Money Supply – Exploding Inflation

[markmax33]

[quote=Arraya]We used to have depressions every 5 years with the gold standards and according to some economic historians, the international gold standard, pushed us to two world wars.
[/quote]
We used to have industries fail as they should have failed when they weren’t productive. The employees went to get retrained immediately and went into the next industry. It wasn’t a depression, it was a hard short downward spike. Now we bail them out and prolong the issue. I’m not saying the gold standard is perfect, I’m saying the fiat currency is doomed like it always has been before and it’s idiotic to stick to it. We could allow for competeing currency issued by many different banks and that would diversify risk signifcantly. The fed has a stranglehold on us and I want everyone to know it.

[quote=Arraya]
Now, this does not mean I don’t understand the systemic risk with how money/banking works now. In fact, we are in the midst of one now – a systemic crisis. But, IMO, it goes deeper than replacing fiat with gold.
[/quote]

Why not just allow competeing currencies. My bank could issue currency, your bank etc. Currencies would float based on risk in the institutions. If one failed the whole society wouldn’t be in massive trouble.

[quote=Arraya]
Also, enough with the misplaced demonization of dead money market theorists. This isn’t “keynesian” economics, it’s economics to keep the whole shebang from collapsing. I guarantee Bernanke is not referring to Keynes literature to make decisions. They are not sitting back there with some Keynes manual for monetary policy. They are treating it like a system and throwing money at where the system is seizing up. That’s it.
[/quote]

The whole shebang will collapse under exponentially increasing debt as has happened EVERY OTHER TIME. You are proping up the ponzi scheme. The Keynes way is to have 12 guys in room and print-print-print and guess at which sector to bail out. How can 12 guys in a room understand the whole market? It is retarded to think or agree a central bank even has a chance. Return the competition to the market place, gold, silver, lotus blossoms, Wells fargo dollars, etc and let the market forces control the winners and losers. You need a feedback loop.

[sdduuuude]

[quote=markmax33]I am writing this because I want to inspire people against the long term affects keynsian economics before the currency goes kaput.[/quote]

I think you underestimate the knowledge and awareness of people on this blog.

[briansd1]

[quote=Arraya] This isn’t “keynesian” economics, it’s economics to keep the whole shebang from collapsing. I guarantee Bernanke is not referring to Keynes literature to make decisions. They are not sitting back there with some Keynes manual for monetary policy. They are treating it like a system and throwing money at where the system is seizing up. That’s it.[/quote]

Exactly. Which is a good thing.

If the system collapses, economic activity ceases, output falls, poverty increases, social upheaval sets in. You may argue that would be a good thing… But what about the human suffering?

[sdduuuude]

[quote=Arraya] … throwing money at where the system is seizing up.[/quote]

Dude – that IS Keynsian economics !

[scaredyclassic]

I don’t think people used to live off savings in their dotage in the olden times. I think they just died regardless of the currency situation.

[Anonymous]

I can at least partially understand the rationale behind most of RP’s economic ideas – although ultimately I don’t agree with most of them.

But the one idea that destroys all his credibly is the “competing currencies” thing.

I challenge anyone to come up with a better recipe for economic clusterf#ck.

[scaredyclassic]

Wait. If you’re so smart how come you’re not rich?

[markmax33]

[quote=pri_dk]I can at least partially understand the rationale behind most of RP’s economic ideas – although ultimately I don’t agree with most of them.

But the one idea that destroys all his credibly is the “competing currencies” thing.

I challenge anyone to come up with a better recipe for economic clusterf#ck.[/quote]

Okay lets sit down and think about this for a second before we right it off. Restaurants compete with food, they all offer different menus. How would competing currencies be different than competition in any other industry? If one currency fails it doesn’t collapse the whole system. All currencies would be competing with each other for efficiency and be competeing for your work production.

Why do you believe the paradigm that the currency must be controlled by one group, concentrating risk into one asset/piece of paper? What if the free market came up with something better? It’s not a crazy idea, there are innovations in every other industry yet we are using a continually failed system for the past 1000s of years?

Do you see the issues we are having with the unified Euro currency? How many currencies should we have in the world? Is one better or infinite better? I gaurentee you one currency controlled by 12 guys is not the answer. That is the direction we are heading towards.

[markmax33]

[quote=briansd1][quote=Arraya] This isn’t “keynesian” economics, it’s economics to keep the whole shebang from collapsing. I guarantee Bernanke is not referring to Keynes literature to make decisions. They are not sitting back there with some Keynes manual for monetary policy. They are treating it like a system and throwing money at where the system is seizing up. That’s it.[/quote]

Exactly. Which is a good thing.

If the system collapses, economic activity ceases, output falls, poverty increases, social upheaval sets in. You may argue that would be a good thing… But what about the human suffering?[/quote]

Brian the current system ensures failure. That’s the point I’m getting at. There will be no money for the social programs. The GOV will be flat broke. If you are for social programs you should be against the current system.

[markmax33]

[quote=pri_dk]I can at least partially understand the rationale behind most of RP’s economic ideas – although ultimately I don’t agree with most of them.

But the one idea that destroys all his credibly is the “competing currencies” thing.

I challenge anyone to come up with a better recipe for economic clusterf#ck.[/quote]

Which other things don’t you agree with other than competing currencies/gold standard? I’m really curious?

