Now that we have a new thread, in order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a complete and thorough read before posting!
NOTE: When providing a source, please provide a very brief summary on what it's about and what purpose it adds to the discussion. The supporting statement should clearly explain why the subject is relevant and needs to be discussed. Please follow this rule especially for tweets.
Your supporting statement should always come BEFORE you provide the source.
On April 29 2019 09:03 BerserkSword wrote: [quote]
Where did I say that inflation increases real interest rate???
I said that inflation is bad for someone living paycheck to paycheck and drowning in debt.
Like you said it's rare for inflation to be higher than nominal rate. So that already means that the debtor is losing out.
It's also impossible for someone investing in the USD as a working class individual to benefit from inflation, because his investment (USD) is depreciating
So any "benefit" a debtor receives from an increase in inflation (and this benefit is actually just a decrease of his losses - he is still net loss) is offset by the same inflation rate screwing over his purchasing power.
By the way, in your hypothetical situation, rarely will the nominal rate be the same thing whether teh inflation rate is 2% or 4%. Nominal rates usually go up when inflation goes up. Lenders arent dumb.
An individual with fewer than zero dollars, for example someone with no cash savings and debt, is not an investor in the USD.
You keep trying to describe the working poor as investors in the USD but if they had significant numbers of USD they wouldn't be poor.
Investors in USD are foreign governments who buy treasury bonds or who have large amounts of cash on hand. Your broke cousin who has no cash on hand and who has an outstanding note on his car should not be considered an investor in USD because he has negative USD.
We're going to keep running into this problem if you keep insisting that people living paycheck to paycheck are hoarding all the dollars.
I am not insisting that people living paycheck to paycheck are hoarding all the dollars....wtf?
And I am not referring to their investment in the USD like an investment banker/financial institution invests in something to hold on for years and make a profit.
I am saying that workers literally invest their time, effort, resources into obtaining US dollars (ie their paychecks). In that sense they ARE investors in USD.
Nearly 10 percent of those making $100,000 or more say they can’t make ends meet.
Overall, most workers said they are in debt and many believe they always will be.
No matter how much you earn, getting by is still a struggle for most people these days.
Seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year, according to a recent report from CareerBuilder.
Overall, 71 percent of all U.S. workers said they’re now in debt, up from 68 percent a year ago, CareerBuilder said.
While 46 percent said their debt is manageable, 56 percent said they were in over their heads. About 56 percent also save $100 or less each month, according to CareerBuilder. While household income has grown over the past decade, it has failed to keep up with the increased cost-of-living over the same period.
Even those making over six figures said they struggle to make ends meet, the report said. Nearly 1 in 10 of those making $100,000 or more said they usually or always live paycheck to paycheck, and 59 percent of those in that salary range said they were in the red.
Let me ask you, why is the number of people who are strugglign increasing over the last 10 years, when the last 10 years have been marked by Obama's and Trump's monetary expansion/inflationary policies? If we go by what you suggest, that inflation helps struggling working/middle class people, then shouldnt the number of people struggling over the last decade have decreased?
We are at a point where 10% of people earning over 100k are saying they are struggling....wtf?
Fact of the matter is that inflation is screwing people at the bottom, and the longer it goes on, the more people it will negatively affect.
You're quoting sources that show that none of these people who you are claiming are harmed by a devalued USD actually had any USD to be devalued. My point is that all these people are poor and therefore they're not holding large amounts of USD. Your counterpoint is a source demonstrating that all the people I said were broke are, in fact, broke.
They're broke, but they're not broke because they had loads of USD which got devalued, they're broke because they had no USD to begin with.
They're struggling in spite of inflation, not because of it. They're struggling because their jobs have gone overseas or have been made obsolete. They're struggling because a single unified currency across a country as diverse as the United States doesn't really work when the cost of labour is so varied. They're struggling because wealth has been concentrated into the hands of the few.
Your argument, that if inflation isn't the problem then why are things bad, would actually make more sense if you substituted inflation for "the position of Neptune" because at least that would be an irrelevant factor, not a factor reducing the impact. You can't just go "if X isn't responsible then why is it bad". That's no better than "if vaccines aren't responsible then why autism".
Consider the inverse. What help is the gold standard to an unemployed former factory worker? Will the lack of inflation bring back his job? What help is the gold standard to an Amazon warehouse employee who is overworked and underpaid because Amazon can replace him with any of a hundred other candidates at a moment's notice. Will gold fix the difference in bargaining power between the employee and the corporation?
If these people have been impoverished by inflation then you should be able to argue how the gold standard would right those wrongs.
Capitalism has left these people with no power, while consumerism drives them to spend themselves into debt. Inflation is an irrelevance to them. The devaluation of currency is no concern to people who do not possess currency. Real wages haven't fallen due to inflation, they've fallen due to structural inequalities and macro economic factors that, when left unchecked, have dramatically reduced the value of unskilled American labour.
I don't know why you keep suggesting that I am claiming that these people are being negatively harmed by inflation because they are holding large amounts of USD.
It's not just that people are broke. Financially, things are becoming more difficult for a greater amount of people, and things are becoming harder.
