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Thread: Money system masking the unavoidable?

  1. #1 Money system masking the unavoidable? 
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    Looking at the way inflation is determined, you add up what people spent their money on, compare it with the price they paid for those things.... etc.... and you can tell if there's inflation because the costs of things are going up.

    But, what if a new product enters the market and soaks up some of the money? Then the prices of other goods could remain the same or drop, and yet more money could be getting injected into the economy. It wouldn't lead to inflation because the new printed money was spent on the new item.

    What if the new item is just hot air? Maybe it's a new age religious preacher giving people hope, and making money from it. Maybe it's a new financial product, that is supposed to yield huge returns later, but only manages to do so by a sort of continuing Ponzi scheme effect. Maybe it's a new series of collectible baseball cards that you can buy for cheap now, and people begin trading them at ever higher prices as time goes on.

    On paper, you might look at the price per baseball card, see how much money is getting spent on them, then compare that with the price of grain and thereby form the belief that if all that money were diverted from baseball cards, we could use it to feed the world. But could we? What's backing up the value of that money? Aren't the baseball cards what is backing it? Get rid of the cards and the money becomes worthless.


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    Money is merely a convenient cultural artefact to be used as a means of exchange for goods or services of value. We could use anything we like. the important thing is that money saves us too many bartering calculations. How much pumpkin for a bicycle tyre? Once you determine that, how much does the amount of pumpkin change when there's a shortage or a surplus of pumpkin? Similar things happen with money.

    There's also the issue of paying now or later for something of enduring value - like a house or jewellery or a factory. Once you introduce the notion of time to transactions you need something like money to account for the value of paying for an item in advance. Like paying architects and fees and builders long before you have something to show for it - like a multi-storey building. Then there's the time issue of money advanced for a completed building long before it produces money itself from tenants or the sale of goods or services. All the time that money's tied up in creating and finishing that building is time that the money isn't being used for instant consumption like food, clothes, power, water, wages, materials and the like.

    If we all decided tomorrow that money as we currently value it is worthless, apart from all of us going broke, we'd have to find another, but very similar way, to calculate what we were willing to give in order to get something else.

    There's very little point in complaining about money as a concept. It is, quite literally, the means of exchange. Get rid of it and you would have to find another - which would have exactly the same problems. The problem is finance and economics. If the whole world moved to pumpkins as the means of exchange, do you really think that pumpkin-based bankers would behave any differently to money-based bankers?

    The core issue is government regulations - the lack of them, the details of them, what they encourage, what they discourage. Changing the means of exchange doesn't do anything to change the balance between good money/pumpkin management and bad. Between good managers and bad. Good economists and bad. Good governments and bad.


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  4. #3  
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    Quote Originally Posted by kojax View Post
    Looking at the way inflation is determined, you add up what people spent their money on, compare it with the price they paid for those things.... etc.... and you can tell if there's inflation because the costs of things are going up.

    But, what if a new product enters the market and soaks up some of the money? Then the prices of other goods could remain the same or drop, and yet more money could be getting injected into the economy. It wouldn't lead to inflation because the new printed money was spent on the new item.

    What if the new item is just hot air? Maybe it's a new age religious preacher giving people hope, and making money from it. Maybe it's a new financial product, that is supposed to yield huge returns later, but only manages to do so by a sort of continuing Ponzi scheme effect. Maybe it's a new series of collectible baseball cards that you can buy for cheap now, and people begin trading them at ever higher prices as time goes on.

    On paper, you might look at the price per baseball card, see how much money is getting spent on them, then compare that with the price of grain and thereby form the belief that if all that money were diverted from baseball cards, we could use it to feed the world. But could we? What's backing up the value of that money? Aren't the baseball cards what is backing it? Get rid of the cards and the money becomes worthless.

    The government numbers on inflation are very crooked in this sense..... They count a desk as a desk, it does not matter the quality or who makes it.. If a desk from 1950 was hand made by americans Vs. a cheap pressed wood/paper desk made by the Chinese today, they count both items as the same and use the cost of the old great desk compared to the new cheap desk to calculated inflation.

    If you want to know real inflation, compare american made products to american made products.. Compare quality to quality. However, the government does not do this.. They compare quality to crap and come up with inflation numbers from that comparison.
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  5. #4  
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    Quote Originally Posted by adelady View Post

    There's very little point in complaining about money as a concept. It is, quite literally, the means of exchange. Get rid of it and you would have to find another - which would have exactly the same problems. The problem is finance and economics. If the whole world moved to pumpkins as the means of exchange, do you really think that pumpkin-based bankers would behave any differently to money-based bankers?
    Agreed. I'm only opposed to the idea of people relying excessively on just that one thing to try and understand their economy. Some things have a physical limitation to them that is very much separate from the world of finance. If we're only producing say 80 billion barrels of oats per year, that isn't necessarily the result of us assigning a lower priority to oats than we do to stealth fighter airplanes or space rockets. It could be that there's only so much land that's good for growing oats inside our borders, and doubling or tripling how much money we spend on oats would not change the quantity because it can't change.

    Certainly the amount of gold doesn't go up when the price of gold rises. (Maybe a little, because some hard-to-mine veins of ore start to get tapped, but not enough to substantially shift t, he amount we have.)




    The core issue is government regulations - the lack of them, the details of them, what they encourage, what they discourage. Changing the means of exchange doesn't do anything to change the balance between good money/pumpkin management and bad. Between good managers and bad. Good economists and bad. Good governments and bad.
    Yeah. There will always be something.

    Even on the gold standard, banks can inflate the currency by writing numbers on a person's account ledger that supposedly represent dollars, even though most of those dollars aren't actually in their vault.

