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Author Topic:   The Giant Pool Of Money. Implications
Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 106 of 423 (615876)
05-17-2011 7:00 PM
Reply to: Message 105 by jar
05-17-2011 6:57 PM


Re: What Is Money?
jar writes:
Would it make any difference if we abandoned the dollar and adopted the Euro?
Honestly? I dont know. I am asking because I worry about the US undergoing an internal crises. What if our money alone becomes worthless? How will we who are paid in dollars survive? I am championing the rights of fairness rather than exploitation by the rest of the world. I am asking what we must do to remain in the game with our assets intact and valued the same as a Europeans would be. (or the prevailing standard)

This message is a reply to:
 Message 105 by jar, posted 05-17-2011 6:57 PM jar has replied

Replies to this message:
 Message 107 by jar, posted 05-17-2011 7:15 PM Phat has replied

  
jar
Member (Idle past 394 days)
Posts: 34026
From: Texas!!
Joined: 04-20-2004


Message 107 of 423 (615877)
05-17-2011 7:15 PM
Reply to: Message 106 by Phat
05-17-2011 7:00 PM


Re: What Is Money?
Phat writes:
jar writes:
Would it make any difference if we abandoned the dollar and adopted the Euro?
Honestly? I dont know. I am asking because I worry about the US undergoing an internal crises. What if our money alone becomes worthless? How will we who are paid in dollars survive? I am championing the rights of fairness rather than exploitation by the rest of the world. I am asking what we must do to remain in the game with our assets intact and valued the same as a Europeans would be. (or the prevailing standard)
Fairness is irrelevant.
To remain in the game we need to educate the current crop of two year olds and all of their little siblings that come after them, get rid of all Local School Boards and instil a National Curriculum, raise taxes drastically, particularly on the upper middle class and above, remove the stops on the Social Security taxes, increase the governmental oversight of industry, create a single payer National Healthcare system, re-regulate all utilities and much of transportation and communications and follow through for about 25-50 years.

Anyone so limited that they can only spell a word one way is severely handicapped!

This message is a reply to:
 Message 106 by Phat, posted 05-17-2011 7:00 PM Phat has replied

Replies to this message:
 Message 108 by Phat, posted 05-17-2011 7:27 PM jar has replied

  
Phat
Member
Posts: 18262
From: Denver,Colorado USA
Joined: 12-30-2003
Member Rating: 1.1


Message 108 of 423 (615878)
05-17-2011 7:27 PM
Reply to: Message 107 by jar
05-17-2011 7:15 PM


Re: What Is Money?
quote:
To remain in the game we need to educate the current crop of two year olds and all of their little siblings that come after them, get rid of all Local School Boards and instil a National Curriculum, raise taxes drastically, particularly on the upper middle class and above, remove the stops on the Social Security taxes, increase the governmental oversight of industry, create a single payer National Healthcare system, re-regulate all utilities and much of transportation and communications and follow through for about 25-50 years.
The problem is lack of consensus. Politicians seem to waste so much time in deadlock. Your ideas sound rational and effective, but implementation remains illusive.

This message is a reply to:
 Message 107 by jar, posted 05-17-2011 7:15 PM jar has replied

Replies to this message:
 Message 109 by jar, posted 05-17-2011 7:37 PM Phat has seen this message but not replied
 Message 112 by crashfrog, posted 05-17-2011 8:17 PM Phat has not replied

  
jar
Member (Idle past 394 days)
Posts: 34026
From: Texas!!
Joined: 04-20-2004


Message 109 of 423 (615879)
05-17-2011 7:37 PM
Reply to: Message 108 by Phat
05-17-2011 7:27 PM


Re: What Is Money?
Phat writes:
quote:
To remain in the game we need to educate the current crop of two year olds and all of their little siblings that come after them, get rid of all Local School Boards and instil a National Curriculum, raise taxes drastically, particularly on the upper middle class and above, remove the stops on the Social Security taxes, increase the governmental oversight of industry, create a single payer National Healthcare system, re-regulate all utilities and much of transportation and communications and follow through for about 25-50 years.
The problem is lack of consensus. Politicians seem to waste so much time in deadlock. Your ideas sound rational and effective, but implementation remains illusive.
Okay. No problem.
What happens when you keep doing the same things and expect a different outcome?

