[quote]overstand wrote:
The United States will NEVER, EVER revert to commodity backed currency. [/quote]
The US may or may not. But I guarantee you the country formerly known as the USA will.
[quote]ZEB wrote:
[quote]Deorum wrote:
[quote]ZEB wrote:
[quote]Deorum wrote:
Gold/Silver standard has always been my favorite basis for a barter system.[/quote]
Is that how your customers pay you on your paper route?[/quote]
“yap yap yap yap pay attention to me deorum yap yap yap yap”
“DOWN BOY!” slaps that ugly dog in the fucking nose [/quote]
If you just knew anything…and I mean just anything about what you’re blathering about all over this forum, I wouldn’t mind looking the other way when you say stupid stuff. But so far from God to the economy it’s just all stupid stuff.
Then again, when I was 19 I didn’t make a whole lot of sense either. The only difference is I knew enough to keep my mouth shut. I guess that’s the down side of the Internet. A stupid thought 20 years ago was only expressed to a friend or relative, now guys like you have the world to spew your mindless chatter.
“I’m 19, barely out of high school and I know there is no God and I fully understand how complex economy’s work.”
There you go I wanted you to read what the rest of us see when you post.
:)[/quote]
You’re only fooling yourself if you think this particular fiat currency will last indefinitely (if that is what you are assuming).
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
You are so dumb that I’m actually embarrassed for you. How is stake in a company worthless paper? I’m assuming you don’t know the difference between cash and securities, so I ask you, in what universe is the USD considered worthless paper? And what are you hoarding, gold? Shiny metal with no instrinsic value?
Everyone else on earth is dealing in reality bud, it would be prudent of you to do the same.
This forum is such a clusterfuck. The only guy in here who understands the bill being discussed is TQB and he lives in Belgium LOL. ZEB, I’m not sure how you managed to deal with it long enough to amass 13k posts. I’m not coming back here, but I shall tell tales of your patience.
[quote]overstand wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
You are so dumb that I’m actually embarrassed for you. How is stake in a company worthless paper? I’m assuming you don’t know the difference between cash and securities, so I ask you, in what universe is the USD considered worthless paper? And what are you hoarding, gold? Shiny metal with no instrinsic value?
Everyone else on earth is dealing in reality bud, it would be prudent of you to do the same.
This forum is such a clusterfuck. The only guy in here who understands the bill being discussed is TQB and he lives in Belgium LOL. ZEB, I’m not sure how you managed to deal with it long enough to amass 13k posts. I’m not coming back here, but I shall tell tales of your patience.[/quote]
By worhtless paper I mean the US dollars his stock is valued in – not ownership in businesses themselves…he claimed he doubled his money I say, so what? considering that he will barely break even if he keeps his money in dollar denominated investments too long. The dollar bubble is soon to burst.
In fact, guess how much value the dollar has lost since going off the gold standard. Guess how much people had to gamble of their life savings before going off the gold standard just to break even.
Your ignorance is not your fault. I blame the financial media for their advertisement shows.
If you want to argue economics with me you are out of your league in this forum.
[quote]cloakmanor wrote:
[quote]ZEB wrote:
[quote]Deorum wrote:
[quote]ZEB wrote:
[quote]Deorum wrote:
Gold/Silver standard has always been my favorite basis for a barter system.[/quote]
Is that how your customers pay you on your paper route?[/quote]
“yap yap yap yap pay attention to me deorum yap yap yap yap”
“DOWN BOY!” slaps that ugly dog in the fucking nose [/quote]
If you just knew anything…and I mean just anything about what you’re blathering about all over this forum, I wouldn’t mind looking the other way when you say stupid stuff. But so far from God to the economy it’s just all stupid stuff.
Then again, when I was 19 I didn’t make a whole lot of sense either. The only difference is I knew enough to keep my mouth shut. I guess that’s the down side of the Internet. A stupid thought 20 years ago was only expressed to a friend or relative, now guys like you have the world to spew your mindless chatter.
“I’m 19, barely out of high school and I know there is no God and I fully understand how complex economy’s work.”
There you go I wanted you to read what the rest of us see when you post.
:)[/quote]
You’re only fooling yourself if you think this particular fiat currency will last indefinitely (if that is what you are assuming).[/quote]
I have not yet discussed currency. I’m still trying to get this little 19 year old “expert” to make sense on some other things.
