U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Economics
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 08-07-2012, 10:23 AM
 
Location: 3rd Rock fts
749 posts, read 1,004,755 times
Reputation: 304

Advertisements

As this crisis goes on the "millions of Americans that are dumber than potatoes" are starting to recognize what's going on; the financial apparatus cut them out of the game--credit productivity/VALUE are not to be squandered on the consumer.

The Economic Fallacy is expecting the consumer to keep borrowing money without the prospect of getting his/her money's worth once in a while.

The Economic Fallacy is forcing the populace into the Stock Market; & expecting them to believe/rely on the wealth effect for sustenance!

The Economic Fallacy is expecting population growth to keep up with this exponentially voracious Economy! Unless you can get a toddler to buy a car/buy a house, have children, travel abroad once a year, & invest in the stock market for income, this toddler is just a tax on the Economy.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 08-07-2012, 12:12 PM
 
19,337 posts, read 16,932,211 times
Reputation: 7515
Quote:
Originally Posted by DSOs View Post
As this crisis goes on the "millions of Americans that are dumber than potatoes" are starting to recognize what's going on; the financial apparatus cut them out of the game--credit productivity/VALUE are not to be squandered on the consumer.

The Economic Fallacy is expecting the consumer to keep borrowing money without the prospect of getting his/her money's worth once in a while.

The Economic Fallacy is forcing the populace into the Stock Market; & expecting them to believe/rely on the wealth effect for sustenance!

The Economic Fallacy is expecting population growth to keep up with this exponentially voracious Economy! Unless you can get a toddler to buy a car/buy a house, have children, travel abroad once a year, & invest in the stock market for income, this toddler is just a tax on the Economy.
The basic problem, as I see it, is what becomes of the surplus. We all must exist to a minimum as any owner of slaves knew. Slaves must have their dwellings and must be fed. So what happens to the left overs? In pioneer societies, there are few rental opportunities used as leverage over those who produce. Therefore the surplus is at the discretion of a producer. We can see when productive business people are given the slack to create their own businesses , they are rather efficient with the surplus. However what happens when such potential is squandered by the housing ponzi scheme and financial swindle? Who with negative home equity is going to take out a mortgage for their business for example?

So where is the wealth and decision making going? To producers?

How many 1%ers are going to know how to improve a production process? Its ownership combined with complete absenteeism.

How many more are just going to blow money on conspicuous consumption which has no real value(see handicap principle). Oh we have no precedent for this do we?

In the end we will have an elite, eating off their lead plates and going mad, embellishing their foppish, ridiculous realities, and making all the decisions.

Funny how these people are called job creators when in other times it was obvious how such people merely tied up and squandered resources. What a boon for humanity it is for 100 people to work in the service of one who is a master of leisure.

Chapter 31 of The Decline And Fall Of The Roman Empire
he opulent nobles of an immense capital, who were never excited by the pursuit of military glory, and seldom engaged in the occupations of civil government, naturally resigned their leisure to the business and amusements of private life. At Rome commerce was always held in contempt; but the senators, from the first age of the republic, increased their patrimony and multiplied their clients by the lucrative practice of usury, and the obsolete laws were eluded or violated by the mutual inclinations and interest of both parties. (31) A considerable mass of treasure must always have existed at Rome, either in the current coin of the empire, or in the form of gold and silver plate; and there were many sideboards in the time of Pliny which contained more solid silver than had been transported by Scipio from vanquished Carthage


See anything new yet?
The greater part of the nobles, who dissipated their fortunes in profuse luxury, found themselves poor in the midst of wealth, and idle in a constant round of dissipation. Their desires were continually gratified by the labour of a thousand hands; of the numerous train of their domestic slaves, who were actuated by the fear of punishment;
Today we would call these people job creators because they employ a thousand hands. Slavery is employment see...


