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Thread: Increasing Price

  1. #1 Increasing Price 
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    Price of a lot of items, as we know it are increasing. Anyone have any say on how we can solve this? Why do think such thing happen and how can this be solved?


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    The first thing you'll hear is "that's inflation", closely followed by "they're printing money"...

    but...

    First, prices going up is only a problem if your income doesnt go up accordingly, but if prices go up and workers wages remain the same(while other segments, like CEOs and the top 1% revenues skyrocket), the workers are getting screwed, in which case simply focusing on the prices and blaming inflation for your absence of purchasing power is letting a big set of culprates out of the spotlight and off the hook for raping you.



    This being said, what are some the factors that can contribute to something's price going up?

    1- More Money in circulation
    a) Fractional Reserve Banking monetary expansion and Money as Debt (credit card spending)
    b) Printing Money in a way that does not generate increased production or access to infrastructure nor the people

    2- Less Production

    3- Speculation:
    a) Commodity as financial instrument
    b) Hot Money, big transfers of money hailed as foreign investments (but that can be borrowed money/carry trade)
    4- Hoarding
    5- Cartels; Concentration/acquisitions, Collusion.

    So what can be done? here's a few ideas I can throw in:

    1- Re-instate Glass-Seagall in the US, Increase reserves and then Ban private Fractional Reserve Banking BUT also issue self-depreciating money like Worgl Experiment issued interest free for a)local/national production investment and infrastructure, b) small portion issued to each citizen as small part of part of a national dividend or basic income, and take this money out of circulation as the equivalent of a payment.
    2- Favor production activities and tax speculation transactions and revenues
    3- Ban commodity speculation as a financial instrument by non-producers/non-users
    4- Put barriers against influx of hot-money/carry trade
    5- Enforce and strengthen anti-trust laws
    6- Strenghten whisleblower protection
    7- Favor Open Transparent NPO and Coops
    8- Favor Open Source development and open source manufacturing
    9- Reduce Patent/Copyright duration
    10-Nationalize strategic companies(ex: energy, insurance, communication) and turn them into non-profit National Open and Transparent Coops.


    Last edited by icewendigo; March 26th, 2012 at 01:52 PM.
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    There are some things I could challenge in the post above, but it does seem to blatantly miss the increase of demand yet unchanged supply. More people have more money in more places, and hence are buying things for which they previously lacked purchasing power. Since demand is higher, so too are the prices sellers can charge for the same item.
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  5. #4  
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    Inflation is still quite low.
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    Inflation has to happen. It serves a psychological role. It's like in those RPG video games, where as you go up in level the amount of "experience points" you get for killing a given monster increases, but...... also the amount of "experience points" you need to get to the next level increases.

    Probably if you compare the two, you'd see that you're still in the same situation you were in at level 1. It's the same amount of monsters to get to next level as it was to get to 2nd level, but .... somehow increasing all the numbers makes you feel like you're going places. It's part of the psychological addictiveness of the game. I point it out because it's an interesting case of an environment that has to engage the gamer psychologically, because it isn't offering them anything of material value. And, that "experience inflation" is clearly part of how they do it.

    Probably most Americans remember what their paycheck was when they first started working, and feel awfully good about themselves for having managed to stay on long enough to get the raises they've gotten. It brings a sense of status. Never mind that those raises were just given to keep them at parity with inflating prices.
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    Quote Originally Posted by Lynx_Fox
    Inflation is still quite low.
    You must have a different definition of "Inflation" from the rest of us then, dotcomrade.

    Chinese invented paper money, inflation, and toilet paper, probably in that order. Maybe we should consult them what to do? :wink:
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    Quote Originally Posted by The Finger Prince
    Quote Originally Posted by Lynx_Fox
    Inflation is still quite low.
    You must have a different definition of "Inflation" from the rest of us then, dotcomrade.
    Not really, no. Lynx_Fox is quite correct. You however, seem not to know your asshole from your elbow.


    http://economix.blogs.nytimes.com/20...-is-still-low/
    Core inflation — which excludes food and energy prices and is a better guide to future inflation — rose slightly less than expected, but only slightly.

    How worrisome is core inflation? The Federal Reserve certainly needs to watch it. If it continues to accelerate, that would suggest the Fed may need to raise interest rates sooner than it now plans. But core inflation remains very low historically. Here it is over the last three months, compared with historical trends:





    And here it is over the last year, again compared historically:




    However, do please carry on as if you're never wrong and have infinite wisdom. While it's rather annoying (in the same way as a gnat at a picnic can be), we always need an imbecilic court jester or two completely oblivious to their inanity to serve as a lightening rod for the community.
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  9. #8  
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    Quote Originally Posted by icewendigo
    The first thing you'll hear is "that's inflation", closely followed by "they're printing money"...

    but...

    First, prices going up is only a problem is your income doesnt go up accordingly
    BUT inflation is destroying savings, prompting innocent parties into "investing" money with Wall Street culprits and mad Red Queen's race to weather uncertain financial future.

    Prince is liking the steps you propose generally, particularly regarding increased production.

    Prince also knows it is "Glass-Steagall", possibly important for those, like Prince, who are seeking knowledge.

    http://www.investopedia.com/terms/g/...eagall_act.asp

    Why is M3 no longer published? Just how much money is in circulation? If GDP goes down while volume of currency goes up, what is effect on inflation, or hyperinflation as case may be? What about fixed exchange rates between currencies? Nixon froze wages and prices, would such a step be indicated today?

    As is obvious to most, Prince has more questions than answers. Thanks in advance for thoughtful and informative responses.
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    Quote Originally Posted by inow
    There are some things I could challenge in the post above, but it does seem to blatantly miss the increase of demand yet unchanged supply. More people have more money in more places, and hence are buying things for which they previously lacked purchasing power. Since demand is higher, so too are the prices sellers can charge for the same item.
    Is not increased demand supposed to lead to increased supply, according to primitive economic theory? Why does this not happen? Is true that not all commodities are increasing in value, e.g. buildings residential and commercial, so maybe no inflation after all, just rising cost of living, TOTALLY different phenomenon!

    So price of gold is up because consumers out of work are suddenly buying more now they are riding bus and not paying automobile expenses? Prince did not know this, as his own purchasing power has declined, as personal experience may color royal judgement.

    You don't like Prince? You got plenty company.

    You think Prince ignorant? Teach me. 8)
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    During a period of hyperinflation in Bolivia, were three de facto currencies circulating, bolivianos, Yankee dollars, and cocaine. Various types of transactions called for each type of currency- this does not appear conducive to orderly economy.

    Weimar Republic suffered from similar hyperinflation, with unpleasant political consequences global.
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  12. #11  
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    Quote Originally Posted by The Finger Prince
    Is not increased demand supposed to lead to increased supply, according to primitive economic theory?
    That's a possibility, but not the only one.
    Prices can increase due to willingness to pay more.
    Sometimes, there is no more supply to offer, and prices go up naturally.
    Sometimes, alternatives will be put forth, and competition will increase.

