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On April 29 2019 09:09 KwarK wrote:Show nested quote +On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:On April 29 2019 08:27 BerserkSword wrote:On April 29 2019 08:09 KwarK wrote:On April 29 2019 08:04 BerserkSword wrote:On April 29 2019 07:49 KwarK wrote:On April 29 2019 07:39 BerserkSword wrote:
[quote]
Wages and money kept sitting in banks/under the mattress are irrelevant to what I am talking about. Wage control is another form on keynesianism which, together with the inflation, only fucks over poor people.
Also, no doubt that the current debt system won't work if there is no inflation....that's the whole reason inflation exists - it's to create a borrowing friendly environment aka the debt slave system. Is that what we really want though? a system that has been, over the last several decades of keynesian monetary expansionist policy, leaving a continually increasing percentage of society unable to even dream of owning a home?
Also, you say that inflation keeps rich people from hording fiat and that's a "good thing" as if most or rich people's net worth is composed of fiat money. The fact of the matter is that rich people keep so much of their wealth in non-fiat assets, whether it's property, equities, stores of value, capital, etc. This is how inflation helps rich people because the inflationary policies like QE artificially pump things like the stock market and make actual non-fiat assets more valuable (compared to basic unit of fiat) in comparison to the decreasing value of the cash money
Inflation literally helps the rich
I dont understand how you are all claiming that "controlled" inflation has no impact on paycheck to paycheck type working and middle class individuals. It is an entirely baseless claim that is in direct odds with the essence of inflation detailed in basic economics. Inflation hits hardest those who are at the bottom of the ladder and latest to see the new circulation, and it hits hardest those who deal the most with fiat money compared to other assets....
[quote]
"paycheck to paycheck means 0 cash on hand"
you do realize that when these people receive paychecks, they have cash on hand....that cash must be used to survive though.
working/middle class literally spend 40 hrs or more per week working to obtain cash. They then use that cash to live.
inflation is good for me and you who have most of net worth in something that is NOT cash, that increases in value at a higher rate than cash 1) Paycheck to paycheck means their paycheck is fully consumed by expenses with no leftover cash at the end of the month. If your definition of paycheck to paycheck includes leftover cash reserves you're not understanding the words. And if they have no leftover cash then they have nothing to be impacted by inflation. 2) No, real rate of return is net of inflation. The higher inflation, the lower real rate of return. If I have a bond that pays 4% annual interest and inflation increases from 2% to 3% then in real terms my rate of return has halved. 3) Debt can be considered a negative rate investment. Therefore the inverse of 2 applies for the exact same reason. If the nominal interest on your debt is 4% but the rate of inflation increases from 2% to 3% then in real terms your interest cost has halved. You need to get back out your textbook. Everything you're saying is the opposite of true. 1) Leftover cash reserves or not, they are still dealing primarily with cash. This is why working AND middle class (who may or may not be pay check to paycheck, but are still barely managing to stay afloat) are getting bent over. Even if they have no cash balance at the end of the month, they still had to use cash to support themselves. The bottom line is that those who cannot afford to diversify their net worth, such as people who are living pay check to pay check, get screwed over to some extent by inflation. 2) your rate of return is still better than the poor guy who has no bond and only gets paid in cash and whose net value of investments (infestment in the USD) is going down. Why do you think the bond yield would be high enough for you to profit anyway? Bond yields are determined by expected inflation - the higher the expected inflation, the higher the bond yields are. And youre ignoring the elephant in the room which is the stock market, probably the biggest target of QE. QE artificially pumps (distorts) the stock market like crazy. That's why the stock market soared under Obama, and that's why Trump lambasts the Fed when they engage in even a small modicum of monetary tightening - Trump wants the stock market to look good during his regime. 3) I never denied that inflation is good for borrowing....i literally said that inflation rewards taking on debt several times already lol. I don't see how this is relevant to this whole discussion. 1) Everyone is transacting in cash. I don't trade Apple stock for bread at Walmart. 2) Yes, having money is better than not having money for a bunch of reasons. But inflation is not one of those reasons. People who have no investments are screwed. But they're not screwed by inflation, they're helped by inflation, they're screwed by poverty. 3) People who have debt have negative future cash outflows. Their net cash position is negative. That means they're helped by inflation. The working poor, for example, with a car, phone, and house payment are having their interest rates reduced by inflation. If you understand that people with a net negative cash position are helped by inflation and you understand that the working poor are living paycheck to paycheck and saddled with debt then I'm not sure where I'm losing you. Paycheck to paycheck + saddled with debt = net negative cash position = helped by inflation. Where did you get lost there? 