/sci/ - Science & Math

>But why is deflation also bad? I want to buy more with less cash. That seems like a good thing.

BECAUSE NOBODY WILL BUY YOUR GODDAMN GOODS

IF NOBODY BUYS YOUR GOODS, YOUR ECONOMY COLLAPSES

> I graduated physics and economics always seems a bit Oz to me

grrr... i cant stay mad if youve already admitted your own shortcommings

fuck economy

what mad guy said. deflation makes your currency worth more relative to others, therefore making your goods more expensive.

>>3752188

You mean exports will drop? Ok. But then we can buy more foreign factories with our strong currency. We then pay malnourished people to make things for rice.

Deflation hurts spenders at the expense of savers. On the plus you can expect it to increase investment, but it will cut into demand and might start a recession.

>>3752211

how do you expect to obtain their precious jewgold if you dont sell them anything

when they buy your goods, you get their jewgold

if they stop buying your goods, no more jewgold

Inflation is an effective tax on those who use the minted money later.

Deflation is an effective tax on those who use the minted money sooner.

Given that the people who mint the money either get to use it first, or are in cahoots with those who use it first, it should be obvious that they don't want this.

1 USD = price of domestic car
100 yen = price of car in japan

Imagine: 1 USD = 100 yen

Now Imagine: 1 USD = 200 yen
This will mean that you can buy 2 japanese cars for 1 USD, money exits the circulatory flow.
But this also means that 100 yen can only buy 0.5 american cars, no money enters the circulatory flow.

When money exits the circulatory flow, it is not multiplied within your economy. This makes the money and your economy less productive.

>>3752234

So is inflation/deflation possible if there's only one type jewgold?

>>3752252

i.e. one global currency.

>>3752252

Yes. Demand and supply.

If there is too much Jewgold but no demand, inflation.

If there is too much demand but not enough Jewgold, deflation.

If there is too much Jewgold but not enough assets, inflation.

If there is too much assets but not enough Jewgold, deflation.

You are starting to make me mad.

>>3752211

For a mostly "let's just import that shit"-economy like the US with a high import to export ratio it could be somewhat beneficial. However let's say you live in a country dependent on tourism. You'll get more tourists if your prices are lower to them. The higher the deflation the more relatively expensive your country will become, thus tourists will fuck you and go to Nicaragua instead.

It's also bad for countries with a strong exporting economy like China or Germany. A strong currency means the products they are trying to sell grow more expensive for the guys who are supposed to buy them ( you can't just lower the price forever since you have to pay for the production costs and taxes in your country).

>>3752259

So if an uber-computer could precisely forecast asset holdings and production capacity, then a global currency would be static.

Just enough jewgold would be created to represent the asset/production capacity.

?

The problem isn't that buyers hold out until goods are cheaper, in mathematical terms it's little different from me putting money in a bank and earning interest because that will increase the value of my money just as much as keeping it in a box under the floorboards under a deflating currency. Why don't I keep all my money in the bank and buy nothing?

The problem with deflation is instability, historically we have had inflation because wildcat banks love printing money so that's what we're used to. That's pretty much it.

>You mean exports will drop? Ok. But then we can buy more foreign factories with our strong currency.

Foreign Direct Investment allows the recieving economy to grow, not your own.

If you build a company in China, China taxes your profits. Not only that, but you are giving them jobs and stimulating your economy.

Your own economy will dwindle and die and unemployment rates will rise.

>>3752276

>and stimulating your economy.

Their economy. I meant. Of course.

>>3752268

Let's not conflate inflation/deflation with appreciation/depreciation. Yes, they are not exactly independent, but neither are they the same thing. We would still have inflation if we wouldn't have international trade.

>>3752272

In the long run, sure, neutrality of money and a few reasonable assumptions would suggest that neither inflation nor deflation would have any effect. As you said, the problem is the shock. However the shocks are different. A deflationary shock would have recessionary effects. An inflationary shock the opposite. Hence why central banks since Fisher have been using inflation to stimulate the economy, with varied success.

>>3752259

define 'Jewgold'

Tungsten?
Silver?

>>3752270

No.

Market forces will create its own equilibrium.

Also, you cannot assume a free market economy, neither can you assume homogeneity in products, and you cant possibly account for price inelastic demand.

Take for example:

Cola and pepsi can be considered homogeneous products.

In a perfect world, if the price of cola goes up, demand for cola will fall and people will buy pepsi.

This makes the demand for cola and pepsi price dependent or price elastic.

Now heres a price inelastic good:

Even if the price of oil goes up, the demand for oil does not change significantly because of its necessity. Hence demand is not price dependent and is hence price inelastic.

And there are still other types of goods that have their own unique equilibrium such as luxury goods.

Why buy that item today if you can get it cheaper tomorrow because of deflation? Why buy it tomorrow when you can get it cheaper again the day after? etc.
And thus no one buys anything. Demand has collapsed...so sellers drop their prices further to make you buy again. Oops, more deflation, cycle repeats.

>ceteris paribus
>without this, all your arguments regarding economics are shit

>>3752301

Because of speculation you fool.

Why do you think the stock market is so volatile?

>>3752301
Sure you are not going to eat for two years right?

>>3752312
are you a dumbass?

>>3752319
Are you retard? There are products that will be bought no matter what.

Defationary Spiral, Great Depression.

That's all you need to know.

>>3752282
Financial systems cannot escape economic reality, the only difference between a deflationary shock and an inflationary shock is that businesses have to reduce or increase wages and prices. Actually I'm wrong, there is a difference, if interest rates in banks do not cover inflation during an inflationary shock then this depletes people's savings preventing them from making large long term purchases reducing their options and reducing the effectiveness of converting their spending power into standard of living, under a deflationary shock this just doesn't happen naturally.

It's all very simple OP, economics isn't based in reality. It's just a game which has become it's own religion.

>>3752332
derp....deflationary spirals

>>3752328

Very true, also known as autonomous consumption.

>>3752334

Wages tend to change slower than money supply. Monetary factors have real effects in the short term.

>>3752301
Why buy that item today when I can invest it in the stock market?

Damn Im late. Hello friends.

>>3752347

Because you want that item...?

>>3752345
So during a deflationary shock every worker essentially gets a pay rise until businesses react to the change while under an inflationary shock every worker gets a pay cut until businesses react to the change, presumably a lot slower than their deflated counterparts.

I was originally arguing that there was no difference but now I seem to be arguing in favor of deflation.

>>3752358

It's not just a pay rise, it's a net worth-rise. All your monetary assets are worth more. The effects are not all that easy to predict.

The Great Depression is a great (no pun intended) example of why deflation can be a very bad thing.

In general, about deflation and inflation, there needs to be one dollar worth of value for every paper dollar in the economy. Naturally the economy as a whole becomes more valuable, because we made more stuff, and we also get better at making stuff. So since the value is going up, the amount of physical dollars needs to go up to to make sure $1 of value = $1 physical dollar.

