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Author Topic:   The Giant Pool Of Money. Implications
crashfrog
Member (Idle past 1467 days)
Posts: 19762
From: Silver Spring, MD
Joined: 03-20-2003


Message 136 of 423 (615948)
05-18-2011 1:47 PM
Reply to: Message 116 by Straggler
05-18-2011 8:21 AM


Re: Good Inflation......? Bad Inflation.....?
In the UK at the moment we have low growth, low interest rates and (relatively) high inflation. This seems like a potentially problematic combination.
It's called a "liquidity trap". Your central bank has hit the zero bound on interest rate discounting; it just can't loan money much cheaper than it's loaning it, now. That said I'm not sure you have "real" inflation; I think you have the same kind of fake inflation in the CPI that Buz is on about. The price of oil underlies the price of a lot of other things - food, plastic items, anything that has to be manufactured using energy or transported via fossil fuels. Since wage growth isn't very high in the UK I suspect your suddenly-higher rate of "inflation" just reflects a Consumer Price Index over-weighted towards oil-derived prices.
Or it could be "stagflation", which economists still aren't too clear about.

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 Message 116 by Straggler, posted 05-18-2011 8:21 AM Straggler has not replied

  
Taq
Member
Posts: 9973
Joined: 03-06-2009
Member Rating: 5.7


Message 137 of 423 (615960)
05-18-2011 3:16 PM
Reply to: Message 128 by Buzsaw
05-18-2011 12:56 PM


Re: Good Inflation......? Bad Inflation.....?
Taq, You're ignoring my point, that the $$ was never in danger as it is today.
You would actually need to make that point in order for me to ignore it. The US dollar is the globe's currency. You would have a tough time finding any currency right now that is going to weather the next 10 years better than the US dollar. This is why China adopted the US dollar as their currency and not the Euro or any other currency. They aren't stupid.

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


Message 138 of 423 (615962)
05-18-2011 3:21 PM
Reply to: Message 137 by Taq
05-18-2011 3:16 PM


Re: Good Inflation......? Bad Inflation.....?
This is why China adopted the US dollar as their currency and not the Euro or any other currency.
Buz is going to turn this around and use it as evidence for his crazy arguments.

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

This message is a reply to:
 Message 137 by Taq, posted 05-18-2011 3:16 PM Taq has not replied

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


Message 139 of 423 (615966)
05-18-2011 3:59 PM
Reply to: Message 127 by Buzsaw
05-18-2011 12:54 PM


Buz not an American?
The emergence into globalism makes the gold standard unfeasible. The best we can do is banish the Federal Reserve,
Now that it has been shown that the gold standard is not feasible you switch arguments in midstream. Is this the Buz gallop?
You want to eliminate the federal reserve? You want our currency to be manipulated by speculators and foreign governments? Why do you hate the USA so much Buz? Without a national entity to help control the dollar and the economy robber barons and foreign governments could quickly manipulate our currency to their benefit.
Why do you hate working people so much? Why do you hate the middle class? Why the love for the ultra wealthy?

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

This message is a reply to:
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Taq
Member
Posts: 9973
Joined: 03-06-2009
Member Rating: 5.7


Message 140 of 423 (615971)
05-18-2011 4:11 PM
Reply to: Message 134 by Theodoric
05-18-2011 1:41 PM


Re: Good Inflation......? Bad Inflation.....?
The fall of the Spanish Empire can be partially attributed to influx of gold and silver from the new world. The huge inflow of gold and silver destroyed the Spanish economy.
Imagine if we backed our currency with diamonds. The Russians would have us by the balls. They have been sitting on mountains of diamonds for decades now, as have the big diamond cartels. All they would need to do to crash the US economy would be to dump the diamonds into the market. The US dollar could lose half of it's value in the matter of a few days.

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Modulous
Member
Posts: 7801
From: Manchester, UK
Joined: 05-01-2005


Message 141 of 423 (616038)
05-19-2011 2:47 AM
Reply to: Message 125 by Buzsaw
05-18-2011 12:41 PM


Re: Good Inflation......? Bad Inflation.....?
I know what it means. It means that the $$ was very sound, able to purchase many goods.
Though you could buy more per dollar, you earned less dollars per day. You did not account for this in your description of the golden Victorian age. That was my rebuttal, and you repeating your original point does not serve to address my rebuttal.