The ostentation of displaying, of magnifying perhaps, the rent roll of the estates which they possess in all the provinces, from the rising to the setting sun, provokes the just resentment of every man who recollects that their poor and invincible ancestors were not distinguished from the meanest of the soldiers by the delicacy of their food or the splendour of their apparel. But the modern nobles measure their rank and consequence according to the loftiness of their chariots,(37) and the weighty magnificence of their dress. Their long robes of silk and purple float in the wind; and as they are agitated, by art or accident, they occasionally discover the under garments, the rich tunics, embroidered with the figures of various animals. (38) Followed by a train of fifty servants, and tearing up the pavement, they move along the streets with the same impetuous speed as if they travelled with post-horses and the example of the senators is boldly imitated by the matrons and ladies, whose covered carriages are continually driving round the immense space of the city and suburbs. Whenever these persons of high distinction condescend to visit the public baths, they assume, on their entrance, a tone of loud and insolent command, and appropriate to their own use the conveniences which were designed for the Roman people. If, in these places of mixed and general resort, they meet any of the infamous ministers of their pleasures, they express their affection by a tender embrace, while they proudly decline the salutations of their fellow-citizens, who are not permitted to aspire above the honour of kissing their hands or their knees. As soon as they have indulged themselves in the refreshment of the bath, they resume their rings and the other ensigns of their dignity, select from their private wardrobe of the finest linen, such as might suffice for a dozen persons, the garments the most agreeable to their fancy, and maintain till their departure the same haughty demeanour, which perhaps might have been excused in the great Marcellus after the conquest of Syracuse. Sometimes indeed these heroes undertake more arduous achievements: they visit their estates in Italy, and procure themselves, by the toil of servile hands, the amusements of the chase

Mind you if the above wealth going to these job creators is such a fine idea one has to wonder why the collapse of the Empire shortly after.

My favorite part:
If at any time, but more especially on a hot day, they have courage to sail in their painted galleys from the Lucrine lake (40) to their elegant villas on the seacoast of Puteoli and Caieta, (41) they compare their own expeditions to the marches of Caesar and Alexander. Yet should a fly presume to settle on the silken folds of their gilded umbrellas, should a sunbeam penetrate through some unguarded and imperceptible *****, they deplore their intolerable hardships, and lament in affected language that they were not born in the land of the Cimmerians, (42) the regions of eternal darkness.

You have been warned for thousands of years.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-08-2012, 01:41 PM
 
Location: San Diego California
6,797 posts, read 6,625,449 times
Reputation: 5180
Quote:
Originally Posted by gwynedd1 View Post
* Can't just keep printing money...
* printing money = bad
* printing money causes inflation"

All the above, complete junk economics.

When gold was all the rage I wonder if faux "Austrian" economists tried to dynamite newly discovered gold mines seeing as more gold must mean it will destroy us all.(actually it was more gold that finally cured us of the catastrophic silver demonetization).

Banks create bank credit to, say , allow someone to buy a car which is supposed to be credit added to the system to represent the new product, the car. Otherwise double the cars means half the credit circulation. So its rather curious people believe this sort of thing when the entire banking system is predicated on creating credit on the spot for productive loans(problem is we have unproductive loans).

If I printed a "counterfeit" $100 bill and handed it to someone who would create 1000 widgets when the going rate of widgets was $100 a piece , is that supposed to cause inflation? Worse is I would be doing everyone more good than the average bank has been doing this decade Err, uh, golly gee. If the numerator is increased with the denominator, there is no inflation.

The problem is not in the amount of credit creation. The problem is when credit creation does jack squat, like say printing money when unemployment is at 0. However if unemployment is a 100% and you print up a note and hand it to someone who will actually do some work....people think THIS causes inflation?

Now I am all for the expectation that public credit is more likely to introduce credit in the system hardly distinguished from land fill , but given that banks are making similar loans, how are we going to finally give credit to a producer?

But I have had enough of junky, crappy, Australoidiotic economics.
If money creation was tied to actual production there would be no problem, but that is clearly not the case.
Credit drives speculation, which in turn drives both inflation, and bubbles, in speculative vehicles such as equities and real estate.
Those bubbles make large amounts of money for a few people in the short term while devastating the wealth of the majority in the long term.
The system works well to do what it was designed to do which is to make wage slaves and peasants of the majority of the citizens while enriching the upper class with the fruits of their labor.
The simple truth of the matter is that since the creation of the FED in 1913 the dollar has lost 94% of its value and if you would not mind please give me one example of any country or civilization in history which has produced prosperity by way of debasing its own currency. I can show you many who have destroyed themselves by doing so.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-08-2012, 02:17 PM
 
19,337 posts, read 16,932,211 times
Reputation: 7515
Quote:
Originally Posted by jimhcom View Post
If money creation was tied to actual production there would be no problem, but that is clearly not the case.
This is where you were ahead.

Quote:
Credit drives speculation, which in turn drives both inflation, and bubbles, in speculative vehicles such as equities and real estate.
Productive credit does not drive speculation. Again, credit is money and money is credit in all but the academic details. Money, credit and even commodity money are debt instruments.