Anyone so limited that they can only spell a word one way is severely handicapped!

This message is a reply to:
 Message 108 by Phat, posted 05-17-2011 7:27 PM Phat has seen this message but not replied

  
crashfrog
Member (Idle past 1467 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 110 of 423 (615880)
05-17-2011 8:08 PM
Reply to: Message 101 by Straggler
05-17-2011 6:04 PM


Re: Good Inflation......? Bad Inflation.....?
So whether inflation is good or bad is directly related to interest rates? Is that right?
Inflation has the same effect at any level - prices and wages go up, the value of individual dollars goes down, savings denominated in dollars decline in value. The smaller the inflation, the more these effects are lessened, because "prices and wages go up, the value of individual dollars goes down, savings denominated in dollars decline in value" is what inflation is.
But, inflation has some positive effects too. We want people to spend their money because that causes economic growth, and we have to print more dollars to keep up with a growing population and a growing domestic product - as people produce more goods and services to sell, the value of goods and services declines unless we deflate the value of a dollar to match. Every time someone invents a new cell phone, it decreases the value of goods and services (because there's one more good or service to sell.) Inflation allows our money to keep up with the increase in GDP.
So, the "optimum" rate of inflation is the one where the positive effects on monetary policy outweigh the negative cost of price and wage increases and the decrease in the "real" interest rate of savings (the "real" rate is the APR minus the annual inflation rate, pretty simple), which are the downsides. What rate is that? In the US it's probably around 6% or so.
Does that make sense? What you want, ideally, is for inflation to be high enough that the central bank has some freedom to discount interest rates without hitting the zero bound, but low enough that, say, your bank can still make money by lending you a 30-year mortgage.

This message is a reply to:
 Message 101 by Straggler, posted 05-17-2011 6:04 PM Straggler has replied

Replies to this message:
 Message 116 by Straggler, posted 05-18-2011 8:21 AM crashfrog has replied

  
crashfrog
Member (Idle past 1467 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 111 of 423 (615881)
05-17-2011 8:14 PM
Reply to: Message 102 by Taq
05-17-2011 6:14 PM


Re: What Is Money?
Judging from the graph, the economy was less stable while on the precious metal standard.
Indeed - it's considerably more expensive, in both a nominal and real sense, to maintain a Federal Reserve of gold or silver to be released during a recession. It's a lot cheaper to simply print money.
Fiat currencies are stabilizing because it's easier to use them to counteract the business cycle.

This message is a reply to:
 Message 102 by Taq, posted 05-17-2011 6:14 PM Taq has not replied

  
crashfrog
Member (Idle past 1467 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 112 of 423 (615882)
05-17-2011 8:17 PM
Reply to: Message 108 by Phat
05-17-2011 7:27 PM


Re: What Is Money?
The problem is lack of consensus.
No, the problem is the need for consensus. It shouldn't work like that - elections should matter. Politicians should put their policies before the voters, the voters decide, and then the party that won gets to rule. If people don't like the results there's always the next election.
The party that wins elections shouldn't need the permission of the losers to rule. That means that elections don't matter. Maybe to amend the Constitution or do other incredibly permanent, long-term things; but regular legislation can't ever be "tyranny of the majority" so why should it be subject to minority rule?