The reason I am attributing the general economic climate of the U.S. over the last decade to inflation, is because, the Fed's policies are the major drivers of the country's economy. That is literally why the Federal Reserve exists - to try to manage the economy. So, if things have gotten worse, you can damn well attribute it to what the Federal Reserve has been doing. Especially when the last decade has been defined by mammoth monetary expansion campaigns - they have put a lot of effort into this. It's foolish to ignore literally the Federal Reserve and chalk up the problems of the economy to some mysterious boogeyman.
Jobs have gone overseas, and wealth has been increasingly concentrated towards the top, precisely because of Keynesian policies like wage targeting and QE.
And yes I can explain how a gold standard/lack of Fed-induced inflation would help combat unemployment. Inflation leads to more fiat money. More fiat money cheapens the unit of currency's value, and, subsequently, the price of goods and services rise in terms of units of fiat money (aka price inflation). More money is accompanied by the by the lower Federal Funds Rate, which leads to malinvestments. These malinvestments take the form of everything from the artificially pumped stock market (it's bubbling), the Bitcoin bubble we saw over the last decade, and, of course, hiring of more workers, who get easily liquidated (layed off) when the market distortion reverts (aka period of economic downturn - and this is when employers realize the actual state of affairs). The end result is an overall faltering economy that might have intermittent transient periods of hiring but are defined by overall unemployment, job insecurity, inefficient capital allocation, etc.
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Do you know what happened when Nixon ditched the gold standard in the 70s? the notorious stagflation. Everything Keynesians held true was turned on its head, like the Philips Curve. In the 80s Regan embraced the monetary expansionist ideology to try and "boost" the economy and the relative standard of living in the U.S. hasnt been the same ever since, with every president after Reagan following suit.
I'm glad you are no longer claiming that the working poor are investors in the USD who lose out when it is devalued. That definitely was your argument, you went as far as to claim that "paycheck to paycheck" meant they had USD reserves, but I'm glad it no longer is.
I agree that things are becoming harder. However there is more evidence that the position of Mercury is to blame than there is that inflation is to blame. That is to say that there is no evidence that Mercury negatively impacts people with negative future cash flows and plenty of evidence that inflation doesn't negatively impact people with negative future cash flows.
The rest of your post is ahistorical nonsense and a complete lack of understanding of macroeconomics.
1) Low skilled manufacturing jobs haven't gone to other countries because of "the Fed", it's because American labour is not competitive due to Americans being unwilling to work in conditions that Chinese slaves will accept.
2) Wealth hasn't concentrated at the top because of "the Fed", it's concentrated at the top because that's how compounding returns works. It's just math. The wealthy invest more, therefore they get more, therefore they invest more. The poor get fucked.
3) Lets assume your premise that malinvestments are the root of the problem. It's not true, but let's assume that it is. Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard. Malinvestments and bubbles result from human failures, they're not caused by "the Fed".
4) Would it surprise you to learn that national debt was extremely common while on the gold standard, that debt doesn't need to be backed by physical gold, just the promise of future gold combined with confidence? I wonder if it would surprise you to learn that hyperinflation has often happened on the gold standard. Whether it was the economic collapse triggered by Musa I in the nations he traveled through or the Conquistors flooding Europe with Mexican and Peruvian silver, it happened. The supply over currency is still a thing under the gold standard, there is still monetary policy, it's just in the hands of prospectors rather than a government.
5) Stagflation wasn't caused by fiat currency. It was caused by an economic downturn during rising oil prices.
When they get their paychecks, they have a reserve of USD. When a worker works for money, he is investing time/effort/labor/etc for USD. I don't know why this is difficult to understand about this. working and middle class people do invest in the USD and they do have
1) oh, so now we are just talking about unskilled jobs that sweatshop workers have now. That's not what you said initially
But, as you can see, those arent the only jobs that are being outsourced.
2) Do you know what exacerbates this? when inflation causes such assets to absolutely skyrocket compared to USD. see: QE and the stock market, skyrocketing property prices due to continually weakening dollar, etc
3) I didn't say only the expansionist policies of the Fed could cause malinvestments. All I said was that the policies of the Fed are leading to malinvestments, and that such malinvestments of that nature would not happen under a gold standard. Tulip mania was the result of monetary expansion in Holland anyway LOL. Look up the free coinage policies in holland at the time, and how that lead to dramatic malinvestment. I dont know what the south sea bubble is.
4) and what is one of the reasons the US had this economic downturn....
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard.
I dont know what the south sea bubble is.
The South Sea bubble was the kind of malinvestment you're insisting could not have happened under the gold standard.
I did not mean that market distortion and malinvestment are impossible no matter what under a gold backed currency
I am saying the distortions that are happening due to inflation would not happen
If it'll happen anyway without "the Fed" then wouldn't you think that it's possible that it's just a thing that happens? If this were the vaccines cause autism argument (rather than the economics equivalent of it) the concession you just made would basically be "oh, no, a lot of kids just get autism without vaccines too, but vaccines still cause some of the autism".
I didn't say it will happen without the fed. I said it's possible.
