Money Supply – Exploding Inflation

[sdduuuude]

Marxman has argued his point with some data, some history and alot of whining about how mean people are to him.

[quote=markmax33][quote=EconProf]Markmax33, I’m afraid that, in general, you are making overly sweeping generalizations based on too little, or simply weak, data.[/quote]

Okay you are calling names and offering no facts here. I offer 775 currencies, a list of all of them and the data is weak and you have offered nothing to the arguement.[/quote]

(Really – did Econ Prof call you a name? Seriously, dude)

Time to put up or shut-up, marxman. Make a prediction here and now. When and to what level will inflation rise ?

Keep in mind – hyperinflation alarmists have predicted 20 of the last 3 hyperinflationary events.

[NotCranky]

[quote=sdduuuude]Marxman has argued his point with some data, some history and alot of whining about how mean people are to him.

[quote=markmax33][quote=EconProf]Markmax33, I’m afraid that, in general, you are making overly sweeping generalizations based on too little, or simply weak, data.[/quote]

Okay you are calling names and offering no facts here. I offer 775 currencies, a list of all of them and the data is weak and you have offered nothing to the arguement.[/quote]

(Really – did Econ Prof call you a name? Seriously, dude)

Time to put up or shut-up, marxman. Make a prediction here and now. When and to what level will inflation rise ?

Keep in mind – hyperinflation alarmists have predicted 20 of the last 3 hyperinflationary events.[/quote]
…and can you address tomatoes specifically?
What does Ron Paul say about future prices of tomatoes? This is important.

[markmax33]

[quote=pri_dk][quote=markmax33]Here is a list of 775 currencies:

[…][/quote]

Thanks for the links. That’s a really cool list and I enjoyed the little walk though the history of currencies.
[/quote]

No problem! I’m glad you started asking questions! I think you are starting to open your eyes a bit which is awesome!

[quote=pri_dk]
I did notice some of the same things that SK did: Seems that many currencies – in fact most currencies – did not fail due to inflationary monetary policy. And there are over a hundred currencies that have never failed. Some of these have been around for more than a century (including ours.)
[/quote]

There are 5 categories on the chart:

1. Currencies in circulation (23%) – obviously they haven’t failed yet because they are too young. The Euro has only been around 10 years. Many have already had massive problems though.

2. Monetary reforms (24%) – Voluntary monetary unions such as the Euro in 1999, or creation of the US dollar in 1792. This would neither a success or a failure of a fiat currency. It was terminated for other reasons.

3. Acts of independence (12%). Acts of former colonial entities renaming or reforming their currency. This doesn’t prove the currency failed OR survived. I would say that generally groups break away due to oppression and currency is often used in oppressing people. We broke away from England because they were taxing and abusing us with their currency. This is neither a failure or a success. It was terminated for other reasons.

4. Destroyed by acts of war (21%). Currency deemed no longer valid through military occupation or liberation. This is neither a success nor a failure. I will say that war is generally how most currencies are over printed. It happened to us in the United States once or twice already. This is neither a success or a failure. It was terminated for other reasons.

5. Hyperinflation (20%) – the obvious way all currencies fail if you give them long enough. It destroyed the Roman empire and several others.

If you take out the other categories that are neither successes or failures, you are left with all of the failed currencies being hyperinflation. They all fail due to hyperinflation. They average currency lasts 27 years. Our fiat currency is 40 years old and was established by Nixon in 1971 when he removed the gold window.

[quote=pri_dk]
BTW, is there an equivalent list for gold-backed currencies? How have they fared through history?
[/quote]

No because gold could not be printed and manipulated. It is controlled by the supply of gold in the world. It has been the default currency almost every time the others have failed because it is small and easy to carry and transfer between people.

[quote=pri_dk]
It’s interesting how many currencies have failed due to war and political upheaval. Especially in times where nations were ruled by political extremists.
[/quote]

Most currencies failed due to expanding empires and monetary policies for social services. Wars and expanding social services to infinity are extreme political and economic ideas.

[quote=pri_dk]
Seems the biggest threat to economies is extremist political ideas and leaders who want to drastically change the economic structure of a nation and attempt to implement their own, untested ideas.

