US Default

[GGT]

Because inflation (and even hyperinflation) didn't exist when gold was the main currency. People need to read what happened to the Spanish empire.

Why's that? To learn how all Empires in history eventually found their decline and demise? Or because you want to keep talking about gold?

"Inflation" has been around since hunter-gatherers complained the first time they had to trade, based on adverse weather conditions and supply/demand principles: "Whaddya mean I have to give you ten pounds of elk meat for one pound of strawberry preserves? Last year it was only five pounds of elk meat!" .... "Well, that was last year, when there wasn't much elk around, but now they're all over the damn place. They're almost a pest now, eating our strawberries. This year our berries are worth more than your elk. Pay up."

[Hazir]

That's not really inflation.

[GGT]

That's not really inflation.

Bad example? Sorry, I was trying to think of examples where tradable "currencies" were inflated based on supply-demand shifts.

[CitizenCain]

Loki's referencing the fact that the Spanish empire suffered a prolonged and devastating period of inflation as a result of flooding their economy with large amounts gold and silver from New World mines. It bears a lot of parallels to more modern examples of countries trying to dig themselves out of debt by printing more [fiat] currency, with the unusual twist that Spain was using gold and silver coins as currency. The main point being (at least as it relates to this discussion) that nothing's immune to the law of supply and demand, not even money itself.

Your little tale of strawberries and elk meat is... not all that... um, based in reality, nor is it really an example of inflation.

[GGT]

Loki's referencing the fact that the Spanish empire suffered a prolonged and devastating period of inflation as a result of flooding their economy with large amounts gold and silver from New World mines. It bears a lot of parallels to more modern examples of countries trying to dig themselves out of debt by printing more [fiat] currency, with the unusual twist that Spain was using gold and silver coins as currency. The main point being (at least as it relates to this discussion) that nothing's immune to the law of supply and demand, not even money itself.

Okay, but the overriding point is that central banks can print "money", as a way of digging nations out of debt. It may have nothing to do with supply/demand, but all about manipulation. Therefore, money itself has gone beyond supply and demand.

Your little tale of strawberries and elk meat is... not all that... um, based in reality, nor is it really an example of inflation.

Yeah, well sue me. That may have been a stretch of natural inflationary pricing index, but if I'd said some one was purposely flooding the elk market with elk testosterone, and making more elk population than was needed based on natural demand, in an effort to help out the strawberry farmers....

Oh, never mind. It's pretty bad when I can see how my early morning drunken ramblings sound half-baked, even to myself.

[CitizenCain]

Okay, but the overriding point is that central banks can print "money", as a way of digging nations out of debt. It may have nothing to do with supply/demand, but all about manipulation. Therefore, money itself has gone beyond supply and demand.

Um, no. The point that the value of currency plummets when you print lots more of it (or import tonnes it from New World mines) indicates exactly that even money is beholden to the laws of supply and demand. Supply goes up, the value (price) of the currency goes down. The reason that countries can print their way out of debt is that generally debts aren't dependent on the value of the currency - the debt's for 100 billion dollars (or whatever), whether the dollar's worth ten Euros or 10 millionths of a Euro. So if you want to pay off the debt, and don't care about fucking your country's economy, just print up enough bills to pay off your debts... but be prepared for a can of Coca-Cola to cost 80,000 Marks or Drachma or whatever your newly hyper-inflated currency is.

[LittleFuzzy]

That's one possibility, sure. Ever consider that it might be the other option? That I said what I meant, meant what I said, and rather than testing your ESP, am actually being deliberately silent or evasive on areas I specifically don't care to discuss? I can't really stop you from trying to practice your ESP skills, of course, but don't accuse me of issuing you a paranormal challenge by trying to avoid topics of discussion that I find utterly tedious.

Of course I considered it. I dismissed it for the time being because assuming it was the case was not conducive to engaging in a discussion which you actually appeared to be interested in. You appeared to be interested in the discussion because you made more than a brief declarative statement, which was a waste of your time and the time of everyone reading if you had no interest in discussion the topic, as would be any replies you ended up making.