1) Yes, but Apple is among the first to receive the effects to inflation, thereby enriching you. The starbucks worker is down at the bottom. This is why Apple shareholders saw their wealth increase dramatically over the period of QE, while things just got harder for the working/middle class. 2) So now youre bringing up this idea of poverty as if it's not tied to the macroeconomic policies of the nation. You just cemented my point - in this climate, this system that decades of monetary expansion has created, the working class is fucked. Believe it or not, there was once a time where a worker could use his paycheck to support his family pretty comfortably and his whole family would have health insurance 3) this is some real ivory tower shit now.... working poor with house payments ??? WTF?? do you think banks hand out mortgages like candy to poor people anymore? (fyi, when banks used to do that, it lead to the liquidity crisis and so many people who had no business having a mortgage lost the shirts off their backs) A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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.
https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html
read this article
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.
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United States41470 Posts
On April 29 2019 09:22 BerserkSword wrote:Show nested quote +On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:On April 29 2019 08:27 BerserkSword wrote:On April 29 2019 08:09 KwarK wrote:On April 29 2019 08:04 BerserkSword wrote:On April 29 2019 07:49 KwarK wrote:
[quote]
1) Paycheck to paycheck means their paycheck is fully consumed by expenses with no leftover cash at the end of the month. If your definition of paycheck to paycheck includes leftover cash reserves you're not understanding the words. And if they have no leftover cash then they have nothing to be impacted by inflation.
2) No, real rate of return is net of inflation. The higher inflation, the lower real rate of return. If I have a bond that pays 4% annual interest and inflation increases from 2% to 3% then in real terms my rate of return has halved.
3) Debt can be considered a negative rate investment. Therefore the inverse of 2 applies for the exact same reason. If the nominal interest on your debt is 4% but the rate of inflation increases from 2% to 3% then in real terms your interest cost has halved.
You need to get back out your textbook. Everything you're saying is the opposite of true. 1) Leftover cash reserves or not, they are still dealing primarily with cash. This is why working AND middle class (who may or may not be pay check to paycheck, but are still barely managing to stay afloat) are getting bent over. Even if they have no cash balance at the end of the month, they still had to use cash to support themselves. The bottom line is that those who cannot afford to diversify their net worth, such as people who are living pay check to pay check, get screwed over to some extent by inflation. 2) your rate of return is still better than the poor guy who has no bond and only gets paid in cash and whose net value of investments (infestment in the USD) is going down. Why do you think the bond yield would be high enough for you to profit anyway? Bond yields are determined by expected inflation - the higher the expected inflation, the higher the bond yields are. And youre ignoring the elephant in the room which is the stock market, probably the biggest target of QE. QE artificially pumps (distorts) the stock market like crazy. That's why the stock market soared under Obama, and that's why Trump lambasts the Fed when they engage in even a small modicum of monetary tightening - Trump wants the stock market to look good during his regime. 3) I never denied that inflation is good for borrowing....i literally said that inflation rewards taking on debt several times already lol. I don't see how this is relevant to this whole discussion. 1) Everyone is transacting in cash. I don't trade Apple stock for bread at Walmart. 2) Yes, having money is better than not having money for a bunch of reasons. But inflation is not one of those reasons. People who have no investments are screwed. But they're not screwed by inflation, they're helped by inflation, they're screwed by poverty. 3) People who have debt have negative future cash outflows. Their net cash position is negative. That means they're helped by inflation. The working poor, for example, with a car, phone, and house payment are having their interest rates reduced by inflation. If you understand that people with a net negative cash position are helped by inflation and you understand that the working poor are living paycheck to paycheck and saddled with debt then I'm not sure where I'm losing you. Paycheck to paycheck + saddled with debt = net negative cash position = helped by inflation. Where did you get lost there? 1) Yes, but Apple is among the first to receive the effects to inflation, thereby enriching you. The starbucks worker is down at the bottom. This is why Apple shareholders saw their wealth increase dramatically over the period of QE, while things just got harder for the working/middle class. 2) So now youre bringing up this idea of poverty as if it's not tied to the macroeconomic policies of the nation. You just cemented my point - in this climate, this system that decades of monetary expansion has created, the working class is fucked. Believe it or not, there was once a time where a worker could use his paycheck to support his family pretty comfortably and his whole family would have health insurance 3) this is some real ivory tower shit now.... working poor with house payments ??? WTF?? do you think banks hand out mortgages like candy to poor people anymore? (fyi, when banks used to do that, it lead to the liquidity crisis and so many people who had no business having a mortgage lost the shirts off their backs) A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article Show nested quote +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.