If you dont do that. If you just leave $10, then one dollar becomes worth more and more. This fucks around with people's value. You want currency to be nice and stable, that promotes a general well being in the economy because people arent worried about the security in their money.

If delfation is the trend and I dont spend my money then I automatically become relatively richer in the long run. Versus someone always spending money is always losing value. If there were $10 in circulation 10,000 years ago. $1 might have represented like, a stick. But fast forward to today and $1 represents 1/10th of everything in the world. The value of $1 has changed quite a bit and thats not fair to some people.

Pareto agree disagree? I feel like I cant quite explain this. Im going to browse upward and read what youve written.

Fisher equation: Real interest rate = nominal interest rate - inflation rate

If inflation is negative, this increases the real interest rate, in turn decreasing the amount of investment and increasing the savings rate. A bi decline in economics activity, which itself decreases inflation further, creating a spiral effect. This is bad.

>>3752401

yarlly.

For a period of time during the Great depression banks were operating at negative interest rates.

You could take out a loan for $1000, and you pay them back with less than $1000

>>3752420

>You want currency to be nice and stable

>implying money can be stable when it's traded on markets like a mere commodity where prices fluctuate daily.

And then I haven't even begun talking about banks printing endless paper out of thin air destroying the value of money on a daily basis.

>>3752450
>banks printing endless paper out of thin air

Just one bank, dude. The central bank.

>>3752456

Fractional reserve banking technically creates money...

>>3752450

Oh yeah?! well you know what!!!

.... I happen agree you big jerk.

At least about fiat currency.

>>3752462

Its hardly printing money. It doesnt increase the overall money supply. They 'create' money by lending it out and getting more back, the profit they make comes from production in the economy.

>>3752456

The Fed is not even a bank. I don't know what monstrosity you've concocted.

>>3752450

Minting is not really a problem in the states or other developed countries. Most countries realise how retarded hyperinflation is. Russia uses it to complement state expenses, but measuredly: it's no more than an additional tax on the holders of currency.

>>3752420

Largely, yes. Although statements like:
>$1 of value = $1 physical dollar
Don't mean very much, do they? A dollar is always worth a dollar. If you're not afraid of the labour theory of value, your base unit could be a man hour. Otherwise, some other proxy.

>>3752473

Uh...

Well actually I think they just adjust the federal reserve rate. They arent actually in the business of making and loaning money. They just control the rate at which banks can loan out relative to their reserves.

>>>3752480

> A dollar is always worth a dollar

Yeah, you are right. I feel like I cant express myself properly, and maybe I am saying that only for my sake since its easy to forget that a dollar is not disconnected from the value it represents.

> If you're not afraid of the labour theory of value

Oh, I certainly am afraid of the labor theory of value.

>>3752480
>The Fed is not even a bank.

Its the central bank, dude. They do lend money out, they do hold money. They arent the usual bank, but i didnt mean to imply i thought that...

>Minting is not really a problem in the states or other developed countries

Not a problem, but it should be noted that many countries fund some portion of their government expenditure through seignorage (printing money, essentially).

>>3752488
They change the interest rate by conducting open-market operations. They change the rate they offer overnight loans, which in turn affect the rates banks themselves charge on their various loans. They're obviously in charge of monetary policy as a whole, but they do operate in the finance industry.

>>3752456

All money today is created in the form of loans by private banks, it's called fractional reserve banking. There also exists no real money today (except for a bunch of coins which make up less than 3% of the total money supply), all of it is debt owed to private bankers

>>3752470

So, you call yourself the supreme economist on here, hey? MWuahahhahahahahhahahahaa. I will monitor this board from now on and destroy you in every possible debate on economics that comes up. Just because I dislike tripfaggots.

Economics is a corrupt science based on outdated 17th century thinking and failed to achieve it's original aim, viz. providing subsistence for every citizen. Economics today is all about how we can make the top of the pyramid stronger and stronger at the expensive of the taxpayer.

I really, really dislike economists.

>>3752509
>All money today is created in the form of loans by private banks, it's called fractional reserve banking.

Im not sure you understand these terms. Fractional reserves means that banks only need to keep a franction of the money that people have in their accounts on hand for when people want money back. The rest they are allowed to loan. They dont "create" meony by any means, they lend it out and make a return on it. The money they lend out goes into the actual creation of things in the economy. No money is created in this process...

>>3752509
>Economics is a corrupt science based on outdated 17th century thinking and failed to achieve it's original aim, viz. providing subsistence for every citizen. Economics today is all about how we can make the top of the pyramid stronger and stronger at the expensive of the taxpayer.

Biased and ill-informed view of the world, much?

>>3752509
I understand that you hate economics.
Simple folks are usually afraid of what they don't understand, and it enrages them.

>>3752508

I actually agree that the Fed is a bank. Its a bank in that, a bank has money, and banks keep their money in the Fed. The Fed is like a bank for banks.

>They change the interest rate by conducting open-market operations.

I dont know, whatever. We could be talking about the same thing with different terms honestly.

>>3752509

I wouldnt say I am the supreme economist. Pareto knows as much if not more than I do. But both of us do study economics in school. But I am the guy available to consult about economics around here.

> I will monitor this board from now on and destroy you

If you want, I can give you my email and we can settle this like men.

>I really, really dislike economists.

;_; Thats not nice. What if I said I really really liked you?

Also what if it turned out we agreed about economics and then we were like best bros?

>>3752508

I confess I don't understand how the Federal Reserve works, but I thought it was more of a pseudo-private management board of twelve federal banks and some private ones? Or something retarded like that?

There's a case of wolves guarding the sheep pen, if there ever was one.

>>3752509

Nice to meet you. I'm quite sure dislike you too. I shall endeavour have my trip on in any economics argument to facilitate your destruction of me also.

On a different note, economics went a long way since the 18th century (The 17th would be the 1600s). It's not that it's a corrupt science: that would imply it was in grace before it fell from heaven. It's merely still trying to establish itself as a reputable field. It doesn't help that there's a lot of politics involved, but I feel we are making substantial progress.

>>3752552

I didnt mean to imply i thought the Fed was a bank, i was mainly saying to the original guy that banks dont print money.

>>3752525

If someone deposits 10 dollars, the banks gets to create 90 NEW dollars with it, like that, out of thin air! If that is not creating money then what is it?

Now, when someone takes on a mortgage, the banks just magically create the money out of thin air. The lender's pledge to borrow allows the bank to create the money, it's sleight of hand.

All money today is debt, there is no REAL money in our money supply.

>>3752555

> but I thought it was more of a pseudo-private management board of twelve federal banks and some private ones?

I used to know all the irrelevant details because of school. Its born from an act called "The Alrich Vreeland act" which was a superior plan. The Alrcih Vreeland act basically said the government was going to found a private bank that could only loan out to other banks.

The act was replaced by the federal reserve act, which was just an obscenely complicated version of the alrich vreeland act. It required something like membership from banks and applications to join the system, and a board of members and... all kinds of mess.