[Arraya]

[quote=sdduuuude][quote=Arraya] … throwing money at where the system is seizing up.[/quote]

Dude – that IS Keynsian economics ![/quote]

Yeah, in a very general sense. Then again, it is avoiding a revolutionary change/collapse. Just letting the “market” work things out would not manifest how the laissez faire advocates think. In fact, it would be the opposite. Keynes essentially said the state has to invest at certain times to avoid certain serious instability. He was correct. If it was not for intervention unemployment levels would be double and there would be serious unrest. Not to say, it’s not coming – but that has little to do with government intervention – the USG is keeping the whole thing from imploding.. The difference with fiat/fractional reserve vs gold backed/non-fractional reserve is the size and frequency of the crises

[Anonymous]

The competing currencies idea would actually just fizzle because none of them would catch on.

But let’s say it did catch on:

Would my local Ralphs accept the same currency as the local Target? Or would they accept all currencies? How would I compare prices at different stores? (would I have to do exchange calculations just to buy a loaf of bread?)

Would small vendors be at a disadvantage because of the overhead of handling multiple currencies?

Would there be currency exchanges? (there would have to be, right?) Would there be middlemen collecting fees?

Would there be arbitrage and derivatives and speculators?

Would I need multiple bank accounts denominated in different currencies just to pay my bills?

Would there be counterfeiters? – who would enforce against it?

Do we have enough worthy presidents to put on the bills and coins or would we have to resort to putting congressmen on bills and coins?

Is it just a ploy by Ron Paul to get his picture on money, since he will never be president?

[markmax33]

[quote=Arraya][quote=sdduuuude][quote=Arraya] … throwing money at where the system is seizing up.[/quote]

Dude – that IS Keynsian economics ![/quote]

Yeah, in a very general sense. Then again, it is avoiding a revolutionary change/collapse. Just letting the “market” work things out would not manifest how the laissez faire advocates think. In fact, it would be the opposite. Keynes essentially said the state has to invest at certain times to avoid certain serious instability. He was correct. If it was not for intervention unemployment levels would be double and there would be serious unrest. Not to say, it’s not coming – but that has little to do with government intervention – the USG is keeping the whole thing from imploding.. The difference with fiat/fractional reserve vs gold backed/non-fractional reserve is the size and frequency of the crises[/quote]

No the diffrence is you deal with the failures at the time they occur under Austrian/gold/competeing currencies and you delay it and build a bigger bubble that will destroy the entire country with Keynes.

Please get it right. You just want to push the pain off to your children. It’s going to hurt much worse.

[briansd1]

[quote=Arraya] Keynes essentially said the state has to invest at certain times to avoid certain serious instability. He was correct. If it was not for intervention unemployment levels would be double and there would be serious unrest. [/quote]

I believe Keynes said that society can avoid waste by having the government intervene to keep output stable. Otherwise, idle capacity goes to waste.

Detractors would argue that the government is wasting a lot of money intervening…. but waste is relative. It’s even more economically wasteful to have millions of unemployed.

[markmax33]

[quote=pri_dk]The competing currencies idea would actually just fizzle because none of them would catch on.

But let’s say it did catch on:

[quote=pri_dk]
Would my local Ralphs accept the same currency as the local Target? Or would they accept all currencies? How would I compare prices at different stores? (would I have to do exchange calculations just to buy a loaf of bread?)
[/quote]

Most likely there would be a market of currencies and there would be somewhere between 5-10 of them that would dominate the market. Remember the currencies would be competing for you business. They would likely have ads on tv and some currencies would be handled more efficiently than others. The currency orginators would find ways to profit from the transactions similar to the American Express, Mastercard, Visa. Those companies operate just like currencies currently and ensure customers from fraud.

[quote=pri_dk]
Would small vendors be at a disadvantage because of the overhead of handling multiple currencies?
[/quote]

No because the currencies would be competing for business and in the electronic age it would be ever easier. Think of the creditcards as an example. You would spend $500 visa per month, $200 mastercard, etc. The small businesses would be fine.

[quote=pri_dk]
Would there be currency exchanges? (there would have to be, right?) Would there be middlemen collecting fees?
[/quote]

Sure there’s always currency exchanges. They would be competing remember and incentive for a low exchange rates. If one form of money became high in transaction fees they would go out of business.

[quote=pri_dk]
Would there be arbitrage and derivatives and speculators?
[/quote]

I’m not sure what to say about this one. Each currency provider would have incentive to keep his currency safe and he would protect his loyal customers.

[quote=pri_dk]
Would I need multiple bank accounts denominated in different currencies just to pay my bills?
[/quote]

I would think the top 8-10 currencies would win out and most stores would take the top 8-10 currencies. It would be like any other market. Just imagine if the credit card companies could issue their own currencies instead of having it in dollars. I guess there’s only 3 or 4 major credit cards so that would be your guide.

[quote=pri_dk]
Would there be counterfeiters? – who would enforce against it?
[/quote]

There’s always counterfeiters. Laws protect against counterfeiting of any currency. The competing currency companies would have major incentive to protect their system and probably do a much better job than our GOV.

[quote=pri_dk]
Do we have enough worthy presidents to put on the bills and coins or would we have to resort to putting congressmen on bills and coins?
[/quote]

Why should we have any lawmaker on a bill/coin? I don’t have lawmakers on my credit cards, restaurants, hardware stores, car dealerships.

[quote=pri_dk]
Is it just a ploy by Ron Paul to get his picture on money, since he will never be president?[/quote]

Silly statement. Ron Paul is trying to return power to the people and stop the GOV from taking your rights and all you can do is make attacks on him? When people try to give me something that is mine, I generally thank them. I usually try to punch people who steal things from me. The dems and republicans are stealing from you and you don’t even care.

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