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
Sometimes, through the years, you’ve had some great posts. But then other times, like with the above, you let me down. Tell me Lift, if I made say $80,000 in the stock market over the past year in what you call “worthless paper” and purchased for myself a 2010 SUV loaded how in the world is that worthless? I don’t know how you live and I’m not trying to pry, but I have a very nice lifestyle. And I’ve been living a very nice lifestyle for many years. And do you know how? It was by starting a business investing in that business and growing it. Then at a certain point investing in the various markets. I’ve made money just about every year for the past 20 years in those markets. This is all very real to me, I live it. It’s not some fanciful wish, or silly prediction of coming doom. This is my reality. When I read lines like “worthless paper” coming from you I can only laugh at you buddy, and I don’t want to do that so stop talking out of your ass.
Your Friend,
Zeb
[quote]overstand wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
You are so dumb that I’m actually embarrassed for you. How is stake in a company worthless paper? I’m assuming you don’t know the difference between cash and securities, so I ask you, in what universe is the USD considered worthless paper? And what are you hoarding, gold? Shiny metal with no instrinsic value?
Everyone else on earth is dealing in reality bud, it would be prudent of you to do the same.
This forum is such a clusterfuck. The only guy in here who understands the bill being discussed is TQB and he lives in Belgium LOL. ZEB, I’m not sure how you managed to deal with it long enough to amass 13k posts. I’m not coming back here, but I shall tell tales of your patience.[/quote]
Thanks for the compliment, but in reality some of these posters such as Lifty are actually quite bright when it comes to OTHER TOPICS. So please be patient with him. And don’t leave the PWI threads please. I need all the help I can get with these guys.
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
Sometimes, through the years, you’ve had some great posts. But then other times, like with the above, you let me down. Tell me Lift, if I made say $80,000 in the stock market over the past year in what you call “worthless paper” and purchased for myself a 2010 SUV loaded how in the world is that worthless? I don’t know how you live and I’m not trying to pry, but I have a very nice lifestyle. And I’ve been living a very nice lifestyle for many years. And do you know how? It was by starting a business investing in that business and growing it. Then at a certain point investing in the various markets. I’ve made money just about every year for the past 20 years in those markets. This is all very real to me, I live it. It’s not some fanciful wish, or silly prediction of coming doom. This is my reality. When I read lines like “worthless paper” coming from you I can only laugh at you buddy, and I don’t want to do that so stop talking out of your ass.
Your Friend,
Zeb
[/quote]
If you take your original investment out to spend it on a consumable good how does that help you in the future when you need to replace the vehicle which has gone up in price (due to inflation) more than double what you paid for it.
I am not saying that doubling your money is not good – it totally depends on how long it takes with respect to the rate of inflation.
It used to be people didn’t have to “invest” in anything other than storing gold because prices tended to drop on a commodity standard and therefore money became more valuable – i.e., gained in purchasing power. Today this is not the case and thanks to horrible monetary policy foisted by the Federal Reserve financially unsavvy people now have to gamble with their life savings just to try and break even.
Besides, I was to just making fun of your “doubled my money” comment which I can only take your word for… you have no reason to lie about this, right?
[quote]overstand wrote:
Haven’t ever posted in PWI, but I saw this on the Recent Activity feed and decided to check it out (I’m an Econ Major/International Trade Minor). Decided I had to reply after reading Deorums nonsense.
The United States will NEVER, EVER revert to commodity backed currency. If it did, shortrun consequences would be disasterous: demand for money through the roof, interest rates skyrocket, business fail left and right, unemployment, etc. would make the Great Depression look like sunshine and rainbows. Assuming we could even recover from that, we would never be a world super power again. Money growth is absolutely essential for GDP growth and stable price levels.
This debate is pointless anyway, this bill has nothing to do with the gold standard. It says nothing about being able to redeem your cash for gold. “Tea Party Activist Larry Hilton” just wanted to get his name on Fox News.
Deorum, pump your brakes kid. Come back after you’ve learned some real Econ. The Illuminati video you saw on youtube doesn’t count. Better yet, get the fuck off the computer and go get laid. Any 19 year old who gets this excited debating fiat vs commodity money is without doubt a virgin.[/quote]
Wow that was such a powerful reply. Switching to a gold/silver standard would put the demand for money through the roof! That is brilliant!!!
By the way, congratulations on being the only one who has ever taken an econ class! That makes you the resident expert here right? Lmfao.