>>3752555
>I confess I don't understand how the Federal Reserve works

Me neither, really. The only thing in my econ education ive not been able to grasp is the exact mechanics behind how the central banks change the interest rate. I know for sure that it not law or anything whereby they say a rate and the banks need to conform. They influence the market in a way that forces, through supply and demand, the banks to change their rates accordingly.

>>3752570
You are too dumb for words. That is not what happens, you moron.

>>3752570
Except that's not how it works.
If somebody deposits 100 euro, the bank keeps 10 euro's liquid, and invests the other 90. That's not creating money.

>>3752552

OK, I absolutely despise economists because they really don't understand how the real world works and only what their corrupt economics books taught. For example, riddle me this:

1. How is money created today?
2. Why is money neither a commodity nor debt/credit
3. What is dollar hegemony?
4. Explain why the Mundell Fleming thesis and how it is preventing governments around the world from creating their own money?
5. Why is Keynes corrupt?
6. Why is Austrian economics corrupt?
7. Why do free markets not exist?
8. What are the 3 main causes that the Western economy has bankrupted itself and is about to die?
9. Why usury the slow poison that surreptitiously and insidiously destroy all?
10. Why does every monetary system that makes use of interest always collapse?

Thank you, that other tripfaggot PARROT something something may also answer these questions.

I'm waiting.

>>3752570

>If someone deposits 10 dollars, the banks gets to create 90 NEW dollars with it, like that, out of thin air! If that is not creating money then what is it?

To understand the system you need to go back in history to when there was a gold standard.

Back then lets say there were 100 contracts that said "This is redeemable for 1 bar of Gold at Bob's Gold shack" and there were only 10 bars of gold. It was printing money in that, you are printing contacts with people, in fact, more than you could actually fufill. It wasnt printing money, in that, each contract was legitimate, and you could legitimately get a physical bar of Gold for your money.

Today your dollar isnt guaranteed to be anything no matter how you look at it.

>>3752593

You don't understand fraction reserve counterfeiting as I like to call it. THE BANKS CREATE NEW MONEY.

>>3752602

You have made a hell of a lot of assurtions and then asked people to explain them.

Example:
>5. Why is Keynes corrupt?

Is he? Was he? huh... i never thought so.

>>3752602

I do apologize for the numerous grammatical and spelling errors on my behalf in that post. It usually happens when I type too fast and not double check my post.

>>3752610

No money was created dumbass.
Bank 3 now has $81, 2 has $9 and 1 has $10. A whole $100, still.

>>3752587

> The only thing in my econ education ive not been able to grasp is the exact mechanics behind how the central banks change the interest rate

This is quite simple, if what you have really is a central bank.

The central bank posts the official cash rate at, say, 5% (in my country this is reasonable. In the US obviously not). This mean, for instance, that the central bank is willing to lend to banks at 5.25% and pay 4.75% on deposits. The private banks don't have to play ball: they can do whatever they want. But if any bank one charges more interest than 5.25%, bank two can simply take a loan from the central bank and loan that out for cheaper. Likewise, if bank one offers less than 4.75% for deposits, bank two can offer, say, 4.7%, then put the deposit into the central bank and reap the 0.05% difference.

Obviously this relies on the central bank having sufficient reserves to enforce this and hence has complications if you're a small, open economy. But that's not something the United States has to worry about.

But I have no idea how your system achieves the same goals.

>>3752610
What if there is a run on the bank? Money isn't created, you give the bank $100, they spend $90 and claim the $100 is still there, but really it isn't. Boom, it's gone.

>>3752633
Which has happened, and why most governments in developed nations have a policy of guarenteeing peoples deposits. They charge banks yearly fees to be able to do this, of course.

>>3752602

I think nearly all these questions have questionable premises, like, "What are the 3 main causes the western economy has bankrupted itself and is about to die"

This implies:
1. There are three causes,
2. There is such a thing as the western economy, which is distinct enough from any other economy, or any sub section or super section of economies
3. That the western economy is "bankrupting itself"
4. That an economy can die, and that "dying" is an immediately understandable concept in economics.

Also, asking about austiran or keynesian being corrupt, implies its corrupt, which, is very debatable.

Just give me a damn email address and Ill email you later. I dont want to talk about potentially 10 seperate heated off-topic arguments in one thread. That wont lead anywhere.

>>3752627

Look at the goddamn picture, asshat. With 100 units of money 171 were loaned out. And those 71 are what? OLD? Today, the power to create money has been handed over to private banks, a power that is so powerful no government should ever hand it over to private interests. NEWSFLASH: our governments do not have the power to create money today, this has been usurped by private banks.

You obviously don't understand how our current monetary system works or what money today actually is. It is DEBT OWED TO PRIVATE BANKERS.

>>3752629

Thats basically what i meant. What i dont understand is the principle behind the overnight loans rate.

>>3752610

The money supply is not the same thing as the reserve. If you had a gold standard gold would be the reserve. And money is the money. You cant put 1 gold in the reserves, and then make 9 dollars, and then put 1 dollar in and make more dollars.

You cant do that today either, because you invest your money into the Fed, and that gets converted to federal reserve currency. There is a barrier between reserves and dollars.

>>3752639
So where does the money come from for guaranteed deposits when there is a run on the bank?

>>3752646

Please tell me you have some kind of mental disorder. I bet you wear a tin foil hat, dont you.

No money was created, and the central bank in every economy DOES have the power to print money. They do it all the time.

>>3752643

I'll give you the three causes:

1. money being created as interest bearing debt by private banks that NEVER create the interest which also needs to be paid back
2. dollar hegemony
3. money mismanagement: money today is only used to play games with money (derivatives et al) and not where it should be used, viz trade and production of actual goods and services

>>3752602
>1. How is money created today?
Some of it is printed, some of it is just a collection of bits. There is, however, at most one authority that can create money.
>2. Why is money neither a commodity nor debt/credit
Money is credit.
>3. What is dollar hegemony?
It's a hypothesis. The hypothesis that, since the dollar is the international standard currency, this provides the FED with extraordinary economical power.
>4. Explain why the Mundell Fleming thesis and how it is preventing governments around the world from creating their own money?
The Mundell-Fleming model says that you cannot concurrently have a fixed exchange rate, free capital movement, and an independent monetary policy. That makes perfect sense. If you do not restrict capital movement, then people can exchange your currency en masse, if you do not change your monetary policy accordingly, the exchange rate will change.
>5. Why is Keynes corrupt?
He is not corrupt. Keynesian economics is often wrongfully used as an excuse for new policy.
>6. Why is Austrian economics corrupt?
It is not corrupt, but it is flawed. It to is often wrongfully used as an excuse for a policy.
>7. Why do free markets not exist?
They do. Unless you mean perfect free markets. Then they don't exist for the same reason perfect situations don't happen in physics.
>8. What are the 3 main causes that the Western economy has bankrupted itself and is about to die?
They are? [Citation needed]
>9. Why usury the slow poison that surreptitiously and insidiously destroy all?
It is not. Although usury is of course a bad practice, it is also illegal.
>10. Why does every monetary system that makes use of interest always collapse?
Because it doesn't. Almost all monety systems have the notion of interest, some of them collapsed, some of them didn't. The usual cause for collapse is a consequence of a collapse of the country that uses the currency.