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Northern Ireland22773 Posts
Because of a multitude of other factors? Inflation has been a thing even in boom periods.
I don’t think it’s massively relevant looking purely at central banks and inflation rates in isolation.
All you’ve said re the middle/lower classes seems to be missing the forest for the trees, unless there are crazy fluctuations in interest, a few percent of fuck all is still a few percent, a lack of capital is still a lack of capital. Also when property prices either to buy or to rent way outpace inflation in many places, that’s probably more an area to look at.
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Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI right?
no one probably cares but I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause.
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On April 29 2019 09:33 KwarK wrote:Show nested quote +On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:On April 29 2019 08:27 BerserkSword wrote:On April 29 2019 08:09 KwarK wrote:On April 29 2019 08:04 BerserkSword wrote:
[quote]
1) Leftover cash reserves or not, they are still dealing primarily with cash. This is why working AND middle class (who may or may not be pay check to paycheck, but are still barely managing to stay afloat) are getting bent over. Even if they have no cash balance at the end of the month, they still had to use cash to support themselves.
The bottom line is that those who cannot afford to diversify their net worth, such as people who are living pay check to pay check, get screwed over to some extent by inflation.
2) your rate of return is still better than the poor guy who has no bond and only gets paid in cash and whose net value of investments (infestment in the USD) is going down. Why do you think the bond yield would be high enough for you to profit anyway? Bond yields are determined by expected inflation - the higher the expected inflation, the higher the bond yields are.
And youre ignoring the elephant in the room which is the stock market, probably the biggest target of QE. QE artificially pumps (distorts) the stock market like crazy. That's why the stock market soared under Obama, and that's why Trump lambasts the Fed when they engage in even a small modicum of monetary tightening - Trump wants the stock market to look good during his regime.
3) I never denied that inflation is good for borrowing....i literally said that inflation rewards taking on debt several times already lol. I don't see how this is relevant to this whole discussion. 1) Everyone is transacting in cash. I don't trade Apple stock for bread at Walmart. 2) Yes, having money is better than not having money for a bunch of reasons. But inflation is not one of those reasons. People who have no investments are screwed. But they're not screwed by inflation, they're helped by inflation, they're screwed by poverty. 3) People who have debt have negative future cash outflows. Their net cash position is negative. That means they're helped by inflation. The working poor, for example, with a car, phone, and house payment are having their interest rates reduced by inflation. If you understand that people with a net negative cash position are helped by inflation and you understand that the working poor are living paycheck to paycheck and saddled with debt then I'm not sure where I'm losing you. Paycheck to paycheck + saddled with debt = net negative cash position = helped by inflation. Where did you get lost there? 1) Yes, but Apple is among the first to receive the effects to inflation, thereby enriching you. The starbucks worker is down at the bottom. This is why Apple shareholders saw their wealth increase dramatically over the period of QE, while things just got harder for the working/middle class. 2) So now youre bringing up this idea of poverty as if it's not tied to the macroeconomic policies of the nation. You just cemented my point - in this climate, this system that decades of monetary expansion has created, the working class is fucked. Believe it or not, there was once a time where a worker could use his paycheck to support his family pretty comfortably and his whole family would have health insurance 3) this is some real ivory tower shit now.... working poor with house payments ??? WTF?? do you think banks hand out mortgages like candy to poor people anymore? (fyi, when banks used to do that, it lead to the liquidity crisis and so many people who had no business having a mortgage lost the shirts off their backs) A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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.