    In short, you're oversimplifying things, there are a multitude of other possibilities in this scenario, and your attempt to suggest there is only one makes you appear rather foolish in the process.


    Quote Originally Posted by The Finger Prince
    Is true that not all commodities are increasing in value <snip> so maybe no inflation after all, just rising cost of living, TOTALLY different phenomenon!
    You seem to be focusing purely on headline inflation, which is both volatile and temporary, yet you are using it to draw conclusions and make assertions about what is permanent or trending. This is why I have spent my time correcting you and providing a more accurate representation. You're misapplying the ideas pretty horribly.


    Quote Originally Posted by The Finger Prince
    So price of gold is up because consumers out of work are suddenly buying more now they are riding bus and not paying automobile expenses?
    No, the price of gold has risen because it's viewed as a safer investment and less likely to be negatively impacted by currency shifts. This tends to cause people with cash on hand... people who would invest that cash in stocks or bonds or material goods... to instead transfer that cash into reserves of gold.

    Further, there has been an intentional effort to increase anxiety in the populace through media such as Fox News (see Glen Beck, who also has a stake in many gold distributors) propagandizing people to believe that gold is the only safe currency, and that their money is unsafe (despite the lack of evidence of this).

    So, when this took place, it increased demand for gold, which... yep... you guessed it... has caused costs to increase since gold supply is relatively stable.


    Quote Originally Posted by The Finger Prince
    Prince did not know this, as his own purchasing power has declined, as personal experience may color royal judgement.
    And this speaks in favor of the comment above by icewendigo (to which you chose to quote and respond). Inflation is only a problem if wages don't rise in parallel.


    As you can see below, headline inflation is very volatile, but wages have grown more than core prices. While your personal wages may have dropped relative to core prices, looking at the actual data we can see rather quickly that your personal experience is an outlier. It is not representative of the overall workforce trend.






    Quote Originally Posted by The Finger Prince
    You think Prince ignorant?
    No, as I stated clearly above, you're annoying like a gnat at a picnic, and your questions are largely inane. You seem to prefer posting as a cartoonish character instead of approaching the dialog like a mature human being who doesn't refer to themselves in the third person and write in nonsensical prose.

    You also seem far too quick to tell others they are wrong and continue to put forth assertions phrased in the absolute when you yourself are generally doing little more than posting inaccuracies and making comments which rely far too often on oversimplifications and remedial applications of theory.
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  13. #12  
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    Very nice- and M3?
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    Quote Originally Posted by The Finger Prince
    Why is M3 no longer published? Just how much money is in circulation?
    Quote Originally Posted by The Finger Prince
    Very nice- and M3?
    You didn't pose that question to me originally, but okay. Here you go:


    http://www.federalreserve.gov/Releases/h6/discm3.htm
    On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate.

    <...>

    M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

    Really, though. Big deal. It's not like this data isn't already available elsewhere:

    http://www.inflationdata.com/inflati...y_supply_2.asp
    http://nowandfutures.com/key_stats.html



    And when we look at that data, what do we see?


    http://www.businessinsider.com/the-m...-supply-2011-3
    Although the USA stopped issuing M3 we can still measure M3 through various independent sources. Hyperinflationists are often quick to point out Shadow Stats when anyone cites the CPI. Ironically, according to their data the M3 money supply is still shrinking at an annualized rate:





    So yes, the US government is running a massive $1.5T deficit, however, by any metric of money supply we can see that this is barely offsetting the continued de-leveraging that is occurring across the US economy. We are certain to see higher rates of inflation in 2011 (especially if oil prices surge higher), however, it is not an accurate portrayal of reality to conclude that the USA is “printing money” uncontrollably and flooding the world with dollars that will lead to hyperinflation. That is simply not the case and the data speaks for itself. At best, we are barely printing enough to offset the destruction of de-leveraging….
    (emphasis mine)


    So, if I infer your intended point accurately, you are yet again speaking without reality as your foundation.
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    Thank you for clarification, but I am right- we ARE using different definitions of inflation.

    Prince's includes escalating costs of food and fuel and attempts to do without are unsatisfactory, no matter how many charts you wish to show all concerned.

    Again, your efforts to enlighten are much appreciated, will be carefully considered, thank you for time and effort. :-D
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    Quote Originally Posted by The Finger Prince
    Prince's includes escalating costs of food and fuel and attempts to do without are unsatisfactory
    Why? For what purpose do you place a higher value on headline inflation over core inflation when all experience and study shows this to be less accurate? If you have a good reason for doing so, I would appreciate hearing it.


    http://en.wikipedia.org/wiki/Core_inflation
    Core inflation is a measure of inflation which excludes certain items that face volatile price movements, notably food and energy.

    The preferred measure by the Federal Reserve of core inflation in the United States is the core Personal consumption expenditures price index (PCE). This is based on chained dollars.

    Since February 2000, the Federal Reserve Board’s semiannual monetary policy reports to Congress have described the Board’s outlook for inflation in terms of the PCE. Prior to that, the inflation outlook was presented in terms of the CPI. In explaining its preference for the PCE, the Board stated: The chain-type price index for PCE draws extensively on data from the consumer price index but, while not entirely free of measurement problems, has several advantages relative to the CPI. The PCE chain-type index is constructed from a formula that reflects the changing composition of spending and thereby avoids some of the upward bias associated with the fixed-weight nature of the CPI. In addition, the weights are based on a more comprehensive measure of expenditures. Finally, historical data used in the PCE price index can be revised to account for newly available information and for improvements in measurement techniques, including those that affect source data from the CPI;the result is a more consistent series over time. —Monetary Policy Report to the Congress, Federal Reserve Board of Governors, Feb. 17, 2000

    Previously the Federal Reserve had used the US Consumer Price Index as its preferred measure of inflation. The CPI is still used for many purposes, for example, for indexing social security. The equivalent of the CPI is also commonly used by central banks of other countries when measuring inflation. The CPI is presented monthly in the US by the Bureau of Labor Statistics. This index tends to change more on a month to month basis than does "core inflation". This is because core inflation eliminates products that can have temporary price shocks (i.e. energy, food products). Core inflation is thus intended to be an indicator and predictor of underlying long-term inflation.


    http://en.wikipedia.org/wiki/Headline_inflation
    Headline inflation is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy. As a result, headline inflation may not present an accurate picture of the current state of the economy.
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    No doubt what you say is true and represents good news.

    Feeling the pinch of "headline inflation" very acutely, subjective impression, did not say my definition was better, only different. Your responses are most gratifying, thank you once again.
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    Quote Originally Posted by inow View Post
    Quote Originally Posted by The Finger Prince
    So price of gold is up because consumers out of work are suddenly buying more now they are riding bus and not paying automobile expenses?
    No, the price of gold has risen because it's viewed as a safer investment and less likely to be negatively impacted by currency shifts. This tends to cause people with cash on hand... people who would invest that cash in stocks or bonds or material goods... to instead transfer that cash into reserves of gold.

    Further, there has been an intentional effort to increase anxiety in the populace through media such as Fox News (see Glen Beck, who also has a stake in many gold distributors) propagandizing people to believe that gold is the only safe currency, and that their money is unsafe (despite the lack of evidence of this).

