The Glade 4.0

How exactly do the wealthy acquire more and more of the currency base without spending any of it? Ho do those without it "bleed" the means to generate wealth for themselves? The wealthy no longer need to pay them for work? What's the point of hoarding? The wealthy all just sit there like Scrooge avoiding spending any of what they ahve in order to keep its value high? If you can't spend it on anything for fear of devaluing your hoard, why hoard it in the first place?

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Duh. That's why you have adventurers come to try to take your hoard. So you can kill them and take their stuff.

Oh wait... were we not talking about dragons?

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Holy shitsnacks!

As far as I can tell we are. Other than Ebeneezer Scrooge, they're the only critter I know of that hoards without spending.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Scrooge McDuck did too, but that's splitting hairs, I suppose.

Not at all. I stand corrected!

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Ebenezer Scrooge... Scrooge McDuck?

SOYLENT GREEN IS DUCKS!!!

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Holy shitsnacks!

The primary difference is, IMO, that it's far more transparent when you manipulate backed currencies, and thus you're less likely to try to get away with it (in the short term) and incur the nasty consequences (which will come out in the long term anyways; hello, bubbles!).

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

I find it laughable that you try to tell others, especially Rafael, about basic economics. Just because there is inflation doesn't mean your money's buying power is worth any more. Inflation isn't what makes your investment worth more. The real buying power of your currency could be less even though you have more than what you invested.

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The Dude abides.

Infaltion is simply an increase in the money supply, its symptoms tend to be malinvestment, over-exuberent borrowing, and a rise in the price of goods and services.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Splitting feathers. Ducks don't have hairs.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Inflation does drive investment. If you have deflation, someone can stuff all their money under their mattress and make a risk-free profit. Inflation requires that you invest your money or you will lose it.

Inflation drives mal-investment.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

Monte, you just crashed into 3rd Rock. Yes, coconuts have a market value as does gold and everything else. Paper currency literally does not.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Thus benefiting the wealthy.


Hence, advocacy of an inflation-based fiscal policy is advocacy of an anti-poor and anti-working-class policy.

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“The duty of a patriot is to protect his country from its government.” - Thomas Paine

No it doesn't, because people still need to exchange some sort of good for others. Inflation not only requires you to buy equities with your wealth (wealth denominated in the fiat currency) or you lose it and that drives mal-investment and price bubbles.

Everyone completely loses sight of the fact that any fiat currency is essentially worthless; you don't want money. You want what money can buy. Let's say we have a deflationary scenario. Long ago I posted a tirade about deflation and inflation and how we must be careful how we define it (aggregate increase in prices, aggregate increase in prices of a certain "metric" such as commodities, growth of money supply indicators and other such metrics, growth in debt instruments etc. all have their benefits).

Let's say that we can attribute all price increases to inflation as the money "instantly distributes" itself and we can indeed separate other price mechanisms (driven by the market) from inflationary influences. We will tend to see the prices of basic consumer goods rise, the price of debt will increase as interest rates rise and people will tend to keep their wealth in currency instruments such as bonds, money markets or other secured debt over equities and perhaps complex vehicles that don't have great exposure to monetary forces (the deflation). If interest rates rise, that means people are going to certainly want to put their money into depository functions. Savings accounts perhaps or less liquid funds such as CD's and money market accounts. More money is available for lending. Interest rates get driven down, and credit "cheapens". Prices (for goods) continue to fall. As interest rates come down and prices fall, consumerism will tend to increase - those cash type instruments will yield less and it will be less attractive to put your money in them then say, go on a vacation (within regions that have large exposures our currency in question i.e. typical tourist hotspots of that country) or buy luxury items or even buy equities (the current situation with our worthless bond market). Deposits decrease, interest rates rise, the demand exert on luxury items drives prices back up and now people start to save again as depository or currency denominated instruments become more attractive. The cycle begins anew.

Now take this exactly negative feedback mechanism and polarize it in the opposite direction. That is what plays out during an inflationary scenario. As long as you don't get acceleration in either direction, stability will occur and the mechanism will reach and equilibrium point. Perturbations to the system exerted by other forces (markets interacting with each other, technology progression, political machinations etc.) will cause the system to unsettle and resettle itself. This is a constant process.