>>3752643
>I dont want to talk about potentially 10 seperate heated off-topic arguments in one thread. That wont lead anywhere.
pussy

>>3752656

As i said, the government makes all banks pay a fee yearly to provide an account for these guarentees. Also, if that situation were to come up it would imply the economy is in the shit already, so its possible they may just print the money. All i know is that there is a policy in place to avoid the situations that happened ages ago, like when 2/3 US banks collpased during a bank run.

>>3752610
Are you seriously this retarded?
In the whole village, there is only lump of gold.
The owner of the gold buys a bread from the baker with the lump of gold. The baker uses the lump of gold to buy a slab of meat at the butcher. The butcher pays his landlord. Etc.
THE VILLAGE SPEND 3 LUMPS OF GOLD, THEY HAVE CREATED NEW GOLDS

>>3752659

You are making extremely broad claims (Everything is going bankrupt/corrupt/evil), using undefined terminology (death, mismanagement, play games, corrupt), citing ideas of questionable relevance (free markets, dollar hegemony).

Im not saying this to ignore you. I dearly want to discuss economics with everyone. I am just saying we need to have a conversation of real substance.

Give me your god damn email address. Ill talk over the phone even if you want.

>>3752666

Ive been around the internet long enough. Ive seen enough flames.

>>3752602

Of course you're not going to get 10 answers in any detail today. But I'll try at a couple, and hopefully there won't be too much overlap with economist.

>5. Why is Keynes corrupt?
Keynes was a good man and a great economist. Even the men who disagree with him largely work within his model. Perhaps his biggest contribution to Economics was the distinction between the long and short run. "In the long run we're all dead". He supported deficit spending in times of recession, arguing that avoiding the slumps of depressions will, in aggregate, outweigh the debt incurred in the process: when the economy is booming, it can be taxed back. Keynes was not afraid of taxes.

From the second world war up until the 1970s Keynes ideas were gospel in public policy. We should be wary to infer causation, but this period also corresponded to phenomenal economic performance in the Western world - the "Thirty Glorious Years". At the end of the period these economies began running into difficulties, partially attributed to shortcoming of Keynesian policy (and, by supporters of Keynes, to the deviation from it) and were largely replaced by monetarist tendencies in the US and strange hybrids in Europe. East Asia stuck to Keynesianism up until the Lost Decade/East Asian Crisis.

Today, Keynes' name is often associated with any deficit expenditures, which is why it has a bad reputation. For instance, the bail out is typically characterised as Keynesian, where as classical Keynesianism would involve direct expenditure: ie, massive construction projects to simulate demand for products and thereby help corporations, rather than giving them aid directly. Also, unlike Keynes, these Neo-Keynesians are afraid of taxes: they spend when there's a recession, but they don't want to tax it back later.

>>3752672

Easy there. You are describing the concept of "velocity of money." Its certainly a valid and important concept, which demonstrates how an economy grows and shrinks with a fixed amount of money, but it doesnt have much relevance to the internal affairs of a bank.

Nonetheless I agree. That pic is very in retarded.

>>3752691
I know. My point was that fractional reserve banking doesn't create money, just like respending money doesn't create money.
Captcha related: ownyou book

>1. How is money created today?
Some of it is printed, some of it is just a collection of bits. There is, however, at most one authority that can create money.

WRONG, private banks and the privately owned FED have the power to create money.

>2. Why is money neither a commodity nor debt/credit
Money is credit.

So, money is debt? Money is a creature of the law, and should therefore be ruled by law. It is the lifeblood of the economy and the power over it should be in hands of the State and not private banks as it is today. Are the legislative powers in private hands? The judicial powers in private hands? Why the fuck is the power over money then privatized?

>3. What is dollar hegemony?
It's a hypothesis. The hypothesis that, since the dollar is the international standard currency, this provides the FED with extraordinary economical power.

It's a fact. The dollar IS the world's reserve currency and the USA is the only country that can issue it at will, by fiat. This is financial slavery, every nation on earth now has to produce goods, aka real wealth, and export them for worthless fiat dollars in return so they can buy much needed commodities only dollars can buy, viz oil etc.

>4. Explain why the Mundell Fleming thesis and how it is preventing governments around the world from creating their own money?
The Mundell-Fleming model says that you cannot concurrently have a fixed exchange rate, free capital movement, and an independent monetary policy. That makes perfect sense. If you do not restrict capital movement, then people can exchange your currency en masse, if you do not change your monetary policy accordingly, the exchange rate will change.

You didn't answer the question. Countries are forced to produce goods for export instead of relying on their own fiat money to develop their domestic economies. Why does every country have to rely on export to develop their country? Again, it's financial slavery made possible through the floating currency standard.

>>3752709

Are you this guy:
>>3752646

You are comically retarded. Please, continue your hilariouly uninformed economic analysis of the modern world.

>>3752689
>>3752602

Okay Ill take a shot at one.

Ill answer why free markets dont exist.

First of all, economic models, like ones that include unrealistic assumptions, are simplifications. Their unrealisms are excused by the fact that they just tools for looking at reality. Just like in physics, you might ignore things like friction, or resistance if you were trying to understand another concept. To simply factor everything into a model is impossible, and would be so difficult to construct you would never make any progress in understanding reality.

So, the concept of a free market is one where people have freedom to do what they want. If you define it that simply, then certainly free markets exist. But usually when we talk about free markets, we are implying some perfection. Like, uniform inforation, no barriers to enter a market, infinite sellers. Obviously these are impossibilities. In that regard no market is a "free market." There are always limits to reality which will make us fall short of the supposed perfect market.

And even at that markets can naturally fail. In that the price and distribution they naturally reach doesnt result in the most good among people. Externalities arise that dont get considered. On top of that markets are interconnected, and if one of them goes badly, all of them go badly by extention.

>>3752649

The principle is competition and profit. Assume there's no middleman for a second, and that everyone can use the reserve bank: You're not going to take a loan for more than 5.25% from anyone, because you can take one for 5.25% from the reserve bank. Neither will you put up with less than 4.75% interest on your savings, because that's what the reserve bank offers you.

It relies on the reserve bank having large enough assets to change demand by doing so. Clearly this wouldn't work in perfect competition - as soon as the reserve bank would deviate from the "true" interest rate it would go bankrupt.

>>3752602

>6. Why is Austrian economics corrupt?
Because they scorn both mathematical formalism and empirical experimentation. They are to Economics what acupuncture is to medicine. People are fooled because the statements made by Austrians often seem surprisingly reasonable. However, we should give priority to method - don't forget that while Peter Schiff correctly predicted the 2008 collapse, he was predicting hyperinflation for as long. A broken clock is right twice a day.