    I'm not trying to advocate an abandonment of the system. More just complaining about all the bad economists out there who just tally the numbers of dollars/yen/euros changing hands and then forget to do a reality check to see if those currency bits are moving in a way that represents actual production. A smart government would kind of try and curtail all the non-production exchanges as best they can. (Here I'm counting back rubs and video games as production.)
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  6. #5  
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    Quote Originally Posted by adelady View Post
    Money is merely a convenient cultural artefact to be used as a means of exchange for goods or services of value. We could use anything we like. the important thing is that money saves us too many bartering calculations. How much pumpkin for a bicycle tyre? Once you determine that, how much does the amount of pumpkin change when there's a shortage or a surplus of pumpkin? Similar things happen with money.

    There's also the issue of paying now or later for something of enduring value - like a house or jewellery or a factory. Once you introduce the notion of time to transactions you need something like money to account for the value of paying for an item in advance. Like paying architects and fees and builders long before you have something to show for it - like a multi-storey building. Then there's the time issue of money advanced for a completed building long before it produces money itself from tenants or the sale of goods or services. All the time that money's tied up in creating and finishing that building is time that the money isn't being used for instant consumption like food, clothes, power, water, wages, materials and the like.

    If we all decided tomorrow that money as we currently value it is worthless, apart from all of us going broke, we'd have to find another, but very similar way, to calculate what we were willing to give in order to get something else.

    There's very little point in complaining about money as a concept. It is, quite literally, the means of exchange. Get rid of it and you would have to find another - which would have exactly the same problems. The problem is finance and economics. If the whole world moved to pumpkins as the means of exchange, do you really think that pumpkin-based bankers would behave any differently to money-based bankers?

    The core issue is government regulations - the lack of them, the details of them, what they encourage, what they discourage. Changing the means of exchange doesn't do anything to change the balance between good money/pumpkin management and bad. Between good managers and bad. Good economists and bad. Good governments and bad.

    In fairness though, and outside of fantasy, I have never seen, heard about or known of a single government that was good. The minute a government controls and defines "money", abuse and theft begins, and every government has gone down this path and goes down that path.

    The beautiful thing about gold, silver, copper, nickel, etc., is that people cannot abuse others or rob others of their value/wealth if they hold and have these metals. Banks and governments can issue all the paper they want but, as long as the people have the right to hold onto metals, they have a means to protect themselves from government abuse and theft of value/wealth.

    Money that is both a means of exchange and a store of value/wealth is good money. Money that is a means of exchange but, due to abuse and theft of value/wealth, is not and cannot be a store of value/wealth, is bad "money.

    I personally do not have a problem with the system concerning myself. I am more than happy with being able to give people a few pieces of a tree for pounds of silver and gold but, I feel bad for those who are clueless and whom are either being striped of their wealth or being denied wealth in the first place due to the fiat currency they work for, use, hold onto and invest.

    The consequences, the pain of the abuse and theft perpetrated upon the american people by the US government used to be seen and felt from one generation to the next, and so the american people remained clueless and ignorant, however, the gap between theft and pain has been closing rapidly and it is going to close even more in the years to come.
    Last edited by gonzales56; October 14th, 2012 at 03:05 PM.
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  7. #6  
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    Quote Originally Posted by gonzales56 View Post
    I personally do not have a problem with the system concerning myself. I am more than happy with being able to give people a few pieces of a tree for pounds of silver and gold but, I feel bad for those who are clueless and whom are either being striped of their wealth or being denied wealth in the first place due to the fiat currency they work for, use, hold onto and invest.
    Be careful putting too much faith in those also. Sure they aren't as easy to subject to Ponzi schemes, but right now I'm pretty sure there's a bubble built up around them.

    Bubbles are just another kind of inflation trick. The bubble builds up around the promise of future value. The gold remains in its previous quantity, but the projected future growth in value is still a form of inflation. If you buy gold right now, you're buying both the gold and the promise. The promise is worthless, and almost certainly will not turn out to be true.

    I'd say to wait until the promise has gone unfulfilled, and then buy just the gold after people have become disillusioned.
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    The beautiful thing about gold, silver, copper, nickel, etc., is that people cannot abuse others or rob others of their value/wealth if they hold and have these metals.
    Unfortunately, gold and other precious metals are also far from ideal as a means of exchange. First of all supply of gold may not peak up with population and economy growth and it will lead to constant rise in price of gold.This in turn will lead to direction of money from investment into production to investment into gold and increase it prise even more.Golden buble may appear and economy will slow down.Secondly those countries which already have largest gold reserves and gold deposites will appear in much more advntageous situation in comparison to have-nots.South Africa will concentrate giant amount of World wealth just because they have gold on their territory.Why other countries should loose on it? If we need some reliable analog of gold then it should slowly increase in amount to peak up with economy growth and be readily available in any country.Have no idea what could it be.
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  9. #8  
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    Quote Originally Posted by kojax View Post
    Quote Originally Posted by gonzales56 View Post
    I personally do not have a problem with the system concerning myself. I am more than happy with being able to give people a few pieces of a tree for pounds of silver and gold but, I feel bad for those who are clueless and whom are either being striped of their wealth or being denied wealth in the first place due to the fiat currency they work for, use, hold onto and invest.
    Be careful putting too much faith in those also. Sure they aren't as easy to subject to Ponzi schemes, but right now I'm pretty sure there's a bubble built up around them.

    Bubbles are just another kind of inflation trick. The bubble builds up around the promise of future value. The gold remains in its previous quantity, but the projected future growth in value is still a form of inflation. If you buy gold right now, you're buying both the gold and the promise. The promise is worthless, and almost certainly will not turn out to be true.

    I'd say to wait until the promise has gone unfulfilled, and then buy just the gold after people have become disillusioned.
    Gold is not in a bubble and very few people purchase gold with the expectations of growth in its value. It is a store of value/wealth.. It is protection against inflation.

