Hmm, oh goddie. I haven't read it yet or seen it yet. Just hold your horses, I only have so much time during the day. I'll get to it when I have time.
First, you have forgotten that I prefer David Friedman, I would add that I support most of http://econfaculty.gmu.edu/bcaplan/whyaust.htm even if, say, my argument in favour of cardinal utility is different.
Prove this accusation. In particular the cherry picking as well as the inventing numbers.
You continue to make claims about what I believe I have rejected already many times. Because I have never claimed that volatility of gold would be small.
A cheap (and unproven) claim.
I know. I have used the word "basic value" simply to distinguish what would be the price of gold in a society where it is used only for technical applications and jewelry from the part related with its use as liquidity and for savings in a society where it is used as money. I know also that this is not a clear-cut distinction, so that one cannot say 11.6% of the price of gold is that "basic" (or however you name it) price, because in a society which has more uses for gold, there will be also more production of gold. This does not change the fact that more uses of a given commodity lead to higher prices, and that one can, roughly, attribute parts of the price to be related with the different uses.
A very sharp, strongly localized peak in the gold price is not an abberation. And somehow caused by poor gold owners who are forced, in 1980, to buy food. Tell this your grandmother. (And, don't forget, it is not questioned at all that this sharp peak is a historical fact.)
Savings are for a long term. To have savings in a currency is, of course, preferable, because it makes it much easier and cheaper to use it when necessary. Especially if one has to take into account that the time when one needs it may be a time where everything is down in general, and markets do not work nicely, thus, to sell saved commodities out of necessity will be connected with great losses - losses which do not exist if one has saved a stable, backed currency.
Yep. But investment is also related with higher riscs to loose it all.
Of course, you will name "serious" only those guys who support your personal ideas. And, yes, there are a lot of useful things which are not necessary. And, again (I would guess for the third time) I think that the role of currencies in the future will decrease, because of the internet revolution which is yet far far from being finished. The state will loose his 2% of de facto property tax for owning money, but this will not be really decisive.
LOL, the severe riscs of deflation. I see a lot of deflation in the computer industry, what I have bought three years ago is worth almost nothing today, the computer industry would be completely bancrypt if the fairy tale of the danger of deflation would be true. It somehow managed to survive this horror.
This is quite typical for Germany. Of course, it is not at all a technical necessity. And, of course, if I want to speculate, so that fast transfers are necessary, I have this possibility too. And the payment with the card in the shop or at the ATM is immediate too. But, for some unknown (but profitable for the banks) reasons a usual transfer needs some time.
Oh, I have claimed that the US dollar is no longer the world reserve currency? Interesting to learn something new about what I think.
With a little bit support from NATO airstrikes.
You don't even know that Janokowitch was not at all Putin's puppet - he was the puppet of the Ukrainian oligarch Achmetow. Just for your information, Putin has, at the elections which Janukowitch has won, supported Timoshenko.
Not a problem at all for iceaura: See, bitcoin uses the internet and computers, computers need electricity, electricity need some infrastructure, which can be provided only by the state (to justify this, can continue this line of reasoning a little bit longer), thus, bitcoin uses - via electricity used by the computer - the state. ;-)
Of course you can. It would be even easier today, where networks can supply references for the values of various commodities, and computers can accurately maintain balances and debts. The government would lose control over the money supply, which is why they generally prefer fiat currencies.
Up until 2000 the Swiss Franc was backed by gold; they seem to do OK.
Have you forgotten your comments with respect to the Austrians or your anti Keynesian rants? Yes, you have said you support David Friedman. But David Friedman doesn’t share your visceral hatred of Keynes general theory, nor is he an economist. Friedman is a law professor. He has no degree in economics or formal education in economics. And he isn’t an independent arbiter of truth, the man his paid by wealthy special interest groups, groups funded by the infamous Koch brothers, to preach libertarian ideology.
That has already been proven multiple times. Perhaps your cognitive dissonance will not let you recognize that fact or perhaps you are just being dishonest. The fact that you want to use the regulated price of gold versus the free market price of gold is by definition cherry picking.
Oh, so you are how agreeing that gold is unsuitable as a currency because of the tremendous price volatility incumbent in commodities? Do you not remember writing, “With commodity money, nothing changes.”, your post #1041?
No, it is proven, a credible chart from a credible source (i.e. Wikipedia) versus your chart from a specious source who makes a living catering to gold bugs and playing on their ignorance.