>7. Why do free markets not exist?
There are many assumptions behind perfect competition, one of the most insidious being an uncountable number of agents. If we relax the perfect requirement and simply ask why markets are not more free than they are, two reasons. One is that there are good arguments, both theoretical and empirical, as to why mixed economies would work better. The second is that even if it weren't for these arguments, there are strong vested state-corporate interests at play.

>8. What are the 3 main causes that the Western economy has bankrupted itself and is about to die?
-Low savings rate.
-Western economies are starting to push at the production possibility frontier.
-Corporations in many countries are growing too used to the state taking the fall for them.

>5. Why is Keynes corrupt?
He is not corrupt. Keynesian economics is often wrongfully used as an excuse for new policy.

He gave the bankers and privately owned central banks to create even more debt. His whole thinking boiled down to: if we take on more debt and spend more using debt our economy will start running again. Endless expansion using debt will destroy anyone....in the long run.

>6. Why is Austrian economics corrupt?
It is not corrupt, but it is flawed. It to is often wrongfully used as an excuse for a policy.

Money is not a commodity, it's a creature of the law. Define money as a commodity and the already wealthy and powerful will control the money supply. Define money as gold and the economy will never be able to grow as fast as it in theory can because the supply of gold is holding it back. Define money as gold and the value of money can never be used as a precise measure for the price of gold fluctuates daily. Money needs to be precise, exact and defined or it cannot do what it's supposed to do. Does the measure inch, feet or liter fluctuate daily? NO THEY DO NOT, for they are defined by law, so too, money needs to be defined by law.

>7. Why do free markets not exist?
They do. Unless you mean perfect free markets. Then they don't exist for the same reason perfect situations don't happen in physics.

Free markets are a fucking scam: those with pricing power price everyone out of the market, cartel forming, those with massive leverage manipulating prices like a puppet etc etc. The free market does not exist and can never exist as long as there are humans that are going to abuse it for their own benefit.

>>3752182

Nothing, really. The fastest growing period ever in America saw deflation.

>>3752725
>The principle is competition and profit.

Thats basically what i originally meant when i mentioned they control the rate through supply and demand rather than force (or whatever).

I think, though, that the Fed only provides a particular loan/deposit at a very short term, and all other, longer, terms offered by other banks use a rate proportionate in risk/rime to this rate the Fed offers.

>>3752742

risk/time* rather...

>>3752725

About Keynesian and Austrian economics, I always considered it a false dichotomy. Hayek and Keynes claimed to agree with each other. Ive heard that Hayek's notion of the business cycle was completely bunk, but I dont know why yet.

The real division between them comes down to whether you think the government is capable of spending money reasonably, and how effective you believe the free market is at delivering people to goodness.

About #8

While I originally criticized the question, I agree about the low savings rate, and the problem with corporations. Those are both problems. Not to suggest that I think they can be all bundled up into "the cause of western bankruptcy."

It seems like the guy who asked the original 10 isnt here any more. I wonder what he was expecting by asking the 10. I wonder if he thought we couldnt talk about these subjects. I also wonder what he thinks of our answers.

>>3752735
>>3752710
>>3752709

Your the one who originally posted the questions, right? I think im beginning to see your agenda here. And you have the gall to hate economists when you spew this bullshit...

>>3752752

Official interest rates are officially low. That is all that is of importance.

>>3752758

Oh thats the guy? I thought he just disappeared.

>WHY IS AUSTRIAN CORRUPT?
>But that implies that it is co-
>WRONG! ITS NOT CORRUPT! ITS FLAWED!
>mfw

>>3752770

I know man... I was hoping for a good chat about economics with an intelligent person. Oh well...

>>3752709

> FED is private
> president appoints FED chairman

Pick only one.

>8. What are the 3 main causes that the Western economy has bankrupted itself and is about to die?
They are? [Citation needed]

See my post >>3752659

>9. Why usury the slow poison that surreptitiously and insidiously destroy all?
It is not. Although usury is of course a bad practice, it is also illegal.

Making money with money only makes the already wealthy even richer and the poor even poorer. Today there are two classes: those who live of the interest and produce nothing of value and are basically nothing but parasites to society and the class that performs the real labor that lives in poverty. There is a good reason why usury was forbidden in the ancient societies.

>10. Why does every monetary system that makes use of interest always collapse?
Because it doesn't. Almost all monety systems have the notion of interest, some of them collapsed, some of them didn't. The usual cause for collapse is a consequence of a collapse of the country that uses the currency.

When the interest is never created, as it is today, the money supply will always be in a perpetual shortage of money and there will always be endless unemployment and bankruptcies all because there simply isn't enough money in the system to pay everyone.

That's why economics has failed today: there is poverty, inequality, massive unemployment and endless financial corruption. Economics has demonstrated to be a complete and total failure today and it needs to done away with.

>>3752752

>About Keynesian and Austrian economics, I always considered it a false dichotomy. Hayek and Keynes claimed to agree with each other.

Hayek and Keynes liked each other, and had similar starting points. When it comes to their work, there is a lovely quote of Keynes' on the matter:

>The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.

But yes, the two currents are not a dichotomy by any means. That perception is really just a reflection of political rhetoric.

>I also wonder what he thinks of our answers.
tl;dr

>>3752758

Shut the fuck up and provide some damn arguments as to why I'm wrong.

On dollar hegemony:

Imperialism, now and then: In contrast to industrial imperialism under which the imperialist economy exports value-added manufactured products for gold, with which to finance more new modern factories at home, the financial imperialist economy imports value-added products from the colonies and pays for them with fiat paper. The colonial economies now export real wealth in the form of value-added products and get paper in return. To make matters worse, under dollar hegemony, the fiat paper currency, in the form of dollars, can only be re-invested in the dollar economy, not non-dollar exporting economies. Exporting for dollars is merely shipping wealth out of the exporting economy to the dollar economy.

>Asks 10 ridiculous questions
>All of OP's answers are "Trick question!"

Well that was stupid.

>>3752789

>tldr nothing

Hahahaha..

Im going to bed. Good night Bro.

Oh boy, as soon as there's a thread about my favourite science, it gets shat on by some homeless twats that don't know a single thing about the field of Economics and spew buzzwords like 'corruption' and 'the top/rich' at every occasion.

Perhaps I should start shitting up threads about physics and mathematics, to return the favour...?

>>3752812
>economics
>science
>supports capitalism and upper-classes

Confirmed for retard.

>>3752816

Hurray, yet another prime example of some faggot thinking he knows what he's talking about!

I think the people you so much despise are 'politicians' and not 'economists'.

>>3752807
I'll try and come up with something...

>Making money with money only makes the already wealthy even richer and the poor even poorer. Today there are two classes: those who live of the interest and produce nothing of value and are basically nothing but parasites to society.