This message is a reply to:
 Message 108 by Phat, posted 05-17-2011 7:27 PM Phat has not replied

  
Buzsaw
Inactive Member


Message 113 of 423 (615893)
05-18-2011 12:33 AM
Reply to: Message 98 by Straggler
05-17-2011 4:49 PM


Re: Good Inflation......? Bad Inflation.....?
Straggler writes:
I ask this question to all economically savvy EvC members...
Mod writes:
Money has to drop in value over time, Buz, otherwise capitalism fails.
I understand enough to understand that this is true.
But what is a 'good' rate of inflation? And at what point does inflation become a bad thing?
Is inflation something whose good/bad effects should be determined in relation to growth/GDP? Or something else?
Basically can someone explain the role of inflation, what is good and what is bad, in Capitalist economics to me?
Hi Straggler. The problem is that historically, it doesn't take long after something precious no longer backs a currency that the currency rapidly inflates. Sooner or later the sheeple will be sweeping it up in the streets like in Germany in the 1930s or using the brass coins for decorative purposes as in China when the old sewing baskets had Peking beads and the inflated coins with square holes in them decorating the lids. Paper notes are as good as the confidence of the public in the government's ability to control the amount of it circulated or counterfeited etc.
(abe: If gold or silver were backing the currency no politiiton could purposely inflate the system for political epediency. Precious things like gold and silver can't be eaten, but they, for sure, do not inflate.)
Imo, the Obama Admin, with the blessings of George Soros et al are purposely inflating the monetary system to pay off the politically induced debts of the stimulus and to control the population by to impoverishing the sheeple. He can keep on stimulating the sheeple so as to get re-elected, or perhaps cause a global monetary disaster so as to effect the New World Order with global currency, distributing the wealth to Islamic and 3rd world nations.
This is in line with the end time Biblical prophecies. It's corroborated by all of the other end time events prophesied to emerge simultaneously as the messianic era approaches. It looks unbelievable but it's all coming to fruition with Israel in place, weather changes, earthquakes, sea waves roaring/tsunamis, rapid fire disasters rise of Islam/antichrist, hostile nations gathering in the Middle East surrounding Israel , emerging one world cashless marks and numbers monetary system the New World order, persecution of Christians, death by beheading, travel & knowledge rapidly increasing, signs in the cosmos, satellites/stars in the sky, capable of falling to earth, capability of all nations to view something in one location, etc etc.
Edited by Buzsaw, : as noted in context

BUZSAW B 4 U 2 C Y BUZ SAW.
The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.

This message is a reply to:
 Message 98 by Straggler, posted 05-17-2011 4:49 PM Straggler has not replied

Replies to this message:
 Message 114 by Coyote, posted 05-18-2011 12:43 AM Buzsaw has replied
 Message 115 by Theodoric, posted 05-18-2011 7:37 AM Buzsaw has replied
 Message 131 by crashfrog, posted 05-18-2011 1:33 PM Buzsaw has not replied

  
Coyote
Member (Idle past 2106 days)
Posts: 6117
Joined: 01-12-2008


Message 114 of 423 (615894)
05-18-2011 12:43 AM
Reply to: Message 113 by Buzsaw
05-18-2011 12:33 AM


Re: Good Inflation......? Bad Inflation.....?
This is in line with the end time Biblical prophecies. It's corroborated by all of the other end time events prophesied to emerge simultaneously as the messianic era approaches. It looks unbelievable but it's all coming to fruition with Israel in place, weather changes, earthquakes, sea waves roaring/tsunamis, rapid fire disasters rise of Islam/antichrist, hostile nations gathering in the Middle East surrounding Israel , emerging one world cashless marks and numbers monetary system the New World order, persecution of Christians, death by beheading, travel & knowledge rapidly increasing, signs in the cosmos, satellites/stars in the sky, capable of falling to earth, capability of all nations to view something in one location, etc etc.
Nonsense.
When it comes to religious belief the capacity for willful self-delusion in humans is unsurpassed.

Religious belief does not constitute scientific evidence, nor does it convey scientific knowledge.