Edit: Why don’t you address some of the points I made on the structure of the fiat economic system. Or why don’t you address something tangible about the gold/silver standard instead of making wild assumptions about “what would happen”. Maybe then I won’t look straight through your pretentious pile of bullshit. I’m waiting for you to put your money where your mouth is and teach me some “real econ” (lmfao). Perhaps you can bring out a graph or a mathematic formula to further avoid the basic criticism of the internal structure of the fiat system? That would be equally impressive as your last post. As for Illuminati videos that is another cute assumption and attempt at dismissing my words. As a matter of fact I have never watched an “Illuminati video” past a couple minutes. I think they are an interesting mix of facts that gets unfortunately distorted by wild extrapolations…
Double Edit: Was the Illuminati reference directed at the last sentences in my post? About the federal reserve being separate from the U.S. Government? Are you saying you DON’T believe that?! LOL!!? My “virgin” eyes are tearing up in response to your post! You’re right I must not get laid enough… Why don’t you show me how to get laid Mr. Econ Major at his local community college! LOL!
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]ZEB wrote:
[quote]LIFTICVSMAXIMVS wrote:
Of course it is. Look around you. People are tired of supporting a failed system.
[/quote]
I think that’s where you’re having a problem/ You’ve looked around you and see that people are tired of supporting the system. Now look beyond your circle of friends and family. Half of the people in the US don’t even pay taxes and they just love Obama and the way things are going. They want free stuff. Their unemployment benefits have been extended to two years. There are more state and federal programs to support them than ever before. They’re quite happy and not about to take to the streets to change things.
So, look beyond those around you.[/quote]
It does not matter what people want. Economic law cannot support the current policy of government expansion regardless of who or what “the people support.”[/quote]
The ‘vampires’ will run out of victims.
But…let’s buy stocks, right Zebbie? Investing in a vampire/parasite society has a wonderful future, right?
LOL!!
[/quote]
I’ve doubled my money in the stock market over the past three years. Tell me are your investments doing as well?
[/quote]
Doubled your holding of worthless paper…? Nice work.[/quote]
Sometimes, through the years, you’ve had some great posts. But then other times, like with the above, you let me down. Tell me Lift, if I made say $80,000 in the stock market over the past year in what you call “worthless paper” and purchased for myself a 2010 SUV loaded how in the world is that worthless? I don’t know how you live and I’m not trying to pry, but I have a very nice lifestyle. And I’ve been living a very nice lifestyle for many years. And do you know how? It was by starting a business investing in that business and growing it. Then at a certain point investing in the various markets. I’ve made money just about every year for the past 20 years in those markets. This is all very real to me, I live it. It’s not some fanciful wish, or silly prediction of coming doom. This is my reality. When I read lines like “worthless paper” coming from you I can only laugh at you buddy, and I don’t want to do that so stop talking out of your ass.
Your Friend,
Zeb
[/quote]
If you take your original investment out to spend it on a consumable good how does that help you in the future when you need to replace the vehicle which has gone up in price (due to inflation) more than double what you paid for it.[/quote]
First of all no one makes a purchase of a new vehicle thinking they’ve made a good investment. It is purely to enjoy. Secondly, the rate of inflation so fart this year is tracking about 1.5%, big deal.
Thank you for a second there I thought you were losing it pal.
As I said inflation is tracking about 1.5% this year.
I cannot disagree with most of that. But keep in mind that the game is always changing. Those of us who recognize this can make serious money. Those who live in the past, or try to predict too far into the future are doomed from the start.
I lied to make myself out to be a big man on a message board (deep sigh). As I said I’ve been in the market for many years. Not all of them have been as rosy as the past few, but I generally do quite well. Did you really think that when the DOW hit 6000 a few years back that it was not going to rebound? I’m a contrarian, when people are running away I am running toward and vice versa. Right now there are enough people around like you who are scared of the future to make stocks fairly cheap so I buy.
I realize that at any moment the market could tank, but that’s why I leave cash on the sidelines. When the market tanks I double up on my best stocks, which buys me the same value for less money. Try to look at stocks as any commodity (I know what a commodity is). Do you want to purchase say lawn furniture when it’s cheap, or expensive? Most people buy when it’s expensive because others are buying and they have a feeling of safety. I purchase the lawn furniture when it’s cheap and no one wants it and then it has room to go up in value. And that’s when the common man wants to buy it.