Quote:
Those bubbles make large amounts of money for a few people in the short term while devastating the wealth of the majority in the long term.
The system works well to do what it was designed to do which is to make wage slaves and peasants of the majority of the citizens while enriching the upper class with the fruits of their labor.
Thats actually not true. It works well for what it was designed to do. It was designed to expand the money supply with new product. The problem that I have explained to near exhaustion is that credit is being issued against fixed assets. Banks make loans to manage scarcity, not to produce.

Quote:
The simple truth of the matter is that since the creation of the FED in 1913 the dollar has lost 94% of its value and if you would not mind please give me one example of any country or civilization in history which has produced prosperity by way of debasing its own currency. I can show you many who have destroyed themselves by doing so.
I don't think you have a good understanding of when countries debase their currency. They do so as a symptom of their weakness. Hyperinflation almost never happens, and when it does its never caused by the domestic government. The reason is simple. Credit contracts are defined in the legal tender. Diluting the legal tender dilutes the real value of the credit contract which is good for the debtor and bad for the creditor. Creditors have money and debtors want money. So who actually runs the country? Creditors run this and every other country. The paranoia about debasement of the legal tender is nothing but creditor propaganda. Depressions are far worse than moderate inflation especially since debtors rarely in the long run can pay off their debts. Credit is always granted based on the past and the debtors ability to expand always runs out. That is why debt jubilees existed all through history.

Hyperinflation is not so good either because it will be abandoned as a measure of value and the economy must go back to barter until other fungible goods step in to add trade liquidity. That will have depression like characteristics. However creditors and da guberment they influence have no desire to dilute the debts owed to them. If all else fails taxes and monetary policy can tax in as much legal tender as they wish. The only inflation they like is when its inflated by their credit like in the housing bubble. That diluted the float of publicly created credit.

Hyperinflation is the result of foreign interests and by that I mean foreign creditors. They don't care about legal contracts in a foreign currency. During the Wiemar republic what did they care about the German mark? All they wanted was gold. Hyper inglation is always a foreign phenomenon. If USD is preferred over a local currency, its simply the reflection of the weakness of the local government. Its never a cause.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 01:20 PM
 
Location: San Diego California
6,797 posts, read 6,625,449 times
Reputation: 5180
Quote:
Originally Posted by gwynedd1 View Post
Productive credit does not drive speculation. Again, credit is money and money is credit in all but the academic details. Money, credit and even commodity money are debt instruments.
The difference in credit and actual cash is that credit represents future earnings where cash represents past earnings. Cash is reality where credit represents earning that may, or may not happen. It is by it's very nature "easy money" as is has not been acquired through hard work, but by simply agreeing to a contract. This is not an academic detail. Retail stores encourage the use of credit cards for just that reason. People are much more conservative with purchases made with actual cash than they are with credit purchases. It is just human nature.
Quote:
Thats actually not true. It works well for what it was designed to do. It was designed to expand the money supply with new product. The problem that I have explained to near exhaustion is that credit is being issued against fixed assets. Banks make loans to manage scarcity, not to produce.
Again we get back to the physiological effect of buying with credit. Any car salesman can tell you the value of being able to up sale a customer with the ploy of saying it will only be a few more dollars a month. It is the difference between being able to sell an item the customer may not really need and may not be practical but if the salesman can make the price difference seem inconsequential by breaking it down over 60 payments they can get the customer to spend money they have not earned yet on something that is not even practical.

Quote:
I don't think you have a good understanding of when countries debase their currency. They do so as a symptom of their weakness. Hyperinflation almost never happens, and when it does its never caused by the domestic government. The reason is simple. Credit contracts are defined in the legal tender. Diluting the legal tender dilutes the real value of the credit contract which is good for the debtor and bad for the creditor. Creditors have money and debtors want money. So who actually runs the country? Creditors run this and every other country. The paranoia about debasement of the legal tender is nothing but creditor propaganda.
Debasement of currency is a product of inflation. Inflation is a tool of bankers by which they steal the value of your earned money. It is a tool by which they make credit more practical than saving. The result is they cut themselves in on a piece of every transaction and increase the deferred payment price to the consumer by a substantial degree. On something like a house it can increase your final outlay by 2 or 3 times. This is the real purpose of inflation and currency debasement to discourage saving, and to encourage credit.