    So, when this took place, it increased demand for gold, which... yep... you guessed it... has caused costs to increase since gold supply is relatively stable.
    I read an interesting post earlier this evening which reminded me of this thread. It seems to support my own assessment above.




    The Glenn Beck / DeBeers Connection - NYTimes.com
    Kash, at the Street Light, has a very good post on the price of gold and its relationship or lack thereof to inflation fears. He points out that the market for gold is surprisingly small, so that it would take only a relatively small number of extra buyers to push the price way up, even when other, more direct measures of expected inflation remain low. And he draws a parallel with diamonds:

    It’s also conceivable that a good advertising campaign by gold producers could be enough to move the price of gold. Imagine that an effective, sustained advertising campaign, targeted at wealthy, conservative individuals in the US, is able to persuade 25,000 of them per month to switch a portion of their financial assets into gold. (Note that the target audience would be those roughly 3 million US households that have over $1 million in financial assets.) Suppose for the sake of argument that each of them is persuaded to shift just 5%, or $50,000, of their portfolio into gold. Such an advertising campaign would have the effect of pushing $15 bn per year into the market for investment gold — very possibly enough to have a significant impact on the price of gold, given how small the overall market for gold is.

    Note that a very similar thing happened to the market for diamonds in the middle of the 20th century. The DeBeers diamond cartel used an incredibly successful advertising campaign in the 1950s to cement the idea of the diamond as the premier gemstone, and in so doing permanently changed the value of diamonds.
    Surprisingly, though, Kash doesn’t say explicitly that this parallel is not at all hypothetical. Glenn Beck was financially intertwined with Goldline, and therefore had a financial stake in pushing fears of hyperinflation. And he had many, many viewers. So there was a direct channel through which conservative Americans were being pushed into buying gold.

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  19. #18  
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    Inflation is just a polite and somewhat deceptive way of telling some people you would like to lower their wages. In fact, one group's wages are going down and another group's are going up, but it has appearance of being a situation where one group's wages are staying the same, and other group's wages are going up.



    Quote Originally Posted by inow View Post

    Quote Originally Posted by The Finger Prince
    So price of gold is up because consumers out of work are suddenly buying more now they are riding bus and not paying automobile expenses?
    No, the price of gold has risen because it's viewed as a safer investment and less likely to be negatively impacted by currency shifts. This tends to cause people with cash on hand... people who would invest that cash in stocks or bonds or material goods... to instead transfer that cash into reserves of gold.

    Further, there has been an intentional effort to increase anxiety in the populace through media such as Fox News (see Glen Beck, who also has a stake in many gold distributors) propagandizing people to believe that gold is the only safe currency, and that their money is unsafe (despite the lack of evidence of this).

    So, when this took place, it increased demand for gold, which... yep... you guessed it... has caused costs to increase since gold supply is relatively stable.


    Quote Originally Posted by The Finger Prince
    Prince did not know this, as his own purchasing power has declined, as personal experience may color royal judgement.
    And this speaks in favor of the comment above by icewendigo (to which you chose to quote and respond). Inflation is only a problem if wages don't rise in parallel.
    Buying gold is exactly identical to the practice of putting money under the mattress during the Great Depression. It's an attempt to take your money out of circulation because you're afraid of losing it. The trouble for the economy is that all that money going out of circulation causes deflation, and all that deflation has to be balanced somehow, and the only way to balance it is with hyperinflation.

    So, the net inflation is small, but the gross inflation is very high. The government has to just keep on printing more and more dollars to keep up with all the dollars going under all those mattresses.
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    I should ammend that last post. Buying gold isn't exactly identical to putting money under a mattress, because the money doesn't disappear. The person who sold the gold still has it, and they might decide to spend it.

    Some of our deflation comes from countries like Japan, that have large holdings of US currency and choose not to spend it (or loan it back to us instead of spending it). Some of it just comes from the incredible amount of it getting shipped over to OPEC countries, who either sit on it, or use it to buy up American business interests.

    Right now, I'd say the price of gas is what's turning the USD into "monopoly/funny money". Everyone knows that if the USD's value in terms of other commodities were to rise, the price of gas would go up to match that increase. OPEC is a semi-monopoly, and as such it bases it's price on what it thinks the world can afford, not on what would lead to a greater number of sales. The last thing they want is more sales. More sales means their reserves will run out faster.
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    Quote Originally Posted by mrsmile View Post
    Price of a lot of items, as we know it are increasing. Anyone have any say on how we can solve this? Why do think such thing happen and how can this be solved?
    Hi!

    Well the actual increase of many of the prices might have its cause in the event of the EU (European Union ).

    The implementation of the Euro currency indicates this strongly. This union does not enable the citizens of the member states to get together closer, but divides them. They now need to follow laws which do not suits their regions and other laws that don’t recon what needs be done like it is being done elsewhere in Europe or the world.

    An other reason that we might already face, by now, can be the fact that some nation trys to arm up its forces. Lets say like mainland China.

    If China would want to increase its war budget aggressively, to attack some other nation or the world, it had to print lots and lots of its own currency, to purchase raw materials it would need to follow this goal.

    That would mean, above-average numbers of the Chinese RMB was found in the global financial circulation, which would devalue any currency, at the end, and prices steadily were increasing.

    Actually, I thought this scenario was the past, however. I though this was history, with the demise of Nazi Germany. But, the news this morning reported about turmoil at the Asian Stock Exchanges or something again. Therefore, one might have a closer look on the Peoples Republic of China, perhaps.

    I couldn’t think of an other nation causing a renewed inflation than the Peoples Republic of China, as for the moment.

    Steve
    Last edited by Steve Miller; August 15th, 2011 at 02:27 PM.
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    i am a chinese, very practical person not willing to talk about empty unrealistic ideas related to our daily life,here i am giving my own useful and realistic countermeasures against inflation:
    1> go to wet market to buy enough food once a week to feed your family. bcs price is like steal.
    2> rent a inexpensive small flat with simple cheap funitures, as long as these funitures can meet your requirements.
    3> use public transportation when going out, dont use taxi, avoiding driving your own car, unless you have urgent things to handle.
    4> go to wholesale market to buy hats,shirts,pants,shoes,underwears,etc. must learn to bargin with pedlar in order to save your pocket.
    there are many more others, but depend on your findings and exploring, if you have any good idea about this, pls share with me.
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    Quote Originally Posted by Dable View Post
    i am a chinese, very practical person not willing to talk about empty unrealistic ideas related to our daily life,here i am giving my own useful and realistic countermeasures against inflation:
    1> go to wet market to buy enough food once a week to feed your family. bcs price is like steal.
    2> rent a inexpensive small flat with simple cheap funitures, as long as these funitures can meet your requirements.
    3> use public transportation when going out, dont use taxi, avoiding driving your own car, unless you have urgent things to handle.
    4> go to wholesale market to buy hats,shirts,pants,shoes,underwears,etc. must learn to bargin with pedlar in order to save your pocket.
    there are many more others, but depend on your findings and exploring, if you have any good idea about this, pls share with me.
    Well, I personally think these are not being economic issues, first hand. As long as you are not belonging to the free world, might it be the UK or the US, as a territory or a nation, that means as long as you are not a citizen of the UK or the US, you will not be in a position to add to some true improvement of the situation. The least, not as a community. These are really global issues.