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United States41470 Posts
On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI?
No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing.
Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor.
If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation.
If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description.
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On April 29 2019 09:33 KwarK wrote:
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.
Remove US from gold standard in 1971 due to cost of Vietnam war.
Run up 6 trillion fiat currency costs in middle eastern and Asian wars since 2001 https://www.cnbc.com/2018/11/14/us-has-spent-5point9-trillion-on-middle-east-asia-wars-since-2001-study.html
Many ordinary Americans so poor that they have to join the military or starve.
Can't see them keeping this system going forever but it's worked out swell for the higher ups who profit from warfare.
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On April 29 2019 10:58 KwarK wrote:Show nested quote +On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI? No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing. Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor. If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation. If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description.
I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause.
What I was saying was that (monetary combined with policy that uses a distorted measure) inflation helps people to maintain the illusion they make more while making less. Masking massive wealth transfers from those who are technically helped by the same inflation as you point out.
The example I used earlier was lifting people out of (nominal) poverty by raising the number of dollars it takes to leave poverty slower than you increase the money supply.
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United States41470 Posts
On April 29 2019 11:01 GreenHorizons wrote:Show nested quote +On April 29 2019 10:58 KwarK wrote:On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI? No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing. Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor. If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation. If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description. Show nested quote + I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause. What I was saying was that inflation helps people to maintain the illusion they make more while making less.
Not really? I mean people know to expect a cost of living raise each year. They know that if they don't get one they've effectively been given a paycut.
The problem is that Americans have effectively been given paycut after paycut because the position of extreme privilege America enjoyed fifty years ago has degraded and the ultra rich have seized control. Inflation doesn't factor into that, there's a whole bunch of other shit that explains what happened there.
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On April 29 2019 11:04 KwarK wrote:Show nested quote +On April 29 2019 11:01 GreenHorizons wrote:On April 29 2019 10:58 KwarK wrote:On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI? No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing. Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor. If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation. If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description. I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause. What I was saying was that inflation helps people to maintain the illusion they make more while making less. Not really? I mean people know to expect a cost of living raise each year. They know that if they don't get one they've effectively been given a paycut. The problem is that Americans have effectively been given paycut after paycut because the position of extreme privilege America enjoyed fifty years ago has degraded and the ultra rich have seized control. Inflation doesn't factor into that, there's a whole bunch of other shit that explains what happened there.
Inflation is part of what allows that expected pay raise to actually be a pay cut while the recipient is none the wiser is what I'm saying. You're right that they know they're getting ripped off though because they haven't even been getting those nominal increases for years now.
EDIT: Basically the US would look more like the streets of France if we had any idea how badly we've been hosed and inflation (along with a host of other factors like politicians, media, the education system, and police) helps keep people docile and unaware.
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United States41470 Posts
On April 29 2019 10:53 BerserkSword wrote:Show nested quote +On April 29 2019 09:33 KwarK wrote:On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:On April 29 2019 08:27 BerserkSword wrote:On April 29 2019 08:09 KwarK wrote:
[quote]
1) Everyone is transacting in cash. I don't trade Apple stock for bread at Walmart.
2) Yes, having money is better than not having money for a bunch of reasons. But inflation is not one of those reasons. People who have no investments are screwed. But they're not screwed by inflation, they're helped by inflation, they're screwed by poverty.