Well you have a lot of contradictions and misinformation going on there. There is no “intrinsic value in anything. While it is a popular belief in right wing circles it has no basis in fact. Commodity prices do change all the time. There is no residual or constant value inherent in anything. It’s all relative and ever changing.
Ah, no. Investment risk runs from virtually zero to gambling. US Treasury bills are viewed as virtually risk free, remember my earlier instruction on interest rates, the risk free rate? The point being unless you are going to stuff your dollars into a mattress or something similar or you are dependent on a fix annuity, your dollars will not be adversely affected by anticipated inflation, because the inflation expectation is baked into the interest you receive on your dollars.
I don’t know what you are trying to say here, if you are asking for the names of economists whom I support and agree with, pick any economist who is independent (i.e. not on the payroll of a special interest group) and well trained.
Yeah, the severe risks of depression. Double digit unemployment is severe; food lines are severe, people losing their homes is severe. Perhaps this gets to your apparent inability to understand the difference between microeconomics and macroeconomics. What you are witnessing in the computer industry isn’t deflation. It’s obsolescence. There is a big difference.
As I said before, that is a local issue. It’s called the float; banks want to hold on to depositor money for as long as possible. Laws in the US were changed some time ago, so now money can be moved much faster. For larger depositors it has never been an issue. At any rate, it isn’t relevant to an argument on currency.
I think you need to reread what you wrote.
And how is that relevant?
Oh, then where did he flee to when his people demanded his impeachment? I assume you are speaking of Yanukovych.
The point is that I don't care about what is his formal education (I'm quite comfortable knowing that is physics), what is his formal job (law professor? Fine, I haven't cared), or who pays him (I doubt he needs much payment to survive). I care about the arguments I find in his books and articles. They are quite fine. And if they are good, but Keynesian, fine, means some Keynesian ideas are fine.
Ok, this translates as you cannot prove it. As expected.
No, I think the usual price volatility of commodities is something more acceptable than a sure loss because of inflation caused by money printing. And, by the way, there is no reason today to back up money with a single commodity, there would be no technical problem with backing it up with a basket. This would reduces volatility but preserve the security against loss of value caused by excessive money printing.
ROTFLBTC.
Correct. But there are some technological restrictions - the costs of production (which depend on technologies, which may change, thus, are not really "intrinsic" to the thing) which are quite objective. And what it can be used for also changes in time, with technology, and with what the people like (culture, fashion), but, once this is given, there is some objective base behind the resulting market price. And, in particular, one can identify some quite objective rules about how the price will change if some aspects of our world change.
Repeating this claim without interesting examples is not helpful. And, of course, there is nothing automatical, there are always a lot of very different influences which make it quite difficult to predict something in real life. Which is, in fact, the point made by the Austrians against all these "empirical" measurements of mainstream economics. I think they are clearly overexaggerating this impossibility - as you now, with claims of type "It’s all relative and ever changing".
Fine, feel free to make your decisions what is the best investment for your savings.
Let's see. I wrote "If the dollar is no longer the base for international trade, this will be a serious loss for the US". If A then B does not mean A is true now.
Without the NATO support, Ghaddafi would be in power today, and possibly could have already started with a gold-backed currency. Of course, there are sufficient other reasons for killing Ghaddafi, he was a rich man with a lot of oil in his land now controlled by the US.
Where will you run if fascists try to kill you? To antifascists, I would guess. To people who will not kill him, because they think he might be useful, even if they despise him.
I meant what I wrote, nothing more, nothing less.Actually, you said more than that.
Oh yes, the Great Putin...I am sure between his bear and tiger wrestling he could fit that into his schedule.
This is New Jersey you are talking about, New Jersey renowned for its corruption. This is a corruption problem, and a local problem. I have never thought local governments should be in the sports business or any other entertainment business or subsidize entertainment related enterprises. Local governments shouldn't be financiers of last resort or speculators. If the project fails and the government defaults, so be it. They file for bankruptcy. Local governments free to go bankrupt just as anyone or any corporation can do in similar circumstances.