This message is a reply to:
 Message 113 by Buzsaw, posted 05-18-2011 12:33 AM Buzsaw has replied

Replies to this message:
 Message 120 by Buzsaw, posted 05-18-2011 11:21 AM Coyote has not replied

  
Theodoric
Member
Posts: 9076
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 3.7


Message 115 of 423 (615909)
05-18-2011 7:37 AM
Reply to: Message 113 by Buzsaw
05-18-2011 12:33 AM


Re: Good Inflation......? Bad Inflation.....?
(abe: If gold or silver were backing the currency no politiiton could purposely inflate the system for political epediency. Precious things like gold and silver can't be eaten, but they, for sure, do not inflate.)
What are the implications of the value of the US Currency if it were currently backed by gold? How would the current speculative run up in the price of gold effect the dollars value and the effect on the world wide economy?
Has not the value of gold inflated?

Facts don't lie or have an agenda. Facts are just facts

This message is a reply to:
 Message 113 by Buzsaw, posted 05-18-2011 12:33 AM Buzsaw has replied

Replies to this message:
 Message 117 by Buzsaw, posted 05-18-2011 9:29 AM Theodoric has replied

  
Straggler
Member
Posts: 10333
From: London England
Joined: 09-30-2006


Message 116 of 423 (615914)
05-18-2011 8:21 AM
Reply to: Message 110 by crashfrog
05-17-2011 8:08 PM


Re: Good Inflation......? Bad Inflation.....?
Crash writes:
Does that make sense?
Yes I think it does.
Crash writes:
What you want, ideally, is for inflation to be high enough that the central bank has some freedom to discount interest rates without hitting the zero bound, but low enough that, say, your bank can still make money by lending you a 30-year mortgage.
In the UK at the moment we have low growth, low interest rates and (relatively) high inflation. This seems like a potentially problematic combination.

This message is a reply to:
 Message 110 by crashfrog, posted 05-17-2011 8:08 PM crashfrog has replied

Replies to this message:
 Message 136 by crashfrog, posted 05-18-2011 1:47 PM Straggler has not replied

  
Buzsaw
Inactive Member


Message 117 of 423 (615917)
05-18-2011 9:29 AM
Reply to: Message 115 by Theodoric
05-18-2011 7:37 AM


Re: Good Inflation......? Bad Inflation.....?
Theodoric writes:
(abe: If gold or silver were backing the currency no politiiton could purposely inflate the system for political epediency. Precious things like gold and silver can't be eaten, but they, for sure, do not inflate.)
What are the implications of the value of the US Currency if it were currently backed by gold? How would the current speculative run up in the price of gold effect the dollars value and the effect on the world wide economy?
Has not the value of gold inflated?
Goods, whether food, oil, gold or sugar are not currency. They are what currency is used for in commerce. They all reflect the inflation of a currency. They all have a limited supply which cannot be regulated and manipulated. Printed or digital currency does not have a limit and is not goods.

BUZSAW B 4 U 2 C Y BUZ SAW.
The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.

This message is a reply to:
 Message 115 by Theodoric, posted 05-18-2011 7:37 AM Theodoric has replied

Replies to this message:
 Message 118 by Theodoric, posted 05-18-2011 10:08 AM Buzsaw has replied

  
Theodoric
Member
Posts: 9076
From: Northwest, WI, USA
Joined: 08-15-2005
Member Rating: 3.7


Message 118 of 423 (615920)
05-18-2011 10:08 AM
Reply to: Message 117 by Buzsaw
05-18-2011 9:29 AM


Re: Good Inflation......? Bad Inflation.....?
I notice you completely ignored the meat of my post.
Theodoric asks writes:
What are the implications of the value of the US Currency if it were currently backed by gold? How would the current speculative run up in the price of gold effect the dollars value and the effect on the world wide economy?
Buz writes:
They all have a limited supply which cannot be regulated and manipulated.
Why is this good?
You do realize the price of gold and silver can be manipulated. Why do we want our currency to be in a position to be manipulated by corporations, billionaires and foreign governments. I think regulation is much more favorable than manipulation.
Do you have any idea of the boom and bust economy the USA had in 8th, 19th and early 20th centuries before the regulation?
You might want to research US financial history and the Hunt brothers.