Again, there is no value, but "value based on use." In other words, value distinct from use does not exist. The distinction you insist on making between "useful purposes" and useless purposes does not actually exist. That which is useless, we do not use and do not value. Everything else, we do use and do value. The only difference seems to be that you don't seem to care for certain "uses," such as the ornamental... but that doesn't matter, since other people do, which creates a market value and a use for shiny metals and sparkly stones. "Making my finger look pretty" or "expressing wealth" or "in exchange for a blowjob" are all uses, regardless of whether or not you want to see them as such. And they are all every bit as "objective" as uses you consider to be more functional, for whatever reason. Which is to say that "preserving meat" and "getting head" both have equally subjective values, independent of whether you're willing to acknowledge it.

You are getting hung up on a specific interpretation of a very general word which I have used in multiple ways, all of which are clear from context. I've explicitly said that nothing has intrinsic value and gone on to talk about the inherent value in various items in the next breath, without any sort of contradiction. It depends on context and what is going on "under the hood." Of course everything someone is willing to trade for or with has value. At that level. But why? Answering that "why" is important in any consideration of different currency and/or trading systems. Any comparative declaration about currency systems is addressing that question, implicitly or explicitly, and if the assumptions backing that declaration are in error, as I think they are with the statements you have made *notwithstanding your subsequent baldly distortive statement that you have at no point done any of this* then the declaration is in error. Evasions, omissions, and pouting declarations that you're not interested in the topic can keep me from exploring whether that's true, but it's not going to change anything.

[CitizenCain]

Of course I considered it. I dismissed it for the time being because assuming it was the case was not conducive to engaging in a discussion which you actually appeared to be interested in. You appeared to be interested in the discussion because you made more than a brief declarative statement, which was a waste of your time and the time of everyone reading if you had no interest in discussion the topic, as would be any replies you ended up making.

Yes, well my apologies for giving the impression I was interested in discussing fiscal policy. I went back and now see how that's a reasonable conclusion based on my posts, and I'll endeavor to make sure no one can reasonably believe me to be interested in such a dry topic of conversation again. Having said that, there's a big distinction between "discussion" and "taking potshots," and I certainly do enjoy taking potshots at the stupidity of the herd, particularly when it's as easy as it is with the public's trust in our currency and the decisions of a particularly inept bureaucrat (Fed Reserve chairman).

I was, and still am, happy to leave it at: gold's increased in value 6 fold (or 5 fold, if you got on board in the 1990's) through two giant bubbles popping, compared with the dollar which is has lost about 20% of it's value in each of the last two decades, due to inflation and some moron bureaucrat magiking fiat money into existence. Hahahahaha.

Made all the sweeter by the insufferable attitudes of many around here, might I point out. Oh, crazy libertarians and their gold lust, delusional fools thinking they don't need government and can buck conventional wisdom and not quite amusing bits on how libertarians are like dwarves and all that other shit I've had to put up with for the past decade+. Hah! Who's crazy now? That's right, crazy like a fox, sheeple.

Again, for clarity's sake, this doesn't mean I care to discuss a drier-than-toast topic like fiscal policy, so much as I want to gloat and take potshots... which probably would have gone better, and resulted in me coming off much like less a gigantic ass if you hadn't insisted on picking at it and picking at it, by the by.

You are getting hung up on a specific interpretation of a very general word which I have used in multiple ways, all of which are clear from context. I've explicitly said that nothing has intrinsic value and gone on to talk about the inherent value in various items in the next breath, without any sort of contradiction. It depends on context and what is going on "under the hood."

You may be on to something there... perhaps this explains a great deal of my confusion in responding to you, particularly when you change the meaning you ascribe to a given word several times in the same train of thought without warning or explanation. Maybe I look like I'm arguing in circles because I'm unsuccessfully trying to follow the changing definitions you ascribe to the key word in this discussion. ("Value.") Yeah, strange idea, I know, but just go with it.

Or, to say it back to you as you said it to me... "You're starting to sound like GGT more and more. There's no mind-reading here."

Hah! Stings, don't it?

Of course everything someone is willing to trade for or with has value. At that level. But why? Answering that "why" is important in any consideration of different currency and/or trading systems. Any comparative declaration about currency systems is addressing that question, implicitly or explicitly,

I'm not sure I agree with that... I can't simply state the medium of exchange that I, and all the other dwarves, () prefer is gaining in value while everyone else's is steadily declining? It has to address the question of why too? Again, looks to me like you're inferring an intention that was never implied.

and if the assumptions backing that declaration are in error, as I think they are with the statements you have made *notwithstanding your subsequent baldly distortive statement that you have at no point done any of this* then the declaration is in error. Evasions, omissions, and pouting declarations that you're not interested in the topic can keep me from exploring whether that's true, but it's not going to change anything.