    It will be as bad soon as that you could not even make a use of late technology, even if you get it for free. When you come to understand that the current underpinning is being faulty, then you make a huge leap ahead. You need to take action towards these possible destinations, rather then to take some time of your life time again to complain about this current situation of yourself. It helps a lot, I think. Going to war not belonging to the free world means that you loose the 'conflict', even before it is started. This was no option really. What could you do?

    Steve
    Last edited by Steve Miller; August 15th, 2011 at 02:51 PM.
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    Throw away those 12-cup coffee makers and get one for four "cups". When the word gets out that we are tightening our belt that way it might bring our morning drink back down a little, but in the long run we can wean ourselves of the grounds and learn the wonders of tea. A run on tea would fire another warning shot at the cartels or whatever agency it is that has stormed our wonted brew.

    (Just hide those bigger coffee pots but don't let on about it.)
    "Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense." --Buddha (563BC-483BC)
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    A "core inflation" that excludes the recent and apparently permanent increases in food, shelter, medical care, and transportation (gas);

    compared with an "hourly wage" that ignores the effect on the "average" hourly wages (always calculated for full time employment) of converting so many lower wage jobs into temporary work and unemployment, while averaging in the large raises given to the very high end employees (to keep up with the cost of living, btw) as well as the increase in nominal earnings caused by the increasing prices themselves (for medical care especially, often averaged into the hourly wages as a "benefit");

    would mislead as an estimate of real inflation as experienced by actual people.
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    Quote Originally Posted by mrsmile View Post
    Price of a lot of items, as we know it are increasing. Anyone have any say on how we can solve this? Why do think such thing happen and how can this be solved?
    Prices are not increasing, the current dollar is losing its value and has been losing its value for some years now. I have had rolls of US issued silver dimes, quarters, half dollars and dollars for some years now and the price of most goods have actually gone down. A gallon of gas cost me about 15 cents a gallon right now while you are paying what? 4 dollars?

    I can take a pre-1965 dollar right now, get me 5 gallons of gas, catch a movie and pick up a burger. Can you take your new dollar and do that? In fact, I challenge you or anyone else to take 50 dollars, put it in your closet, pull it out 20 years from now, and see if you can get 5 gallons of gas, catch a movie and buy a burger with it. You wont be able to. I will also bet you or anyone else that I will still be able to take a pre-1965 dollar and by 5 gallons of gas, catch a movie and pick up a burger.

    Do not let people fool you. The reason why you lost your purchasing power and continue to lose your purchasing power is because the new US currency is rapidly catching up to its real value, which is close to nothing. It is inflation, it is backed by nothing and it has nothing to do with global trade or anything else other than the fact that paper money, backed by nothing, will always end up traveling towards worthlessness.

    The problem can only be fixed by backing the US dollar with real value, hard assets, precious metals, etc.. If the US government is not going to back their currency with real value then you have to do it yourself if you want to lock in your purchasing power and wealth and NOT be subjected to, or a victim of, rising inflation and rising prices.

    Until the government acts, you should try to at least purchase a dollar or two of real money, and by that I mean pre-1965 US issued dimes, quarters, half dollars and dollars. It will suck to buy a US issued dollar coin or coins that have a face value of a dollar for 30 current US dollars but, you will lock in your purchasing power with it and not have to deal with inflation and/or rising costs down the road. Put this money up and save it. You can also get bullion (silver rounds and gold) online. Again, buy it and save it.
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    Silver is the key. You are paid in pure silver, then the factory moves to malasia, and you are unemployed. Theres thousands of other people unemployed and desperate because their jobs were outsourced or made obsolete by automation, a landlord offers you a bowl of gruel a day to shine his shoes and use you as a human coat holder, but he pays you in miligrams of silver! so you can buy a bowl of gruel to survive! So be happy because hes paying in silver! No inequality, or poverty or servitude existed in the middle ages because they used metal! Human work slaves toiling 16 hours a day without vacations (on building opulent estates they will never live in) in an Arab Kingdoms would be better off if they were exploited for a slavish wage paid in silver. If they were paid 4 milligrams of silver, they could say "hey wait just one minute, I dont want a tiny fraction of 1 ounce, I want 16 ounces of Silver and you are going to pay for it buddy, I cant ask to work half has much (8hours a day) for 4 times the fiat money wage but somehow silver makes it possible!"
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    Quote Originally Posted by iceaura View Post
    A "core inflation" that excludes the recent and apparently permanent increases in food, shelter, medical care, and transportation (gas);

    compared with an "hourly wage" that ignores the effect on the "average" hourly wages (always calculated for full time employment) of converting so many lower wage jobs into temporary work and unemployment, while averaging in the large raises given to the very high end employees (to keep up with the cost of living, btw) as well as the increase in nominal earnings caused by the increasing prices themselves (for medical care especially, often averaged into the hourly wages as a "benefit");

    would mislead as an estimate of real inflation as experienced by actual people.
    Inflation is a serious problem and government numbers are flat out worthless. People are not stupid and they know basic math.

    They know what the price of goods were in the past and they know what they are today.

    They also know that goods and products are also being made by millions and millions of peasants now and that inflation occurring on products and goods being made by peasants and servitude labor (which used to be made by the middle class) is bad news. Inflation should not be occurring under those circumstances.

    Sound currency would deflate prices for goods and products when a switch from a middle class work force to a peasant and servant class work force occurs. Inflation is so bad that the currency in US has inflated despite using the worlds poorest of the poor to get products and goods to the market.
    Last edited by gonzales56; March 19th, 2012 at 11:06 AM.
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    Quote Originally Posted by icewendigo View Post
    Silver is the key. You are paid in pure silver, then the factory moves to malasia, and you are unemployed. Theres thousands of other people unemployed and desperate because their jobs were outsourced or made obsolete by automation, a landlord offers you a bowl of gruel a day to shine his shoes and use you as a human coat holder, but he pays you in miligrams of silver! so you can buy a bowl of gruel to survive! So be happy because hes paying in silver! No inequality, or poverty or servitude existed in the middle ages because they used metal! Human work slaves toiling 16 hours a day without vacations (on building opulent estates they will never live in) in an Arab Kingdoms would be better off if they were exploited for a slavish wage paid in silver. If they were paid 4 milligrams of silver, they could say "hey wait just one minute, I dont want a tiny fraction of 1 ounce, I want 16 ounces of Silver and you are going to pay for it buddy, I cant ask to work half has much (8hours a day) for 4 times the fiat money wage but somehow silver makes it possible!"
    Silver and gold are highly valuable to all people, to all tribes and to all nations, and they always will be. They are a store of value and important to societies.