    The fewer people who own gold, silver, copper or nickel, the better it is for people like me. I am not going to argue to much, to long or to hard against those who have warnings against owning metals. All I will stress to people is that inflation of fiat currencies is a reality, it is the monetary policy of the united states to decrease the value of the dollar constantly, continually, without pause, and so a dollar today will always be worth less tomorrow. However, metals will keep your value/wealth intact... They will maintain it.
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    Gold is not in a bubble and very few people purchase gold with the expectations of growth in its value. It is a store of value/wealth.. It is protection against inflation.
    Is that really true, or do the people who fall for the buy gold advertising the majority--most adds seem to emphasis not missing the next big increase.

    As a stable commodity, it has a terrible track record of maintaining stable price. In fact speculation over gold has made it a very volatile.
    Gold Price Volatility Soars | GoldAlert

    The insane volitility is probably one of the reasons government got off using it as a standard--and since than the dollar has remained far more stable and inflcation and deflationary periods mild by comparison.
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    Quote Originally Posted by Lynx_Fox View Post
    Gold is not in a bubble and very few people purchase gold with the expectations of growth in its value. It is a store of value/wealth.. It is protection against inflation.
    Is that really true, or do the people who fall for the buy gold advertising the majority--most adds seem to emphasis not missing the next big increase.

    As a stable commodity, it has a terrible track record of maintaining stable price. In fact speculation over gold has made it a very volatile.
    Gold Price Volatility Soars | GoldAlert

    The insane volitility is probably one of the reasons government got off using it as a standard--and since than the dollar has remained far more stable and inflcation and deflationary periods mild by comparison.
    [img]
    From 1800 to 1930, gold had been between 19-30 usd an ounce. That is stability, that is not volatility.

    The price swings you are talking about concerning products and goods were due to war. In 1914 WW1 started. Prices for products and goods raised. It is/was a supply and demand thing. This has and had nothing to do with gold. In fact, when the war ended prices immediately began to return to normal, meaning the price went back down. At this time though, and even during the civil war, fractional paper currency had already been in practice and it was this practice that led the united states government to outlaw the ownership of gold by the american people.

    In 1933 the United States government outlawed the ownership of gold bullion, confiscating the gold from the american people, thus removing the people of the United States off of the gold standard. The American people where not allowed to own gold (except for a few gold coins/bullion as collector/dealer type items) until 1975 (december 31st, 1974).

    The dollar has not remained or been more stable under a fiat currency than it was under the silver or gold standards.

    When one see's a spike in price due to war or supply and demand issues, what is stable, like gold and silver, will correct the price of products and goods as soon as those supply and demand issues are over or corrected. This is what is normal, this is the very definition of stability. This is expected. What fiat currencies do is inflate the cost of products and goods on its own. No war required, no supply and demand issues needed, it is the fiat currency itself that causes prices to rise.

    Your chart shows that inflation, the devaluation of the dollar, has been the constant since the american people were stripped/robbed of their gold by the United States government in 1933. That is not stability. After ww2 the prices of products and goods should have been drastically reduced but, they were not. The prices remained inflated, in a bubble, because the fiat currency the american people had used and were using, just like the currency today, was itself over created and devalued.

    People have to keep in mind that when one looks at charts like the one you posted, the stability is seen in a return to value, a return to proper prices, and not a continued rise in prices with no return to reality. Each year there is an increase in prices, or a devaluing of the dollar, is another year that has to be added to the loss in value. Add up all the loss in value from 1933 till today and one can easily see that this is not stability, instead, this is a massive and serve loss in value.


    From 1930 to 2012, under a fiat currency for the american people, the price of gold has gone from $21.00 usd an oz to $1740.00 usd an oz. That is not stability. That is a devaluing of the value and wealth of the american people. In stark contrast, from 1800 to 1930, under silver and gold standards, the price of gold an oz went from $19.00 usd (in 1800) to $21.00 usd (in 1930). That is stability.

    The means of exchange, silver and gold, where not volatile, it was circumstances such as wars and supply and demand issues that caused prices to move, and this is normal... This is stability, this is how it should be... However, with the fiat currencies we have now, it is the fiat currency itself that is volatile, it is the fiat currency itself that cause the increase in prices more than anything else. No wars needed, no supply and demand issues required, fiat currencies, by themselves, run full steam ahead devaluing and stripping the wealth of the american people.
    Last edited by gonzales56; October 15th, 2012 at 08:53 AM.
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    The monetary system is as archaic as bones in the nose, face paintings and stone tools. Tribes habituated to face paint and necklaces of trinkets bones and seashells find these normal, the same way we find the monetary system normal because we are braught up in it, the same way cave men cant imagine using anything else than crude stones as tools as opposed to bronze or metal.


    If you look at the ressources available on earth, the man power, the bilions of human brains that could learn, create, build, and what is physically possible, its blatant our current uncivilization is wasting potential on a planetary scale, and allowing millions of people to struggle, needlessly, for basics that could easily be accessible in a civilization not based on money, organized differently. If there are space faring civilizations we probably would not be considered civilized whatsoever, just a disorganized horde of hairless monkeys running around for a figment called money and myried in conflicts of interests, petty competition and corruption, spewing pollution (insert Chimp sounds and shouts).


    This beins said, if we must sink into the depths of bone in noses and stone tools, it should be noted that


    1- Inflation is not a problem if your purhcasing power inflates along with prices, therefore, if the price of goods goes up more than what you earn, its not just the inflation thats the underlying problem, its that you are being screwed (cheap labor, outsourcing, trusts/colusion/cartels, automation, balance of power, etc)


    2- Issuing money is just one side of the coin, if production rises (more houses, etc), issuing more money by itself isnt a problem (depends how much and who benefits, or who controls it). Worgl propered during the Great Depression by issuing its own public "paper" money according to specific parameters .


    3- Wealth is access to production, which can be greatly increased with technology and non human power sources and non human activity(automation, computer assisted tools, information systems). If millions are unemployed (because of our outdated system) and starving on our planet, we are producing less wealth.