You asked me how a gold system would help remedy the problems inflation has caused, and that's what I explained. I didn't say having a gold system means that such things cant happen
On April 29 2019 09:09 KwarK wrote: [quote] An individual with fewer than zero dollars, for example someone with no cash savings and debt, is not an investor in the USD.
You keep trying to describe the working poor as investors in the USD but if they had significant numbers of USD they wouldn't be poor.
Investors in USD are foreign governments who buy treasury bonds or who have large amounts of cash on hand. Your broke cousin who has no cash on hand and who has an outstanding note on his car should not be considered an investor in USD because he has negative USD.
We're going to keep running into this problem if you keep insisting that people living paycheck to paycheck are hoarding all the dollars.
I am not insisting that people living paycheck to paycheck are hoarding all the dollars....wtf?
And I am not referring to their investment in the USD like an investment banker/financial institution invests in something to hold on for years and make a profit.
I am saying that workers literally invest their time, effort, resources into obtaining US dollars (ie their paychecks). In that sense they ARE investors in USD.
Nearly 10 percent of those making $100,000 or more say they can’t make ends meet.
Overall, most workers said they are in debt and many believe they always will be.
No matter how much you earn, getting by is still a struggle for most people these days.
Seventy-eight percent of full-time workers said they live paycheck to paycheck, up from 75 percent last year, according to a recent report from CareerBuilder.
Overall, 71 percent of all U.S. workers said they’re now in debt, up from 68 percent a year ago, CareerBuilder said.
While 46 percent said their debt is manageable, 56 percent said they were in over their heads. About 56 percent also save $100 or less each month, according to CareerBuilder. While household income has grown over the past decade, it has failed to keep up with the increased cost-of-living over the same period.
Even those making over six figures said they struggle to make ends meet, the report said. Nearly 1 in 10 of those making $100,000 or more said they usually or always live paycheck to paycheck, and 59 percent of those in that salary range said they were in the red.
Let me ask you, why is the number of people who are strugglign increasing over the last 10 years, when the last 10 years have been marked by Obama's and Trump's monetary expansion/inflationary policies? If we go by what you suggest, that inflation helps struggling working/middle class people, then shouldnt the number of people struggling over the last decade have decreased?
We are at a point where 10% of people earning over 100k are saying they are struggling....wtf?
Fact of the matter is that inflation is screwing people at the bottom, and the longer it goes on, the more people it will negatively affect.
You're quoting sources that show that none of these people who you are claiming are harmed by a devalued USD actually had any USD to be devalued. My point is that all these people are poor and therefore they're not holding large amounts of USD. Your counterpoint is a source demonstrating that all the people I said were broke are, in fact, broke.
They're broke, but they're not broke because they had loads of USD which got devalued, they're broke because they had no USD to begin with.
They're struggling in spite of inflation, not because of it. They're struggling because their jobs have gone overseas or have been made obsolete. They're struggling because a single unified currency across a country as diverse as the United States doesn't really work when the cost of labour is so varied. They're struggling because wealth has been concentrated into the hands of the few.
Your argument, that if inflation isn't the problem then why are things bad, would actually make more sense if you substituted inflation for "the position of Neptune" because at least that would be an irrelevant factor, not a factor reducing the impact. You can't just go "if X isn't responsible then why is it bad". That's no better than "if vaccines aren't responsible then why autism".
Consider the inverse. What help is the gold standard to an unemployed former factory worker? Will the lack of inflation bring back his job? What help is the gold standard to an Amazon warehouse employee who is overworked and underpaid because Amazon can replace him with any of a hundred other candidates at a moment's notice. Will gold fix the difference in bargaining power between the employee and the corporation?
If these people have been impoverished by inflation then you should be able to argue how the gold standard would right those wrongs.
Capitalism has left these people with no power, while consumerism drives them to spend themselves into debt. Inflation is an irrelevance to them. The devaluation of currency is no concern to people who do not possess currency. Real wages haven't fallen due to inflation, they've fallen due to structural inequalities and macro economic factors that, when left unchecked, have dramatically reduced the value of unskilled American labour.
I don't know why you keep suggesting that I am claiming that these people are being negatively harmed by inflation because they are holding large amounts of USD.
It's not just that people are broke. Financially, things are becoming more difficult for a greater amount of people, and things are becoming harder.
The reason I am attributing the general economic climate of the U.S. over the last decade to inflation, is because, the Fed's policies are the major drivers of the country's economy. That is literally why the Federal Reserve exists - to try to manage the economy. So, if things have gotten worse, you can damn well attribute it to what the Federal Reserve has been doing. Especially when the last decade has been defined by mammoth monetary expansion campaigns - they have put a lot of effort into this. It's foolish to ignore literally the Federal Reserve and chalk up the problems of the economy to some mysterious boogeyman.
Jobs have gone overseas, and wealth has been increasingly concentrated towards the top, precisely because of Keynesian policies like wage targeting and QE.
