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Within framework of the developed, highly monetized world, nearly every human activity (including yours) occurs because it promises gain (profit) to the people in control of that particular line of business you are a part of. In other words, every economic "transaction" (for brevity sake) occurs because people in charge of that transaction may lay a claim to X% share of that transaction (as expressed in $). Being able to lay a claim to X% share of an economic "transaction" is the only reason to initiate that particular transaction. For example, nobody bakes bread because you are hungry, a bakery bakes bread because a "transaction" of bread baking and selling it to the people (with money) promises $1000 in revenue, shareholders and managers can reasonably expect to bank X% of $1000 of that revenue. That this reasonable expectation to bank X% of $1000 is the only reason why bread is baked and sold.
Naturally, if shareholding class appropriate small (but sizable) % share of every economic transaction, the time will come (rather fast, but how fast, this is the question?) when shareholding class (i.e. class that owns production capacity, land, resources, etc.) will suck available money supply dry. After all, it's the only point of the economic game. Sure, they will exchange small portion of that money they've accumulated to procure services, goods and labor of small number of people, the rest will be left with little or no money (or resources for that matter). Sure, in the real world, shareholding class will spend small portion of that accumulated money on the social control (bread and circuses) and debt peonage (it rings the bell, huh ). But for all practical purposes, economic activity will come to the halt.
Remember, "Investing" has no point, they own all the money and resources in circulation already, they have enough of the indentured servants to serve their needs. Does it remind you something? No matter how much $ FED creates, investor class gobbles it up in no time at all and does nothing with trillion$ of windfall. Why invest? They own it already. It's not the fact that investor class accumulates $ that is scary, it's the rate of accumulation that is mind-blowing. Apparently, it take virtually no time (or real world efforts, little/no interaction with the world of peons) for the investor class to gobble up all the QEDs FEDs pull from its rear. In other words, a questionable but effective (up to a point) economic model hit the wall.
Frozen new money supply would lead to near zero money velocity, because winners do take all (or almost all), that's the point of the economic game. If money supply is frozen, winners have no "stimulus" of new money to reinvest their current holding$ (they've got all the money in circulation already). Money supply (and economy) must grow or collapse because people who have all must have more in order for our economic machinery to function.
The question is - how long it would take for our economy to collapse after money supply is frozen? I would presume that an enjoyable (from the human standpoint) economy where money circulates among many and many semi-autonomous players should be quite resilient (but not immune). Heavily monopolized, monstrously unequal, top down corporate structure with a small number of the independent players and wide wage earner base should collapse pretty fast, since our money goes up the corporate food chain as soon as we spend it, there is minimum (if any) of the local money "conservation", due to the fact that there are no local economies supplying us with survival basics and more. Everything is centralized and monopolized, that's probably reason #1 QEDs didn't precipitate desired (by FEDs) rates of inflation. The battle plan was to trigger much higher rates of inflation in order to scare people holding on $ stockpiles into spending $, but since the very same people (who are to be scared by inflation into spending) gobble up QEDs too fast, inflation can't pick up steam.
Even if FEDs would carpet bomb us with $10 trillions in dollar bills the results wouldn't be dramatic. Economy concentrates and deposits money on the top way too fast.
Last edited by RememberMee; 07-27-2013 at 05:25 PM..
Within two years unemployment would be over 15% and riots would start. And I am talking official unemployment not the real rate which is over 15% already.
Within two years unemployment would be over 15% and riots would start. And I am talking official unemployment not the real rate which is over 15% already.
The REAL unemployment rate is U-3 just as it has been for generations. Your idiot U-6 number is but an alternate measure if labor underutilization that has existed only since 1994.
I don't understand the U-6 and U-3 numbers. But government reports don't consider someone working part time who wants to be full time and completely misses anyone who has given up looking. During good times, which we haven't seen for years, the official rate may actually overstate the problem as some candidates hold out for the perfect opening like employers hold out for the perfect employee today, or recently laid off employees decide to take a break.
U-3 is the unemployment rate. It is the number unemployed divided by the sum of the employed and unemployed. That sum is also known as the labor force. The employed are those who have a job. The unemployed are those who do not have a job, but are available to work and have taken some active step to look for work over the past four weeks.
Quote:
Originally Posted by pvande55
But government reports don't consider someone working part time who wants to be full time...
Persons employed part time for economic reasons are part of U-6. These are people who do want and are available for full-time work but who have had to settle for part-time work for the time being. U-6 has nothing to do with unemployment. U-6 is rather a measure of labor under-utilization.
Quote:
Originally Posted by pvande55
...and completely misses anyone who has given up looking.
Persons who are not currently working or looking for work who nonetheless say that they do want to work and are available for work and have looked for work at any time during the past 12 months are "marginally attached" workers. They are not in the labor force but are included in both U-5 and U-6. Persons who have not bothered to look for work for more than 12 months are not included anywhere at all for obvious reasons.
Quote:
Originally Posted by pvande55
During good times, which we haven't seen for years, the official rate may actually overstate the problem as some candidates hold out for the perfect opening like employers hold out for the perfect employee today, or recently laid off employees decide to take a break.
Stay-at-home-moms are often taking a break. So are many retirees and full-time students. But if you don't work and don't look for work or are not available for work, you are not a part of the labor force. It's been that way for quite a long time.
What you are otherwise describing is frictional or transitional unemployment. Recent graduates and career-changers are examples. So are civilian spouses of reassigned members of the military as they look for work in the area of the new assignment. This type of unemployment is economically positive. It is cyclical and structural unemployment that cause all the problems.
Aahhh, but interesting thing is - it's not the investors class that owns or sucks ALL the money. All the money are owned by very few people. Those few do own pretty much entire investors class AND chandala (it's not peons, OP. Mr Nietzsche already had the right term established) and they do play entire money flow which ever way it profits those few. They play the game they have created their own rules for. Nothing will dry out or collapse completely, unless THEY decide so.
Give me control over a nation's currency, and I care not who makes its laws. -- Mayer Amschel Rothschild, 1743 - 1812
Mr. Rothchild's Energy Discovery
What Mr. Rothschild had discovered was the basic principle of power, influence, and control over people as applied to economics. That principle is "when you assume the appearance of power, people soon give it to you." Mr. Rothschild had discovered that currency or deposit loan accounts had the required appearance of power that could be used to induce people (inductance, with people corresponding to a magnetic field) into surrendering their real wealth in exchange for a promise of greater wealth (instead of real compensation). They would put up real collateral in exchange for a loan of promissory notes. Mr. Rothschild found that he could issue more notes than he had backing for, so long as he had someone's stock of gold as a persuader to show his customers. Mr. Rothschild loaned his promissory notes to individual and to governments. These would create overconfidence. Then he would make money scarce, tighten control of the system, and collect the collateral through the obligation of contracts. The cycle was then repeated. These pressures could be used to ignite a war. Then he would control the availability of currency to determine who would win the war. That government which agreed to give him control of its economic system got his support. Collection of debts was guaranteed by economic aid to the enemy of the debtor. The profit derived from this economic methodology mad Mr. Rothschild all the more able to expand his wealth. He found that the public greed would allow currency to be printed by government order beyond the limits (inflation) of backing in precious metal or the production of goods and services.
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). But for all practical purposes, economic activity will come to the halt. 
