[quote]Neuromancer wrote:
These ‘gold standard’ rabid free marketeers are cut from the same cloth as fervent communists.
Both sound plausible and idyllic in theory,but bear absolutely no resemblance to the real world whatsoever.
[/quote]
It truly represents a devolution in thought.
[quote]LIFTICVSMAXIMVS wrote:
tGunslinger wrote:
Headhunter wrote:
The future?
Reality.
Inflation.[/quote]
That actually made me LOL.-
[quote]beebuddy wrote:
LIFTICVSMAXIMVS wrote:
A bunch of nonsense…
Dude, you are in lala-land. Are you actually claiming that the average American consumer’s purchasing power has DECREASED since 1913? Seriously?
You and the logic you are using are operating from the completely unsophisticated and NON EXISTENT commodity standard.
An increase in productivity without increasing the money supply would lower prices and make people better off.
Exhibit A. You clearly don’t know what you are talking about and I want you to think long and hard about what I am about to write because if you don’t show some sign of grasping what I write I can not continue this discussion, and our fun is over…
Money ONLY has symbolic value. So if we increased productivity & production without changing the money supply eventually we would be paying one cent instead of one dollar for a McDonald’s cheeseburger. Nothing wrong with that except that eventually we would be forced to divide money into the thousandths and even millionths, which is no different than increasing the money supply. You can’t divide commodities indefinitely, and there is no point in dividing symbolic money indefinitely when the net result is the same as an increase in supply.
Please get this into your head. At least try because what you are saying is retarded.[/quote]
Wow, you did so not get what he posted that it is nine kinds of awesome.
[quote]rainjack wrote:
No - according to your “theory” - any increase in price is inflation. Labor is a cost. If you raise wages, you also have to raise prices.
[/quote]
No, according to my theory (the Austrian theory actually) inflation is not an increase in prices. It is an increase in the money supply. Wages only rise for productive individuals and productive companies across the industry where those goods are produced. If the producer is giving a wage increase to a more productive employee it must be because he values the productivity of that employee more than he values what he is giving up. That cost is either removed from the existing budget (or cash on hand) or eaten from the expectations of next year’s revenue. It does not affect his productivity overall; but he is still subject to market fluctuations that determines the price he can fetch for what he produces, interest rates, etc. In other words, he gambled on giving raises and bonuses.
He will not raise prices because he has not been hindered. Also, he cannot raise prices because his customers will leave him and go to his competitors who will price him out of business.
[quote]orion wrote:
LIFTICVSMAXIMVS wrote:
tGunslinger wrote:
Headhunter wrote:
The future?
Reality.
Inflation.
That actually made me LOL.-[/quote]
Are you the same person as Lifticus? Be honest.
[quote]orion wrote:
beebuddy wrote:
LIFTICVSMAXIMVS wrote:
A bunch of nonsense…
Dude, you are in lala-land. Are you actually claiming that the average American consumer’s purchasing power has DECREASED since 1913? Seriously?
You and the logic you are using are operating from the completely unsophisticated and NON EXISTENT commodity standard.
An increase in productivity without increasing the money supply would lower prices and make people better off.
Exhibit A. You clearly don’t know what you are talking about and I want you to think long and hard about what I am about to write because if you don’t show some sign of grasping what I write I can not continue this discussion, and our fun is over…
Money ONLY has symbolic value. So if we increased productivity & production without changing the money supply eventually we would be paying one cent instead of one dollar for a McDonald’s cheeseburger. Nothing wrong with that except that eventually we would be forced to divide money into the thousandths and even millionths, which is no different than increasing the money supply. You can’t divide commodities indefinitely, and there is no point in dividing symbolic money indefinitely when the net result is the same as an increase in supply.
Please get this into your head. At least try because what you are saying is retarded.
Wow, you did so not get what he posted that it is nine kinds of awesome.
[/quote]
I have an excuse because what he wrote was bullshit. Why don’t you explain yourself instead of cheering for for another man? I would love to hear it.
[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
No - according to your “theory” - any increase in price is inflation. Labor is a cost. If you raise wages, you also have to raise prices.
No, according to my theory (the Austrian theory actually) …[/quote]
More theory. It doesn’t work that way in real life. I know. I am a producer. It is increasingly sad that all you can do in this forum is parrot theory, or bastardize it and start making up your own definitions and terms.
But I do have to ask - why do you prefer living in a world void of common sense? have you ever participated in the real world?