Im pretty sure usury refers to charging too high a rate of interest, which doesn't actually happen... I know this isnt a good argument, but if cannot see how loans create ACTUAL production, and cannot see how banks can justify receiving a return on their loan, then i have little hope for you .
>7. Why do free markets not exist?
This isnt much of a question. Its obvious to ALL economists that free markets are a bit of a pipedream, incredibly unrealistic.

>Countries are forced to produce goods for export instead of relying on their own fiat money to develop their domestic economies.

You seem to be implying economies dont seem to have a domestic currency... They do. Countries aren't forced to produce goods to export. Im not entirely sure I understand what you mean here...

>>3752812

Fact is that less than 10% of the world's population own over 80% of the wealth. Fact is that over 60% of the world's population have to live on less than 2 $ a day. Fact is that the banks get bailed out when they fuck up gambling with their money. Fact is that the FED is a privately owned bank and not owned by the USA government. Fact is that the world's richest nations also have the world's highest debts.

FACTS, do you speak them? Please shut the fuck.

>>3752824

These "economics" threads are rarely about economics, moreso political science and ethics. Its sad really, it gives econ people a bad name.

>>3752826
>thinks economics supports vast inequality
>doesn't know that it hampers economic growth in the long run
>can't differentiate between economics and politics

Look at him, look at him and laugh.

>>3752825

>You seem to be implying economies dont seem to have a domestic currency...

I never said that nor implied that. Countries are not able to create DEBT free money and not debt free as for example the Greenback dollar was. You don't seem to understand that there are various types of fiat money. The fiat money I am talking about is debt free and was properly elucidated in the State theory of money by George Friedrich Knapp. STM asserts that a government can create its own money DEBT free for all the expenses it might have. You are talking about corrupt fiat money created as INTEREST BEARING DEBT.

>>3752832

People like you, getting caught in semantics, truly slow humans down

>>3752826

>Fact is that less than 10% of the world's population own over 80% of the wealth.

Why is this a bad thing? What is inherently wrong here? Do you believe there are people who have a right to this money who arent getting it, or do you think it should be equal for the sake of equality?

>Fact is that over 60% of the world's population have to live on less than 2 $ a day.

Is it that many? Huh.

>Fact is that the banks get bailed out when they fuck up gambling with their money.

Yes, because if they didnt the situation would be worse. Put your blame on the causes of the banking failure.

>Fact is that the FED is a privately owned bank and not owned by the USA government.

Yeah, you'll have to help me out with this one, you clearly know something I dont.... I assume you'll answer with something about Goldman-Sachs...

>Fact is that the world's richest nations also have the world's highest debts.

Tell me why this is bad.

>>3752830

Well, you must be really dumb then. Economics and politics are intertwined as they both deal with how a country is governed. One can no go without the other.

Ever heard of the word Political Economy or Political Science?

>>3752840

I dont understand your problem. Im willing to concede you know more about this than me.

If a country prints money, it doenst create debt, right? Many small economies printed shitloads of money in the 90s/200s, causing hyperinflation. Are you suggesting there is/was a way to create money without causing inflation and devaluing the currency? Im not sure i understand the concept here...

>>3752847

As in: they discuss questions of equality, of law regarding the management of corporations, of class warfare and of freedom/liberty. These subjects are more closely aligned with sociology and political science than economic theory. Economics usually describe the situation and the effects of it. We dont deal (usually) with the right/wrong ethical dilemmas of income inequality and class struggles.

>>3752851

I have studied monetary systems, political science and money for over 5 years.

I always begin with the 10 questions I posted to understand what level my opponents are at. You see, the science of money has been completely lost today as has been evident from the responses in this thread. 95% of these people calling themselves economists have absolutely no idea what money actually is and more importantly how it is actually created nor how economics work in the real world.

I can't debate people like this and shall refrain from further debating these teenage trip fags as they have absolutely no fucking clue how the real world works and are merely parroting from their flawed economic textbooks.

You people can find me on ZEROHEDGE.COM where I debate intelligent people that truly understand "economics", money and monetary systems.

Oh, PS this is my usual trip on economic forums where I destroy people on a daily basis.

The Moneypulator

>>3752878

You did not respond to a single of my posts. How exactly are my claims ludicrous? I've studied Economics for a number of years myself, and find it droll that you would class me as a "teenage tripfag"

>>3752878

Interesting. Never knew Economists were only supposed to talk about and study money. I also never knew there were people around that fully understood the precise workings of the global economy (something you imply to know).

Guess New Institutional Economics, Behavioural Economics and Development Economics (all fields that don't focus purely on 'money') don't actually exist

I give you a 7/10, because your post made me chuckle.

Go 'destroy' 'em!

>>3752851

Let me at least answer your question before I go, sorry.

>If a country prints money, it doenst create debt, right?

It does create debt. Explain all the debt Western countries have? Simple, the money is created as interest bearing debt. Our governments handed over the supernal prerogative any country can exercise, viz. the power to create and control the money supply, over to private interests.

For example, I live in the Netherlands and we are part of the EU. If my country needs new money for some project it has to go to the EU to ask for money, the EU then create this money as an interest bearing debt which of course has to be paid back by us, the taxpayers.

STM asserts that money is a power of the State and not banks. STM wants to power over the money to be returned to its rightful owner: the State, simply because it is always the State and only the State can declare something to be money. Take commodity money, we believe that it is the gold that lends the money its worth but that is wrong, the State declares this amount of gold to be worth this amount of money, the State thus decides what is money and what it is not. If the State declares shit and doo doo to be money then it is money. Do you see?

Now, if the State were to issue debt free money and do so in limited amounts and more importantly only when new goods and services have been created the money will never lose its value.

>>3752900

Your posts are not worth replying to, they contain the same mindless dribble every standard economic textbook parrots day after day on CNBC and Bloomberg. Also applies to that other ECONOMIST TRIP FAGGOT.

I can't debate with people that don't understand dollar hegemony, money as interest bearing debt, usury, private powers having usurped our governments, what money really is etc etc.

>>3752906

Money is the basis of economics and political science, define it wrongly and you voila: our modern world of corruption, inequality, unemployment and poverty has been born. Money is the Big Bang. Money is the Atom.

And there are many people who understand global economics, you just won't find them in your economic textbook nor on Bloomberg, CNN or Fox News. Hell, there are whole websites filled with thinkers like me that debate this stuff on a daily basis.

Learn to think for yourself, learn to think independently.

Great thinkers are not parrots!

>>3752941

Quite. I fear I may be unable to debate with a man who claims to have studied Economics for over five years yet reads Pareto as "parrot".

>>3752941

>And there are many people who understand global economics, you just won't find them in your economic textbook nor on Bloomberg, CNN or Fox News. Hell, there are whole websites filled with thinkers like me that debate this stuff on a daily basis.

Keep telling yourself that. It seems you already actually believe what you're saying. Curious how these 'geniuses' are never heard of.