And yes I can explain how a gold standard/lack of Fed-induced inflation would help combat unemployment. Inflation leads to more fiat money. More fiat money cheapens the unit of currency's value, and, subsequently, the price of goods and services rise in terms of units of fiat money (aka price inflation). More money is accompanied by the by the lower Federal Funds Rate, which leads to malinvestments. These malinvestments take the form of everything from the artificially pumped stock market (it's bubbling), the Bitcoin bubble we saw over the last decade, and, of course, hiring of more workers, who get easily liquidated (layed off) when the market distortion reverts (aka period of economic downturn - and this is when employers realize the actual state of affairs). The end result is an overall faltering economy that might have intermittent transient periods of hiring but are defined by overall unemployment, job insecurity, inefficient capital allocation, etc.
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Do you know what happened when Nixon ditched the gold standard in the 70s? the notorious stagflation. Everything Keynesians held true was turned on its head, like the Philips Curve. In the 80s Regan embraced the monetary expansionist ideology to try and "boost" the economy and the relative standard of living in the U.S. hasnt been the same ever since, with every president after Reagan following suit.
I'm glad you are no longer claiming that the working poor are investors in the USD who lose out when it is devalued. That definitely was your argument, you went as far as to claim that "paycheck to paycheck" meant they had USD reserves, but I'm glad it no longer is.
I agree that things are becoming harder. However there is more evidence that the position of Mercury is to blame than there is that inflation is to blame. That is to say that there is no evidence that Mercury negatively impacts people with negative future cash flows and plenty of evidence that inflation doesn't negatively impact people with negative future cash flows.
The rest of your post is ahistorical nonsense and a complete lack of understanding of macroeconomics.
1) Low skilled manufacturing jobs haven't gone to other countries because of "the Fed", it's because American labour is not competitive due to Americans being unwilling to work in conditions that Chinese slaves will accept.
2) Wealth hasn't concentrated at the top because of "the Fed", it's concentrated at the top because that's how compounding returns works. It's just math. The wealthy invest more, therefore they get more, therefore they invest more. The poor get fucked.
3) Lets assume your premise that malinvestments are the root of the problem. It's not true, but let's assume that it is. Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard. Malinvestments and bubbles result from human failures, they're not caused by "the Fed".
4) Would it surprise you to learn that national debt was extremely common while on the gold standard, that debt doesn't need to be backed by physical gold, just the promise of future gold combined with confidence? I wonder if it would surprise you to learn that hyperinflation has often happened on the gold standard. Whether it was the economic collapse triggered by Musa I in the nations he traveled through or the Conquistors flooding Europe with Mexican and Peruvian silver, it happened. The supply over currency is still a thing under the gold standard, there is still monetary policy, it's just in the hands of prospectors rather than a government.
5) Stagflation wasn't caused by fiat currency. It was caused by an economic downturn during rising oil prices.
When they get their paychecks, they have a reserve of USD. When a worker works for money, he is investing time/effort/labor/etc for USD. I don't know why this is difficult to understand about this. working and middle class people do invest in the USD and they do have
1) oh, so now we are just talking about unskilled jobs that sweatshop workers have now. That's not what you said initially
But, as you can see, those arent the only jobs that are being outsourced.
2) Do you know what exacerbates this? when inflation causes such assets to absolutely skyrocket compared to USD. see: QE and the stock market, skyrocketing property prices due to continually weakening dollar, etc
3) I didn't say only the expansionist policies of the Fed could cause malinvestments. All I said was that the policies of the Fed are leading to malinvestments, and that such malinvestments of that nature would not happen under a gold standard. Tulip mania was the result of monetary expansion in Holland anyway LOL. Look up the free coinage policies in holland at the time, and how that lead to dramatic malinvestment. I dont know what the south sea bubble is.
4) and what is one of the reasons the US had this economic downturn....
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard.
I dont know what the south sea bubble is.
The South Sea bubble was the kind of malinvestment you're insisting could not have happened under the gold standard.
I did not mean that market distortion and malinvestment are impossible no matter what under a gold backed currency
I am saying the distortions that are happening due to inflation would not happen
If it'll happen anyway without "the Fed" then wouldn't you think that it's possible that it's just a thing that happens? If this were the vaccines cause autism argument (rather than the economics equivalent of it) the concession you just made would basically be "oh, no, a lot of kids just get autism without vaccines too, but vaccines still cause some of the autism".
I didn't say it will happen without the fed. I said it's possible.
You asked me how a gold system would help remedy the problems inflation has caused, and that's what I explained. I didn't say having a gold system means that such things cant happen
It's possible in the sense that I gave you an example of it happening?
And unfortunately you've explained nothing. Everything you've said has been total nonsense because you lack a basic understanding of what inflation is.
On April 29 2019 12:16 KwarK wrote: What rate of inflation would you expect under a monetary system that relied upon precious metals, assuming no debasement?
On April 29 2019 09:22 BerserkSword wrote: [quote]
I am not insisting that people living paycheck to paycheck are hoarding all the dollars....wtf?
And I am not referring to their investment in the USD like an investment banker/financial institution invests in something to hold on for years and make a profit.
I am saying that workers literally invest their time, effort, resources into obtaining US dollars (ie their paychecks). In that sense they ARE investors in USD.