    Fiat currencies (like the new US Dollar) always end up inflating, deteriorating and crashing. Silver and Gold can be key to and for people who want to store real wealth and not be victims of inflation.

    People have to know and realize that every US dollar they have is constantly losing value. They have to know and realize that they are losing their purchasing power and wealth by simply holding onto that dollar.
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    - Lost your job because the factory you work for was relocated to a slave wage country while the owners are profiting though the nose?
    - Yeah.
    - Then the owners having a lavish party on a luxury yatch would like you to know you are a victim of the nameless phenomenon known as inflation.
    - Really?
    - Yea, thats the ticket, look over there, inflation.
    - My wife lost her job as a cashier at the bank since they introduced ATM is she a victim of inflation?
    - Sure, its because of inflation.
    - If average working people are paid relatively less and we are paying more for whats produced where's all the money going?
    - The people on the Yacht eating caviar on crumpets say the money magically disappears in the mysterious vault of inflation, remember its all because of fiat money and inflation, look into my eyes and repeat after me in-fla-tion.
    Oil corporations arent making more money and raping you at the pump, its inflation, they're barely getting by, its not like there making billions in profit.
    - But they are making billions.
    - You see, what have I been telling you, its the magic of inflation, inflation inflates CEO bonuses and corporate profits, but its all hot air, its paper money which is worthless like I was telling you, what can a few million dollars buy you anyway? Its not even real money. You should be glad you dont have a 10 million $ bonus of phony paper money, you're much better off with a single and sound Silver dollar, its real money!
    - But cant the CEO buy much more silver with his million dollars?
    - Never mind, dont think, just look in the 60s, a hamburger was a quarter, your money looses value.
    - But if you project wages backwards you would have even tinier wages requiring 2 parents to work for full time to barely make it, which was not the case, my father was ok on a single income. So its not just inflation
    -
    What are you, some kind of trouble maker? These arent the droids your looking for, Inflation, look into my eyes! Inflation.
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    Quote Originally Posted by icewendigo View Post
    - Lost your job because the factory you work for was relocated to a slave wage country while the owners are profiting though the nose?
    - Yeah.
    - Then the owners having a lavish party on a luxury yatch would like you to know you are a victim of the nameless phenomenon known as inflation.
    - Really?
    - Yea, thats the ticket, look over there, inflation.
    - My wife lost her job as a cashier at the bank since they introduced ATM is she a victim of inflation?
    - Sure, its because of inflation.
    - If average working people are paid relatively less and we are paying more for whats produced where's all the money going?
    - The people on the Yacht eating caviar on crumpets say the money magically disappears in the mysterious vault of inflation, remember its all because of fiat money and inflation, look into my eyes and repeat after me in-fla-tion.
    Oil corporations arent making more money and raping you at the pump, its inflation, they're barely getting by, its not like there making billions in profit.
    - But they are making billions.
    - You see, what have I been telling you, its the magic of inflation, inflation inflates CEO bonuses and corporate profits, but its all hot air, its paper money which is worthless like I was telling you, what can a few million dollars buy you anyway? Its not even real money. You should be glad you dont have a 10 million $ bonus of phony paper money, you're much better off with a single and sound Silver dollar, its real money!
    - But cant the CEO buy much more silver with his million dollars?
    - Never mind, dont think, just look in the 60s, a hamburger was a quarter, your money looses value.
    - But if you project wages backwards you would have even tinier wages requiring 2 parents to work for full time to barely make it, which was not the case, my father was ok on a single income. So its not just inflation
    -
    What are you, some kind of trouble maker? These arent the droids your looking for, Inflation, look into my eyes! Inflation.
    Are you OK? Your points are becoming harder and harder to follow. I will try to deal with them for you though.

    Concerning your claim that businesses have far more wealth in purchasing power is just not the case. They have more access to higher amounts of dollars but they have not increased their purchasing power by having those dollars. That is inflation.

    You keep connecting the idea of having more US dollars to the idea that it equals or means more wealth. That is just not reality.

    The US budget in 1964 was 114 billion real dollars. Today, the new fiat Dollar budget is over 4 trillion US dollars a year. There is no increase in wealth in what the new fiat money will buy, in fact, there is a decrease, it just takes a lot more fiat money, due to inflation, to have the same purchasing power. The same applies to all businesses.

    The inflation (devaluation of the US dollar) on the price of Oil from 1964 to 2012 is 5800%. Just digest that for a minute. The new fiat dollar, in its ability and wealth to purchase a barrel of oil, has dropped at least 5800% in just 50 years. The price of a barrel of oil in 1964 was $1.80. Today it is $105.00.

    Wages have gone down in their purchasing power due to inflation (devalue and deterioration of the US dollar). Wages have not gone up in their purchasing power.
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    I think your confusion as to the points I am making comes from missing the point(or focusing on something I am not talking about), unless the cashier at the gas station is making 300,000$ a year and the lady answering the phone for insurance claims is making 350,000$ a year, the inflation is cloaking the fact that the % of the price you pay thats going to wages of people at the bottom providing the service is going down (a-because you dont get a wage raise = to real inflation[no union, unemployment, etc], b-because you are being out-sourced to slave labor land[or someone else who got outsourced is competing for what jobs are left], and c-because your old job is being automated[or someone else who got out-automated is competing for what jobs are left]) and that the upper 1% are vacuum cleaning us dry. Of course the local store owner isnt having much more purchasing power because hes also getting cleaned by the upper 1% and everyone else is also raising prices, but everyone else price is not allocating the 1964 % of labor in it and more trickles up to the upper 1% [usury, insurance, toll booth, cartel-ish acquisitions, lobby profiteering, etc]). Automation and information systems are increasing productivity of workers(with less of them needed), but the owners of the corporation see that difference. In the 50s there might have been 3 employees wipping your windows at the gas station, now no one does that and you pump the gas yourself with an automated DIY pump, which you dont even need a cashier for anymore, so you pay more than in the 50s, but less of what you pay goes to workers, less of the money other people are paying for something goes to you, more and more of it is going to the upper 1%. Is inflation the reason Nikes are made in the 3rd world? Is inflation the reason you have self-service with pay at the pump? If money is gold backed, and all gas station raise the price in gold backed dollars, you will pay more for it because you have no choice, even if its more automated and less of it goes to other workers, but most people will not be able to get more gold-backed wages and some will be laid off or not hired for stuff done by cheap labor/automation so out of desperation they will be glad to get less gold-backed wage and work as a human coat holder. The automation is only a problem because of our outdated monetary-based economic system (technically automation should mean we increase our quality of life a little while working a little less, but the benefits are disproportionately being vacuumed up to a small % of the population).