[quote]beebuddy wrote:
But that isn’t what happened, so you have no point.[/quote]
But I told you already you have to analyze it as a possibility to understand where actions go “wrong”. That is the only way economics means anything. It is about choices do A rather than B and expect X as a consequence instead of Y. You cannot predict behavior with mathematics because people are neither stones nor atoms.
[quote]
So you’re measure for the health of the economy is suits? Has it occurred to you that the quality of suits might have improved?[/quote]
You cannot measure the economy. I offered it only as an example of a good that can be compared then from now. The quality does not matter to the price. It is only the supply verses the demand for suits that determines price – higher quality suits are typically more expensive because there are less of them because they cannot be mass produced, for example; they are different goods as far as a suit compared to suits are concerned. The point still remains that
[quote]
Gold is a stupid form of money. As more wealth is produced it’s easier to create money to represent that wealth than it is to change the price of everything to match that productivity. [/quote]
MONEY IS NOT WEALTH!!! IT IS AN EXCHANGE MEDIUM ONLY. WEALTH ONLY COMES FROM PRODUCTION. YOU DO NOT NEED ONE PIECE OF PAPER TO REPRESENT EVERY GOOD PRODUCED.
[quote]
The irony is that the comfort you enjoy today is a direct result of our financial system and the ease with which it facilitates investment. What are you so hell-bent on fixing? Your life is cake because of this.[/quote]
The comfort I enjoy today comes from hard work, productivity and savings from people before me. Not from financial systems. That you don’t understand that point hinders any further discussion of economics with you.
Please read some theory on the subject. There have been numerous links posted. I don’t have the energy any more.
[quote]rainjack wrote:
But I do have to ask - why do you prefer living in a world void of common sense? have you ever participated in the real world? [/quote]
How many drug dealers do you employ on your payroll? You sound like a retailer and or a service provider not a producer…
Your success at your “business” is independent of your lack of understanding of basic economic principle.
Since you think I bastardize theory I invite you to find exactly what I am bastardizing; a scholar such as yourself should have no problem with that.
Please let us know what you uncover in your research.
I’d post links for you but I don’t want to influence where you find your info.
[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
But I do have to ask - why do you prefer living in a world void of common sense? have you ever participated in the real world?
How many drug dealers do you employ on your payroll? You sound like a retailer and or a service provider not a producer…[/quote]
Perhaps you should not be so quick to assume that you know anything about what I do. It is quite evident to me that you haven’t a clue.
I have been successful for 10 years in one business, and wildly successful in another for the last 3 years. maybe I don’t understand the theory, but I am mastering the practice. Which one will make me wealthy? Thinking? Or doing?
[quote]Since you think I bastardize theory I invite you to find exactly what I am bastardizing; a scholar such as yourself should have no problem with that.
[/quote]
You invent definitions to words to fit your needs. That is bastardizing. I have been on your ass for a couple of months about this.
But - how about you answer my question? Have you ever participated in the real world? Why do you prefer the fantasy land of theory to the thrill of actually doing something?
[quote]LIFTICVSMAXIMVS wrote:
MONEY IS NOT WEALTH!!! IT IS AN EXCHANGE MEDIUM ONLY. WEALTH ONLY COMES FROM PRODUCTION. YOU DO NOT NEED ONE PIECE OF PAPER TO REPRESENT EVERY GOOD PRODUCED.
[/quote]
Wow, the Austrians must be touchy from soooo many people telling them for soooo long that they ‘just don’t get it.’
I never said money is wealth. We basically agree about wealth. I said gold is a stupid form of money. The reason I said that is because as more wealth is produced it is easier and faster to adjust the money supply (to represent that new wealth and thus facilitate it’s trade) than it is to wait for the market to adjust prices on it’s own. All that there needs to be is semi-accurate monetary representation of the wealth of our nation. We can do that by paying less or we can do that buy having more dollars. It’s the same either way, but the fiat system is much faster and more efficient. The benefits of our financial system FAR outweigh the little hiccups we experience.
Greenspan figured it out eventually. Don’t give up, you can get this!
[quote]LIFTICVSMAXIMVS wrote:
[/quote]
PS, you haven’t written a single that I didn’t understand, and we agree on the fundamentals. What your argument really boils down to is that the gold standard gives us a more accurate representation of what prices should be, but what you and the Austrians haven’t figured out is that it leads to a severe lack of investment. When you drop it you get REAL growth and that is what I meant about you enjoying the benefits of not using a gold standard. So what if suits cost too much? There are still more suits going around now than ever before, and you’ve got more money to chase those suits.
