Money Supply – Exploding Inflation

[sdduuuude]

[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.[/quote]

Almost a strawman argument. You suggest that most such advocates think the market would be beautiful and stable. I’m not one of them. I do think, however, it would be better in the long-run.

[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. 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]

If we weren’t so far in debt, we wouldn’t need the intervention.

The cost of short-term stability is long-term disaster.

Two analogies I like:

It’s like putting a patch on a hose as the pressure builds. Then a stronger patch, then a stronger patch. Eventually, the patch loses.

Also, it’s like jumping off an elevator that only goes up. Not jumping now means more pain later.

That’s Keynsian economics. Keynsian econ seems to work, but the current credit/debt situation is going to throw it for a loop, to everyone’s detriment.

Also, having unemployment at double the current level may be the right thing if it recovers to half the current level more quickly.

[UCGal]

[quote=markmax33]Yes every time. The average currency has lasted 27 years. The other ones that haven’t busted aren’t old enough. Name a currency that’s lasted since the 1800s. EVERY TIME. Please go find one.[/quote]

I keep thinking about this and it bugs the crap out of me…

You’re claiming that the average currency lasts 27 years. I’m assuming you’re talking about fiat currency, and not gold back currency.

The US dollar went off the gold standard in 1934. That’s 77 years ago. 77/27 = 2.85… or almost 3. In other words, we’ve lasted almost 3 times the average since we went off the gold standard.

This would seem to be an argument for continuing what we’re doing – since it means we’ve performed 3 times better than average.

And as for old /long lasting currencies – as mentioned the British pound… That went off the metal standard around the same time (1931) that the dollar did… So it’s also beating your 27 year average.

I actually don’t have strong opinions on fiat vs gold standard. I’m fine with sponging off my kids in my advanced years… especially since I’m currently housing my in-laws… It’s what families do…. work together.

You’re passionate MM – but you are quick to make sweeping statements and disregard counter arguments. That’s not name calling, that’s just a statement of fact.

Oh… and I probably won’t vote for Ron Paul or start hoarding gold. But like Jacarondoso – I’m curious about the future price of tomatoes… my plants are still producing this year and maybe that will be worth something if hyperinflation takes off.

Edited to correct: I misstated the US dollar converting to full fiat in 1934. That was only a partial move. It moved to full fiat in the 70’s.
Gold bugs feel free to flame my mistake.

[markmax33]

[quote=UCGal][quote=markmax33]Yes every time. The average currency has lasted 27 years. The other ones that haven’t busted aren’t old enough. Name a currency that’s lasted since the 1800s. EVERY TIME. Please go find one.[/quote]

I keep thinking about this and it bugs the crap out of me…

You’re claiming that the average currency lasts 27 years. I’m assuming you’re talking about fiat currency, and not gold back currency.

The US dollar went off the gold standard in 1934. That’s 77 years ago. 77/27 = 2.85… or almost 3. In other words, we’ve lasted almost 3 times the average since we went off the gold standard.
[/quote]

Yes a fiat currency and your statement is incorrect. We exited the gold standard in 1971 when Nixon suspended the gold window. It was 40 years ago.

[quote=UCGal]
And as for old /long lasting currencies – as mentioned the British pound… That went off the metal standard around the same time (1931) that the dollar did… So it’s also beating your 27 year average.
[/quote]

I’m not sure when the British pound went completely off of the gold standard. I kind of doubt they went completely off of it in 1931 if we didn’t, but I’ll look into it. Our currency is merely 40 years old and since it has been considered the reserve currency of the world this makes sense.

[quote=UCGal]
I actually don’t have strong opinions on fiat vs gold standard. I’m fine with sponging off my kids in my advanced years… especially since I’m currently housing my in-laws… It’s what families do…. work together.

You’re passionate MM – but you are quick to make sweeping statements and disregard counter arguments. That’s not name calling, that’s just a statement of fact.
[/quote]

Thanks keep asking me questions and I will explain each and everything to you.

[quote=UCGal]
Oh… and I probably won’t vote for Ron Paul or start hoarding gold. But like Jacarondoso – I’m curious about the future price of tomatoes… my plants are still producing this year and maybe that will be worth something if hyperinflation takes off.[/quote]

I never said to gold hoard. I said you should not trust the currency and you should start backing law makers that want to fix it before it ends badly. I do not hoard gold. I do not think hyperinflation is tomorrow. I do think it will occur by the end of my children’s (yet to be born) lifetime. If you care about your kids, you care about this issue.

[briansd1]

[quote=sdduuuude]
Also, having unemployment at double the current level may be the right thing if it recovers to half the current level more quickly.[/quote]

Only if YOU are not affected, and you live long enough to enjoy the future prosperity, whenever it returns.

