The definition I use is popular among people who actually understand economics. Even still, rising prices do cause market’s value to rise.
[/quote]
Here’s what you don’t get… When an increase in money supply generally co-occurs with an increase in ACTUAL production, then money is NOT debased. This brings me back to your original post… It was totally non-sequitur, you may as well have posted something about hot-dogs.
I actually agree with about half of your longer post, and don’t care to argue about the conspiracy stuff.
[quote]beebuddy wrote:
Here’s what you don’t get… When an increase in money supply generally co-occurs with an increase in ACTUAL production, then money is NOT debased.[/quote]
Yes it is. Increasing the money supply ALWAYS will reduce purchasing power. An increase in productivity without increasing the money supply would lower prices and make people better off. Increasing the money supply always punishes productivity.
Debasing the currency also has the effect of raising producers costs first which concurrently lowers supply and raises prices even further when demand is increased due to having more paper in the system.
There is no way around it. All you need to do is look at how much the dollar has been devalued since the creation of the Fed to see the proof of what inflation does.
Productivity creates wealth and inflation destroys it.
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Here’s what you don’t get… When an increase in money supply generally co-occurs with an increase in ACTUAL production, then money is NOT debased.
Yes it is. Increasing the money supply ALWAYS will reduce purchasing power. An increase in productivity without increasing the money supply would lower prices and make people better off. Increasing the money supply always punishes productivity.
Debasing the currency also has the effect of raising producers costs first which concurrently lowers supply and raises prices even further when demand is increased due to having more paper in the system.
There is no way around it. All you need to do is look at how much the dollar has been devalued since the creation of the Fed to see the proof of what inflation does.
Productivity creates wealth and inflation destroys it.[/quote]
Indulge my stupidity then,and explain to me how the standard of living has gone up so drastically in the last 70 years?
[quote]Neuromancer wrote:
Indulge my stupidity then,and explain to me how the standard of living has gone up so drastically in the last 70 years?
[/quote]
Don’t bring reality into this. Lifty is all about theory. Reality is to confining for him.
[quote]LIFTICVSMAXIMVS wrote:
A bunch of nonsense… [/quote]
Dude, you are in lala-land. Are you actually claiming that the average American consumer’s purchasing power has DECREASED since 1913? Seriously?
You and the logic you are using are operating from the completely unsophisticated and NON EXISTENT commodity standard.
Exhibit A. You clearly don’t know what you are talking about and I want you to think long and hard about what I am about to write because if you don’t show some sign of grasping what I write I can not continue this discussion, and our fun is over…
Money ONLY has symbolic value. So if we increased productivity & production without changing the money supply eventually we would be paying one cent instead of one dollar for a McDonald’s cheeseburger. Nothing wrong with that except that eventually we would be forced to divide money into the thousandths and even millionths, which is no different than increasing the money supply. You can’t divide commodities indefinitely, and there is no point in dividing symbolic money indefinitely when the net result is the same as an increase in supply.
Please get this into your head. At least try because what you are saying is retarded.
[quote]Neuromancer wrote:
Indulge my stupidity then,and explain to me how the standard of living has gone up so drastically in the last 70 years?
[/quote]
Productivity. “But,” you ask, “how can we have a higher standard of living and inflation at the same time? This seems contrary to your statement about inflation destroying wealth.”
It does seem contrary but only if you assume that you wouldn’t be even better off had the currency not been inflated in the first place. Prices could be cheaper than they are and you could be making a higher wage relative to that inflation.
If productivity is higher then supply is higher and prices are lower; you can now demand a higher wage because you helped increase the suppliers profits and he is more likely to raise your wages lest he lose you to a competitor.
What we have instead is situation where wages do not keep up with the cost of living. Now, which situation do you prefer?
[quote]LIFTICVSMAXIMVS wrote:
Neuromancer wrote:
Indulge my stupidity then,and explain to me how the standard of living has gone up so drastically in the last 70 years?
Productivity. “But,” you ask, “how can we have a higher standard of living and inflation at the same time? This seems contrary to your statement about inflation destroying wealth.”
It does seem contrary but only if you assume that you wouldn’t be even better off had the currency not been inflated in the first place. Prices could be cheaper than they are and you could be making a higher wage relative to that inflation.
If productivity is higher then supply is higher and prices are lower; you can now demand a higher wage because you helped increase the suppliers profits and he is more likely to raise your wages lest he lose you to a competitor.
What we have instead is situation where wages do not keep up with the cost of living. Now, which situation do you prefer?[/quote]
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Fuck, I knew it.
But do you understand it?[/quote]
I understand that you are totally confused. The “Fuck, I knew it.” statement was in regards to my prediction that you would be encouraged to cook up more bullshit in response to Neuromancer’s open-ended rhetorical question… which you did.
You didn’t read the post I wrote before that one, did you?
[quote]beebuddy wrote:
I fear you have just given him license to cook up more nonsense. [/quote]
If the ideas I present are nonsense then why can you not refute them?
