Why is plat so important????

[Splorf22]

Originally Posted by Alarti0001 [You must be logged in to view images. Log in or Register.]

The only way US currency will have 0 value is if scarcity no longer exists. 2050 is a more likely scenario.

The USD has already lost over 90% of its value since Nixon took us off the gold standard.

[Ravager]

Originally Posted by Splorf22 [You must be logged in to view images. Log in or Register.]

The USD has already lost over 90% of its value since Nixon took us off the gold standard.

The dollar started to lose it's value when the Federal Reserve was created, because from that point forward every dollar was printed as debt. Debt that is paid for by Federal Income Taxes (that's right, if there was no Federal Reserve, there would be no 16 Trillion Dollar Debt and you wouldn't be paying 20% of your paycheck to pay the interest on that debt). If there was no Federal Reserve, the dollar would only be worth a small fraction less than it was in the early 1900's, because the inflation would have matched the amount of new gold coming in the market which would have been less than 1% per year.

[Frieza_Prexus]

Originally Posted by Ravager [You must be logged in to view images. Log in or Register.]

The dollar started to lose it's value when the Federal Reserve was created, because from that point forward every dollar was printed as debt. Debt that is paid for by Federal Income Taxes (that's right, if there was no Federal Reserve, there would be no 16 Trillion Dollar Debt and you wouldn't be paying 20% of your paycheck to pay the interest on that debt). If there was no Federal Reserve, the dollar would only be worth a small fraction less than it was in the early 1900's, because the inflation would have matched the amount of new gold coming in the market which would have been less than 1% per year.

Yet the population grows at closer to 3% leading to more overall demand relative to the money supply (EDIT: UNDER A GOLD STANDARD) which grows at 1% leading to a deflationary economy.

Who here is brave enough to ride the bimetallism horse?!

[Kraftwerk]

Originally Posted by Frieza_Prexus [You must be logged in to view images. Log in or Register.]

Yet the population grows at closer to 3% leading to more overall demand relative to the money supply which grows at 1% leading to a deflationary economy.

Who here is brave enough to ride the bimetallism horse?!

Energy and Food prices - up.
Worthless gadget prices - down.
Economy labelled deflationary - check.

[Splorf22]

Originally Posted by Frieza_Prexus [You must be logged in to view images. Log in or Register.]

Yet the population grows at closer to 3% leading to more overall demand relative to the money supply which grows at 1% leading to a deflationary economy.

Who here is brave enough to ride the bimetallism horse?!

My father told me a story once. In boarding school (50s I guess) and out of cash, he managed to find a $5 bill in one of his socks, which was enough for him to eat for a week on 35 cent chili dogs [You must be logged in to view images. Log in or Register.] On a more personal note, I remember bitching when gas hit 85c/gallon a mere 15 years ago.

Meanwhile the Fed estimates that M1 has gone up by almost 10x since 1960 - about 6% per year.

How can you possibly call this deflation?

[Frieza_Prexus]

Originally Posted by Splorf22 [You must be logged in to view images. Log in or Register.]

How can you possibly call this deflation?

I'm not. We are absolutely, unequivocally, the literal definition of an INflationary economy. We use a fiat currency (for good or ill) that is subject to manipulation by a specific manager.

My comment was directed at Ravager when he invoked the gold standard. It seemed, to me, that his tone was in support of the gold standard. To which I rebutted that the gold standard is inherently DEflationary because the gold supply has, historically, always been less than the population's growth rate. Because, under a gold standard, population (hence demand) grows faster than the supply, the scarcity of money continually increases increasing its relative value.

Hence my remarks that a gold standard is deflationary. I then mentioned bimetallism (essentially a gold AND silver standard) as a wry reference as bimetallism has not been seriously discussed outside of academic circles (See: Friedman or Kindleberger) since the late 1800's.

[Splorf22]

Originally Posted by Frieza_Prexus [You must be logged in to view images. Log in or Register.]

\To which I rebutted that the gold standard is inherently DEflationary because the gold supply has, historically, always been less than the population's growth rate. Because, under a gold standard, population (hence demand) grows faster than the supply, the scarcity of money continually increases increasing its relative value.

Isn't it a good thing when stuff gets cheaper? Sure I agree a small constant deflation is probably bad but its much much worse to have a government in charge of printing money whenever they feel like it.

And Hitchens, in my humble opinion the entire economics professions should be taken out and shot for crimes against humanity. There is a reason there was no Nobel prize is economics - 90% of it is unscientific blather which is used by people who run our country (i.e. the bankers) to justify looting and plundering.

[Frieza_Prexus]

Originally Posted by Splorf22 [You must be logged in to view images. Log in or Register.]

Isn't it a good thing when stuff gets cheaper? Sure I agree a small constant deflation is probably bad but its much much worse to have a government in charge of printing money whenever they feel like it.

And Hitchens, in my humble opinion the entire economics professions should be taken out and shot for crimes against humanity. There is a reason there was no Nobel prize is economics - 90% of it is unscientific blather which is used by people who run our country (i.e. the bankers) to justify looting and plundering.

Deflation tends to make goods cheaper in terms of the amount of currency spent on the item, however consider the effects of this on an economy in the aggregate. Being paid less for your goods results in less income, and because you have less money, salaries (and everything else) must lessen to reflect this reduced income in terms of the number of dollars coming in.

That said, if $0.95 buys the same thing that $1.00 would have a year ago, there doesn't seem to be much of a problem. In terms of absolute buying power, everyone has the same amount.

The problem is most visible in areas where the currency is dealt with in absolute invariant numerical terms. IE: debt. If you owe $100 today, your money is worth less next year but you still owe the same $100. This means that the absolute debt becomes increasingly burdensome.

That said, inflation also reduces the value of a person's savings and it is also arguably terrible. However, strong inflation tends to be less disastrous than strong deflation. Inflation means all debts are cleared more easily whereas deflation leads to all debts stagnating.

Both are sides of the same coin and both represent a problem if left unchecked. Our current society has been constructed via the use of debt and leveraging and its benefits are undeniable to our current capitalistic model. Inflation is simply more controllable and less harmful to our current social construction.

Our government also favors inflation as it gives them more to play with. Control of the money supply is a vital tool under most modern economic models. If you're interested in ideas or constitutional amendments to fairly and justly control the expansion of the money supply, I suggest you read Free to Choose by Milton Friedman, specifically chapter 9: The Cure for Inflation.

[falkun]

Originally Posted by Splorf22 [You must be logged in to view images. Log in or Register.]

Isn't it a good thing when stuff gets cheaper? Sure I agree a small constant deflation is probably bad but its much much worse to have a government in charge of printing money whenever they feel like it.

And Hitchens, in my humble opinion the entire economics professions should be taken out and shot for crimes against humanity. There is a reason there was no Nobel prize is economics - 90% of it is unscientific blather which is used by people who run our country (i.e. the bankers) to justify looting and plundering.

I'd love to admire the Nobel prize, but they lost my respect when they gave the Nobel Peace Prize to Barak Obama in 2009. He was inaugurated president in January 20, 2009, submissions for Nobel candidates had to be postmarked by February 1, 2009, and he was selected as the winner on October 9, 2009. I'm not saying the man doesn't deserve a Nobel medal, that's a separate argument, but I fail to see what he had done in 11 days to get him recommended. As a counterpoint, the 2010 recipient, Liu Xiaobo, has been advocating for democracy in China since 1989. That's 21 years of work compared to 11 days.

This thread may now resume its regularly scheduled trolling.