The thing about the markets it they don’t punish the ones responsible, but they punish ordinary people.

If the big banks had collapsed, sure the bankers would have been punished, but they have the means to live well their whole lives. The ones who would have been punished are the people thrown out of work because of economic contraction.

In the long run we are all dead.

[markmax33]

[quote=briansd1][quote=sdduuuude]
Also, having unemployment at double the current level may be the right thing if it recovers to half the current level more quickly.[/quote]

Only if YOU are not affected, and you live long enough to enjoy the future prosperity, whenever it returns.

The thing about the markets it they don’t punish the ones responsible, but they punish ordinary people.

If the big banks had collapsed, sure the bankers would have been punished, but they have the means to live well their whole lives. The ones who would have been punished are the people thrown out of work because of economic contraction.

In the long run we are all dead.[/quote]

Brian – when you go to college don’t you have a choice in the major you choose? If you go into an industry that is not efficient and about to go under isn’t that your fault? Shouldn’t you choose to go into an industry that is taking off and has 30 years of growth? How is it not the employee’s fault or responsibility?

How is the employee’s innovation in a company not part of it’s success or failure? If the employees work well and innovate the company continues. If the company is ran poorly, smart employees ALWAYS exit the company first. Haven’t you ever noticed that? The employees have as much power and ability to compete as the owners.

[sdrealtor]

Is it just me or is markmax starting to sound like this guy?

http://www.youtube.com/watch?v=x4o-TeMHys0

[briansd1]

markmax33, I think you live in a fantasy land.

When credit contracts (as when banks fail and don’t lend) the economy suffers.

For example Boeing could lose orders if Air France, or Emirates can’t get their European banks to finance their plane purchases. The workers in Seattle get punished by layoffs. That’s how ruthless the markets are.

[markmax33]

[quote=sdrealtor]Is it just me or is markmax starting to sound like this guy?

http://www.youtube.com/watch?v=x4o-TeMHys0%5B/quote%5D
lol…

[sdduuuude]

[quote=briansd1]The thing about the markets it they don’t punish the ones responsible, but they punish ordinary people.[/quote]

Sometimes you say things that aren’t even closely related to reality.

[markmax33]

[quote=briansd1]markmax33, I think you live in a fantasy land.

When credit contracts (as when banks fail and don’t lend) the economy suffers.

For example Boeing could lose orders if Air France, or Emirates can’t get their European banks to finance their plane purchases. The workers in Seattle get punished by layoffs. That’s how ruthless the markets are.[/quote]

Brian – You are missing my point. Banks are not part of a market! They are controlled by the federal reserve and it hasn’t been a free market for years! The federal reserve system and Keynesian economics are very inefficient and that’s how we got here. Stop blaming the free market because we surely don’t have one!

[sdduuuude]

[quote=sdrealtor]Is it just me or is markmax starting to sound like this guy?

http://www.youtube.com/watch?v=x4o-TeMHys0%5B/quote%5D

There’s something to be said for consistency.

[sdduuuude]

[quote=markmax33][quote=briansd1]markmax33, I think you live in a fantasy land.

When credit contracts (as when banks fail and don’t lend) the economy suffers.

For example Boeing could lose orders if Air France, or Emirates can’t get their European banks to finance their plane purchases. The workers in Seattle get punished by layoffs. That’s how ruthless the markets are.[/quote]

Brian – You are missing my point. Banks are not part of a market! They are controlled by the federal reserve and it hasn’t been a free market for years! The federal reserve system and Keynesian economics are very inefficient and that’s how we got here. Stop blaming the free market because we surely don’t have one![/quote]

Don’t even try, MM.
Don’t even try. Trust me on this.

[scaredyclassic]

The rent is too damn high party really never caught on like I expected. Maybe it’s just my timeline that’s off

[swave]

[quote=markmax33]
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]

I agree with you on this. But, I don’t think that the currencies need to be based on gold. Let the market decide what they are backed with. The money could be based on clean water or fertile farmland.

Sacred Economics: Chapter 11, Currencies of the Commons (Pt. 12)

[swave]

[quote=flu][quote=afx114]
By golly, you’re a genius… What the U.S. government needs to do is invent a time based currency… It starts to exponentially decay the moment it leaves the banks and ends up in the hands of people. If you don’t use it, it starts to decay…Don’t use it for a few days…it turns into ashes…..That’s how our government can stimulate growth here in the U.S.A….Forcing people to spend their dollars the moment they get them…[/quote]
You think this sounds silly, but Charles Eisenstein has proposed that currency decay. But at a significantly longer half life than you laughed at. Currency that decays with a half life of about 20 years really fixes a lot of problems. It is described very clearly in chapter 12 of his book.

Sacred Economics: Chapter 12, Negative-Interest Economics (Pt. 13)

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