If you say so... still seems like you're creating distinctions where none exist, and/or using some changing definition that you expect me to divine somehow... nor am I sure even vaguely what declaration of mine you feel is in error or why, what "baldly distortive statement" you're referencing or if any of it is in any way related to anything I'd care to discuss. So color me all kinds of confused, or something.

Oh, and just before the opportunity to say this passes, I think that you, of all people, should be the last one to begrudge me some tangential nitpicking here. Had Loki complained that I was making niggling little corrections to his narrative of history without stating (or necessarily having) a clear position on the broader issue, that would be one thing, but to see you do it (I think that's what you're doing, anyway) is just surprising and weird... and a little... unsettling.

[Lebanese Dragon]

I don't like the idea of printing money either, I don't like the idea of my work can suddenly be devalued if the government decided to print a bunch of money, not really sure what to do about it though. Be nice if they made sure after their printing everyone still had the same amount of wealth. guess you have to anticipate these "stimulus" packages and switch currencies real quick, then convert back once it's leveled off.

[LittleFuzzy]

I'm not sure I agree with that... I can't simply state the medium of exchange that I, and all the other dwarves, () prefer is gaining in value while everyone else's is steadily declining? It has to address the question of why too? Again, looks to me like you're inferring an intention that was never implied.

It directly states they are different. That some of those differences are involved in the changing relative values is a necessary corollary to the claim, even if not directly stated. Otherwise the relative values would not be changing. That those differences work in such and such away is, at the very least, an assumption being made for the corollary to be true. And that those differences work in such and such a way addresses that "why". You may not intend it, you may not be thinking about it at all, but it is there.

[GGT]

Um, no. The point that the value of currency plummets when you print lots more of it (or import tonnes it from New World mines) indicates exactly that even money is beholden to the laws of supply and demand. Supply goes up, the value (price) of the currency goes down. The reason that countries can print their way out of debt is that generally debts aren't dependent on the value of the currency - the debt's for 100 billion dollars (or whatever), whether the dollar's worth ten Euros or 10 millionths of a Euro. So if you want to pay off the debt, and don't care about fucking your country's economy, just print up enough bills to pay off your debts... but be prepared for a can of Coca-Cola to cost 80,000 Marks or Drachma or whatever your newly hyper-inflated currency is.

We're saying the same thing. Supply/demand of money (as decided by the Fed) aren't the same as supply/demand of our consumer economy or labor market. The Fed is all about manipulating currency values, inflation/deflation, even monetizing debt. Their dual mandate for sound monetary policy and full employment is a crazy conflicting combo.

[RandBlade]

We're saying the same thing. Supply/demand of money (as decided by the Fed) aren't the same as supply/demand of our consumer economy or labor market. The Fed is all about manipulating currency values, inflation/deflation, even monetizing debt. Their dual mandate for sound monetary policy and full employment is a crazy conflicting combo.

Everything difficult in life is about a "crazy conflicting combo". It is almost pointless to the point of redundancy to only have one mandate - any monkey can achieve one mandate if they ignore the consequences on everything else.

[GGT]

Everything difficult in life is about a "crazy conflicting combo". It is almost pointless to the point of redundancy to only have one mandate - any monkey can achieve one mandate if they ignore the consequences on everything else.

Oh! Sorry, I didn't realize UK's central bankers (what do you call them, Exchequer or something like that?) or the ECB had legal mandates to focus on "full employment" like the US central bank does. How's that working out over the pond?

[RandBlade]

Oh! Sorry, I didn't realize UK's central bankers (what do you call them, Exchequer or something like that?) or the ECB had legal mandates to focus on "full employment" like the US central bank does. How's that working out over the pond?