Quote:
Depressions are far worse than moderate inflation especially since debtors rarely in the long run can pay off their debts. Credit is always granted based on the past and the debtors ability to expand always runs out. That is why debt jubilees existed all through history.
Far worse for whom? They are definitely far worse for the bankers as they force people to become more conservative and to shun credit and the interest that comes with it. For the savers, it actually is a favorable condition as it puts debtors in a position of needing to raise cash.
Inflation on the other hand drains the value of savings while encouraging the kind of spending which over the course of people’s lives results in little or no real wealth accumulation due to lack of savings and a lifetime of interest payments on every purchase.

Quote:
Hyperinflation is not so good either because it will be abandoned as a measure of value and the economy must go back to barter until other fungible goods step in to add trade liquidity. That will have depression like characteristics. However creditors and da guberment they influence have no desire to dilute the debts owed to them. If all else fails taxes and monetary policy can tax in as much legal tender as they wish. The only inflation they like is when its inflated by their credit like in the housing bubble. That diluted the float of publicly created credit.
Hyperinflation is a red herring, and not the real issue. Regular normal inflation is what robs people of the results of a lifetime of work. It encourages the speculative credit purchases that depend on the continuation of inflation to realize a return on your investment. The problem is inflation is always punctuated by recessions which cause many credit speculators to not be able to make good on their commitments and lose their assets as a result. It also takes back what people mistakenly think they are earning in purchasing power. People sell appreciated assets only to find that the money they made on those investments has the same purchasing power as the value of the original asset price. They in fact have not achieved any additional purchasing power despite making 10's or 100's of thousands of dollars.
They have though in the process, paid much of their hard earned money to the lenders in the form of interest.

[
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 03:14 PM
 
19,337 posts, read 16,932,211 times
Reputation: 7515
Quote:
Originally Posted by jimhcom View Post

Debasement of currency is a product of inflation. Inflation is a tool of bankers by which they steal the value of your earned money. It is a tool by which they make credit more practical than saving. The result is they cut themselves in on a piece of every transaction and increase the deferred payment price to the consumer by a substantial degree. On something like a house it can increase your final outlay by 2 or 3 times. This is the real purpose of inflation and currency debasement to discourage saving, and to encourage credit.
Ah yes, if they are creating credit as I said but a rapid debasement of the currency especially created by the Treasury is not going to happen. If the banks are a monopoly on credit, they will never "debase" the currency. The Euro zone is a prime example. When banks create credit here, they dilute free credit.


Financial Predators v. Labor, Industry and Democracy | Michael Hudson


Quote:
Far worse for whom? They are definitely far worse for the bankers as they force people to become more conservative and to shun credit and the interest that comes with it. For the savers, it actually is a favorable condition as it puts debtors in a position of needing to raise cash.
Yes I agree savors benefit and we would like them too except when they become hoarders which is nothing monopoly income on a credit instrument. We in theory would like it to reflect a real surplus accurately.

Quote:
Inflation on the other hand drains the value of savings while encouraging the kind of spending which over the course of people’s lives results in little or no real wealth accumulation due to lack of savings and a lifetime of interest payments on every purchase.
Its just not necessary true. Creating $100 in goods with $100 dollars of circulation causes no price inflation. As I have said exhaustively, credit that is issued for increases in value do to monopolistic practices does that, not productive loans. If I buy up my competitors and jack up prices, which a banks approves as a business plan, then inflation. This is especially the case if I speculatively buy land on credit. Credit increase while land does not.


Quote:
Hyperinflation is a red herring, and not the real issue. Regular normal inflation is what robs people of the results of a lifetime of work. It encourages the speculative credit purchases that depend on the continuation of inflation to realize a return on your investment. The problem is inflation is always punctuated by recessions which cause many credit speculators to not be able to make good on their commitments and lose their assets as a result. It also takes back what people mistakenly think they are earning in purchasing power. People sell appreciated assets only to find that the money they made on those investments has the same purchasing power as the value of the original asset price. They in fact have not achieved any additional purchasing power despite making 10's or 100's of thousands of dollars.
They have though in the process, paid much of their hard earned money to the lenders in the form of interest.
Again, this is the overly simplistic view which I aim to overturn. Expanding credit with production is a good thing. Otherwise even savers of the debt instrument benefit from artificial scarcity and unearned income from its increased marginal utility. Neither they or the creditors who dilute the currency through unproductive credit should get the free lunch.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 03:25 PM
 