I know you have attempted to but every attempt you make you stop short on the full logical analysis. In economics you have to look at the consequence of not only the special group that benefits in the short term but the consequences to everyone in the long term. It is not an easy task, I know.
Henry Hazlitt in “Economics in One Lesson” does it way better than I do.
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
I fear you have just given him license to cook up more nonsense.
If the ideas I present are nonsense then why can you not refute them?
I know you have attempted to but every attempt you make you stop short on the full logical analysis. In economics you have to look at the consequence of not only the special group that benefits in the short term but the consequences to everyone in the long term. It is not an easy task, I know.
Henry Hazlitt in “Economics in One Lesson” does it way better than I do.[/quote]
I have refuted every single one of your points. It’s possible that posts aren’t showing up… Look again.
[quote]LIFTICVSMAXIMVS wrote:
beebuddy wrote:
Fuck, I knew it.
But do you understand it?[/quote]
You don’t even understand it. In your idiotic little scenario, wages can’t go up without inflation - but you say they can. Prices can’t go down because of deflation - but you say they can.
The world is not static. that only occurs in your books.
[quote]beebuddy wrote:
Dude, you are in lala-land. Are you actually claiming that the average American consumer’s purchasing power has DECREASED since 1913? Seriously? [/quote]
If prices rise faster than wages and productivity then that is the only result, logically and mathematically, that can happen.
Obviously one cannot compare technology that didn’t exist back then. One can look at the price of a suit in terms of gold to see that the dollar has had its purchasing power destroyed.
[quote]
You and the logic you are using are operating from the completely unsophisticated and NON EXISTENT commodity standard.[/quote]
And you are operating on the incorrect logic that central planning can cancel the laws of supply and demand. That is more faulty and unsophisticated than honest money.
Just as I suspected, you don’t know monetary theory at all.
Gold is a commodity that can be divided nearly infinitely which was why it was chosen as a money in the first place. Congress had no problem revaluing the dollar to 1/35 oz gold from 1/20 oz when there wasn’t enough gold to represent all the paper they were printing in '20s.
In other words, Congress allowed banks to steal $75 out of every $100 from the American people that held gold and then told them they were no longer allowed to use it as money. Usually in a free market this would have happened on its own if gold were no longer seen as useful money.
Nothing you can say that has been preached by the establishment is valid. It is these very ideas that have caused every economic crises since 1913.
[quote]rainjack wrote:
In your idiotic little scenario, wages can’t go up without inflation. [/quote]
Yes they can. They can also be lowered. As wages rise in one sector they will also lower in other less productive sectors.
As producers become more productive they don’t need to hire as many people for the same job and wages can increase without burdening the total money supply. The reduced (less productive) labor force is directed to an other capacity and will have their wages decreased.
Typically we would also see a reduction in population growth as people become more prosperous thus burdening the money supply even less.
Your theories remind me of my friend who was completely smashed and insisted that money shouldn’t exist and we should only use hamburgers and stamps for all our transactions. I difference is he sobered up the next day and realized he was talking nonsense.
[quote]TBT4ver wrote:
Your theories remind me of my friend who was completely smashed and insisted that money shouldn’t exist and we should only use hamburgers and stamps for all our transactions. I difference is he sobered up the next day and realized he was talking nonsense.[/quote]
Hmmm…you’re friends theories and the theories of the Austrian School are completely different.
If prices rise faster than wages and productivity then that is the only result, logically and mathematically, that can happen.
[/quote]
But that isn’t what happened, so you have no point.
So you’re measure for the health of the economy is suits? Has it occurred to you that the quality of suits might have improved?
It works better than gold because in the long run symbolic money doesn’t experience debasement (which you don’t seem to understand). It also works better than gold because the market wasn’t/still isn’t efficient enough to come up with a new commodity fast enough for when gold runs out, which it did. Waiting for the market would have been disastrous and stupid. Think of the national security risks of investment grinding to a halt whenever the market demands a new form of money.
I don’t even know why I am making this point. The idea of going to JP Morgan to get a truckload of gold to invest in building a oil rig is stupid anyway.
Gold is a stupid form of money. As more wealth is produced it’s easier to create money to represent that wealth than it is to change the price of everything to match that productivity.
The irony is that the comfort you enjoy today is a direct result of our financial system and the ease with which it facilitates investment. What are you so hell-bent on fixing? Your life is cake because of this.
[quote]LIFTICVSMAXIMVS wrote:
rainjack wrote:
In your idiotic little scenario, wages can’t go up without inflation.
Yes they can. They can also be lowered. As wages rise in one sector they will also lower in other less productive sectors.
As producers become more productive they don’t need to hire as many people for the same job and wages can increase without burdening the total money supply. The reduced (less productive) labor force is directed to an other capacity and will have their wages decreased.
Typically we would also see a reduction in population growth as people become more prosperous thus burdening the money supply even less.[/quote]
No - according to your “theory” - any increase in price is inflation. Labor is a cost. If you raise wages, you also have to raise prices.
Please. Go read some more books. Bury your head in theory, and let those who have the ability do the living.