Do we know of any current politicians that are like that?
[/quote]

Yes, the democrats and the republicans are using extreme measure to debase the currency. The democrats are expanding social services through healthcare and other things not authorized by the constitution and the republicans are sending us to more wars that aren’t authorized by Congress or the people and not upholding the constitution. When we look back, if the currency doesn’t get saved, we see these guys as the people who destroyed our democracy.

[quote=pri_dk]
BTW, what are the other four times that the US currency has failed?
[/quote]

I don’t think I said 4 times, there are a few failures we’ve had since the colonies were established. The continental and a few others, mostly at times of war. Generally we print money to fund war efforts and money becomes worthless. Sound familiar? We are in 6 wars right now…

[quote=pri_dk]
And were these dates before or after the existence of the Fed?
[/quote]

The failures were before the present day fed. There were other central banks, that were identical to the fed at the time of those failures. As soon as the currency fails it pisses everyone off and you go back on the gold or silver standard. After 50 years everybody that was pissed off about the currency failure dies and the bankers trick the people again into a central bank. The same routine has happened 100s of times in history.

[Anonymous]

[quote=sdduuuude]Keep in mind – hyperinflation alarmists have predicted 20 of the last 3 hyperinflationary events.[/quote]

Right on.

Probably more than 20, actually.

[Anonymous]

[quote=markmax33]No because gold could not be printed and manipulated. It is controlled by the supply of gold in the world. It has been the default currency almost every time the others have failed because it is small and easy to carry and transfer between people. [/quote]

Can you name one example of a successful gold-backed currency?

I’m having trouble getting behind an idea with a 100% failure rate.

[markmax33]

[quote=sdduuuude]Marxman has argued his point with some data, some history and alot of whining about how mean people are to him.

[quote=markmax33][quote=EconProf]Markmax33, I’m afraid that, in general, you are making overly sweeping generalizations based on too little, or simply weak, data.[/quote]

Okay you are calling names and offering no facts here. I offer 775 currencies, a list of all of them and the data is weak and you have offered nothing to the arguement.[/quote]

(Really – did Econ Prof call you a name? Seriously, dude)

Time to put up or shut-up, marxman. Make a prediction here and now. When and to what level will inflation rise ?

Keep in mind – hyperinflation alarmists have predicted 20 of the last 3 hyperinflationary events.[/quote]

If he said I offered “too little, or simply weak data” he is discrediting me and effectively calling me names. That isn’t a grown up argument and adds nothing to the discussion. I expect better from somebody going by “EconProf”. If he is a Keynsian EconProf, he has already been discredited.

A credible economist never gives a timetable. It is IMPOSSIBLE to tell when the bankers will decide to manipulate things too far. Economists can only predict future trends based on past trends and reading history. China/Japan/foreign countries could decide to turn around and sell all $5T treasure bonds they own at the same time and flood the market. China has already started to exit the US bond market and now is buying 10X the amount of gold they did 1 year ago. This should be sounding alarm bells to you guys. There are WAY too many factors but one thing for sure, the dam is only so high and once you get a hole in the thing it will all rip loose. That’s what always happens to fiat currencies. 12 men hold your fate in a room. I can’t read their mind. I will predict the next thing that happens though. The central bankers will try to put us on a one world currency so they can control everyone in the world. I expect the dollar and the euro to combine if we don’t wake up. Mark the tape on that one please.

[markmax33]

[quote=pri_dk][quote=markmax33]No because gold could not be printed and manipulated. It is controlled by the supply of gold in the world. It has been the default currency almost every time the others have failed because it is small and easy to carry and transfer between people. [/quote]

Can you name one example of a successful gold-backed currency?

I’m having trouble getting behind an idea with a 100% failure rate.[/quote]

The central bankers have always taken over society and made the currency fiat. No gold standard has ever failed. It has a 100% success rate and that’s why it becomes the default when the fiat currencies fail and are left with nothing.

When we went off the gold standard in 1971 nobody went broke. It didn’t fail, the fed was printing too much money and we didn’t have enough gold to support the printing and we closed the gold window. When you go off the fiat currency you are forced and lose all of your savings.

GOV greed and spending ends all gold standards and we the people are in charge of keeping the GOV in check. It is time to stand up and be heard before we go through the miserable fate of every fiat currency, hyper-inflation.