Facts don't lie or have an agenda. Facts are just facts

This message is a reply to:
 Message 117 by Buzsaw, posted 05-18-2011 9:29 AM Buzsaw has replied

Replies to this message:
 Message 119 by Buzsaw, posted 05-18-2011 11:10 AM Theodoric has replied

  
Buzsaw
Inactive Member


Message 119 of 423 (615922)
05-18-2011 11:10 AM
Reply to: Message 118 by Theodoric
05-18-2011 10:08 AM


Re: Good Inflation......? Bad Inflation.....?
Theodoric writes:
I notice you completely ignored the meat of my post.
Theodoric asks writes:
What are the implications of the value of the US Currency if it were currently backed by gold? How would the current speculative run up in the price of gold effect the dollars value and the effect on the world wide economy?
Buz writes:
They all have a limited supply which cannot be regulated and manipulated.
Why is this good?
You do realize the price of gold and silver can be manipulated. Why do we want our currency to be in a position to be manipulated by corporations, billionaires and foreign governments. I think regulation is much more favorable than manipulation.
Do you have any idea of the boom and bust economy the USA had in 8th, 19th and early 20th centuries before the regulation?
You might want to research US financial history and the Hunt brothers.
I'm all eyes and ears. Tell me about hyperinflation and busting of the $$ in the 19th and 20th century in America. I've lived 2/3 of the 20th century and it never happened until the $$ couldn't be cashed for silver. In 1900 you could buy a solid oak dining set for around $30 and eggs for a nickel or so a dozen.
Any commodity can be manipulated to some extent, but never inflated due to over supply.
LOL on the Hunt brothers. They went bust trying to corner the silver market. All they did was inflate the amount of currency to buy goods, in this case, silver. They did not inflate the amount of silver as Obama & co. is doing to our once precious dollar.

BUZSAW B 4 U 2 C Y BUZ SAW.
The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.

This message is a reply to:
 Message 118 by Theodoric, posted 05-18-2011 10:08 AM Theodoric has replied

Replies to this message:
 Message 121 by Taq, posted 05-18-2011 11:32 AM Buzsaw has replied
 Message 122 by Modulous, posted 05-18-2011 11:57 AM Buzsaw has replied
 Message 124 by fearandloathing, posted 05-18-2011 12:35 PM Buzsaw has replied
 Message 132 by Theodoric, posted 05-18-2011 1:36 PM Buzsaw has not replied

  
Buzsaw
Inactive Member


Message 120 of 423 (615923)
05-18-2011 11:21 AM
Reply to: Message 114 by Coyote
05-18-2011 12:43 AM


Re: Good Inflation......? Bad Inflation.....?
Coyote writes:
This is in line with the end time Biblical prophecies. It's corroborated by all of the other end time events prophesied to emerge simultaneously as the messianic era approaches. It looks unbelievable but it's all coming to fruition with Israel in place, weather changes, earthquakes, sea waves roaring/tsunamis, rapid fire disasters rise of Islam/antichrist, hostile nations gathering in the Middle East surrounding Israel , emerging one world cashless marks and numbers monetary system the New World order, persecution of Christians, death by beheading, travel & knowledge rapidly increasing, signs in the cosmos, satellites/stars in the sky, capable of falling to earth, capability of all nations to view something in one location, etc etc.
Nonsense.
When it comes to religious belief the capacity for willful self-delusion in humans is unsurpassed.
You're deluding yourself, Coyote, denying the evidence in the daily news the past century and in the historical archives. It's all coming to fruition and you're sitting there denying reality

BUZSAW B 4 U 2 C Y BUZ SAW.
The Immeasurable Present Eternally Extends the Infinite Past And Infinitely Consumes The Eternal Future.

This message is a reply to:
 Message 114 by Coyote, posted 05-18-2011 12:43 AM Coyote has not replied

  
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