Let me ask you, why is the number of people who are strugglign increasing over the last 10 years, when the last 10 years have been marked by Obama's and Trump's monetary expansion/inflationary policies? If we go by what you suggest, that inflation helps struggling working/middle class people, then shouldnt the number of people struggling over the last decade have decreased?
We are at a point where 10% of people earning over 100k are saying they are struggling....wtf?
Fact of the matter is that inflation is screwing people at the bottom, and the longer it goes on, the more people it will negatively affect.
You're quoting sources that show that none of these people who you are claiming are harmed by a devalued USD actually had any USD to be devalued. My point is that all these people are poor and therefore they're not holding large amounts of USD. Your counterpoint is a source demonstrating that all the people I said were broke are, in fact, broke.
They're broke, but they're not broke because they had loads of USD which got devalued, they're broke because they had no USD to begin with.
They're struggling in spite of inflation, not because of it. They're struggling because their jobs have gone overseas or have been made obsolete. They're struggling because a single unified currency across a country as diverse as the United States doesn't really work when the cost of labour is so varied. They're struggling because wealth has been concentrated into the hands of the few.
Your argument, that if inflation isn't the problem then why are things bad, would actually make more sense if you substituted inflation for "the position of Neptune" because at least that would be an irrelevant factor, not a factor reducing the impact. You can't just go "if X isn't responsible then why is it bad". That's no better than "if vaccines aren't responsible then why autism".
Consider the inverse. What help is the gold standard to an unemployed former factory worker? Will the lack of inflation bring back his job? What help is the gold standard to an Amazon warehouse employee who is overworked and underpaid because Amazon can replace him with any of a hundred other candidates at a moment's notice. Will gold fix the difference in bargaining power between the employee and the corporation?
If these people have been impoverished by inflation then you should be able to argue how the gold standard would right those wrongs.
Capitalism has left these people with no power, while consumerism drives them to spend themselves into debt. Inflation is an irrelevance to them. The devaluation of currency is no concern to people who do not possess currency. Real wages haven't fallen due to inflation, they've fallen due to structural inequalities and macro economic factors that, when left unchecked, have dramatically reduced the value of unskilled American labour.
I don't know why you keep suggesting that I am claiming that these people are being negatively harmed by inflation because they are holding large amounts of USD.
It's not just that people are broke. Financially, things are becoming more difficult for a greater amount of people, and things are becoming harder.
The reason I am attributing the general economic climate of the U.S. over the last decade to inflation, is because, the Fed's policies are the major drivers of the country's economy. That is literally why the Federal Reserve exists - to try to manage the economy. So, if things have gotten worse, you can damn well attribute it to what the Federal Reserve has been doing. Especially when the last decade has been defined by mammoth monetary expansion campaigns - they have put a lot of effort into this. It's foolish to ignore literally the Federal Reserve and chalk up the problems of the economy to some mysterious boogeyman.
Jobs have gone overseas, and wealth has been increasingly concentrated towards the top, precisely because of Keynesian policies like wage targeting and QE.
And yes I can explain how a gold standard/lack of Fed-induced inflation would help combat unemployment. Inflation leads to more fiat money. More fiat money cheapens the unit of currency's value, and, subsequently, the price of goods and services rise in terms of units of fiat money (aka price inflation). More money is accompanied by the by the lower Federal Funds Rate, which leads to malinvestments. These malinvestments take the form of everything from the artificially pumped stock market (it's bubbling), the Bitcoin bubble we saw over the last decade, and, of course, hiring of more workers, who get easily liquidated (layed off) when the market distortion reverts (aka period of economic downturn - and this is when employers realize the actual state of affairs). The end result is an overall faltering economy that might have intermittent transient periods of hiring but are defined by overall unemployment, job insecurity, inefficient capital allocation, etc.
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Do you know what happened when Nixon ditched the gold standard in the 70s? the notorious stagflation. Everything Keynesians held true was turned on its head, like the Philips Curve. In the 80s Regan embraced the monetary expansionist ideology to try and "boost" the economy and the relative standard of living in the U.S. hasnt been the same ever since, with every president after Reagan following suit.
I'm glad you are no longer claiming that the working poor are investors in the USD who lose out when it is devalued. That definitely was your argument, you went as far as to claim that "paycheck to paycheck" meant they had USD reserves, but I'm glad it no longer is.
I agree that things are becoming harder. However there is more evidence that the position of Mercury is to blame than there is that inflation is to blame. That is to say that there is no evidence that Mercury negatively impacts people with negative future cash flows and plenty of evidence that inflation doesn't negatively impact people with negative future cash flows.
The rest of your post is ahistorical nonsense and a complete lack of understanding of macroeconomics.
1) Low skilled manufacturing jobs haven't gone to other countries because of "the Fed", it's because American labour is not competitive due to Americans being unwilling to work in conditions that Chinese slaves will accept.
2) Wealth hasn't concentrated at the top because of "the Fed", it's concentrated at the top because that's how compounding returns works. It's just math. The wealthy invest more, therefore they get more, therefore they invest more. The poor get fucked.
3) Lets assume your premise that malinvestments are the root of the problem. It's not true, but let's assume that it is. Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard. Malinvestments and bubbles result from human failures, they're not caused by "the Fed".