The Exchequer is the Treasury as you call it. The Chancellor of the Exchequer looks after tax, spending etc

In the UK, same as the US, the BOEs #1 priority is inflation but after inflation they're also expected to deal with growth etc - this is working pretty well IMO.
In the Eurozone, the ECB prioritises inflation almost to the exclusion of everything else, for which there is a lot of criticism and after just a decade of existance at least 5 of the economies there are going through pretty major existential crises (although only Irelands would be the fault of the Euro more than their own domestic government).

[GGT]

Right, so none of those entities have a legal mandate to consider monetary policy plus "full employment". As our US central bank and its regional governors do.

[CitizenCain]

Where did you hear that? I'm pretty sure that the Fed's official stance is to hold inflation down, despite the dollar having lost >95% of its value since the Fed was given that job... nothing wrong with hating on them, just do it for the right reasons, eh? From the way Rand puts it, the Fed's job sounds like pretty much the same as the BoE's.

[GGT]

Where did you hear that? I'm pretty sure that the Fed's official stance is to hold inflation down, despite the dollar having lost >95% of its value since the Fed was given that job... nothing wrong with hating on them, just do it for the right reasons, eh? From the way Rand puts it, the Fed's job sounds like pretty much the same as the BoE's.

Where did I "hear" that? Wow, where have you been?

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

http://www.federalreserve.gov/aboutthefed/section2a.htm

[Aimless]

I thought the fed's job was both inflation and employment??

http://en.wikipedia.org/wiki/Federal...rm_Act_of_1977

The Federal Reserve Reform Act of 1977[1] enacted a number of reforms to the Federal Reserve, making it more accountable for its actions on monetary and fiscal policy and tasking it with the goal to "promote maximum employment, production, and price stability".[2]

http://www.dailyfinance.com/2010/11/...-unemployment/

One of the things most people don't realize when they watch the Federal Reserve move the levers of U.S. monetary policy is that its leaders actually wear two hats. The Fed's marching orders from Congress are to "promote effectively the goals of maximum employment and stable prices."

[GGT]

Pretty sad when minx in Sweden knows more about US federal reserve dual mandates than Cain, eh.

[CitizenCain]

I thought the fed's job was both inflation and employment??

"Official stance." I wasn't talking about what they actually do, or are supposed to do, but what they say they do, which it seems has changed since I last checked their website. About time they dropped the "inflation fighting is goal #1" crap.

[GGT]

"Official stance." I wasn't talking about what they actually do, or are supposed to do, but what they say they do, which it seems has changed since I last checked their website. About time they dropped the "inflation fighting is goal #1" crap.

"Full employment" has been part of their dual mission for quite a while, Cain.....

[Aimless]

"Official stance." I wasn't talking about what they actually do, or are supposed to do, but what they say they do, which it seems has changed since I last checked their website. About time they dropped the "inflation fighting is goal #1" crap.

I obviously have no idea about that, I've only just googled it today. The amendment is from like 1977 though, and I just assumed an amendment to an act is a fairly official thing.

[Hazir]

Oh! Sorry, I didn't realize UK's central bankers (what do you call them, Exchequer or something like that?) or the ECB had legal mandates to focus on "full employment" like the US central bank does. How's that working out over the pond?

Thank God the ECB has the task of controling inflation, their target is to keep that below and around 2%. At the moment they are performing some tasks in order to not have the rug pulled out from under some EMU contries as a fund is set up to ensure liquidity of EMU member states.

[CitizenCain]

I obviously have no idea about that, I've only just googled it today. The amendment is from like 1977 though, and I just assumed an amendment to an act is a fairly official thing.

It would be, if an amendment was required for the politicians and bureaucrats who run the thing to change their public face. As far back as I can remember, their statements have always been about how their primary job is fighting the evils of inflation (which was the rationale for every decision they made on the prime interest rate since about the time I entered grade school). The fact that they're focusing attention on their "full employment" mandate, while unemployment is the #1 issue on everyone's mind is probably not coincidental.

[Hazir]

I just recieved $800, is that worth anything still in real money ?

[Dreadnaught]

1/2 of the gold coin I'm thinking of selling to take advantage of this gold bubble.

[Loki]

I just recieved $800, is that worth anything still in real money ?

Send it here and I'll get you 100 euros.

[Hazir]

Send it here and I'll get you 100 euros.

I put it in my dollar account

[RandBlade]

I just recieved $800, is that worth anything still in real money ?

Four hundred and eighty four pounds sterling.