The biggest argument for a non fiat money is that manipulation of this delicate balance is not something humans can achieve, just like we should not (directly) manipulate the climate as it is equally complex and difficult to understand in this quantitative sense. With gold, which is a steady growth and reliable commodity, the market forces get to dominate everything else, and investment gets allocated to the most productive ventures, credit is valued as it should be and people and other entities know what their assets are worth so they can appropriately plan.

And Monte, there is no such thing as "libertarian" economics. Libertarianism deals strictly with the idea of personal freedoms. Economics is the study of human behavior.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Maybe if you live in a fantasy land where people actually save money. Deflation only helps a poor person if he manages to save some money every year. In America, poor people almost universally have more debt every year. Inflation reduces the severity of those debts.

With houses being the only real big asset most people have and house prices being so far in the shitter I would not be surprised to learn that the net worth of the majority of Americans was less than zero. Deflation will only make their problems worse. The average net worth in the US dropped 25% in the last two years, that's 25% of all the wealth in the country *poof* gone overnight.

Inflation never reduces the severity of debt, since debt out scales income in an inflation based society. Because the poor and working class cannot, without "great" discipline break the cycle, all inflation means is they have to borrow more and more each year to cover the basic cost of living. The irony of the board liberals advocating an inflation based economy should not be lost on anyone: you want perpetual wage slaves.

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No it doesn't. Inflation certainly wipes out dollar denominated assets and liabilities, but not for one who's income relies (as Khross as already pointed out) on wages which hardly adjust. All it does is increase their cost of living, it doesn't make it easier to service debt. Deflation also reduces aggregate prices for a poor person quicker than his wage can respond. In effect, the purchasing power of his wage increases.

Your contention that people don't save is a logical fallacy. People don't save because interest rates are low in an inflationary enviroment. People not saving doesn't make an inflationary enviroment happen - lack of savings, rather, drives up interest rates.



No it won't. Deflation makes the situation for those people worse, but you cannot conflate such an a contention to mean such policy is bad in general. What it would force is lots of people to rent rather than own which is a more accurate reflection of what they can afford.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

To put Khross and Rafael speak into the my answer to Xeq, let me explain why inflation based fiscal policies keep the poor poor, and it has nothing to do with how much you save.

Given the 100 year historical rate of around 3% inflation, this means that any "investment" must return MORE than 3% in order to experience actual gain (ignoring the need for wage changes). There is almost zero low-to-moderate risk investment that will clear 3% annually. This makes moderate-to-high risk (such as stocks) mandatory. Since the risk is higher, you must alleviate risk. In order to alleviate risk, you must diversify. Diversifying when you're poor or low-income is atrociously difficult, and thus their entire investments are at risk.

Incidentally, this is the moral reason pension plans worked: pool all the low-income workers investment moneys and you can diversify successfully, thus more effectively alleviating risk.


By forcing high-risk investments on a particular demographic, you force reliance on an external entity to help them (be it government retirement such as SS or a private entity such as a pension). In a deflationary or static fiscal policy, the risk is alleviated, so the individual can manage their own investments well enough to get by, even if it is as simple as a savings account earning 1% or less.

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“The duty of a patriot is to protect his country from its government.” - Thomas Paine

What if the poor(er) are not borrowing to cover the basic cost of living? For example, borrowing to buy a house. Assuming a fixed-rate loan and adequate income int he first place, the relatively poor or working person does not need to borrow any more.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Diamondeye:

That would speak to people with discipline who save 15-20% of their annual gross income, own a house for which they paid less than 400% of current yearly salary at purchase, and have no credit card or mortgage equity debt. Or, in other words, "great" discipline in contemporary American society. Since behavior demonstrates otherwise, I'll suggest they are an extreme minority.

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Fair enough.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

400% of pretax or post-tax income Khross?

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“The duty of a patriot is to protect his country from its government.” - Thomas Paine

Show your work please.

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Ezekiel 23:19-20 

You guys are making this too complicated.

Long long time ago in a place far far away... people liked shiny stuff, (or they married people who liked shiny stuff) and they needed to be surrounded by shiny stuff to make their neighbours jealous. Now unfortunately silver lost its shine too easily (especially against certain skin types), and platinum/white gold/titanium was yet to be discovered... gold was the shiniest metal there was. Plus it looked like the sun when umm.. under the sun...

The need for gold started and has remained, eventually been used as currency...

So ya.. the females started it all >.>