I know what’s happening in the economy, it’s quite shaky but I intend to make money regardless. And I don’t have to out think the Fed or any other major institution. All I have to do is out think the average investor and that’s easy because they move on fear and greed. When things look bad they run and when they look good they charge in and spend their money and that’s when I’m selling (most of the time).
[quote]overstand wrote:
The United States will NEVER, EVER revert to commodity backed currency. If it did, shortrun consequences would be disasterous: demand for money through the roof,[/quote] why? [quote]
interest rates skyrocket[/quote] if "demand for money skyrocketed, yes , they would which brings me back to why? [quote]
, business fail left and right,[/quote] why? [quote]
unemployment, etc. would make the Great Depression look like sunshine and rainbows.[/quote] why? [quote]
Assuming we could even recover from that, we would never be a world super power again. Money growth is absolutely essential for GDP growth and stable price levels.
[/quote]
That is actually somewhat true. It is completely irrelevant, as I am sure your econ major credentials are making you quite aware of, so I can only assume that you trying to pull the wool over the eyes of us rubes.
[quote]ZEB wrote:
[quote]overstand wrote:
Haven’t ever posted in PWI, but I saw this on the Recent Activity feed and decided to check it out (I’m an Econ Major/International Trade Minor). Decided I had to reply after reading Deorums nonsense.
The United States will NEVER, EVER revert to commodity backed currency. If it did, shortrun consequences would be disasterous: demand for money through the roof, interest rates skyrocket, business fail left and right, unemployment, etc. would make the Great Depression look like sunshine and rainbows. Assuming we could even recover from that, we would never be a world super power again. Money growth is absolutely essential for GDP growth and stable price levels.
This debate is pointless anyway, this bill has nothing to do with the gold standard. It says nothing about being able to redeem your cash for gold. “Tea Party Activist Larry Hilton” just wanted to get his name on Fox News.
Deorum, pump your brakes kid. Come back after you’ve learned some real Econ. The Illuminati video you saw on youtube doesn’t count. Better yet, get the fuck off the computer and go get laid. Any 19 year old who gets this excited debating fiat vs commodity money is without doubt a virgin.[/quote]
Good post.
As to your accusation of Deorum being a virgin, all I can say is that he cannot stop talking about dicks, so take it from there.[/quote]
Just so that I know, what made that a good post?
The total lack of an argument, the ad hominem or the appeal to authority?
Ok, Orion, I’ll give it a try.
The amount of available gold in the world is more or less stable. Newly mined gold only adds a small amount every year.
Now assume that we have growth in the economy, i.e. people are entrepreneurial and more stuff comes on the market. The effect of this is prices getting lower. Your gold will buy more stuff. Salaries for the people making the stuff will not easily decrease (remember: growth) as they want their share. So if you want to invest in your company, buyng equipment or whatever, you will need to borrow the capital (i.e. gold) to do so.
Your successful company now has to pay the wages and pay back the loan, all in gold, while producing items that will decline in price in a growth economy.
If the economy hits a recession, everybody will hold on to their gold, i.e prices go up, labour unrest (no raises), companies tanking, etc.
A gold standard only works in a completely stable economy where you have zero growth
I think that is sort of what he meant…
[quote]TQB wrote:
Ok, Orion, I’ll give it a try.
The amount of available gold in the world is more or less stable. Newly mined gold only adds a small amount every year.
Now assume that we have growth in the economy, i.e. people are entrepreneurial and more stuff comes on the market. The effect of this is prices getting lower. Your gold will buy more stuff. Salaries for the people making the stuff will not easily decrease (remember: growth) as they want their share. So if you want to invest in your company, buyng equipment or whatever, you will need to borrow the capital (i.e. gold) to do so.
Your successful company now has to pay the wages and pay back the loan, all in gold, while producing items that will decline in price in a growth economy.
If the economy hits a recession, everybody will hold on to their gold, i.e prices go up, labour unrest (no raises), companies tanking, etc.
A gold standard only works in a completely stable economy where you have zero growth
I think that is sort of what he meant…[/quote]
I know, and he would have been wrong.
Unfortunately you did not adress the part of his post that were so deligthtfully ignorant, like inflation is necessary doe a rising GDP. Totally true, the more you inflate the money supply, the higher the GDP. Not because of any real growth, but never mind, the real reason for an economy is not to provide goods and services to us mere mortals but to look good on paper in arbitrary government statistics.
