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Old 01-11-2009, 03:58 PM
 
Location: Los Angeles Area
3,306 posts, read 3,551,660 times
Reputation: 592

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Quote:
Originally Posted by BankREO View Post
Because we are issuing a debt-based currency into a fractional reserve banking system. The point is that we do not create the interest when the principle is brought into existence so when the interest has to come due, it will of come from the new issuance of currency which will create perpetual debt. Sounds like an oppressive monetary system.
Great, so why is it useful to track M3? What does it predicate? What is it a leading indicator for? Defining what M3 is, or talking about our monetary system does not answer these questions.

Also, there is nothing wrong with a debt-backed currency. Of course, I do prefer the Pez backed currency.
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Old 01-11-2009, 04:28 PM
 
Location: Seattle, WA
209 posts, read 548,837 times
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Quote:
Originally Posted by Humanoid View Post
Great, so why is it useful to track M3? What does it predicate? What is it a leading indicator for? Defining what M3 is, or talking about our monetary system does not answer these questions.

Also, there is nothing wrong with a debt-backed currency. Of course, I do prefer the Pez backed currency.
Because with this artifact of our monetary system, we have a policy of constant expansion at a rate that is well above the rate that new productive capabilities come online and that is inherently inflationary which is a hidden tax on everyone who uses the system. Inflation of this type is a monetary event that raises all prices overtime.

It is quite misguided having a monetary system that constantly reduces its purchasing power.
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Old 01-11-2009, 05:03 PM
 
Location: Los Angeles Area
3,306 posts, read 3,551,660 times
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Quote:
Originally Posted by BankREO View Post
Because with this artifact of our monetary system, we have a policy of constant expansion at a rate that is well above the rate that new productive capabilities come online and that is inherently inflationary which is a hidden tax on everyone who uses the system. Inflation of this type is a monetary event that raises all prices overtime.
Lovely, so again why is tracking M3 useful from a monetary policy point of view? What does it predict? What is it a leading indicator for? Etc.

You are complaining about the monetary system. You aren't answering the question despite claiming that "some have use for it". What is that use? You don't need to measure it to know what the FED is doing with the money supply, so that use can be eliminated.

Quote:
Originally Posted by BankREO View Post
It is quite misguided having a monetary system that constantly reduces its purchasing power.
I can think of thousands of economists that would disagree. Predictable inflation is not a problem in any sense, its no different than having zero inflation really. Its unpredictable inflation that is the problem. Having a positive rate of inflation allows for more effective monetary policy.

With the exception of barter, every monetary system is subjected to inflation. A fiat money system allows the most control over it though.
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Old 01-11-2009, 06:24 PM
 
Location: Charlotte, NC
2,193 posts, read 4,612,596 times
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But wouldn't it be easier to just have a set amount of money in our money supply rather than having it debt based and perpetually increasing (until now). I feel like we're going through a roller coaster. We were worrying about inflation, now we have to worry about deflation.

Also wouldn't it be easier to track and account for money if there was just a set amount of money in the system? Because now with all the out of control leveraging, it seems like it would be impossible to account for everything.
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Old 01-11-2009, 09:20 PM
 
Location: Texas
4,933 posts, read 6,965,540 times
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They need to hit the financial reset buttom to free the slaves from this rigged system. Can anyone honestly defend a system where banks lend out money they don't have and when the borrower is unable to pay the money back, steal the asset right from under them? We're all in this rat race together. It's time to take mankind back to the stone age. It's better than this.
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Old 01-12-2009, 12:06 AM
 
Location: Los Angeles Area
3,306 posts, read 3,551,660 times
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Quote:
Originally Posted by sheenie2000 View Post
But wouldn't it be easier to just have a set amount of money in our money supply rather than having it debt based and perpetually increasing (until now).
No because the economy grows. If the amount of money was fixed, it would deflate whenever the economy grew but this would cause problems.

Quote:
Originally Posted by sheenie2000 View Post
I feel like we're going through a roller coaster. We were worrying about inflation, now we have to worry about deflation.
Be careful with the "we", many people (including myself) were never worried about inflation.
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Old 01-12-2009, 08:10 AM
 
Location: Charlotte, NC
2,193 posts, read 4,612,596 times
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Originally Posted by Humanoid View Post
No because the economy grows. If the amount of money was fixed, it would deflate whenever the economy grew but this would cause problems.
Well, I guess I was thinking when the economy grows, more money would be added to the system at a fixed amount. So there will be a only a little, steady inflation as time went on.

But then this probably isn't much different that the system we have now. The way I'm describing would be controlled by the government, the current system is controlled by the Fed and banks.

Quote:
Be careful with the "we", many people (including myself) were never worried about inflation.
You are right, I think a lot of people only saw inflation and worried about how to make enough money for the future, so they were speculating. It seems like if people just put money into a CD at 5%, they would be fine rather than speculating with it. A CD is simple and easy too!
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Old 01-12-2009, 08:15 AM
 
Location: Charlotte, NC
2,193 posts, read 4,612,596 times
Reputation: 1075
Quote:
Originally Posted by sheenie2000
I feel like we're going through a roller coaster. We were worrying about inflation, now we have to worry about deflation.

Quote:
Be careful with the "we", many people (including myself) were never worried about inflation.


Well even though you were never worried about inflation, I meant our economy and everyone is just watching a roller coaster whether we are affected by it monetarily or not.

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Old 01-12-2009, 09:48 AM
 
Location: Seattle, WA
209 posts, read 548,837 times
Reputation: 87
Quote:
Originally Posted by Humanoid View Post
No because the economy grows. If the amount of money was fixed, it would deflate whenever the economy grew but this would cause problems.


Be careful with the "we", many people (including myself) were never worried about inflation.
How about a money supply that grows & falls with the population so we have currency available for the amount of people we are servicing in our economic block (our nation). I don't wanted a fixed amount of currency as well but I think issuing debt in a fractional reserve manner is unsustainable and oppressive because you can never get rid of the debt so it puts you on a treadmill that always breaks down over time and hurts your saving class that is quite important because they are partly your investment class.
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Old 01-12-2009, 12:06 PM
 
Location: Los Angeles Area
3,306 posts, read 3,551,660 times
Reputation: 592
Quote:
Originally Posted by sheenie2000 View Post
Well, I guess I was thinking when the economy grows, more money would be added to the system at a fixed amount. So there will be a only a little, steady inflation as time went on.
Increasing the money supply only causes inflation (in terms of prices) if the economy doesn't grow with it. The problem is there is no real way to know how much money you need to add in order to avoid deflation. There is no simple formula you can use or a "fixed amount" you can add each year. Currently the FED has a pro-inflation policy and lets inflation float in a particular range. Some central banks are a bit more picky and they try to fix inflation at a certain percentage.
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