    If there no 5800% inflation in wages, then there's something other than inflation at work, otherwise the average worker would complain that "a burger used to be 5 cents from my 5,000$ salary, and now I must spend 5$ of my 500,000$ income to pay for a burger" (relatively the same shit, just different measurement), if all there was as a problem was inflation that is what we would complain about.
    Last edited by icewendigo; March 20th, 2012 at 11:06 AM.
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    Quote Originally Posted by icewendigo View Post
    I think your confusion as to the points I am making comes from missing the point(or focusing on something I am not talking about), unless the cashier at the gas station is making 300,000$ a year and the lady answering the phone for insurance claims is making 350,000$ a year, the inflation is cloaking the fact that the % of the price you pay thats going to wages of people at the bottom providing the service is going down (a-because you dont get a wage raise = to real inflation[no union, unemployment, etc], b-because you are being out-sourced to slave labor land[or someone else who got outsourced is competing for what jobs are left], and c-because your old job is being automated[or someone else who got out-automated is competing for what jobs are left]) and that the upper 1% are vacuum cleaning us dry. Of course the local store owner isnt having much more purchasing power because hes also getting cleaned by the upper 1% and everyone else is also raising prices, but everyone else price is not allocating the 1964 % of labor in it and more trickles up to the upper 1% [usury, insurance, toll booth, cartel-ish acquisitions, lobby profiteering, etc]). Automation and information systems are increasing productivity of workers(with less of them needed), but the owners of the corporation see that difference. In the 50s there might have been 3 employees wipping your windows at the gas station, now no one does that and you pump the gas yourself with an automated DIY pump, which you dont even need a cashier for anymore, so you pay more than in the 50s, but less of what you pay goes to workers, less of the money other people are paying for something goes to you, more and more of it is going to the upper 1%. Is inflation the reason Nikes are made in the 3rd world? Is inflation the reason you have self-service with pay at the pump? If money is gold backed, and all gas station raise the price in gold backed dollars, you will pay more for it because you have no choice, even if its more automated and less of it goes to other workers, but most people will not be able to get more gold-backed wages and some will be laid off or not hired for stuff done by cheap labor/automation so out of desperation they will be glad to get less gold-backed wage and work as a human coat holder. The automation is only a problem because of our outdated monetary-based economic system (technically automation should mean we increase our quality of life a little while working a little less, but the benefits are disproportionately being vacuumed up to a small % of the population).

    If there no 5800% inflation in wages, then there's something other than inflation at work, otherwise the average worker would complain that "a burger used to be 5 cents from my 5,000$ salary, and now I must spend 5$ of my 500,000$ income to pay for a burger" (relatively the same shit, just different measurement), if all there was as a problem was inflation that is what we would complain about.
    It is not business owners, investors and bankers (1%) who did this or who are doing this, it is government. The United States of America has been enacting their policy of gradual wealth deterioration and currency devaluation of America and Americans, along with the policy of increasing the wealth and purchasing power of 3rd world and merging markets, in an attempt to merge and then solidify the global economy at a common economic level.

    The "1%" have been forced to adapt to US policy, they have not drive it. Most of the wealthy in America have lost their wealth due to fighting against the United States globalization policy. The ones that have survived have figured out how to use technology to keep some jobs in america while still competing in the new global market or they have given into the United States governments demands and turned the tasks of producing and manufacturing goods and products over seas.

    It is the governments policy to devalue the US dollar and attempt to increase the value of 3rd world and merging markets currencies in the process. The 1% do not want this to happen, they do not want their wealth or purchasing power to continue its devaluation no more than the poor or the middle class do.

    I will explain to you how inflation works because you do not seem to get it. Fiat currency has a set base value (so be it arbitrary, it still has one). That base value does not move. For instance, a 100 fiat dollars is set at a purchasing power of 100. That 100 dollars represents that 100 base points. If the government prints another 100 dollar bill, making $200, the value of that 200 dollars is still 100 base points. Now 100 dollars has the purchasing power of 50 base points and the other 100 dollars has the purchasing power of the other 50 base points. Do you get fiat inflation now?

    The United States government is 15 trillion dollars in debt on fiat currency. The American public is 120 trillion dollars in debt on fiat currency.

    Calculating the difference between minimum wage from 1964 to today, one can actually get a decent ball part figure as to how many times the fiat currency has been split from its own arbitrary base and how much purchasing power has been lost.

    $1.25 was the minimum wage in 1964 (currency backed by hard assets). That is equal to, and has the purchasing power of, 30 USD right now.

    $7.25 is the minimum wage in 2012 (fiat currency). That is equal to, and has the purchasing power of, just .30 cents, or 3 1964 dimes.

    What makes it even worse is the fact that in 1964 America did not produce its products and goods on the backs of peasant and slave labor, the Middle Class made the products and goods but, today, peasants and slave labor makes those products. One does not have to use much intelligence to understand what the true devaluation of the fiat dollar would be today if Americans still made and supplied the products and goods to their fellow Americans and the rest of the world today.

    One also does not have to think much at all to know and understand that the wealth, purchasing power and wages in 3rd world and merging markets will rise, and that will force the US government to print trillions and trillions of more fiat dollars so Americans can keep up with those rising costs.

    Print, print and print to pay debt and print, print and print so Americans can buy. Remember to keep in mind that every fiat dollar is anchored to a base, printing does not increase wealth, it devalues and deludes the purchasing power from every other dollar so it can exist.
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    Quote Originally Posted by gonzales56 View Post
    $1.25 was the minimum wage in 1964 (currency backed by hard assets). That is equal to, and has the purchasing power of, 30 USD right now.
    How are you doing that math? Just based on inflation that $1.25/hour in 1964 is worth about $9.00/hr now. The Inflation Calculator

    Furthermore many things are MUCH cheaper. For example a dozen egg in 1964 cost $0.54 which is more than $3.50 in todays money and more than double what an actual dozen eggs cost today. Eggs and many basic commodities are much cheaper with respect to income than they were during the 60s.
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    Quote Originally Posted by Lynx_Fox View Post
    Quote Originally Posted by gonzales56 View Post
    $1.25 was the minimum wage in 1964 (currency backed by hard assets). That is equal to, and has the purchasing power of, 30 USD right now.
    How are you doing that math? Just based on inflation that $1.25/hour in 1964 is worth about $9.00/hr now. The Inflation Calculator

    Furthermore many things are MUCH cheaper. For example a dozen egg in 1964 cost $0.54 which is more than $3.50 in todays money and more than double what an actual dozen eggs cost today. Eggs and many basic commodities are much cheaper with respect to income than they were during the 60s.
    Inflation calculators based on government numbers (which they all are) are really worthless. You have to know how the federal government produces these numbers in order to realize that.

    The Best real inflation tool on the web is actually coinflation.com . I recommend everyone use it. The Dollar was backed by gold and silver and it is that value, not a made up value, which shows and tells what pre-1965 dollars used to be worth and are still worth today.

    The price of eggs and all commodities have everything to do with quality, supply, demand and cost to bring them to the market place (production). Eggs have gone down in price due to less quality, greater supply, production methods and government subsidies. Anyone can get a cheap dozen today for half a 1964 dime.

    The ability of half a 1964 dime to buy a dozen eggs today, is the reality, not the difference between 1964's and 2012's quality, supply, demand and costs to get the eggs to the market place (including government subsidies to help even further to reduce the cost).