3) People who have debt have negative future cash outflows. Their net cash position is negative. That means they're helped by inflation. The working poor, for example, with a car, phone, and house payment are having their interest rates reduced by inflation. If you understand that people with a net negative cash position are helped by inflation and you understand that the working poor are living paycheck to paycheck and saddled with debt then I'm not sure where I'm losing you. Paycheck to paycheck + saddled with debt = net negative cash position = helped by inflation. Where did you get lost there? 1) Yes, but Apple is among the first to receive the effects to inflation, thereby enriching you. The starbucks worker is down at the bottom. This is why Apple shareholders saw their wealth increase dramatically over the period of QE, while things just got harder for the working/middle class. 2) So now youre bringing up this idea of poverty as if it's not tied to the macroeconomic policies of the nation. You just cemented my point - in this climate, this system that decades of monetary expansion has created, the working class is fucked. Believe it or not, there was once a time where a worker could use his paycheck to support his family pretty comfortably and his whole family would have health insurance 3) this is some real ivory tower shit now.... working poor with house payments ??? WTF?? do you think banks hand out mortgages like candy to poor people anymore? (fyi, when banks used to do that, it lead to the liquidity crisis and so many people who had no business having a mortgage lost the shirts off their backs) A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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.
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United States41470 Posts
On April 29 2019 11:07 GreenHorizons wrote:Show nested quote +On April 29 2019 11:04 KwarK wrote:On April 29 2019 11:01 GreenHorizons wrote:On April 29 2019 10:58 KwarK wrote:On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI? No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing. Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor. If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation. If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description. I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause. What I was saying was that inflation helps people to maintain the illusion they make more while making less. Not really? I mean people know to expect a cost of living raise each year. They know that if they don't get one they've effectively been given a paycut. The problem is that Americans have effectively been given paycut after paycut because the position of extreme privilege America enjoyed fifty years ago has degraded and the ultra rich have seized control. Inflation doesn't factor into that, there's a whole bunch of other shit that explains what happened there. Inflation is part of what allows that expected pay raise to actually be a pay cut while the recipient is none the wiser is what I'm saying. You're right that they know they're getting ripped off though because they haven't even been getting those nominal increases for years now. EDIT: Basically the US would look more like the streets of France if we had any idea how badly we've been hosed and inflation (along with a host of other factors like politicians, media, the education system, and police) helps keep people docile and unaware.
I don't think inflation is a significant factor there. Again, inflation generally helps poor Americans because nominal interest - inflation = real interest and poor Americans generally pay more interest than they receive.
They know they're getting ripped off, it's just the French instinctively know that if they're working for a guy and they have no money and that guy has all the money then it's probably the fault of the guy they're working for. Americans generally look at the same situation and conclude that the problem is immigrants.
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"Americans generally look at the same situation and conclude that the problem is immigrants." - kwark
I usually don't like counter posting the Admins here, you never know when the sword of seeker will fall but this is a pretty disgusting thing to say.
Are you saying A) all american's that are poor or feel like they are being cheated by the ultra rich are also too stupid to know they are being duped and would rather blame immigrants?