    As for the use of baseball cards as money sinks, it would be better (again if we keep the stone tools which money is) to sink that money along with 99% of military expenditures into space program, hospitals, and building housing, hydroponics, solar panels, for earthlings .


    (Caveat: Although its plain to me the monetary system is crap, I admit the detail of a money-less civilization are not yet clearly defined, like conceptual drawing by Davinchi for flying contraptions that dont fly but are first drafts that need much improvement, it has to be designed. )
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    The current 'modern' money system is so simple and funny that it beats many magicians as a way to move rabbits around with hats. You see it so you believe that it is a working solution to some problem. Money As Debt - Full Length Documentary - YouTube is a good place to start unveiling the trick.

    You should completely split the notions of money (promises of usage of value) and the economy (who produce value, why and who it goes around, and especially in whose hands)

    There are plenty of money system (read exchangeable promise) possible, many already (or still) used , all perfectly working, at various scale. All of them may have some draw-back, but none as blatant than this stupid pseudo central-bank system, witch is this: money is called into existence from nowhere, attached to a DEBT, and then loans with interest.
    Yes it is a racket, also called a business by their exclusive owners Rothschild and Rockefeller and the likes...
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    From 1800 to 1930, gold had been between 19-30 usd an ounce. That is stability, that is not volatility.
    The year to year variability was extremely variable, look at all the years over 5% and many over 10% gain or losses in a single year, many having nothing do with war---that is volatility. Business would have a very difficult time operating under those conditions--a dampened slow increase which characterizes most years after we dropped the gold standard is a much better environment to operate in.
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    Quote Originally Posted by Boing3000 View Post
    The current 'modern' money system is so simple and funny that it beats many magicians as a way to move rabbits around with hats. You see it so you believe that it is a working solution to some problem. Money As Debt - Full Length Documentary - YouTube is a good place to start unveiling the trick.

    You should completely split the notions of money (promises of usage of value) and the economy (who produce value, why and who it goes around, and especially in whose hands)

    There are plenty of money system (read exchangeable promise) possible, many already (or still) used , all perfectly working, at various scale. All of them may have some draw-back, but none as blatant than this stupid pseudo central-bank system, witch is this: money is called into existence from nowhere, attached to a DEBT, and then loans with interest.
    Yes it is a racket, also called a business by their exclusive owners Rothschild and Rockefeller and the likes...
    I do agree that interest on fiat currency is morally wrong. However, what is far more morally corrupt and wrong is that a person can create fiat currency out of thin air and sell it/trade it to people.

    It is amazing to me that some people get to ask someone to cut their lawn, grow and cook their food, build their cars, take care of them, etc., and when the people ask them what they get in return, these people go to their backroom, write a few numbers on a piece of paper, call it currency, go back out, hand it to the workers, and tell them that they can use that piece of paper to get someone else to work for them and/or to give them things because they sure as h*ll are not going to. I mean, and if you have no problem with it, it must be nice to have a bunch of people working for you and it must be even nicer to pay them with the hard work, products and goods other people have.
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    Quote Originally Posted by Lynx_Fox View Post
    From 1800 to 1930, gold had been between 19-30 usd an ounce. That is stability, that is not volatility.
    The year to year variability was extremely variable, look at all the years over 5% and many over 10% gain or losses in a single year, many having nothing do with war---that is volatility. Business would have a very difficult time operating under those conditions--a dampened slow increase which characterizes most years after we dropped the gold standard is a much better environment to operate in.
    Only during war times Fox. You are wrong here. Inflation in 1914 was due to the war, and that was/is 100% expected.What happened afterwards was a return to and towards normal prices. The price of gold remained steady. War materials and products increased, companies shifted production to war products and normal goods and products during ww1 that were not being produced rose drastically. This is what happens.Your claim that this inflation was due to being on a gold standard is just wrong.

    I also challenge you to post a 10% inflation in prices across the board, average, in one year, outside of war under the gold standard. Good luck with that.

    Americans could no longer hold gold after 1933. The gold standard ended in america then and the fiat currency took over for them.
    Last edited by gonzales56; October 15th, 2012 at 12:41 PM.
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    year value of one ounce of gold
    2010 $1,410
    2005 $513
    2000 $272
    1995 $386
    1990 $424
    1985 $354
    1980 $615
    1975 $151
    1970 $38
    1965 $36
    1960 $37
    1955 $35
    1950 $40
    1945 $37
    1940 $35
    1935 $35
    1930 $21
    1925 $21
    1920 $21
    1915 $21
    1910 $21
    1905 $21
    1900 $21
    1895 $21
    1890 $21
    1885 $21
    1880 $21
    1875 $23
    1870 $23
    1865 $30
    1860 $21
    1855 $21
    1850 $21
    1845 $21
    1840 $21
    1835 $19
    1830 $19
    1825 $19
    1820 $22
    1815 $22
    1810 $19
    1805 $19
    1800 $19
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    Look at the wild inflation and deflation gyrations before WWI as compared to afterwards--often wild swings of plus or minus 10% or more over a year or two. And if you compare the past 40 years or so, it's even more obvious that inflaction under our current system if far more stable than gold prices--- gold inflaction was nearly 100% in 1980, as compared to about 20% for example. Such craziness would kill business. No way in heck would most Americans want it.

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    Quote Originally Posted by icewendigo View Post
    1- Inflation is not a problem if your purhcasing power inflates along with prices, therefore, if the price of goods goes up more than what you earn, its not just the inflation thats the underlying problem, its that you are being screwed (cheap labor, outsourcing, trusts/colusion/cartels, automation, balance of power, etc)
    The problem is that in the latter situation (of getting screwed), the money system makes it harder to see. If we were on a gold standard, it would be quite obvious when your wages start to drop. If you measure your wages against gold right now, you'd see they had dropped substantially in the last 10 years.