[Anonymous]

[quote=markmax33]A credible economist never gives a timetable. It is IMPOSSIBLE to tell when […][/quote]

My doctor told me I will die, but he doesn’t know when.

I guess that makes him credible.

But not very useful.

[Coronita]

[quote=markmax33]

…(most of rant deleted)…..

A credible economist never gives a timetable. It is IMPOSSIBLE to tell when the bankers will decide to manipulate things too far. Economists can only predict future trends based on past trends and reading history. China/Japan/foreign countries could decide to turn around and sell all $5T treasure bonds they own at the same time and flood the market. China has already started to exit the US bond market and now is buying 10X the amount of gold they did 1 year ago. This should be sounding alarm bells to you guys.

….(more rant deleted)….

[/quote]

Sigh…Please…. We’re not talking about overnight collapse here….

http://usa.chinadaily.com.cn/china/2011-08/16/content_13123503.htm

Care to explain Markmax33?

NEW YORK – China, the largest foreign holder of US Treasuries, continued to increase its purchases in June as its holdings rose by $5.7 billion to $1.17 trillion, according to new data from the US Department of the Treasury.

China boosted its holdings for the third straight month although global demand for US stocks, bonds and other financial assets weakened in June from a month earlier as the US Congress remained deadlocked over the debt ceiling, which were not settled until Aug 2.

But analysts say that the political infighting over the debt limit talks and the weakening US economy should send a clear signal to China, the biggest creditor to the US, that the only sustainable solution for China is to “move forward with currency/capital account reform”, said Yao Wei, China economist with SocieteGenerale, a French bank, in Hong Kong.

“The debt ceiling drama serves as a strong reminder to Chinese policymakers that the current model is not sustainable. China has to rebalance its economy, open up its capital account, and reform its currency regime to meaningfully slow down the pace of foreign exchange reserves accumulation,” Yao added.

While many experts say that there is not much China can do in the short term, it should consider diversifying its investments.

“As for diversification, gold probably tops on the list, besides euro-denominated assets and emerging market debt. The share of gold in China’s foreign exchange reserves is significantly lower than those with other central banks. The pace of diversification will be subject to the situation in global financial markets and China’s own pace of currency reform,” said Yao.

Others, however, still believe the US Treasuries are one good option for China because the choices are limited.

“It’s not feasible for China to drastically reduce investment in US T-bonds, and definitely not a good idea to withdraw from (buying) the US (bonds), either. China can purchase some Japanese yen, British pounds, or Swiss francs, for example, but the US dollar is still the most trustworthy, and the US remains the safest place to invest,” said Zhu Zhiqun, a professor of political science and international relations at Bucknell University in Pennsylvania.

Zhu said that China should, however, be “more creative” and look into diversifying investments in different sectors in the US market and the domestic market.

“Chinese companies can help the failing US businesses through acquisitions and purchases. The US Congress is likely to block Chinese investment in key sectors related to US national security such as the oil industry, but it is not opposed to Chinese investment in less sensitive businesses,” Zhu said.

“China should also allocate some of its foreign reserves to invest domestically to stimulate domestic consumption and further growth. In the long term, China has to shift away from the export-driven growth model and expand its domestic market,” Zhu said.

The new Treasury data showed that foreign residents decreased their holdings of long-term US securities in June – net sales were $11.5 billion. Net sales by private foreign investors were $23.0 billion, and net purchases by foreign official institutions were $11.5 billion.

Japan, the second-largest holder, reduced its holdings in June by $1.4 billion to $911 billion. Hong Kong, counted separately from China, reduced its holdings by $3.5 billion to $118.4 billion in June.

Monday’s report also reflected the concern over the debt limit crisis which affected many investors’ confidence in the US economy.

Shortly after Washington reached a last-minute deal on raising the debt ceiling earlier this month, rating agency Standard & Poor’s downgraded the US credit rating to “AA+”. Other rating agencies such as Moody’s kept the US’ AAA credit rating but put a “negative outlook” on it for review, which indicates that the rating could be knocked down within six months to a year’s time.