4) Would it surprise you to learn that national debt was extremely common while on the gold standard, that debt doesn't need to be backed by physical gold, just the promise of future gold combined with confidence? I wonder if it would surprise you to learn that hyperinflation has often happened on the gold standard. Whether it was the economic collapse triggered by Musa I in the nations he traveled through or the Conquistors flooding Europe with Mexican and Peruvian silver, it happened. The supply over currency is still a thing under the gold standard, there is still monetary policy, it's just in the hands of prospectors rather than a government.
5) Stagflation wasn't caused by fiat currency. It was caused by an economic downturn during rising oil prices.
When they get their paychecks, they have a reserve of USD. When a worker works for money, he is investing time/effort/labor/etc for USD. I don't know why this is difficult to understand about this. working and middle class people do invest in the USD and they do have
1) oh, so now we are just talking about unskilled jobs that sweatshop workers have now. That's not what you said initially
But, as you can see, those arent the only jobs that are being outsourced.
2) Do you know what exacerbates this? when inflation causes such assets to absolutely skyrocket compared to USD. see: QE and the stock market, skyrocketing property prices due to continually weakening dollar, etc
3) I didn't say only the expansionist policies of the Fed could cause malinvestments. All I said was that the policies of the Fed are leading to malinvestments, and that such malinvestments of that nature would not happen under a gold standard. Tulip mania was the result of monetary expansion in Holland anyway LOL. Look up the free coinage policies in holland at the time, and how that lead to dramatic malinvestment. I dont know what the south sea bubble is.
4) and what is one of the reasons the US had this economic downturn....
If the money is backed by gold, there is no market distortion and no transient malinvestment.
Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard.
I dont know what the south sea bubble is.
The South Sea bubble was the kind of malinvestment you're insisting could not have happened under the gold standard.
I did not mean that market distortion and malinvestment are impossible no matter what under a gold backed currency
I am saying the distortions that are happening due to inflation would not happen
If it'll happen anyway without "the Fed" then wouldn't you think that it's possible that it's just a thing that happens? If this were the vaccines cause autism argument (rather than the economics equivalent of it) the concession you just made would basically be "oh, no, a lot of kids just get autism without vaccines too, but vaccines still cause some of the autism".
I didn't say it will happen without the fed. I said it's possible.
You asked me how a gold system would help remedy the problems inflation has caused, and that's what I explained. I didn't say having a gold system means that such things cant happen
It's possible in the sense that I gave you an example of it happening?
And unfortunately you've explained nothing. Everything you've said has been total nonsense because you lack a basic understanding of what inflation is.
The argument is that a gold standard would be superior to the monstrosity of a monetary policy the Fed has in place.
Ive explained everything perfectly and even supplied you with several sources over the last few days. Unfortunately, it doesnt seem to be getting through to you though.
On April 29 2019 12:16 KwarK wrote: What rate of inflation would you expect under a monetary system that relied upon precious metals, assuming no debasement?
How am I supposed to determine that lol?
Are you being serious right now?
Your entire argument has been that the problem is inflation caused by monetary policy and that we need to get back on the gold standard to stop "the Fed" from robbing us with their "Ponzi scheme". It's a simple enough question, all I'm asking is what would your suggestion do?
If you're unable to determine whether your proposed solution to the problem addresses the problem you probably haven't thought this through.
You're arguing the A is broken because of X, but if we do Y instead of X that'll fix it. Literally all I'm asking is what A will look like if we do Y. It's actually pretty remarkable that you're unwilling to even venture "yeah, A will be great" and instead are claiming a complete inability to possibly know any answer to that.
On April 29 2019 12:16 KwarK wrote: What rate of inflation would you expect under a monetary system that relied upon precious metals, assuming no debasement?
How am I supposed to determine that lol?
Are you being serious right now?
Your entire argument has been that the problem is inflation caused by monetary policy and that we need to get back on the gold standard to stop "the Fed" from robbing us with their "Ponzi scheme". It's a simple enough question, all I'm asking is what would your suggestion do?
If you're unable to determine whether your proposed solution to the problem addresses the problem you probably haven't thought this through.
You're arguing the A is broken because of X, but if we do Y that'll fix it. Literally all I'm asking is what A will look like if we do Y. It's actually pretty remarkable that you're unwilling to even venture "yeah, A will be great" and instead are claiming a complete inability to possibly know any answer to that.
Would you like to try again?
As long as it's not the expected inflation that the Fed induces, it doesnt matter.
As per the money neutrality principle, and as was well explained by Milton Friedman when he explained the violation of the Philips Curve in the 1970s, the neutrality principle only asserts itself if inflation is expected (IE what the fed does)
You have been trained to look for and expect specific inflation rates because that's what central bank's have espoused
On April 29 2019 12:16 KwarK wrote: What rate of inflation would you expect under a monetary system that relied upon precious metals, assuming no debasement?
How am I supposed to determine that lol?
Are you being serious right now?
Your entire argument has been that the problem is inflation caused by monetary policy and that we need to get back on the gold standard to stop "the Fed" from robbing us with their "Ponzi scheme". It's a simple enough question, all I'm asking is what would your suggestion do?