[quote]beebuddy wrote:
LIFTICVSMAXIMVS wrote:
MONEY IS NOT WEALTH!!! IT IS AN EXCHANGE MEDIUM ONLY. WEALTH ONLY COMES FROM PRODUCTION. YOU DO NOT NEED ONE PIECE OF PAPER TO REPRESENT EVERY GOOD PRODUCED.
Wow, the Austrians must be touchy from soooo many people telling them for soooo long that they ‘just don’t get it.’
I never said money is wealth. We basically agree about wealth. I said gold is a stupid form of money. The reason I said that is because as more wealth is produced it is easier and faster to adjust the money supply (to represent that new wealth and thus facilitate it’s trade) than it is to wait for the market to adjust prices on it’s own. All that there needs to be is semi-accurate monetary representation of the wealth of our nation. We can do that by paying less or we can do that buy having more dollars. It’s the same either way, but the fiat system is much faster and more efficient. The benefits of our financial system FAR outweigh the little hiccups we experience.
Greenspan figured it out eventually. Don’t give up, you can get this!
[/quote]
Sorry bud, this is just plain wrong. There is no practical reason to grow the money supply unless you need something smaller than a penny for regular transactions. We are far from that. That being said, inflation is not necessarily harmful. Straight line inflation is no more harmful than straight line deflation, and neither are noticably more harmful than no fluctuation. The problem arrises when the money supply is expanded and contracted haphazardly. The key to reducing the ill effect of inflation is to be able to predict it long term. Not being able to do this effects the outcome of contracts, the proper pricing of goods and services, and can ultimately slow a growing market or make speculative bubbles much, much worse.
The Austrians were definately hard liners but they were brilliant and all of the most respected economist have studied them. There is no question the gold standard is superior to a fiat money supply. It is not subject to political whims and limits gov’t in the harm it can inflict on a market. Unfortunatly, we are far past this and it’s not even really worth discussing anymore. Never happen. Some economists, like Friedman, have accepted this and have attempted to outline solutions that work within the current money systems. Much to the dismay of hard line followers of the Austrians, like Rothbard.
Not being a practical solution today does not mean we would not be better off with solutions outlined by Von Mises, Hayek, or Rothbard. The only reason they are not practical is that politicians would never give up control of the money supply.
Greenspan is a very smart man but he was a Keynesian in practice, no matter what claims he makes to the contrary. This school of economics was pretty muched dismissed in economic circles 30 years ago. Politicians still like it though. Even though I beleive Greenspan fucked us, his book is a very good read. Really two different books. The first part is history and politics. The second half is economics, including analysis of several countries.
To finish up, there is no substitute for economic theory. It is all we have. Real world experience or historical data is almost completely worthless in economics. There are entirly too many variables in play to accurately model specifics of a market. Fluctuating money supplies, mountains of changing regulation, unstable gov’ts and the fear and uncertainly this creates in markets, prohibit any accurate case study in macro economics. You have to start with theory and try to defend it or destroy it with logic and reasoning. Any of the major booms or busts can be explained quite well using Austrian theory.
[quote]dhickey wrote:
Sorry bud, this is just plain wrong. There is no practical reason to grow the money supply unless you need something smaller than a penny for regular transactions.
[/quote]
I view the Austrian idea that money was ever a product of free individuals as nonsense, at least as far as gold & silver are concerned. Gold money (and of course fiat money) was much more likely the product of some sort of political monopoly. So IMO there are ONLY practical reasons to use fiat, such as buffering recessions and maintaining the stability of the state and thus our society. You can’t really argue that recessions haven’t been as bad since 1933. Also capital markets haven’t stopped and real growth has been better than ever. The USD might as well be called gold. Both are intrinsically worthless AFAIC.
[quote]dhickey wrote:
Not being a practical solution today does not mean we would not be better off with solutions outlined by Von Mises, Hayek, or Rothbard. The only reason they are not practical is that politicians would never give up control of the money supply.
[/quote]
Also, the Austrians never offered a single solution. Hobbes et al were correct that money is the state’s, the state is sovereign, and we are all much worse off in the state of nature. The Austrians lived in lala-land where people are free. There is a better way to keep our government in check and preserve our numbered liberties than a gold standard, and that is the constitution.