Money is not the basis of Economics. Behaviour is. Money is merely a tool that has allowed for the expansion of economies, but it is not the foundation of the entire field.

>>3752941
>Learn to think for yourself and think what I think.

>>3752973

Allow me to post some quotes from brilliant minds that you won't hear in our Zionist media.

"There is no logic in insisting on repeating the mistakes of the capitalist West by copying a bankrupt market system bent on recurring self-destruction. Yet Margaret Thatcher's fanatic TINA (there is no alternative) mantra is accepted as the gospel of truth. Income disparity and wealth maldistribution natural to market economies are celebrated as necessary dynamos of prosperity. Economics, unlike truth-respecting physics from which it pilfered many theoretical concepts, tends to hang on to obsolete ideas long proved dysfunctional by events with ever more sophisticated rationalization. While Issac Newton is now a relic in the history of physics, Adam Smith is alive and well in the temples of economic thought more than two centuries after his time."

Henry CK Liu

>>3752941
>there are whole websites filled with thinkers like me that debate this stuff on a daily basis.

>>3752878
>ZEROHEDGE

I checked that site, literally nothing at all knowlegable, let alone approaching GENIUS, has been postind there. Everything is as innane, uninformed and biased as everyhting you have posted.

Literally nothing you have written in this thread has in any way approached a critique of modern economics thought nor have you managed to even master the english language to an extent where you can state your ideas in a manner that is in any way recognisable. You have consistently berated an entire disipline of study using little more than weasel words and logical fallcies. I cant even comprehend the stupidity that leads someone to claim that all those who write textbooks on a subject have no understanding of the subject at hand. Seriously, fuck off.

On Economics/Political Economy

The original problem was “How can wealth be controlled to serve the best interests of society” Today the problem is “How can nine-tenths of society be controlled to serve the interests of existing wealth?”
To sum up then. Consideration of the present so-called science of Political Economy demonstrates that its results are not those originally aimed at ; in its development its problems have become inverted ; it has not arrived at the state of qualitative prevision ; it is illogical and ambiguous ; and lastly, it is out of harmony with the science of ethics. The cause of this is its fundamental assumptions, which recognize as permanent and as absolutely necessary certain institutions established under the reign of " blood and iron." No true science of Political Economy is possible based upon injustice. It is necessarily a moral science, hence its principles and premises must be just. In championing private interests economists have entirely missed the goal towards which the science should naturally tend, viz., the well-being of society. Political Economy is not a science for enriching individuals at the expense of society.

The Money Question by Arthur Kitson

>Moneypulator: Start thinking with your own head, and start believing what i believe.

yeah, real smart, champ. You can't claim that you "know" because "knowing" is serious business, no one here "knows", we all only believe what one side in economic war tells us.

The monopoly of money is the greatest of all monopolies, for it controls all others ! It gives its controllers supreme power over production, trade and commerce nay, over life itself! If such a monopoly must exist, let it be owned by the nation. Here is a legitimate field for democratic control. For, even in the hands of the State, a hanking monopoly may be a source of infinite harm to the public, unless it is properly and impartially conducted for the interests of all classes alike.

Arthur Kitson - Trade Fallacies

hey Moneypulator, recommend sites and books to read about your economics way, i'm interested in this shit, i dont support any side in economics, but i want to know what all sides claim

>>3753022
>>3753016
>>3752878
>>3752941
>>3752913

heh good to know economics too is plagued by these asshole aspies
i thought only sciences attracted their sort

On money as interest bearing debt

Since the banker draws interest on this curious and dubious money, the more debts, the more interest. The more wealth a nation has the more debt the banks can force. Hence the more wealthy a nation is the more it goes into debt. The more it goes into debt the greater are the profits to the banking system. The Federal Reserve System is a mathematical impossibility. It was illogically constructed and predestined to failure and will eventually crush the Government of the United States under a burden of debt. This system supports the nation like a rope supports the hanged.

CITADELS OF CHAOS
By Cornelius Carl Veith

>>3753016

Nice quote. Shame it's complete buzzword-ridden bullcrap. The fact that you spelled Isaac Newton as "Issac Newton", and the fact that you're pretending Newton's work plays no role in physics only makes it funnier.

“Whoever has or is given the authority to create credit has the authority to extract wealth from the economy by that same mechanism. Moreover, there is no meaningful
distinction between fractional reserve banking and money expansion. The analogy of counterfeiting looms large as the mathematics reveals. In many ways the only difference between illegal counterfeiting and legal privately‐owned money expansion is that gains by the recipient in the latter case are officially sanctioned, not indiscriminate, and limited based on the expansion rate. Therefore, paradoxically, privately‐owned money expansion is basically equivalent to `legalized counterfeiting,ʹ i.e. a surreptitious statesanctioned
plundering of money holder wealth by private bankers!

Vladimir Z. Nuri

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake‐up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
—President Thomas Jefferson2

ʺHistory records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.ʺ
— President James Madison

“All the perplexities, confusion and distress in America arise, not from defects in the Constitution, not from want of honor or virtue, so much as downright ignorance of the nature of coin, credit, and circulation.”
— Salmon P. Chase, Lincolnʹs Secretary of Treasury3

the powerful class of the financial elite rightly fear the broad recognition “…that what makes them…wealthy is…only robbery” and that it “must from the beginning …have beset (political economy’s) primary step…”4
— Henry George, 20th century reformer and social philosopher

the short answer to your question:
your lose understanding is basically correct (despite what the keynesians want you to believe).

but consider the reality:
during inflation, the bank/lender absorbs the difference in rates.
during deflation, the money holder/borrower absorbs the difference in rates.

DEFLATION IS EVIL BECAUSE IT HURTS BANKS

Country A

Country A prints its own money through its own government. This money is spent out into the economy and taxed back, with 100% of the taxes being put back into the economy (typically in the form of public works, infrastructure or other projects).

Country B

Country B has a government that buys money from a bank that lives inside Country B. The government gets the money as a *loan* from the bank, which must be paid back with interest. The government spends the money into the economy in the same fashion that Country A does.

The difference is that Country B has to depend on income generated from profits attained from foreign trade to pay back the bank, because the bank is waiting for its loan to be repaid. Country A however has no loans to pay, dictates its own inflation/deflation for a healthy economy, depends on its own economy to float and *thrives* on foreign trade.

This is why the Federal Reserve is the *fourth* attempt at a national bank, because every time it happens, intellects realize that it's the worst idea any country could undertake.

Unless you're a banker.

>>3753029

The State Theory of Money - Georg Friedrich Knapp
The Webt of Debt - Ellen Brown
The Lost Science of Money - Stephen Zarlenga
The Money Question - Arthur Kitson
The Science of Money - Alexander del Mar
The Citadels of Chaos - C. Veith

Those are great places to start.

I just love how the current Federal Reserve overnight rate is so low that it is actually discouraging lending because the returns are so poor.

The banks have you by the balls either way. We all just need to hope that the system won't implode before we all die.

hey Moneypulator, i'm on zh quite a bit, what's your trip over there?