Your point that people clinging to their gold would make prices rise is wrong, it would actually make them fall until people were willing to buy again. You do the same thing as he does, you are assigning magic properties to money, i.e. you think it is actually worth something and can exert its influence when it is not used. Let us assume more people hide their precious under their mattress → Less money in circulation chases the very same goods → prices drop.
Now one point you made is interesting. It is true that in a relatively stable economy it is more less irrelevant if wages are stable. However, in an ever more productive economy and a fixd money supplyit might actually be necessary to lower them from time to time. Now, in real terms that would still be a raise but nominally you would take home less and less.
If the Fed is unable to adjust the money supply, they can’t utilize monetary policy. When an economy grows, the demand for money grows and thus the interest rate rises. If it rises too high, firms are unable to invest in new capital. This is where the big bad evil Fed steps in, prints money and buys US Treasury bonds in the open market. This drives the interest rate back down and allows further investment and further growth. In the real world, the interest rate does not fluctuate wildly because the Fed is very good at what they do. This allows for stable price levels and steady GDP growth.
On the other hand, if we are tied to a gold standard, the money supply is fixed; the Fed is unable to print new money. When the economy tries to expand, the interest rate rises…and rises…and rises until firms are unable to turn a profit. They must shut down, people lose their jobs and the economy tanks until it adjusts to whatever meager growth a finite money supply allows. But hey, no inflation right?? LOL.
For references, google “IS LM graph”, “aggregate expenditures schedule” and “loanable funds market graph”. These are the tools of the modern macroeconomist. They are based on Keynesian economics, the prevailing economic orthodoxy today.
Before Keynes, commodity money was widely accepted as a practical system. The “Classical economists” (pre Keynes era) believed that shocks to the financial market had no impact on the goods market and vice versa. Today we know this to be false (General Motors anyone?), but back then it implied that monetary policy was virtually useless. Classicals believed that an increase in the money supply would increase prices and nothing else. However, fiscal policy COULD stimulate GDP growth (as it can today, but that subject is highly debatable. See Stimulus Package) and thus began decades of deficit spending “gun and butter” economics in the United States. This culminated in the 70s with Stagflation. The only reason we ever pulled out of Stagflation was because Nixon listened to Keynes and finally took us off the gold standard.
So, chill out people. The Fed isn’t printing hundreds and stuffing them in their pockets. I agree the system isn’t perfect and the checks and balances are lacking, but it’s the best system the world knows as of yet.
Also, this is macro side of things. TQB posted a pretty accurate (and much more concise!) micro analysis.
[quote]TQB wrote:
A gold standard only works in a completely stable economy where you have zero growth
[/quote]
You do realize the gold standard was used long before the advent of fiat currencies? And imagine this - they had economies that grew! -.-
A gold standard is really not that radical…
It is virtually identical to fiat currency only it is not susceptible to the direct inflation and deflation tactics used by those who we trust the responsibility of printing our money to… A tactic used to consolidate power and money and keep YOU poor… Yet the average person is so quick to dismiss it in favor of what they have known… Homeostasis of the mind? …And pockets… lol…
The Greatest Depression is just starting to roll…
[quote]overstand wrote:
If the Fed is unable to adjust the money supply, they can’t utilize monetary policy. When an economy grows, the demand for money grows and thus the interest rate rises. If it rises too high, firms are unable to invest in new capital. This is where the big bad evil Fed steps in, prints money and buys US Treasury bonds in the open market. This drives the interest rate back down and allows further investment and further growth. In the real world, the interest rate does not fluctuate wildly because the Fed is very good at what they do. This allows for stable price levels and steady GDP growth.
On the other hand, if we are tied to a gold standard, the money supply is fixed; the Fed is unable to print new money. When the economy tries to expand, the interest rate rises…and rises…and rises until firms are unable to turn a profit. They must shut down, people lose their jobs and the economy tanks until it adjusts to whatever meager growth a finite money supply allows. But hey, no inflation right?? LOL.
For references, google “IS LM graph”, “aggregate expenditures schedule” and “loanable funds market graph”. These are the tools of the modern macroeconomist. They are based on Keynesian economics, the prevailing economic orthodoxy today.
Before Keynes, commodity money was widely accepted as a practical system. The “Classical economists” (pre Keynes era) believed that shocks to the financial market had no impact on the goods market and vice versa. Today we know this to be false (General Motors anyone?), but back then it implied that monetary policy was virtually useless. Classicals believed that an increase in the money supply would increase prices and nothing else. However, fiscal policy COULD stimulate GDP growth (as it can today, but that subject is highly debatable. See Stimulus Package) and thus began decades of deficit spending “gun and butter” economics in the United States. This culminated in the 70s with Stagflation. The only reason we ever pulled out of Stagflation was because Nixon listened to Keynes and finally took us off the gold standard.
