[quote]Zap Branigan wrote:
Headhunter wrote:
Zap Branigan wrote:
LIFTICVSMAXIMVS wrote:
Weasel42 wrote:
How does a US market crash equate to “a global absolute tyranny/oligarchy?”
The world super powers will attempt to employ an FDR-like “New Deal” on a very massive, all-encompassing level. Government will attempt to assert its dominance into every aspect of private life to “ensure” this tragedy never happens again. Of course, they will just prolong the effects of a crash just like FDR did.
Or we will just inflate and those that keep their money under the mattress and those that hold debt will be screwed while the rest of us keep plugging away.
Yep, those widows and orphans are happy to subsidize inflation.
Anyway, you simply don’t understand how inflation works — the printed money is circulated before the value is diluted. As more people catch on, it gets harder and harder to sucker-punch anyone. Everyone knows the trick, spends the money as quickly as they get it.
When no one is left to give value to the fiat money, they could literally print bushel baskets of it and…well, you know the rest.
We then get someone like Hitler, who’ll restore order. The mess is so big that only a tyranny/oligarchy can handle it. Case closed.
I fully understand how inflation works. Most of you clowns don’t. That is why you are fixated on the gold standard or fascism and other nonsense.[/quote]
Zap,
This is one of those discussions that pins itself on a viewpoint. You and I may share some not shared by the “youngsters” here.
For example, this business about “printing money” and inflation. That term, we know, is an allegory. In modern reality, the costs of renting money (nominal interest rates) go up and down, and value is added or subtracted from an investment economy thereby.
To fix a value, and limit or fix an interest rate, freezes the value of investment over time. Deflation is not yummy. As I intimated above, if we limit the productivity and imagination of the American people, we will be in real trouble.
Second example. I was speaking with a well regarded gold and commodity trader today, casually. He points out, accurately I believe, that if the 1980 price of gold had kept up with nominal inflation, it should be $2200 per ounce. So what does that mean: We should buy gold futures for $2199–no one else seems so eager to make that bet. Is gold undervalued? Or is it the case that other commodities are inflated relative to gold?
I expect that gold bugs would protest, but it stands to reason that gold, commonly referred to as a “hedge against inflation” is a very poor hedge…sometimes. (Its value is largely dependent on fear, fear as expressed in Shanghai, Hong Kong and Singapore.) Or perhaps it should be allowed to rise and fall with/against other commodities, without interference (i.e., the gold standard).
OK. The fire ants will now come out of their mound…