This message is a reply to:
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Replies to this message:
 Message 142 by Phat, posted 05-19-2011 4:14 PM Modulous has replied

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


Message 142 of 423 (616114)
05-19-2011 4:14 PM
Reply to: Message 141 by Modulous
05-19-2011 2:47 AM


Re: Good Inflation......? Bad Inflation.....?
in the Twenties, an ounce of gold would buy a new suit for a man. Today, it still will.

This message is a reply to:
 Message 141 by Modulous, posted 05-19-2011 2:47 AM Modulous has replied

Replies to this message:
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Modulous
Member
Posts: 7801
From: Manchester, UK
Joined: 05-01-2005


Message 143 of 423 (616118)
05-19-2011 5:18 PM
Reply to: Message 142 by Phat
05-19-2011 4:14 PM


Re: Good Inflation......? Bad Inflation.....?
I'm not sure where you are shopping for suits. I can get half a dozen decent suits, maybe even a dozen pretty good ones (in a sale) for an ounce of gold. If I was going to be spending a whole ounce of gold on a suit it'd have to be top end commercial designer wear or the like.
Edited by Modulous, : No reason given.

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Dr Adequate
Member (Idle past 285 days)
Posts: 16113
Joined: 07-20-2006


Message 144 of 423 (616127)
05-19-2011 6:49 PM
Reply to: Message 125 by Buzsaw
05-18-2011 12:41 PM


Re: Good Inflation......? Bad Inflation.....?
I know what it means. It means that the $$ was very sound ...
That's not what "sound" means. Obviously it has nothing to do with the purchasing power of the currency, otherwise you'd have to think that the US dollar was "sounder" than the US cent!
Rather, it has to do with the rate of change of the purchasing power --- i.e. with inflation. The inflation rates in the 1900s were little different from those today.
It was a low period in terms of inflation, but a wonderful high time in the industrial revolution, prosperity and progress, beautiful victorian homes fancy oak furnishings emerging oil and energy production & rural estates, and the emerging of automobiles, advancement of electrical and media technology and air travel, etc. INCOME WAS NOT TAXED!
And the average life expectancy was 46 for men and the average wage was 22 cents an hour. What you're describing is the life of the rich --- "beautiful Victorian homes, fancy oak furnishings ... rural estates". What the average American had was poverty and squalor.
You say you could buy a solid oak dining set for $30? Yes, but back then the annual wage of a schoolteacher was $325. Today you can pick up an oak dining set for ~$500, which is higher, but the annual wage of a schoolteacher is considerably higher than $5,400 (the equivalent of $325 on the oak dining set standard), meaning that s/he would be much more able to afford it.
Those weren't the good old days, Buzsaw.

This message is a reply to:
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Buzsaw
Inactive Member


Message 145 of 423 (616205)
05-20-2011 10:04 AM
Reply to: Message 30 by crashfrog
10-08-2010 12:16 PM


Re: The American Mindset
crashfrog writes:
The only intention of the original paper $$ was that all of it printed would represent and equal amount of precious metal held in reserve.
Right, but the value of precious metal is by fiat, too.
Online Dictionary
quote:
fiat money
n.
Legal tender, especially paper currency, authorized by a government but not based on or convertible into gold or silver.
Commodities are not fiat legal tender/currency. They are products that legal tender buys in commerce.
crashfrog writes:
Whether you're trading gold or trading paper dollars doesn't matter, Buz. Money is just an abstract representation of how valuable we consider goods and services, and how much demand for them there is. There's literally no difference between trading paper dollars that represent fiat values of precious metal, and trading paper dollars that are themselves a fiat value.
Silver will always have value for trading for paper. Paper money which has historically been swept up in streets after inflating into oblivion cannot always necessarily be traded for silver.
crashfrog writes:
It could be taken to any bank and exchanged for an equal amount of silver coinage on demand.
So what's so great about silver, Buz?
It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes.