    The thing is, deflation relative to gold has absolutely all the effects of ordinary deflation. Production goes down, capital investment goes down, and the whole economy grinds toward a stop. Everything we saw in the Great Depression (though perhaps less severe due to the stimulus packages.)

    As for the use of baseball cards as money sinks, it would be better (again if we keep the stone tools which money is) to sink that money along with 99% of military expenditures into space program, hospitals, and building housing, hydroponics, solar panels, for earthlings .


    (Caveat: Although its plain to me the monetary system is crap, I admit the detail of a money-less civilization are not yet clearly defined, like conceptual drawing by Davinchi for flying contraptions that dont fly but are first drafts that need much improvement, it has to be designed. )

    Good way to turn this back into a discussion about money's mirage. The high going price of a solar panel hides the fact that the price is based on labor, whereas the price of oil or natural gas or coal is based on mineral rights. Mineral rights is just an entitlement. Like any other entitlement. It does no more for the economy than a welfare entitlement does.

    The guy who owns a big oil field isn't working for the money he collects (he may of course choose voluntarily to work for other reasons). It's not like the oil wouldn't be there any more if he died tomorrow. He didn't in any meaningful sense cause it to exist. We're not paying him to produce anything, because the production already happened millions of years ago. He's just standing there taking credit for it.

    At least welfare leads to better distribution of wealth (which is essential to an industrial economy - given the importance of economy of scale in our productive processes.)
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    If you measure your wages against gold right now

    Yes it might be easier to conceal were getting screwed, though its a small comfort when the
    (sound holy lunar) gold is backing the wage you dont have:
    breadline_great_depression.jpg
    (yeah, the money I dont have is backed by gold, woohoo)
    But with all the talk of gold standard as THE solution, its like throwing even more anti-radar Chaff out the window imo, it adds to the decoy. But on top of that theres a major problem I see (beyond the outdated-ness wage-4-labor-vs-automation inadequate and integral corruption of all typical monetary systems ), and on top of the lack of flexibility, is that gold forces you in the end to Pay for money to exist, which I compare to You working for the next 3 years of your life for the purpose of being "allowed" to Use the "Alphabet" . This sounds like an outrageous racket but its essentially what happens with gold . Worgl prospered with fiat money, they didnt pay or loan the right to have economic activity, they just got cracking, they didnt pay and vacuum out towns resources or loan at interest to use the alphabet either(which would be a racket just as outrageous as paying for money to exist), they just used it. (plus with fractional reserve banking, private banks still create money out of thin air, even if its "backed" by gold, btw)

    cheers

    Last edited by icewendigo; October 16th, 2012 at 08:35 AM.
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    Quote Originally Posted by Lynx_Fox View Post
    Look at the wild inflation and deflation gyrations before WWI as compared to afterwards--often wild swings of plus or minus 10% or more over a year or two. And if you compare the past 40 years or so, it's even more obvious that inflaction under our current system if far more stable than gold prices--- gold inflaction was nearly 100% in 1980, as compared to about 20% for example. Such craziness would kill business. No way in heck would most Americans want it.

    Fox, you have to understand and know what you are looking at concerning this chart. For starters, when we talk about the 1600s and 1700s, we are NOT talking about gold or silver, we are dealing with fiat currencies that sprung up all over the place, inflated, became worthless and then were replaced by other fiat currencies. It is also very difficult to get true inflation numbers from this time period. What we do know though is that the inflation and deflation rates were probably much higher than what your chart shows due to the fact that these fiat pieces of paper became worthless, were replaced, became worthless again, etc..

    The 1800s is also a very difficult time period to calculate inflation and the numbers on inflation come with a big, "don't bank or bet on these inflation estimates/numbers." With that said though, it does not matter. The 1800s, outside of 3 wars, fiat currency still being issued by banks in the early part of the 1800s and the greenback being created for the civil war, silver and gold, when they were not being driven out by paper money, were used for the most part.

    I do not think it is critical to give a lesson concerning how fractional banking up until 1836 caused inflation and deflation, "booms" and "busts", until Jackson effectively ended the practice in 1836. Regardless of this fractional practice, which was nothing like it is today, the biggest inflation and deflation between 1800 and 1900 was due to war or government currency changes/laws etc.

    Gold and silver were pretty stable, especially compared to fiat currencies.



    You are not advocating or making an argument for stability. You are advocating or making an argument for run away inflation, unsustainable inflation. Gold and silver as currency do not allow for run away inflation or run away deflation. They pull them back, they constantly seek out and work hard to maintain stability.

    You also have to understand and know the causes of inflation and deflation. Is it the value of the currency itself that is inflating or deflating, is it supply and demand, is it quality of products, is it a combination of multiple things, and if so, to what degree/extent?

    The value of the dollar between 1800 and 1933, compared to the value of a dollar in 1967, remained, roughly, between 2 and 4 dollars. In 1801 the value was $2.00. In 1933 the value of the dollar was $2.57. This is stability.

    The value of the dollar in 2010, compared to the dollar in 1967, is .15 cents. Within the next 20 years, we will be lucky if the dollar is worth .01 cent. This is not stability. This is theft.
    Last edited by gonzales56; October 16th, 2012 at 09:44 AM.
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    An environment with 10% inflation every single year is MUCH preferable to an average zero inflation that wild gyrates from year to year--from say -10%...than +10% the next for example.

    While you are dismissing the instability of the gold-standard economies of the past you aren't making a case that pinning it to gold would decrease the huge volatility experienced back then.
    --
    Also, given the shifts and demand for gold for manufacturing, the ability to mine for more and control the flow, and speculative markets, a gold-pinned currency wouldn't be much better than one pinned to sea-shells.
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    Quote Originally Posted by Lynx_Fox View Post
    An environment with 10% inflation every single year is MUCH preferable to an average zero inflation that wild gyrates from year to year--from say -10%...than +10% the next for example.