Location: The North
5,581 posts, read 9,857,822 times
Reputation: 4911
Quote:
Originally Posted by jimhcom View Post
If money creation was tied to actual production there would be no problem, but that is clearly not the case.
Credit drives speculation, which in turn drives both inflation, and bubbles, in speculative vehicles such as equities and real estate.
Those bubbles make large amounts of money for a few people in the short term while devastating the wealth of the majority in the long term.
The system works well to do what it was designed to do which is to make wage slaves and peasants of the majority of the citizens while enriching the upper class with the fruits of their labor.
The simple truth of the matter is that since the creation of the FED in 1913 the dollar has lost 94% of its value and if you would not mind please give me one example of any country or civilization in history which has produced prosperity by way of debasing its own currency. I can show you many who have destroyed themselves by doing so.
Who cares if the dollar is worth less? We dont get to buy anything in 1913 prices so what the dollar is "worth" is a pointless debate. Are you going to argue we have worse living standards than we had in 1913?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 04:02 PM
Status: "But in the aggregate..." (set 28 days ago)
 
Location: The Triad (NC)
31,333 posts, read 69,492,784 times
Reputation: 37339
Quote:
Originally Posted by Willy702 View Post
Are you going to argue we have worse living standards than we had in 1913?
The argument is how many hours of work are required to earn what is incorporated
in a given standard of living whether 1913 or 1953 or 1983 or 2013.

If you're inclined to explore that (which has been done to death btw)...
be careful of the "but Grand-Pop never had X" red herring and similar pitfalls.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 04:43 PM
 
Location: San Diego California
6,797 posts, read 6,625,449 times
Reputation: 5180
Quote:
Originally Posted by Willy702 View Post
Who cares if the dollar is worth less? We dont get to buy anything in 1913 prices so what the dollar is "worth" is a pointless debate. Are you going to argue we have worse living standards than we had in 1913?
Worse or better is not an easy equation, due to advances in technology. The question that you need to focus on is; are you able to accumulate real wealth, and what price do you pay for your prosperity.
Technology has made everything exponentially less expensive due to massive increases in efficiency.
That does not mean that inflation has aided prosperity. While we may live an easier life because of that technology, the majority of people are no more than well treated wage slaves.
In 1913 for example ownership of land which has long been a measure of wealth was much easier for common people than today. The usual family farm at that time was at a minimum 40 acres. Who do you know today who owns 40 acres?
In 1913 the so called American dream was still very much alive and people were under much less burden from laws, taxes and regulations that now stifle common people. It was possible to get ahead, as millions of immigrants proved. My father returned from WWI to start his own factory with only what he had saved and went on to employ 40 people before losing everything in the depression.
A depression caused by the Federal Reserve’s policies of credit and inflation.
Today people pat themselves on the back for having a good "standard of living" but nearly 50% of the population is a couple of paychecks away from living in poverty. Many people who are able to obtain degrees in order to get upper level employment do so at the cost of 10's or 100's of thousands of dollars in debt which hamstrings their lives for decades. Most people live under constant fear and stress of losing their jobs, and being unable to make payments on everything they own. They chronically use alcohol, antidepressants, and recreational drugs to cope. 50% of all marriages end in divorce shattering the lives of school age children, and the overwhelming cause of most divorce is financial problems. Suicide rates have never been higher. So you tell me do we have it better or worse?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 08-09-2012, 08:19 PM
 
19,337 posts, read 16,932,211 times
Reputation: 7515
Quote:
Originally Posted by MrRational View Post
The argument is how many hours of work are required to earn what is incorporated
in a given standard of living whether 1913 or 1953 or 1983 or 2013.

If you're inclined to explore that (which has been done to death btw)...
be careful of the "but Grand-Pop never had X" red herring and similar pitfalls.

Glad to see a good point. Just because you have a good harvest has nothing to do with the crows eating the corn. It is also worth pointing out, again, that unequal income no matter how good it is yields unequal political power especially with unearned income since it has few limits. I am not here defend the crooks in finance at all , quite the opposite. I am here to say that they steal with deflation as well as they do with inflation. They steal with the changes in the volume of money they know about being the insiders they are. The volume of money can go up or down. Some people get the idea that they only steal when it goes up. And it certainly is not nearly so much stealing when depressions are prevented with da guberment deficits when finance tries to steal reducing the volume of money.
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics
Similar Threads

All times are GMT -6. The time now is 03:17 PM.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top