So, chill out people. The Fed isn’t printing hundreds and stuffing them in their pockets. I agree the system isn’t perfect and the checks and balances are lacking, but it’s the best system the world knows as of yet.
Also, this is macro side of things. TQB posted a pretty accurate (and much more concise!) micro analysis.[/quote]
This is simply not true, because there is no added demand for money if the prices simply drop when the economy expands, as they must when the money supply is relatively stable.
And guess what, that is exactly what they did during the time of the much vilified robber barons.
Standard oil cut the price of petrol by 90%, the same was true for the price of steel.
It also has the additional benefit of dampen the markets exuberance when there is more money in demand that there are actual resouces to buy, which would be, I dont know, a good thing. Of course we can also pretend that there are more resources than there actually are, and live with a constant boom and bust cycle.
As for the Fed not being able to use monetary policies, um yeah, that is the whole point.
Guess we would simply have to abolish it, damn shame, really.
[quote]overstand wrote:
If the Fed is unable to adjust the money supply, they can’t utilize monetary policy. When an economy grows, the demand for money grows and thus the interest rate rises. If it rises too high, firms are unable to invest in new capital. This is where the big bad evil Fed steps in, prints money and buys US Treasury bonds in the open market. This drives the interest rate back down and allows further investment and further growth. In the real world, the interest rate does not fluctuate wildly because the Fed is very good at what they do. This allows for stable price levels and steady GDP growth.
On the other hand, if we are tied to a gold standard, the money supply is fixed; the Fed is unable to print new money. When the economy tries to expand, the interest rate rises…and rises…and rises until firms are unable to turn a profit. They must shut down, people lose their jobs and the economy tanks until it adjusts to whatever meager growth a finite money supply allows. But hey, no inflation right?? LOL.
For references, google “IS LM graph”, “aggregate expenditures schedule” and “loanable funds market graph”. These are the tools of the modern macroeconomist. They are based on Keynesian economics, the prevailing economic orthodoxy today.
Before Keynes, commodity money was widely accepted as a practical system. The “Classical economists” (pre Keynes era) believed that shocks to the financial market had no impact on the goods market and vice versa. Today we know this to be false (General Motors anyone?), but back then it implied that monetary policy was virtually useless. Classicals believed that an increase in the money supply would increase prices and nothing else. However, fiscal policy COULD stimulate GDP growth (as it can today, but that subject is highly debatable. See Stimulus Package) and thus began decades of deficit spending “gun and butter” economics in the United States. This culminated in the 70s with Stagflation. The only reason we ever pulled out of Stagflation was because Nixon listened to Keynes and finally took us off the gold standard.
So, chill out people. The Fed isn’t printing hundreds and stuffing them in their pockets. I agree the system isn’t perfect and the checks and balances are lacking, but it’s the best system the world knows as of yet.
Also, this is macro side of things. TQB posted a pretty accurate (and much more concise!) micro analysis.[/quote]
WOW! You people honestly do not even know what inflation and deflation ARE do you??? This is fucking amazing… I’m so done here…
“So, chill out people. The Fed isn’t printing hundreds and stuffing them in their pockets.”
Go. Fucking. Kill. Your. Self. You could not have misinterpreted me any fucking worse… People amaze me with how fucking stupid they can be every fucking day… I’m done… I’m done… I’m done… I’m done…
Edit: My frustration is coming out… I can’t continue this debate anymore because it is obvious people do not understand the required concepts… Many will argue what is more damaging to the economy - inflation or deflation. It is not that you are siding with one being worse than the other, a disagreement. You honestly are showing you do not even know what they are. This is fucking pointless. Go fucking study inflation and deflation - INDEPENDENTLY - and then try to wrap your little fucking brain around how they can be used to keep you poor and consolidates power… Then study history and tell me if it is not MORE than obvious that this is the exact fucking case… It’s not that fucking hard to understand… Oh man, I’m sorry they don’t teach this in your econ classes!!! THEY TEACH YOU EVERYTHING YOU NEED IN SCHOOL THOUGH RIGHT!!! If somebody didn’t teach you how to shake your own fucking dick you would have some yellow ass tighty fucking whiteys… You people disgust me. I’m done now…