B) does this not go against your entire point about inflation not hurting lower income people and in fact being a boon to them? what reason would they have to hate anyone if based off of the economic policy if it was good for them? or are they just stupid hateful bigots (see section A)
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On April 29 2019 11:20 KwarK wrote:Show nested quote +On April 29 2019 11:07 GreenHorizons wrote:On April 29 2019 11:04 KwarK wrote:On April 29 2019 11:01 GreenHorizons wrote:On April 29 2019 10:58 KwarK wrote:On April 29 2019 10:43 GreenHorizons wrote:
Just to follow the conversation when we say "inflation" we're talking about that measure that doesn't match actual monetary inflation but the number reported linked to the CPI? No, because he’s upset about monetary policy, printing currency, and allowing banks to create currency through issuing debt with fractional reserve borrowing. Basically dollars collectively represent the value of American labour and therefore as you create more dollars you increase the share you possess by diluting the shares of all other holders of dollars. Future rights to receive dollars are also diluted, which is bad for the bond holder, while future obligations to pay dollars are diluted, which is good for the debtor. If the value of your asset/labour remains constant then it should track inflation. If the real value is going down then inflation isn’t responsible for your pay cut, market conditions are. American labour doesn’t command as much as it used to because the value has gone down, not because it hasn’t kept up with inflation. If you think about it saying that pay hasn’t kept up with inflation is just another way of saying that real pay has been cut. That’s not a cause, it’s an effect. Employers are paying less, therefore real wages are down. If the price of milk went through the roof you wouldn’t explain it with “grocery stores are charging more”, that’s simply a rephrasing of the question. Similarly if real wages were down you wouldn’t explain it with “pay increases haven’t kept up with inflation”, real wage change = nominal change - inflation, the proposed explanation is just a description. I think the confusion is that (monetary) inflation is just one of several ways this transfer of wealth is masked, rather than a genesis or cause. What I was saying was that inflation helps people to maintain the illusion they make more while making less. Not really? I mean people know to expect a cost of living raise each year. They know that if they don't get one they've effectively been given a paycut. The problem is that Americans have effectively been given paycut after paycut because the position of extreme privilege America enjoyed fifty years ago has degraded and the ultra rich have seized control. Inflation doesn't factor into that, there's a whole bunch of other shit that explains what happened there. Inflation is part of what allows that expected pay raise to actually be a pay cut while the recipient is none the wiser is what I'm saying. You're right that they know they're getting ripped off though because they haven't even been getting those nominal increases for years now. EDIT: Basically the US would look more like the streets of France if we had any idea how badly we've been hosed and inflation (along with a host of other factors like politicians, media, the education system, and police) helps keep people docile and unaware. I don't think inflation is a significant factor there. Again, inflation generally helps poor Americans because nominal interest - inflation = real interest and poor Americans generally pay more interest than they receive. They know they're getting ripped off, it's just the French instinctively know that if they're working for a guy and they have no money and that guy has all the money then it's probably the fault of the guy they're working for. Americans generally look at the same situation and conclude that the problem is immigrants.
I'm fine with considering it a factor among many, but I do think that the vast majority of people never do the math to figure out whether their pay bump was a real net increase or not and that makes a reasonably significant difference.
That's to say if you made $100,000 in 2010, you have to make at least (and this is a low estimate) $117,000 in 2019 just to not make less than you did in 2010. If you made $50k in 2010 you have to make almost $60k to not be making less now than you did then.
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On April 29 2019 11:17 KwarK wrote:Show nested quote +On April 29 2019 10:53 BerserkSword wrote:On April 29 2019 09:33 KwarK wrote:On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:On April 29 2019 08:27 BerserkSword wrote:
[quote]
1) Yes, but Apple is among the first to receive the effects to inflation, thereby enriching you. The starbucks worker is down at the bottom. This is why Apple shareholders saw their wealth increase dramatically over the period of QE, while things just got harder for the working/middle class.
2) So now youre bringing up this idea of poverty as if it's not tied to the macroeconomic policies of the nation. You just cemented my point - in this climate, this system that decades of monetary expansion has created, the working class is fucked. Believe it or not, there was once a time where a worker could use his paycheck to support his family pretty comfortably and his whole family would have health insurance
3) this is some real ivory tower shit now....
working poor with house payments ??? WTF?? do you think banks hand out mortgages like candy to poor people anymore? (fyi, when banks used to do that, it lead to the liquidity crisis and so many people who had no business having a mortgage lost the shirts off their backs)
A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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
https://qz.com/1144201/under-trump-us-jobs-are-moving-overseas-even-faster-than-before/
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....
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United States41470 Posts
On April 29 2019 11:39 Taelshin wrote:
"Americans generally look at the same situation and conclude that the problem is immigrants." - kwark
I usually don't like counter posting the Admins here, you never know when the sword of seeker will fall but this is a pretty disgusting thing to say.
Are you saying A) all american's that are poor or feel like they are being cheated by the ultra rich are also too stupid to know they are being duped and would rather blame immigrants?