The gold standard did not prevent it, or even reduce its severity. It restricted the government response in the aftermath somewhat, making things worse. So intelligent adults got rid of it.michael said:
It requires an internet, utilities, international enforcement of contracts and laws regarding theft, and so forth. And after all that, bitcoin is not yet a currency.michael said:
No. I am making the observation that a government is necessary to establish a currency. You are the one hat-yakking about "violence".michael said:
What about it? Finland has better government than Venezuela, which is critical in the maintaining a sound currency. Otherwise I don't see the point.michael said:
The progressives are not the ones building stadiums, and floating bonds to subsidize rich people's commercial sports teams, and handing out huge tax breaks and advantages that stick the regular citizen with the bond repayments. That's a rightwing capitalist businessmen's scene.michael said:
One more thing Michael, these special projects are normally financed with revenue bonds. A revenue bond is only guaranteed by project revenues. Bond holders have no claim to the issuers tax base. If the project goes bust, well sorry bond holder. The bond holder is not entitled to reimbursement from general tax revenue, one of "dem" minor details again.
from someone who name wikipedia a credible source. Without doubt, wiki quotes a lot of credible sources, but in itself it is not.
In this case, the difference was completely irrelevant. Because my point - that it is not a good idea to start computing an average with a sharp peak and to end it with the actual value which is quite low, below production costs - remains valid. And that a comparison of two peaks would be less prejudiced remains valid too.
Indeed, intrinsic value is a myth. But that quite objective things, in particular technological developments, influence the price in predictable ways is also clear.
Why this? The price oscillations related with problems of the particular commodities average out.
Fine. But once all commodities are down in a similar way, it means that I can nonetheless buy with commodity-basket-backed money the commodities I need. If the reason for the oscillations is macroeconomic, then what I want to buy is down at the same time when the commodity-basket - thus, my money - is down.
Mistake, sorry.
Unproven claims that he wanted to do in the net. Then, note that to create a gold-backed currency in itself does not need much military, economic and political power. (Except in a situation where the world hegemonic power does not allow this.) You look at how much gold you have, how much of your money are out, what is the actual price of gold, then you can make the backing of your currency a little lower than the actual gold you can by for it on the free market, and you have a gold-backed currency, and there will be no immediate run to change it.
Yes. To present evidence against people who simply refuse to see the obvious, for obviouse ideological reasons, does not make much sense. If the German Kanzler would be invited to make a speech in the Congress, and finishes his speech with "Heil Hitler", you would not care about this as long as CNN does not tell you that the Nazis have got power in Germany.
The information about the increasing corruption I have from the internet. No chance to find the source again, but the factor 2-3 increase of what you have to pay as bribes I think I have from yurasumy. An Ukrainian, he is now in Russia, but his family is yet in Sumy, thus, he has good Ukrainian sources, and he has predicted in his blog the Summer 2014 offensive of the novorussian forces - with many details which later appeared to be correct, about where it will happen. He tends to err in the direction of being too optimistic, contrary to Colonel Cassad who is too pessimistic, reading above gives a good base.
That would double the cost of living every four years. That is not happening.michael said:
1) That does not solve the inflation and volatility problem, which is the one you were trying to solve by tying your currency to a few commodities. 2) That depends on the competence of your government in designing and maintaining the "backing".schmelzer said:
Traders will destroy your currency by speculating, and you will find your country has a vault full of redeemed currency that no one will accept and no gold, or a vault full of gold and all your currency stashed somewhere unavailable to buy anything with. That's if the counterfeiters don't get to it first. Or the enemies of your State, handed a cheap way to take you out of any conflict you may have landed in. Or your domestic industry and commercial banking sector, motivated to exceed the limitations of your nation's gold supply (the world supply of gold, despite intense production efforts, has grown less than a third as fast as the world economy over the past fifty years).schmelzer said:
You'll want to make sure your wages and savings are "relative" as well.schmelzer said:
The problem with inflation in Mises sense (that means, caused by excessive money printing) is solved already by a single commodity.
This is the third problem, which is not solved nor by a gold-backed currency, nor by a basket-backed currency - the state can, every day without any real penalty, stop the backing. And then your money is only worthless paper. Thus, you need some trust in the government. A quite stupid thing, but in peaceful periods with no large crisis it may work.
The only point is that it is not the bad speculant who destroys this currency, but the government printing excessively money which it cannot back. This works some time, but not forever, and there will be a moment when the cheating becomes obvious and the backing will be given up. And, of course, it will be the bad speculants (depending on the time, Jewish) who have destroyed the currency, in the propaganda. Or counterfeiters or enemies, in any case somebody else.
Nonsensical. The gold supply is not the issue of the industry or banking sector. If there is not enough gold, the price of gold will rise. If one would use real gold coins, this would be a problem - but one solved by a raising gold price. If one uses gold-backed currencies, it is not a problem.
This is what the state wants to prevent, by forcing me to denominate wages and savings in his currency. So, yes, I would like to make sure that I have the freedom to make savings as well as job contracts in the commodities I prefer.