    While you are dismissing the instability of the gold-standard economies of the past you aren't making a case that pinning it to gold would decrease the huge volatility experienced back then.
    --
    Also, given the shifts and demand for gold for manufacturing, the ability to mine for more and control the flow, and speculative markets, a gold-pinned currency wouldn't be much better than one pinned to sea-shells.
    Gold and silver currency, outside of inflation and deflation caused by war, never had these 20 point swings from year to year. I also do not mind something going from $1.20 one year due to war, supply and demand issues or government policy, only to go back to a $1.00 afterwards or the "next year."

    A constant devaluing of the dollar due to inflating the money supply is not stability and advocating a 10% decrease in the value of a dollar each and every year over stability in the value of the dollar is something I cannot agree with or support.

    Dollar 1800 to 2010

    I wish we could agree that the devaluing of the dollar is not stability, it is a planned and systematic theft of the american peoples value/wealth, and under gold and silver, the purchasing power/value/wealth of the american people, the dollar, was extremely stable.

    I am also not advocating a silver or gold standard. What I am saying is that the current fiat system is on its way out and something is going to have to replace it. I am suggesting that it is only currencies with intrinsic value that protect the poor and weak from abuse and suffering at the hands of those who are stronger or more powerful, and fiat/by force/strong people over the weak currencies should not replace the current fiat currency.
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    I am suggesting that it is only currencies with intrinsic value that protect the poor and weak from abuse and suffering at the hands of those who are stronger or more powerful,
    We havent' figured out a way to keep track of love and compassion.
    Last edited by Lynx_Fox; October 18th, 2012 at 01:35 AM.
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    Quote Originally Posted by icewendigo View Post
    If you measure your wages against gold right now

    Yes it might be easier to conceal were getting screwed, though its a small comfort when the
    (sound holy lunar) gold is backing the wage you dont have:
    breadline_great_depression.jpg
    (yeah, the money I dont have is backed by gold, woohoo)
    But with all the talk of gold standard as THE solution, its like throwing even more anti-radar Chaff out the window imo, it adds to the decoy. But on top of that theres a major problem I see (beyond the outdated-ness wage-4-labor-vs-automation inadequate and integral corruption of all typical monetary systems ), and on top of the lack of flexibility, is that gold forces you in the end to Pay for money to exist, which I compare to You working for the next 3 years of your life for the purpose of being "allowed" to Use the "Alphabet" . This sounds like an outrageous racket but its essentially what happens with gold . Worgl prospered with fiat money, they didnt pay or loan the right to have economic activity, they just got cracking, they didnt pay and vacuum out towns resources or loan at interest to use the alphabet either(which would be a racket just as outrageous as paying for money to exist), they just used it. (plus with fractional reserve banking, private banks still create money out of thin air, even if its "backed" by gold, btw)

    cheers

    You're right the system wouldn't be different, but the public would have an easier time mobilizing. If you want people to see a fraud for what it is and then choose to resist it, it helps if that fraud is easier to see.

    The current system allows those trained in the ways of finance to bamboozle the general public merely by making their actions/plans/proposals so complicated that a person not trained in the art wouldn't honestly know what they're being presented with anyway. It's kind of like if you and I made up a board game, and then required everyone to play our board game, meanwhile inventing new rules as we go. And if they didn't play, they couldn't have any money. And of course, only a few specialists have enough time to go through the study necessary to understand the rules.

    Now, the sad thing is, some people are so naive they really think that everyone who doesn't study the rules deserves to lose. They just can't step back and look at the bigger picture. What does an auto-mechanic contribute to the wealth of our society? What does a wall street game player contribute to the wealth of our society? If you answer both of those questions the way I answer them, then you'll have to shake your head and wonder why anyone would believe that the guy who contributed more deserves to have less?
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    Quote Originally Posted by Lynx_Fox View Post
    I am suggesting that it is only currencies with intrinsic value that protect the poor and weak from abuse and suffering at the hands of those who are stronger or more powerful,
    We havent' figured out a way to keep track of love and compassion.
    I do not understand the point you are trying to make with this statement. .One does not have to keep track of such things, they only have to give people a currency that will hold its value in order to protect and empower working men and women economically.
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    Quote Originally Posted by kojax View Post
    Quote Originally Posted by icewendigo View Post
    If you measure your wages against gold right now

    Yes it might be easier to conceal were getting screwed, though its a small comfort when the
    (sound holy lunar) gold is backing the wage you dont have:
    breadline_great_depression.jpg
    (yeah, the money I dont have is backed by gold, woohoo)
    But with all the talk of gold standard as THE solution, its like throwing even more anti-radar Chaff out the window imo, it adds to the decoy. But on top of that theres a major problem I see (beyond the outdated-ness wage-4-labor-vs-automation inadequate and integral corruption of all typical monetary systems ), and on top of the lack of flexibility, is that gold forces you in the end to Pay for money to exist, which I compare to You working for the next 3 years of your life for the purpose of being "allowed" to Use the "Alphabet" . This sounds like an outrageous racket but its essentially what happens with gold . Worgl prospered with fiat money, they didnt pay or loan the right to have economic activity, they just got cracking, they didnt pay and vacuum out towns resources or loan at interest to use the alphabet either(which would be a racket just as outrageous as paying for money to exist), they just used it. (plus with fractional reserve banking, private banks still create money out of thin air, even if its "backed" by gold, btw)

    cheers

    You're right the system wouldn't be different, but the public would have an easier time mobilizing. If you want people to see a fraud for what it is and then choose to resist it, it helps if that fraud is easier to see.

    The current system allows those trained in the ways of finance to bamboozle the general public merely by making their actions/plans/proposals so complicated that a person not trained in the art wouldn't honestly know what they're being presented with anyway. It's kind of like if you and I made up a board game, and then required everyone to play our board game, meanwhile inventing new rules as we go. And if they didn't play, they couldn't have any money. And of course, only a few specialists have enough time to go through the study necessary to understand the rules.