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 30 by crashfrog, posted 10-08-2010 12:16 PM crashfrog has replied

Replies to this message:
 Message 146 by jar, posted 05-20-2011 10:09 AM Buzsaw has replied
 Message 147 by crashfrog, posted 05-20-2011 10:21 AM Buzsaw has seen this message but not replied
 Message 153 by Theodoric, posted 05-20-2011 12:28 PM Buzsaw has not replied

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


Message 146 of 423 (616206)
05-20-2011 10:09 AM
Reply to: Message 145 by Buzsaw
05-20-2011 10:04 AM


Re: The American Mindset
Buzsaw writes:
It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes.
Sorry Buz but silver most certainly corrodes, and is very easily corroded.

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

This message is a reply to:
 Message 145 by Buzsaw, posted 05-20-2011 10:04 AM Buzsaw has replied

Replies to this message:
 Message 148 by Buzsaw, posted 05-20-2011 11:37 AM jar has replied

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


(1)
Message 147 of 423 (616207)
05-20-2011 10:21 AM
Reply to: Message 145 by Buzsaw
05-20-2011 10:04 AM


Re: The American Mindset
Commodities are not fiat legal tender/currency.
Precious metals are and always have been; they have no intrinsic worth because they have little intrinsic utility.
By definition they're a fiat currency whose value, instead of being set by a central bank charged with regulating the economy, is set instead by narrow, parochial mining outfits interested only in making money and thereby inflating your currency.
On a metals standard, your currency inflates every time someone opens a mine.
Paper money which has historically been swept up in streets after inflating into oblivion cannot always necessarily be traded for silver.
If there's silver to buy, money can always buy it. But not everybody wants to buy silver.
There's not much of a market for giant stone wheels, these days. You certainly couldn't argue that they were paper money, but the value of giant stone wheel currency plummeted when Irish sailors started importing wheels to the Island of Yapp.
All currencies can inflate, even gold-backed dollars. Historically gold-backed dollars inflated even faster than today's fiat dollars. We proved it.
It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use.
Money has always been considered precious and been of commercial use. Money has enduring value simply because of its role as currency. Hence, numismatics.

This message is a reply to:
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Replies to this message:
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 Message 157 by NoNukes, posted 12-04-2011 3:24 PM crashfrog has replied

  
Buzsaw
Inactive Member


Message 148 of 423 (616219)
05-20-2011 11:37 AM
Reply to: Message 146 by jar
05-20-2011 10:09 AM


Re: The American Mindset
s
jar writes:
Buzsaw writes:
It has, historically, always considered precious, having non-corrosive beauty, durability and commercial use. Not so with unbacked paper notes.
Sorry Buz but silver most certainly corrodes, and is very easily corroded.
You needn't be sorry. It's less corrosive than brass, copper and iron, suitable in many electronic components and other industrial uses. and highly desirable for it's beauty in jewelry, flatware, decorative desirables, etc whether used as plated or solid. The base metals have historically been less coveted than silver and gold since history has been recorded. Go figure.

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 146 by jar, posted 05-20-2011 10:09 AM jar has replied

Replies to this message:
 Message 150 by jar, posted 05-20-2011 11:41 AM Buzsaw has replied

  
Wounded King
Member
Posts: 4149
From: Cincinnati, Ohio, USA
Joined: 04-09-2003


Message 149 of 423 (616220)
05-20-2011 11:38 AM
Reply to: Message 147 by crashfrog
05-20-2011 10:21 AM


Re: The American Mindset
There's not much of a market for giant stone wheels, these days. You certainly couldn't argue that they were paper money, but the value of giant stone wheel currency plummeted when Irish sailors started importing wheels to the Island of Yapp.
And they were the devil for wearing a hole in your pockets.
I also considered a comment on my almost having enough ningis to make one pu.
TTFN,
WK

This message is a reply to:
 Message 147 by crashfrog, posted 05-20-2011 10:21 AM crashfrog has not replied

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


Message 150 of 423 (616221)
05-20-2011 11:41 AM
Reply to: Message 148 by Buzsaw
05-20-2011 11:37 AM


Re: The American Mindset
Actually Buz, silver is not used in many electronic components because it is so corrosive.

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

This message is a reply to:
 Message 148 by Buzsaw, posted 05-20-2011 11:37 AM Buzsaw has replied

Replies to this message:
 Message 152 by New Cat's Eye, posted 05-20-2011 12:23 PM jar has replied
 Message 204 by Buzsaw, posted 12-09-2011 7:18 PM jar has replied

  
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