That's what the Spanish monarchy thought, in the late 1500s. Their economy never recovered, actually - Spain was a world power until then.schmelzer said:
No, it isn't. The deflationary busts punish capital investors and borrowing, the inflationary booms punish wage earners and lending. The uncertainty imposes an extra risk premium on every transaction.schmelzer said:
You underestimate international currency speculators, enemies of your country, etc.schmelzer said:
If your country is using gold backed currency, the amount of that money is limited by the amount of gold on hand to back it. If the whole world is using gold backed currencies, the economy cannot grow faster than the gold supply unless the "backing" is continually adjusted - which is the same as printing fiat money, with the added problems of commodity supply, manipulation, and speculation.schmelzer said:
So you don't plan to actually use money at all?schmelzer said:
If you have that trust, what do you need the commodity backing for?schmelzer said:
Nonsense. Sorry, but the gold (or silver, or mixed) standard was at that time everywhere, thus, not the problem of Spain.
Phantasies about the danger of deflation have nothing to do with volatility of baskets. And the computer industry does not look very damaged, despite the horrible deflation rates in this domain.
If I give out with the promise that it is backed up only what I can really back up, no speculation is dangerous for me. Enemies can try to steal or destroy commodities to back up - ok. But what they can reach in this way would be in the same way harmful if these would be simply commodities.
Not really. What people care is if they get the value. So I can give out also other commodities of the same value, at that day.
No. The grow of the economy is not bounded by the amount of money. If the speed of transactions is fast, there will be a low necessity for money.
The banking of the future makes money unnecessary.
Because there is a difference between the situation where some guy has made a promise, and I have to trust that he holds his promise, and the situation when he does not even make a promise, and I somehow have to hope that he will not cheat me.
I have argued that it does, missed yet a counterargument. I have no problem accepting that a commodity backed currency means volatility. But volatility is not inflation - not that part of price increase caused by excessive money printing Mises names inflation. Then, the problem of volatility of the gold price is solved by using a basket.
This is your personal belief, I don't believe this.
Sorry, I'm not accountable for these US-backed colonial administrators sold us as German governement. And this has nothing to do with any Soviet influence. It is shared by American libertarians as well. And many other people who don't go to elections because they have recognized them as a cheating irrelevant for them.
I actually suspect it in the Ukraine. Which is in general a nice illustration of what waits in our future.
Cool. Meanwhile, in these few brief years before the future, we need to manage the money we are stuck with.schmelzer said:
Uh, what? The problem Spain had was inflation of its currency, which was gold. You stated that having a single commodity backing one's currency "solved the inflation problem". It didn't. Inflation destroyed Spain's economy, because its currency was commodity based and Spain found great piles of that commodity in Mexico.schmelzer said:
Fiat currencies rest on government promises same as all currencies do.schmelzer said:
It's called arithmetic, not fantasy. Try it sometime.schmelzer said:
No manufacturing industry, computers or anything else, can escape damage from a deflation of the currency. None of the current major industries have suffered one, except possibly (marginally) some of Japan's.schmelzer said:
Running short of money slows the velocity of money, by boosting the return on savings and the opportunity cost of spending.schmelzer said:
People can always resort to barter, true. But modern industrial economies find that inconvenient.schmelzer said:
Living and learning about banking man. Here's a prediction: when the guys who target your currency have redeemed their notes, and your vaults are full of your own paper while theirs are full of the gold you were using to back it, the price of gold in your currency will for some reason begin to rise.schmelzer said:
Which is something which has happened in this particular case, but in general not very probable.
If it is based on commodities, it is more probable that it remains stable. Because it has to be stopped explicitly, and this stopping will not happen unobserved, and stopping the backing will be considered, by all reasonable people, as theft, making the guy who does it unpopular. Instead, stealing using inflation of fiat money goes unnoticed, thus, will be done with certainty.
Yes. But this promise does not include that there will be no inflation caused by excessive money printing.
Tried and found that it is fantasy, and how you prefer to call it is fantasy too, and, moreover, irrelevant.
Wrong, the prices for computers decrease, this is a constant effect of technological progress, which is consistent over many years. Nobody would buy a computer knowing that tomorrow the same computer will be, predictably, cheaper? The computer industry proves that this is wrong.
This is not about a return to barter.
I have given my paper out for the fixed amount of gold, I have taken it back for the same amount of gold, some transaction fee I have taken for the exchange, and I have had some credit in gold for some time without paying rent. What is the problem?