    If subsidies, lesser quality, greater supply and different production methods were not developed for Eggs then everyone would be paying at least $15.00 of the current fiat dollars for a dozen of eggs today. That is not better than 1964, that is far worse. If the 2012 levels and development of lesser quality, greater supply, production methods and subsidies existed in 1964 for eggs, then their cost would have been 5 cents.

    As it is though, today, anyone can buy a dozen of cheap eggs for half a 1964 dime (even less in some places) and they will pay over a dollar in 2012 dollars for that same dozen.
    Last edited by gonzales56; March 20th, 2012 at 11:25 PM.
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    The Best real inflation tool on the web is actually coinflation.com . I recommend everyone use it. The Dollar was backed by gold and silver and it is that value, not a made up value, which shows and tells what pre-1965 dollars used to be worth and are still worth today.
    Honestly useless and not based on purchasing anything other than silver. The dollar hasn't been based on metals for over 80 years.
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    Quote Originally Posted by Lynx_Fox View Post
    Honestly useless and not based on purchasing anything other than silver. The dollar hasn't been based on metals for over 80 years.
    The very definition and meaning of the word "Dollar" set by the United States Constitution is a specific weight of silver. 371.25 Grains of Sliver is a "Dollar"..... A "Dollar" is "371.25 Grains of Silver". They are synonymous. The value of a "Dollar" is the value of "371.25 grains of Silver". A dollar is nothing but that amount of Silver.

    DOLLARS OR UNITS —each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

    One connot disconnect the meaning and value of pre-1965 dollars from what they were and what they are. Dollar means a specific amount of Silver... Value = that specific amount of Silver.

    From the very beginning of The United States until the last dollars were struck and dated 1964, dollar meant and was a specific amount of Silver and its value was, and still is, 371.25 grains of silver.

    Real inflation:
    $1.25 was the minimum wage in 1964 (currency backed by hard assets). That is equal to, and has the purchasing power of, 30 USD right now.

    $7.25 is the minimum wage in 2012 (fiat currency). That is equal to, and has the purchasing power of, just .30 cents, or 3 1964 dimes.

    Americans are making 62.5% less per an hour in 2012 than they were in 1964.

    The 2012 dollar has 2500% less purchasing power than a 1964 dollar.

    A 1964 dollar could buy quality made american products and goods built, made and produced by american workers.

    A 2012 dollar can only buy poor quality foreign products and goods built, made and produced by peasant and slave labor.

    The value of modern fiat dollars are still losing their value and prices are still going up despite poor quality foreign products and goods being built, made and produced for the american markets by peasant and slave labor.

    The value of pre-1965 dollars are steady and sure, but due to products and goods in the american markets being made by peasants and slave labor now, the price for those products and goods in pre-1965 dollars have gone way down.
    Last edited by gonzales56; March 22nd, 2012 at 12:50 AM.
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    [QUOTE=gonzales56;315241]
    Quote Originally Posted by Lynx_Fox View Post

    The very definition and meaning of the word "Dollar" set by the United States Constitution is a specific weight of silver. 371.25 Grains of Sliver is a "Dollar"..... A "Dollar" is "371.25 Grains of Silver". They are synonymous. The value of a "Dollar" is the value of "371.25 grains of Silver". A dollar is nothing but that amount of Silver.
    It was the Coin Act of 1792, not in the Constitution. It became obsolete in 1873 when Congress established a Gold standard and then completely decoupled from metals by Congress during the great depression. The yearly variability of inflation and deflation has been dramatically better ever since.
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    [QUOTE=Lynx_Fox;315621]
    Quote Originally Posted by gonzales56 View Post
    Quote Originally Posted by Lynx_Fox View Post

    The very definition and meaning of the word "Dollar" set by the United States Constitution is a specific weight of silver. 371.25 Grains of Sliver is a "Dollar"..... A "Dollar" is "371.25 Grains of Silver". They are synonymous. The value of a "Dollar" is the value of "371.25 grains of Silver". A dollar is nothing but that amount of Silver.
    It was the Coin Act of 1792, not in the Constitution. It became obsolete in 1873 when Congress established a Gold standard and then completely decoupled from metals by Congress during the great depression. The yearly variability of inflation and deflation has been dramatically better ever since.
    It was, and still is, a constitutional mandate. Coin (money) was to be made of gold or silver, or both, and it was up to congress to pick a unit (name the unit, as well as its weight and value) and to coin that unit as currency/money.

    The 1873 act only lasted a few years and the silver dollar was reinstated. The 1873 act not only kept the value of the metals (gold and silver, in this case gold) as the value and definition of the dollar but, the gold dollar issued before 1873 and during 1873 kept the same ratio and value scale for the gold dollar as 371.25 grains of silver.

    The coin act of 1873 was short lived. It wasn't until 1900 that Congress took the United States off the silver dollar standard and declared the US on a gold dollar standard (still giving the new gold dollar standard the same value as 371.25 grains of silver), and still issued silver coins.

    The gold dollar was the same value, due to its metal content, as the silver dollar but, the creation of unconstitutional money in the form of paper notes (basically the same notes we are all familiar with today) became a tool of the US government during the civil war and then with the creation of the federal reserve in 1903.

    Silver coins were still minted and issued through all of this though, and they continued to be minted for circulation up until 1964. The United States government is not allowed to issue paper currency. They can only issue coin as currency. This is why they created the federal reserve and declared that it is not part of the United States Government.

    Silver and gold can only cause inflation if and when massive new veins are discovered (this rarely happens), and even when this happens, their value still only drops slightly due to the new money being discovered in the ground.

    Silver and gold never cause deflation when they are currencies.... Cheaper labor and/or cheaper products cause that when gold and silver are currencies.

    The great depression was caused by the over printing of notes. The over printing of notes caused inflation and a great fear of even more inflation. Instead of spending the notes on goods and products the american people flocked to real value, real money, gold and silver, which caused the economy to come to a grinding halt. The economy coming to a stand still caused massive deflation, and that caused business' and bank's to fail left and right.

    The governments response to this was to take the peoples gold from them (they made it illegal for anyone to own or have more than 100 dollar coins). By threat of punishment, and by punishing anyone they caught, the US government made every american turn their coins in for exchange of illegal fiat dollars issued by the Federal Reserve.

    Private gold ownership remained illegal in the US until 1974.

    They stopped gold in the 1930s and they stopped silver in the 1960s but, just like in the 30s and throughout all of history, it is gold and silver that are sound currency and sound stores of wealth. It is gold and silver that protect against inflation caused by the over printing of fiat dollars, and in the end, and I mean in just about every case, it is gold and silver (mainly silver though) that ends up burying fiat currencies.
    Last edited by gonzales56; March 25th, 2012 at 05:28 AM.
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  40. #39  
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    (shrugs).....

    You can live in your fantasy world I guess. You failed to show it in the Constitution and refuse to acknowledge the acts of Congress which completely invalidate your arguments.

    Good luck trying to use your concept of money in the real world.
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    Quote Originally Posted by Lynx_Fox View Post
    (shrugs).....

    You can live in your fantasy world I guess. You failed to show it in the Constitution and refuse to acknowledge the acts of Congress which completely invalidate your arguments.