Edit: It may have been Locke that said that, I just associate Hobbes with ‘state of nature’ automatically.
[quote]beebuddy wrote:
There is a better way to keep our government in check and preserve our numbered liberties, and that is the constitution.[/quote]
Hmm. Doesn’t seem like such a great way to me anymore. What, with our government practicing cronyism. Bailouts, buying up mortgages, holding stakes in banks now (oh yeah, sure it’s temporary), obscene entitlement programs, subsidizing the defense of other nations on the backs of US taxpayers, etc. The Constitution is dead. But, it was a good try.
[quote]Sloth wrote:
beebuddy wrote:
There is a better way to keep our government in check and preserve our numbered liberties, and that is the constitution.
Hmm. Doesn’t seem like such a great way to me anymore. What, with our government practicing cronyism. Bailouts, buying up mortgages, holding stakes in banks now (oh yeah, sure it’s temporary), obscene entitlement programs, subsidizing the defense of other nations on the backs of US taxpayers, etc. The Constitution is dead. But, it was a good try.[/quote]
Still, I guess my point was that I’d prefer not to live in a state of anarchy, and I don’t see the state giving up money… In that other thread I started about Congressional redistricting, check it out. That’s how we break the two party system and get some REAL representation.
[quote]beebuddy wrote:
orion wrote:
beebuddy wrote:
LIFTICVSMAXIMVS wrote:
A bunch of nonsense…
Dude, you are in lala-land. Are you actually claiming that the average American consumer’s purchasing power has DECREASED since 1913? Seriously?
You and the logic you are using are operating from the completely unsophisticated and NON EXISTENT commodity standard.
An increase in productivity without increasing the money supply would lower prices and make people better off.
Exhibit A. You clearly don’t know what you are talking about and I want you to think long and hard about what I am about to write because if you don’t show some sign of grasping what I write I can not continue this discussion, and our fun is over…
Money ONLY has symbolic value. So if we increased productivity & production without changing the money supply eventually we would be paying one cent instead of one dollar for a McDonald’s cheeseburger. Nothing wrong with that except that eventually we would be forced to divide money into the thousandths and even millionths, which is no different than increasing the money supply. You can’t divide commodities indefinitely, and there is no point in dividing symbolic money indefinitely when the net result is the same as an increase in supply.
Please get this into your head. At least try because what you are saying is retarded.
Wow, you did so not get what he posted that it is nine kinds of awesome.
I have an excuse because what he wrote was bullshit. Why don’t you explain yourself instead of cheering for for another man? I would love to hear it.[/quote]
He has posted the theory over and over again, in a concise and understandable manner.
You make fun of it, in a way that clearly shows that you do not understand a word of it.
What makes you think that I would discuss anything of real practical value with someone that would rather piss on it than try come up with at least a decent attempt of an rebuttal?
What is in it for me?
[quote]beebuddy wrote:
LIFTICVSMAXIMVS wrote:
MONEY IS NOT WEALTH!!! IT IS AN EXCHANGE MEDIUM ONLY. WEALTH ONLY COMES FROM PRODUCTION. YOU DO NOT NEED ONE PIECE OF PAPER TO REPRESENT EVERY GOOD PRODUCED.
Wow, the Austrians must be touchy from soooo many people telling them for soooo long that they ‘just don’t get it.’
I never said money is wealth. We basically agree about wealth. I said gold is a stupid form of money. The reason I said that is because as more wealth is produced it is easier and faster to adjust the money supply (to represent that new wealth and thus facilitate it’s trade) than it is to wait for the market to adjust prices on it’s own. All that there needs to be is semi-accurate monetary representation of the wealth of our nation. We can do that by paying less or we can do that buy having more dollars. It’s the same either way, but the fiat system is much faster and more efficient. The benefits of our financial system FAR outweigh the little hiccups we experience.
Greenspan figured it out eventually. Don’t give up, you can get this!
[/quote]
You forget that when you make the money supply subject to human judgment, you open up all sorts of bad possibilities. Wars are much easier to prosecute using fiat money. Fiat money can be introduced into a society as an economic stimulant by politicians and create bubbles of varying magnitude. Witness 1929…
Gold as money is infinitely superior to fiat money, for the simple reason that it cannot be abused by governments. It is a basically stable store of value over centuries.
I would sooner trust gold than the promises of politicians, especially ones like our future POTUS.