    Now, the sad thing is, some people are so naive they really think that everyone who doesn't study the rules deserves to lose. They just can't step back and look at the bigger picture. What does an auto-mechanic contribute to the wealth of our society? What does a wall street game player contribute to the wealth of our society? If you answer both of those questions the way I answer them, then you'll have to shake your head and wonder why anyone would believe that the guy who contributed more deserves to have less?
    The wall street fella, or most of them, function within a huge fiat bubble. The vast majority of wall streets "wealth" comes by way of systems and schemes to create fiat currency based on goods, products and services that just do not exist or they are based on government manipulation or handouts.. The vast majority of them sell absolutely nothing or garbage for computer generated fiat bank notes.

    The auto tech keeps america and Americans moving. They sell/offer real services/value but, gets paid in a currency that is constantly losing its value due to those who are creating it hand over fist. You see, the auto tech cant work long enough or fast enough to acquire enough "money" to keep up with the devaluing/theft of the currency he is getting paid in, let alone work hard enough or long enough to accumulate wealth. The government, the banker, wall street and everyone else that can devalue every working man and woman's currency by creating it out of thin air in order to line their pockets with it can create that currency far faster than real products, goods and services can and so these people make a lot more "money" than the auto tech ever can or ever will under the current system.
    Last edited by gonzales56; October 18th, 2012 at 09:00 AM.
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    Do you think that the new liberalism and the globalitzation is the reason why poor countries are getting poorer and rich countries richer?would there be any way out of this process?
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    Can you establish first, that poor countries are getting poorer while rich countries are getting richer?
    It seems that if that is the premise of the question, it must first be established before the question can really be answered.
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    poor countries are getting poorer and rich countries richer
    Are you sure ? http://en.wikipedia.org/wiki/List_of...e_(latest_year)
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    I WORSHIP THE DEVIL AND I HATE CHRISTIANS. THEY MAKE ME SO MAD BY SPILLING THEIR SO CALLED THEORIES ABOUT JESUS CHRIST BEING THE SAVIOR. omg i hate everything!
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    Quote Originally Posted by Blckpplrevl View Post
    I WORSHIP THE DEVIL AND I HATE CHRISTIANS. THEY MAKE ME SO MAD BY SPILLING THEIR SO CALLED THEORIES ABOUT JESUS CHRIST BEING THE SAVIOR. omg i hate everything!

    Sigh. I hope you didn't register just to troll the science forum. I'll give you a few days to look around though at which point you can decide whether to be civil and try to contribute something meaningful.
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    An interesting gold anecdote:

    Mid 1800s, an ounce of gold would buy a good pistol, or a good suit of men's clothing.

    Around 1900, an ounce of gold would buy a good pistol, or a good suit of men's clothing.

    Around 1950, ditto (my hand's tired!).

    Around 2000, ditto.

    Now? The whole idea flopped! jocular
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    Quote Originally Posted by jocular View Post
    An interesting gold anecdote:

    Mid 1800s, an ounce of gold would buy a good pistol, or a good suit of men's clothing.

    Around 1900, an ounce of gold would buy a good pistol, or a good suit of men's clothing.

    Around 1950, ditto (my hand's tired!).

    Around 2000, ditto.

    Now? The whole idea flopped! jocular
    Don't wish for the prices of good pistols and good suits to go up to fast.. Sooner I fear, rather than later, the prices of these things are going to go up, they are going to equal an ounce of gold pretty soon. Gold and then other commodities tend to lead the way on fiat inflation while everything else catches up in a decade or so.

    Shortly after interest rates rise to 3-4% the inflation on the US dollar will begin to sky rocket out of control... The government will only be able to prolong the crash of the us dollar for a few years beyond that point, and they will do so by dropping bombs, sending troops and subsidies but, it will not work for long.

    What is even more amazing about the entire US governments power hungry and greedy screw up is that they create so many fiat dollars that machine assistance, machine manufacturing and dirt cheap foreign workers cant reduce the prices of goods, services and products fast enough to overcome the inflation created by the US governments appetite for the confiscation and creation of more fiat dollars to spend. Think about that for a minute.

    American workers, being the highest paid in the world, used to make everything one ever needed or wanted. They did not have the machines or science there is today... If you cut the workers pay by 2000% plus (I am being nice here), add today's automation/machines and current sciences, one would expect the prices for all goods, service and products to drop like a ton of bricks from an airplane but, this is not what has happened. Prices are constantly going up, they will never go down over the long run even though the workers who make these products are now getting paid 1000's of times less in real wealth/value and automation/machines/science are pumping things out at a pace that seems to be a million or billion times greater.

    We can all thank the piggish and power hungry US politicians (of which Obama has been the worst offender in US history) for the inflation/theft of the american peoples good jobs and wealth/purchasing power due to their endless appetite for the creation of fiat dollars in order to see their own personal wealth, gain and power grow.
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    I see a lot of rather bold assertions in that post but not a lot of proof?
    As is often the case with technical subjects we are presented with an unfortunate choice: an explanation that is accurate but incomprehensible, or comprehensible but wrong.
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    Quote Originally Posted by gonzales56 View Post
    We can all thank the piggish and power hungry US politicians (of which Obama has been the worst offender in US history) for the inflation/theft of the american peoples good jobs and wealth/purchasing power due to their endless appetite for the creation of fiat dollars in order to see their own personal wealth, gain and power grow.
    You have no idea what inflation is.
    You have no idea who creates money and why.
    Purchasing power has never been so high in the States, even in India. Although it start declining because there is no more oil to power all your dreams.