B) does this not go against your entire point about inflation not hurting lower income people and in fact being a boon to them? what reason would they have to hate anyone if based off of the economic policy if it was good for them? or are they just stupid hateful bigots (see section A)
It's not about being stupid, the system is set up against them. It's a sick society. Americans aren't naturally any worse than anyone else, if you took them out of America as infants they'd grow up differently. But growing up in America they will be made promises by American society which will not be kept, and then be fed a stream of misinformation about who is to blame for their circumstances.
My point is that inflation is incidental, that Americans are absolutely getting fucked, but they're not getting fucked by a shadowy cabal called "the Fed".
The problem isn't Americans, it's America. I'm sure the Americans would be perfectly lovely people if you could take them out of America.
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United States41470 Posts
On April 29 2019 11:44 BerserkSword wrote:Show nested quote +On April 29 2019 11:17 KwarK wrote:On April 29 2019 10:53 BerserkSword wrote:On April 29 2019 09:33 KwarK wrote:On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:On April 29 2019 08:31 KwarK wrote:
[quote]
A mortgage is an example of debt that would cause them to have a net negative cash position. So would a loan to their cousin if that's less elitist for you. The point remains that your argument only works if they have a net positive cash position. People who live paycheck to paycheck and buried in debt do not have a net positive cash position and are therefore not the victims of inflation. If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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 https://qz.com/1144201/under-trump-us-jobs-are-moving-overseas-even-faster-than-before/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.
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On April 29 2019 12:07 KwarK wrote:Show nested quote +On April 29 2019 11:44 BerserkSword wrote:On April 29 2019 11:17 KwarK wrote:On April 29 2019 10:53 BerserkSword wrote:On April 29 2019 09:33 KwarK wrote:On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:On April 29 2019 08:38 BerserkSword wrote:
[quote]
If the nominal interest rate of the cousin's loan is higher than the inflation rate, then the real interest rate is greater than 0% and it means that the debtor is losing out Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that. But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt? Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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 https://qz.com/1144201/under-trump-us-jobs-are-moving-overseas-even-faster-than-before/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.... Show nested quote +If the money is backed by gold, there is no market distortion and no transient malinvestment. Show nested quote +Have you heard of the South Sea Bubble? What about the Tulip Mania? These existed under the gold standard. 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
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United States41470 Posts
On April 29 2019 12:09 BerserkSword wrote:Show nested quote +On April 29 2019 12:07 KwarK wrote:On April 29 2019 11:44 BerserkSword wrote:On April 29 2019 11:17 KwarK wrote:On April 29 2019 10:53 BerserkSword wrote:On April 29 2019 09:33 KwarK wrote:On April 29 2019 09:22 BerserkSword wrote:On April 29 2019 09:09 KwarK wrote:On April 29 2019 09:03 BerserkSword wrote:On April 29 2019 08:41 KwarK wrote:
[quote]
Yes, this is true. It's rare for inflation to be higher than the nominal rate. I wasn't arguing that paying interest on debt is a good thing, the working poor who are broke and owe money are certainly fucked, I'm not debating that.
But is it better for them to have a nominal rate on their debt of 5% and inflation at 2% or a nominal rate on their debt of 5% and inflation at 4%? Which would lead to the higher real rate of interest on their debt?
Remember, the question was never "is it good to have debt?", it was "to what extent does inflation hurt those with a negative cash position?". My argument was that inflation serves to reduce their real rate of interest on debt, yours that it serves to increase it. 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. https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.htmlread this article 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 https://qz.com/1144201/under-trump-us-jobs-are-moving-overseas-even-faster-than-before/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".
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Anyway, if people don't want to see the Fed and its policies for what they really are, there's nothing I can do about it.
Americans will continue to elect the same shills, whether it's democrat or republican, who allow the Fed to fuck over those on the lower end of the socio-economic ladder
The Fed is an instrument for disaster and they are the reason wealth continually flows from the bottom up. Their monetary expansion is devastating and they are in constant league with big banks and corporations.
Even Bernie Sanders knows the Fed fucks people over
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."
https://www.sanders.senate.gov/newsroom/press-releases/the-fed-audit
Everything they do is to transfer wealth to the top. and people who have a track record against the Fed, like Sanders and Ron Paul the GOAT, will never win
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EPT