If you're unable to determine whether your proposed solution to the problem addresses the problem you probably haven't thought this through.
You're arguing the A is broken because of X, but if we do Y that'll fix it. Literally all I'm asking is what A will look like if we do Y. It's actually pretty remarkable that you're unwilling to even venture "yeah, A will be great" and instead are claiming a complete inability to possibly know any answer to that.
Would you like to try again?
As long as it's not the expected inflation that the Fed induces, it doesnt matter.
As per the money neutrality principle, and as was well explained by Milton Friedman when he explained the violation of the Philips Curve in the 1970s, the neutrality principle only asserts itself if inflation is expected (IE what the fed does)
You have been trained to look for and expect specific inflation rates because that's what central bank's have espoused
Hyperinflation post WWI germany is the problem shows an inherent weakness in tiring your money to a physical object. Once pressures prevent you from gathering the object, you'd be press the entire country into immediate bankruptcy coupled by spiraling deflation and risk the economy becoming insolvent. While if you inflate the devalue your currency as you're not tied to anything you can at least just default on debt and the internal economy can chug along for awhile before that implodes as well. Inflation is only a risk to an economy that would have already failed under a fixed currency.
Greece's problems with being tied to the Euro are similar to being tied to a fixed currency. As the government cannot even attempt to fix an economy where it's becoming to expensive to borrow, driving down wages and stifling investment.
I think we've all learned a valuable lesson on how to spot the libertarian and when you should bail when libertarianism is afoot. It would be good for people to go back a few pages and see when they realize somethings up.
I was kind of expecting that BS would start talking about the gold standard. It’s the internet after all, no political / economic discussion is complete without someone raising that stuff at one point and defending it to death despite all empirical evidence that it’s a terrible, terrible, terrible idea.
Aaaaanyways. In the DonaldTrump being a c*** department and working hard on being the most inflammatory, toxic, divise jerk as humanly possible:
That's a direct reference to Ralph Northam. He's the Democratic Virginia governor. Just compare the language between Trump and Northam from the video.
Saying that this is Donald Trump lying about abortion is just gloating that everybody dismissed Northam's comments and never dealt with the killing of born-alive babies.
On April 29 2019 16:59 Velr wrote: Killing born alive babies isn't abortion.
First, considering that they're one result of a botched late-term abortion, and the general faith in the doctor's ability to diagnose a fatal condition of the baby, you might be surprised. Legislation permitting abortion up until the end of the third trimester necessarily involves what happens if the baby is delivered alive, since the dividing line is as low as minutes or seconds. (See here)
Secondly, without context, a Trump quote obviously referring to a D-VA Ralph Northam quote (any replies, watch the two videos before responding) should be understood as that reference, and not some herp derp abortion lies narrative. Some other internet troll fooled Plansix by omitting the context of MS-13 just this month. Skepticism is warranted.
In case people were wondering, this possibility of a recently delivered baby being left to die after a discussion between doctors and mother led directly to some old Medical Schoolmates of Northam's directing reporters to a yearbook blackface photo. Then it was all about Blackface Northam, not maybe-its-infanticide Northam. Also, the debate was briefly revived when the Born Alive Abortion Survivors Protection Act was defeated.
Its pretty much how Northam laid it out, I don't see any issues with what trump said. personally i'm pro choice but that ends well before birth.
Will biff answer? did he have a yellow vest in his eye? A spark from Notre-Dame perhaps? but he lives in France and it seems they have more strict abortion law's then Canada and America, Could it be that he just doesn't like President trump, who knows.
Re: Kwark, GH and BS (I just realized that shortening BerserkerSword to BS also sums up all his posts rather succintly )
There are clearly two completely unrelated arguments going on:
1. Inflation is bad because <insert bad economic understanding>. That argument was dead before it begun, but somehow lasted 10 pages or so.
2. Current US monetary policy is bad, because the US has far too many impoverished people and it does nothing to help them. This is a somewhat interesting discussion, although I don't really agree with most of the points brought up so far. I think there is more here though, so lets go through them:
Fiat currency is bad for the worker, as it allows the government complete control over the currency and this has been mismanaged, leading to a spiralling government debt and a corresponding tax burden to pay that debt.
This seems like a reasonable argument, but I don't really see where the US has higher taxes since allowing its debt to really skyrocket with Reaganomics, or W financing wars in Afghanistan and Iraq almost entirely with increased debt. Moreover, I don't really see the connection between spiralling government debt and fiat currency. I'd say the clearest example of how having a "gold standard" (in this case, a USD standard) doesn't stop irresponsible borrowing is Argentina during the 1990s. In fact, looking at how that ended is a good argument in *favour* of a fiat currency that allows for QE, whereas the Corralito caused all the easing to happen all at once and decimated every Argentineans savings (and destroyed any confidence from foreign investors for over a decade). We can definitely have an argument about irresponsible borrowing by the US government, but the relationship to a fiat currency or not doesn't seem relevant.
Wages aren't rising at the same rate as inflation. Leading to increased poverty.
