly nobody will want to accept fiat that is just being printed at a whim of a politician, who is just buying votes with 'free money'.
1. Self sufficient people are already doing quite enough, and if you sent them to 'colonize Mars', all of a sudden you'd be mostly out of jobs.
2. Lucerne, Switzerland. Singapore. Hong Kong. Just to name a few places where things are structured in much more business oriented ways and do promote 'my ideology', and this is just a short list of places I personally prefer.
3. I would never be getting 'elected'. One reason is I am not interested. Another - I do not like the connotation of quid pro quo - I do not see myself buying off votes from the general population to destroy the economy further. I do not like liars and thieves, and that's what politics is about, and unfortunately that's how I see most 'constituency', who'd be voting for those, who promise them ever more free bread and circuses.
No, if you are only making 500K, you'd be bringing home about 355K., however, any money somewhere above 380K is taxed at about 46% in total.
Yes, it is more than 67K etc. No, it doesn't mean that people should be cheering while giving up their income regardless of their tax brackets.
You did notice that I am for one single income tax bracket, correct? 0%
Its bankers and wallstreet guys pulling get rich quick schemes and shooting for short term unsustainable gains
- sure, but you may want to check out my sig to understand how it is, that they gained this ability.
The poor should be revolting against their government, not against 'rich people'.
Not true. There is normally a reflection in that one pixel of entire scenes of crime.
- yeah, it's been tried and it worked for thousands of years
Hm, no, at least not nearly as well as since the gold standard was abolished.
Aaaah, so I am talking about gold being used as money for thousands of years throughout the world, while you are saying: gold standard hasn't been used successfully since it was abolished (you are referring to Nixon's gold shock, aren't you?) So you are comparing the last 40 years without gold standard because it was artificially abolished, while still being used as real money of choice, with thousands of years when it was actively used as actual money, you are deriving a conclusion that since gold was abolished it hasn't been used successfully as money, and you are calling me an idiot?
Well, at least one of us is hopeless, and from this thread it's clear that I am not the one.
The individuals will always be corrupted by the government system, as all government system are susceptible to corruption, this is tried and true and has been shown for millennia, there is a reason Socrates wrote about it with such conviction, it's because it has happened enough times for people to observe the same exact phenomena - democracies eventually turn into 'rule-by-the-mob' types of systems, that later turn dictatorial. This has happened before and is happening now - people expect to be taken care of in empires, that start with great productivity and wealth and then turn into welfare 'bread and circuses' states, which fall into decadence, inability to provide for ones own needs, dependence on the government for everything and eventual crash of the society, which inevitably leads to acceptance of some 'strong' parent figure in place of the former democratic government body and this turns dictatorial and eventually violent for the 'common good'.
There is no such thing as 'common good'. What's good for me is not good for you, etc. We can never agree on what that 'common good' is and we shouldn't be preoccupied with it. What we should do is produce and trade the fruits of our labor and that's the way to a strong economy and a wealthy society.
Too bad, really, that we are now going through the inevitable observation of the collapse of the Western civilizations, but they have entered their final stage of post-production and decadent 'bread and circuses' age, with a totally predictable outcome of a hyper-inflationary depression, a dictatorial post-government and a possible violent military conflict.
You think for-profit prison lobbyists pushing for harder terms is bad now? If the police were to be for-profit, it would benefit from catching "criminals" - and from redefining what a criminal is, and squeezing as much labor out of them as they could manage, and if possible, encouraging criminals to commit greater offenses.
- this is not the problem of private prisons, this is a failure of the gov't 'justice system'. If it can't effectively sort out the criminals from the rest, then it has no merit or purpose. As to private prisons, cops, etc., of-course they all should be private. But the point is there should be no government money in it, to provide such skewed incentives that you speak of.
Cut the federal government spending by 99.9%, get it to do only military for protection and justice system, and have the states/municipalities implement their own local charity programs and compete on outcomes between the states/municipalities.
At least this way those who really do not want to participate in your idea of government structured 'society' can move to places that do not promote such ideology. Is that fair enough? Without this option, the only other option is to skip the country altogether, which is going to be the more and more chosen option, especially for motivated US youth, who should not have to pay for their predecessors 'social obligations'.
The 94% that there used to exist was never paid, because ppl modify their behavior, and the actual effective rate for income taxes never goes outside of the 18-20% box for the federal gov't.
However I am not going to start there, my starting point is simple - income taxes and payroll taxes all must be 0%. There is no other percentage that is correct and I hope that's what you are paying for your sake.
You cannot run an economy on gold or even cotton as a monetary base. It has been tried and it was a mess
- yeah, it's been tried and it worked for thousands of years, and every time the gov't started a counterfeiting operation it was the beginning of its end, and nothing has changed since the last time, it's still going to be the same outcome. There is a reason why JP Morgan now accepts gold as counterparty collateral, why the central banks are no longer sellers but are massive buyers and why the price in all fiat currencies keeps going up.
But of-course, it is I, who is an idiot.
Anyway, enjoy your life there, cheers.
Well, actually, they got what they wanted, didn't they? Once the gov't gave itself the power to tax income and to print fiat notes, it has been steadily buying the votes of those very people with handouts, promised with printed fiat, while at the same time the gov't grew itself in size throughout all times. Look at /., it's filled with people who expect government to take care of everything, economically speaking - take the money from those who can make it and give it to those who for some reason decided that they cannot.
Of-course there is a huge gov't agenda going on, with the dep't of education and all the SS and Medicaid/Medicare having plenty to do with it, ppl are bought hook line and sinker.
As to being 'slaves to the bank' - again, thank the gov't, which promotes the culture of living on credit and loans for everything, from buying houses and cars, to now buying smallest things on credit. All gov't sponsored.
It's not that some gov't "caved to the wealthy's demands" to turn the lower income people into credit junkies, it's that the gov't itself turned the country into a huge credit junkie, living on borrowed time and dime. Thank the Chinese, well, don't thank them, they are not doing you any favors by providing both: the credit and the goods, and gobbling up insane amounts of worthless printed green pieces of paper.
Actually thank Rubin, who during Clinton's administration figured out how to refinance the then debt with short term obligations, I mean really short term - 3 months, 6 months and maybe a year bonds. If US tried to finance its debt with anything real - like 10-30 year bonds, the interest rates would have been in high double digits right now.
Anyway, I have no sympathy for anybody in this situation - it is completely self created, it will crash and everybody will have to restart from scratch in the West. I really hope that the smarter ones do get their capital into save heaven before that happens, because they will be needed for real new credit and investments.
False analogy. Slavery and relative poverty are clearly not in the same league.
As to 'wealth disparity' - thank the government, which destroys the competition and promotes monopolies and drives prices up with government subsidies.