    I didn't know that you were allowed to be communist in the states. A communist with gold, very interesting mix.
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    Quote Originally Posted by Boing3000 View Post
    Quote Originally Posted by gonzales56 View Post
    We can all thank the piggish and power hungry US politicians (of which Obama has been the worst offender in US history) for the inflation/theft of the american peoples good jobs and wealth/purchasing power due to their endless appetite for the creation of fiat dollars in order to see their own personal wealth, gain and power grow.
    You have no idea what inflation is.
    You have no idea who creates money and why.
    Purchasing power has never been so high in the States, even in India. Although it start declining because there is no more oil to power all your dreams.

    I didn't know that you were allowed to be communist in the states. A communist with gold, very interesting mix.
    Purchasing power in the US has been dropping like a ton of bricks for decades. What you are trying to say is that the quality and labor/manufacturing of goods, services and products have gone way down thanks to peasant foreign labor forces and automation/machines. Americans rarely buy anything that says "made in america" because they can no longer afford it, they no longer have the purchasing power and wealth they once did. What Americans can afford now is garbage being made by people whom can arguably be referred to as foreign slaves, and we can barely afford those things today... Soon, due to the US governments non stop lust for the constant creation of more fiat dollars, what they call debt, most Americans will not be able to continue to afford the goods, services and products provided and made by foreign peasants either, for the dollars purchasing power keeps going down and prices keep going up (millions and millions of Americans already cannot afford foreign peasant products).
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    Quote Originally Posted by gonzales56 View Post
    Purchasing power in the US has been dropping like a ton of bricks for decades.
    No, that is the other way round, but it going to happens, and not because of what you think.

    Quote Originally Posted by gonzales56 View Post
    What you are trying to say is that the quality and labor/manufacturing of goods, services and products have gone way down thanks to peasant foreign labor forces and automation/machines.
    Quantity have gone up thanks to cheap labors thank to cheap oil / automation. Foreign peasant has nothing to do with the quality, they work twice better then you do, just got that into your head. They are un-paid to do worst product for another reason... consumption/marketing addiction.

    Quote Originally Posted by gonzales56 View Post
    Americans rarely buy anything that says "made in america" because they can no longer afford it,
    Sorry excuses. You Americans have imposed on the rest of the world, that stupid race and rigged competition.
    You can by American product all you want, but you prefer ever more crap (foreign or not) than a few working things.

    Quote Originally Posted by gonzales56 View Post
    they no longer have the purchasing power and wealth they once did.
    Nice piece of mythology (I mean lie). Purchasing power correspond to build-ed thing. GDP are reaching a flat plateau (after 150 year of DEEP INCREASE) because there is no more oil to build more thing. Not because you are too lazy to build anything. The power come from physical entity, namely OIL. There is 10 calories of petrol in each calories of food. More for beef.
    So wait a little, you'll soon be able to rediscover to pleasure (not kidding) to plow your field powered on bull power, like you "once did"

    Quote Originally Posted by gonzales56 View Post
    What Americans can afford now is garbage being made by people whom can arguably be referred to as foreign slaves,
    Yes their are slaves of yours (and mine). Happy you notice it. You are too lazy to build things yourself, so stop complaining, and enjoy the flow of crap you are thriving for (like gun and gold).

    Quote Originally Posted by gonzales56 View Post
    and we can barely afford those things today...
    You barely make sense. Are you living in wonderlands ?

    Quote Originally Posted by gonzales56 View Post
    Soon, due to the US governments non stop lust for the constant creation of more fiat dollars, what they call debt,
    that is what you got wrong (like the rest). Government does not create debt. BANK (private corporation) does create money, and that is the way they control(own) you and your government. There is no fiat money involved. You call them "investor, you fools...

    Quote Originally Posted by gonzales56 View Post
    most Americans will not be able to continue to afford the goods, services and products provided and made by foreign peasants either, for the dollars purchasing power keeps going down and prices keep going up (millions and millions of Americans already cannot afford foreign peasant products).
    If it were true (and it is a lie, you are buying it because your are too lazy to interest yourself in economics, and prefer to listen to Fox News)
    that would mean that those peasant (this derogatory term just show how much of a xenophobe your are) would stop having a work(slave job) for them. Do you understand ?

    There is no power in ANY money. Try giving a ton of gold to every people in the world, will we all be rich ?
    Think for once... it is not that complicated.
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    You cant give a ton of gold to everyone on the planet.

    People do not have to use commodities and products to store and protect their wealth. They have the choice to do it or not. They can buy bonds, invest in the stock market, etc, but what is going to be the return on those investments?

    If a 10 year bond is going to give you 1% interest a year, and inflation on the products, goods and service someone buys is 2-5% a year, then that person has lost wealth and value. What they have done, is put say 100 dollars away that bought 100 things one year, and 10 years later, they get their money back and now can only buy 60 to 90 of the same identical things they could have with the same money 10 years ago. That is a huge loss in value, in wealth, in purchasing power.

    However, if someone takes their hard earned money and purchases commodities, products and goods with it, they will find that 10 years down the road they can and will be able to at least sell and then purchase the same number of things they could 10 years ago. This is what protecting ones purchasing power and value is all about.

    Now if someone understands markets and how they work, they can purchase 100 dollars of something today, watch the value skyrocket, and make a nice profit on that investment. Case in point, .223 ammunition used to go for about 5-7 dollars for a box of 20 rounds 6 month ago. That ammunition will never be sold for less than that (rock bottom and was not in a bubble), and so on its own merit, when bought 6 months ago, was a good product to have to protect ones purchasing power and wealth... However, the price of 20 rounds of .223 today is easily sold for around 20 to 30 dollars.

    1 boxes of 20 rounds .223 (six months ago) = $5 usd
    $100 dollar investment (6 months ago) = 20 boxes of 20 round .223
    Sell those 20 boxes today at 20 dollars each = $400 usd

    That is a 300% return on a 100 dollar investment.

    I am only saying that when one puts their money in real commodities, products and goods then they are going to at least protect/preserve their real purchasing power and wealth, they are not going to lose their purchasing power and wealth.
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