    Good luck trying to use your concept of money in the real world.
    Anyone who would suggest or call gold and silver a fantasy as a currency of exchange and a store of wealth just does not understand the value of gold and silver or of saving and protecting ones wealth/value against inflation and fiat currencies.

    The constitution only allows the federal government to make coins, not paper. That is just a fact and that is why the us government does not make fiat currency, they only make coin, and the federal reserve makes the fiat paper currency.

    There is no doubt that people in the federal government have taken the peoples silver and gold dollars and exchanged/switched them for fiat paper currency and copper, zinc and nickle coins. We agree.

    It does not matter what US law is today though, it does not change the definition of what a dollar was before fiat paper dollars and it does not change the value of those gold and silver dollars. They still retain their value, and it is that value which shows how much the new paper dollars have depreciated in value and how much they have been inflated due to over printing.

    It has to also be the first time in the world of economics that a fiat paper supporter has told holders of gold and silver that they wish them well with their concept of money and a store of value in the real world..
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    I hope this is not an inappropriate question. However, I was wondering how does this impact us for the next year or two? I read two news letters today from highly regarded financial experts. One from a guy in Hong Kong, believes that because interest rates are low and money supply is high, then prices of risky assets (stocks / gold) should continue to rise at least for the next several months.

    The other news letter is a highly rated precious metals news letter that focuses on smaller miners. This letter was cautioning that we may be in for a near term significant pull back in gold price before another rally. The letter was looking at some hedging options of the near term to hedge against the pull back.
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    Quote Originally Posted by dedo View Post
    I hope this is not an inappropriate question. However, I was wondering how does this impact us for the next year or two? I read two news letters today from highly regarded financial experts. One from a guy in Hong Kong, believes that because interest rates are low and money supply is high, then prices of risky assets (stocks / gold) should continue to rise at least for the next several months.

    The other news letter is a highly rated precious metals news letter that focuses on smaller miners. This letter was cautioning that we may be in for a near term significant pull back in gold price before another rally. The letter was looking at some hedging options of the near term to hedge against the pull back.
    Gold is not a risky asset. It is a hard asset that is very stable and has very little volatility (although it can be manipulated, and often is, by paper markets). It is not really gold that rises or falls over time for the most part though, it is the volatility and the value of the US dollar and other fiat currencies that move. As long as the value of the US Dollar is going down, not compared to other fiat currencies but compared to commodities, then it will continue to take more and more US Dollars to purchase an ounce of gold.

    It is estimated by those who count the global gold supply that gold increases its supply (due to mining) by about 1.5% a year on average. With fiat currencies being created or printed at a much greater rate than 1.5% a year, gold prices will do nothing but continue to go up over time.

    If someone believes that their government and nation is going to pay off all their debt (as if they can) and stop printing money (as if they will) then they should not count on the price of gold, in fiat currencies, to go up.
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  44. #43  
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    Quote Originally Posted by gonzales56 View Post
    Quote Originally Posted by dedo View Post
    I hope this is not an inappropriate question. However, I was wondering how does this impact us for the next year or two? I read two news letters today from highly regarded financial experts. One from a guy in Hong Kong, believes that because interest rates are low and money supply is high, then prices of risky assets (stocks / gold) should continue to rise at least for the next several months.

    The other news letter is a highly rated precious metals news letter that focuses on smaller miners. This letter was cautioning that we may be in for a near term significant pull back in gold price before another rally. The letter was looking at some hedging options of the near term to hedge against the pull back.
    Gold is not a risky asset. It is a hard asset that is very stable and has very little volatility (although it can be manipulated, and often is, by paper markets). It is not really gold that rises or falls over time for the most part though, it is the volatility and the value of the US dollar and other fiat currencies that move. As long as the value of the US Dollar is going down, not compared to other fiat currencies but compared to commodities, then it will continue to take more and more US Dollars to purchase an ounce of gold.

    It is estimated by those who count the global gold supply that gold increases its supply (due to mining) by about 1.5% a year on average. With fiat currencies being created or printed at a much greater rate than 1.5% a year, gold prices will do nothing but continue to go up over time.

    If someone believes that their government and nation is going to pay off all their debt (as if they can) and stop printing money (as if they will) then they should not count on the price of gold, in fiat currencies, to go up.
    Thanks.

    I agree that the general trend for gold is up.

    However, many assets also increase until a "bubble" occurs.

    Then the asset collapses. Gold is likely to follow that course.

    However, I agree that we don't seem to be at that point as long as governments are printing money.

    I read one "gold bug" book, that also implied that gold has a way to go on the upside. However, the author noted that gold generally moves inversely with stocks. In the last couple years, gold has moved up in parallel with stocks. Eventually they should diverge. Maybe that is the basis for a forecast of a short term pull back in gold--improved corporate earnings that should favor stocks?
    Anyway, triggers for true bear markets for gold seem to be rising interest rates that don't seem to be in the near term outlook.
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    Quote Originally Posted by dedo View Post
    Thanks.

    I agree that the general trend for gold is up.

    However, many assets also increase until a "bubble" occurs.

    Then the asset collapses. Gold is likely to follow that course.

    However, I agree that we don't seem to be at that point as long as governments are printing money.

    I read one "gold bug" book, that also implied that gold has a way to go on the upside. However, the author noted that gold generally moves inversely with stocks. In the last couple years, gold has moved up in parallel with stocks. Eventually they should diverge. Maybe that is the basis for a forecast of a short term pull back in gold--improved corporate earnings that should favor stocks?
    Anyway, triggers for true bear markets for gold seem to be rising interest rates that don't seem to be in the near term outlook.
    In the early 1980s the interest rate on bonds hit about 20% and many people took their dollars and currency and invested in those bonds. This did cause some to sell gold and buy bonds, but the price of gold was $190.00 US fiat dollars in 1978 and even with those 20% yields, the price of gold never dropped to or came close to returning to $190.00.

    Gold was $35 US dollars an ounce in the 1960s and it is $1600 US fiat dollars an ounce today. It is $1600 US fiat dollars an ounce today and one can use simple math to calculate where it will be in 40 years regardless of the fluctuations (spikes and dips) that will occur throughout the next 40 years.

    I think I understand your concerns though.. If you have no gold or silver, can you lose some fiat dollars if you plan on buying today and selling next week, in a month or even in a year or two? The answer to that is yes. It can happen over the short term if you get in gold and silver when and while the value of fiat currencies are relatively rapidly trying to find their lesser values against gold and silver.

    You also have to watch out for the United States using JPMorgan and other banks to manipulate the price of gold and silver downwards. These banks will dump 100s and 100s of millions of paper gold and paper silver ounces (which do not even exist) into the market in order to flood the gold and silver markets with a fake supply of gold and silver, thus driving the prices of real gold and silver down.

    Due to this manipulation and system of manipulation, if you are ever going to buy gold and silver, do not get fooled or suckered into buying a piece of paper. Buy real gold and real silver.
    Last edited by gonzales56; March 26th, 2012 at 10:13 PM.
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