Although many believe that the S&P downgrade is largely due to the political standoff over the debt ceiling talks, some experts think Washington’s political foot-dragging has done enough damage to the US credibility.

“The damage to US credibility has been done – the process showed an inability to deal with tough problems in a mature and reasonable way. The deal (on the debt ceiling) as constructed will not help the US economy grow but rather jeopardizes the economy,” said David Riedel, president of Riedel Research Group in New York.

Zhu, however, said he thinks the US and China are linked economically and are “joined at the hip” and that no dramatic change will be seen in the near future.

“They need each other – the US remains China’s largest export market and strong growth in China helps the US recovery. So in the months and years ahead, the two countries will have no other choice but to continue to cooperate on trade and economic issues even if they may continue to disagree on China’s currency, trade imbalance, protectionism and others,” Zhu said.

China Daily

[sdduuuude]

[quote=markmax33]… he is discrediting me and effectively calling me names.[/quote]

Ah. “Effective Name-calling” is not a technique I am familiar with. Must be more advanced name-calling that I ever learned. That econ prof is a smart one.

I prefer the direct name-calling, such as “You are a poo-poo head”.

Suggest you learn some tact, which I define as “making a point without making an enemy” and argue your points without getting so defensive.

Still waiting for that prediction. No better way to prove a point than to make an accurate prediction.

[sdduuuude]

[quote=pri_dk]My doctor told me I will die, but he doesn’t know when.
I guess that makes him credible.
But not very useful.[/quote]

Right there with ya on that one.

By the way, I predict 5 solid years of no hyperinflation in the US Dollar and thus ends my argument.

[The-Shoveler]

China, Japan etc… decide to sell all us treasuries at once in an act of whatever,
Let’s see.
Well seeing as the fed seems to have the ability to purchase an UNLIMITED amount of U.S. treasuries ,
I would think the fed will wait to buy the treasuries back at some extreme discount , then proceed to buy as many treasuries as necessary to bring the interest rate back down to a reasonable level. The very next day,
Then Ben will come on TV and do an end-zone dance.

Just joking (well about the end zone thing anyway).

[markmax33]

[quote=pri_dk][quote=markmax33]A credible economist never gives a timetable. It is IMPOSSIBLE to tell when […][/quote]

My doctor told me I will die, but he doesn’t know when.

I guess that makes him credible.

But not very useful.[/quote]

If you got wasted every night drinking alcohol and the doctor told you that most poeple who drink as much as you do die at an early age due to liver failure would you stop drinking? The doctor would never give you an expiration date. Your analogy is meaningless.

[Coronita]

[quote=Nor-LA-SD-GUY2]China, Japan etc… decide to sell all us treasuries at once in an act of whatever,
Let’s see.
Well seeing as the fed seems to have the ability to purchase an UNLIMITED amount of U.S. treasuries ,
I would think the fed will wait to buy the treasuries back at some extreme discount , then proceed to buy as many treasuries as necessary to bring the interest rate back down to a reasonable level. The very next day,
Then Ben will come on TV and do an end-zone dance.

Just joking (well about the end zone thing anyway).[/quote]

I like to think in much more simple terms.

1. China (because I don’t Japan would do it) dumps U.S. treasuries.

2. U.S. drops a few nuclear bombs….

3. Everyone is dead and flattened.

Whether we have fiat currency or not is besides the point.

Having the largest military arsenal makes negotiating and writing off debt much easier..

All you folks against military spending don’t know that it’s actually much cheaper to maintain a large military to force the rest of the world to eat our debt for which we have no intention of ever repaying instead of actually trying to pay off what we already owe…..

[Coronita]

[quote=markmax33][quote=pri_dk][quote=markmax33]A credible economist never gives a timetable. It is IMPOSSIBLE to tell when […][/quote]

My doctor told me I will die, but he doesn’t know when.

I guess that makes him credible.

But not very useful.[/quote]

If you got wasted every night drinking alcohol and the doctor told you that most poeple who drink as much as you do die at an early age due to liver failure would you stop drinking? The doctor would never give you an expiration date. Your analogy is meaningless.[/quote]

Yeah, but red wine has been proven to reduce your risk of heart disease. If I don’t drink red wine every night, I might die earlier of a heart attack.

[Author]

Posts