This seems like the main argument against inflation. However, it shouldn't be, as wages and inflation are two different things: wages are about how much labor is worth now, inflation is purely about whether the value of your labor now should be worth more, the same, or less than it is worth *now* at some point in the future. The pressures on wages are unrelated to inflation, although I find GH's point that people are bamboozled into thinking a 1% pay rise is a good thing while inflation is 2% an interesting one. Not against inflation, but for better education of the masses. Economic thinking is something you absolutely need to learn, preferrably starting in primary school.
The rich get richer, and monetary policy is to blame.
No. Compound interest is to blame. Basically, the rich will get richer as long as you assume an average RoI > 0 (meaning, if you invest money, you will get more back than you invested with), which is a basic tenet of capitalism (and possible even a universal law, I mean, why else would you invest at all). It isn't monetary policy, nor is it up to monetary policy to curb this (I'm not even sure it can). It *is* something the government can (try to) stop, through policies of redistribution. Death tax is a fantastic tax to do this. The US has indeed been running very fast in the opposite direction, leading to accelerated rich get richer syndrome, with Trump's tax cuts being just another example.
On April 29 2019 16:59 Velr wrote: Killing born alive babies isn't abortion.
First, considering that they're one result of a botched late-term abortion, and the general faith in the doctor's ability to diagnose a fatal condition of the baby, you might be surprised. Legislation permitting abortion up until the end of the third trimester necessarily involves what happens if the baby is delivered alive, since the dividing line is as low as minutes or seconds. (See here)
Secondly, without context, a Trump quote obviously referring to a D-VA Ralph Northam quote (any replies, watch the two videos before responding) should be understood as that reference, and not some herp derp abortion lies narrative. Some other internet troll fooled Plansix by omitting the context of MS-13 just this month. Skepticism is warranted.
In case people were wondering, this possibility of a recently delivered baby being left to die after a discussion between doctors and mother led directly to some old Medical Schoolmates of Northam's directing reporters to a yearbook blackface photo. Then it was all about Blackface Northam, not maybe-its-infanticide Northam. Also, the debate was briefly revived when the Born Alive Abortion Survivors Protection Act was defeated.
It was a herpderp abortion lie. Stop with the whataboutism Dangars. He spewed another blatant lie and you look pathetic trying to justify it.
Given how few late term abortions happen, I’m not convinced by this narrative that Trump was talking about some mythical botched late term abortion over him peddling some more hot bullshit.
On April 29 2019 19:50 Acrofales wrote: Re: Kwark, GH and BS (I just realized that shortening BerserkerSword to BS also sums up all his posts rather succintly )
There are clearly two completely unrelated arguments going on:
1. Inflation is bad because <insert bad economic understanding>. That argument was dead before it begun, but somehow lasted 10 pages or so.
2. Current US monetary policy is bad, because the US has far too many impoverished people and it does nothing to help them. This is a somewhat interesting discussion, although I don't really agree with most of the points brought up so far. I think there is more here though, so lets go through them:
Fiat currency is bad for the worker, as it allows the government complete control over the currency and this has been mismanaged, leading to a spiralling government debt and a corresponding tax burden to pay that debt.
This seems like a reasonable argument, but I don't really see where the US has higher taxes since allowing its debt to really skyrocket with Reaganomics, or W financing wars in Afghanistan and Iraq almost entirely with increased debt. Moreover, I don't really see the connection between spiralling government debt and fiat currency. I'd say the clearest example of how having a "gold standard" (in this case, a USD standard) doesn't stop irresponsible borrowing is Argentina during the 1990s. In fact, looking at how that ended is a good argument in *favour* of a fiat currency that allows for QE, whereas the Corralito caused all the easing to happen all at once and decimated every Argentineans savings (and destroyed any confidence from foreign investors for over a decade). We can definitely have an argument about irresponsible borrowing by the US government, but the relationship to a fiat currency or not doesn't seem relevant.
Wages aren't rising at the same rate as inflation. Leading to increased poverty.
This seems like the main argument against inflation. However, it shouldn't be, as wages and inflation are two different things: wages are about how much labor is worth now, inflation is purely about whether the value of your labor now should be worth more, the same, or less than it is worth *now* at some point in the future. The pressures on wages are unrelated to inflation, although I find GH's point that people are bamboozled into thinking a 1% pay rise is a good thing while inflation is 2% an interesting one. Not against inflation, but for better education of the masses. Economic thinking is something you absolutely need to learn, preferrably starting in primary school.
The rich get richer, and monetary policy is to blame.
No. Compound interest is to blame. Basically, the rich will get richer as long as you assume an average RoI > 0 (meaning, if you invest money, you will get more back than you invested with), which is a basic tenet of capitalism (and possible even a universal law, I mean, why else would you invest at all). It isn't monetary policy, nor is it up to monetary policy to curb this (I'm not even sure it can). It *is* something the government can (try to) stop, through policies of redistribution. Death tax is a fantastic tax to do this. The US has indeed been running very fast in the opposite direction, leading to accelerated rich get richer syndrome, with Trump's tax cuts being just another example.
I pretty much agree with that.
I'm just curious how you reconcile the difference in monetary inflation and reported numbers of price inflation?
EPT
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