>>3753066

Country A is also more likely to go on a spending spree, because they can't default anyway. Change the political system so that a country's leaders have no possibility of exploiting such a system, and it could very well work. The purpose of an independent (emphasis on that word) central bank is that excessive spending is prevented, so that money is put to good use and inflation isn't sky-high.

>>3753066
BTW Country A was the USA at all points when our money was based on the weight of silver and there was no national bank. It worked great, and the best periods of growth are located during these times.

I have the facts on my side!

What is the richest nation on earth? USA!
What nation has the largest debts on earth? USA!

Hey, is that coincidence or what?

>>3753084
>>3753085
Country A can't go on a spending spree. Risk of default doesn't factor in, correct. They can't go on a spending spree because it can't be considered negative even if they did, and it'd all go back into the economy anyway. If it was spent on foreign things, it would cause a slight inflation, and of course not all of it would ever be spent entirely on foreign things, that's what budgets are for. It works better than a central bank, learn it you brainwashed fuck.

>>3753103

So you're effectively claiming that printing money, ceteris paribus, doesn't increase inflation? Pretty interesting position you've got there.

>>3753091

Amount I trust graphs:
0% |--------------------------------------------------------|100%

Graphs with well documented sources:
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||---|

Graphs with comic sans:
|||-----------------------------------------------------------|

>>3753111
I didn't say it didn't produce any. The point is it's better in the hands of Country A because it's better controlled, and there's no debt either, and there's no debt either, and there's no debt either, and there's no debt either, and there's no debt either.

>>3753111
I also don't know how you could possibly conclude that from my post unless you just didn't read it, or didn't understand it. or if you're a troll. either way, you suck if you think the federal reserve is a good idea. seriously, you suck, and the only one that thinks you don't suck is yourself (and possibly your family which has banking family ties)

>>3753120

That's the whole point - it's not better controlled, because a government can arbitrarily print more money and destroy, for instance, people's savings or banks' investments. Just because it 'gets put back into the economy' doesn't magically make the downsides disappear.

How do you arrive at the conclusion that inflation would be of no concern? Am I correct in assuming that you're very, very anti-Keynesian?

>>3753074
>>3753074
>>3753074
>>3753074
>>3753074
>>3753074
>>3753074

and sites, besides zerohedge?

>>3753132

I don't give a damn about the FED (- I'm don't live in North America -) and my family consists of Chemical Engineers. Please, by all means come up with another ad hominem.

>>3753143

>*I don't live in North America

Fixed the typo, in case you wanted to use that as some kind of 'clever' rebuttal.

>>3753143
>my family consists of Chemical Engineers
>I have two daddies

>>3753143
It wasn't ad honem to me because I live in north america

also, it is better controlled because the federal reserve has its own panel of economists who dictate where and how much money goes to the united states of america. They do not have to and do not on a regular basis indicate any of their numbers to our government. If the government controlled it, the numbers and effects of the money distribution are entirely in the governments (and thus the people's) hands. This, is why it's better. It is also why the FED is a concept that many people have died over (including a president) to preserve and more particularly, ABOLISH.

OP here. Well, I think this was my most successful post. My questions were genuine and not trick btw. And my last post was >>3752270 fyi

I've read most replies with interest (no pun lol). From what I can tell, there is disagreement over how money is created. What seems acceptable to all is that a unit of currency needs to be repaid with interest. That seems to imply that only by exporting labour/products can one avoid debt. Further implying that someone somewhere is destined to hold more debt than capital.

The secret of success then, is to accrue capital faster than debt. And that, perhaps, one needs to work harder during a deflationary spiral than in an inflationary one.

>>3753165

>the numbers and effects of the money distribution are entirely in the governments (and thus the people's) hands. This, is why it's better.

Elaborate. Should everything truly be in the hands of one institution? As much as I hate involving the term, that sounds pretty communist to me.

>It wasn't ad honem to me because I live in north america

You kept saying how I "suck", and how I must have ties with banks. You living in NA has fuck-all to do with validating the use of personal attacks.

>>3753159

Surprisingly enough, no.

>>3753188
>there is disagreement over how money is created

It is obviously created by the allmighty Atheismo, all other theories are heretical.

Praise be to Him!

>>3753113
is that negative trust?

>>3753188
Sad they think that, because a central banking system is the number one thing the middle class faught tooth and nail for, rather unsuccessfully due to the top tier of money holders holding a majority of the money, to abolish. It does not need to be a system of debt. There is no positive reason for it. Wilson was suckered into putting the fed in, and wrote several essays outlining how it sent him into a depression due to his realization of how he single-handedly ruined the economy. Look it up. central banks hurt people

>>3753195
It would be handled by *a part of* - *your country's government.* Usually this entails a high degree of transparency to the public, not to mention knowledge is in the hands of the ones elected to care for the people. The central banks do not give a flying shit, and they do not disclose anything, and are not legally obligated to, because they are not a part of your government. They are an NGO, NON-GOVERNMENT-ORGANIZATION, and the operate as such. Having a government bureau control the economic inflation by controlling the fiat money is literally incomparable to communism, and has nothing to do with such. It's all about putting the power in the hands of the people who are affected by the power.

also, fair enough. I just hate when people clearly have no idea the distinction between a central and localized bank. it seems you don't know much about them, or rather, not much about the FED, the most demonized banking institution in the world (in my eyes). It also has nothign to do with keynsian economics, even though it is equally awful because it by definition creates a ~5% population who will forever be in debt and suffer conditions literally impossible to struggle out of as a class together because of an economic system. That's why I think it's bad. Look it up, it's in the book itself, I'm sure I could get you the page number in a couple of hours even.

OP

So, Govt goes to Central Bank, says:

- this is our economic forecast, we'll borrow an amount of money that represents the forecast.

- central bank creates that amount of money, to be repaid at interest.

- country produces wealth to cover borrowing + interest.

Who keeps the interest?

>>3753253

WHO WAS PHONE?

>>3753230

You *assume* that the government will properly control inflation and that the population, which is supposedly in power, knows how to actually deal with/control inflation. That's a pretty damned strong assumption - one that I'm definitely not willing to make. You also assume that governments are inherently, fully transparent - yet another assumption I can't make given the fact that a government consists of *people*, all of whom have their own interests.

>it is equally awful because it by definition creates a ~5% population who will forever be in debt and suffer conditions literally impossible to struggle out of as a class together because of an economic system.

Just because the US' policy towards its own citizens is retarded doesn't mean every other capitalist country suffers from mass-poverty. See, for instance, the Nordic countries. Furthermore, I'm curious as to hear where 'fairness' comes into play. Consider the long-term unemployed; what incentive do they have to work when they can live comfy lives without any effort? Or consider the employed, for that matter.

You're right in assuming I don't know much about the FED - the institution has only received superficial attention from me thus far.


Just out of curiosity, let's say that the government is in control of creating money. What then? How would conditions suddenly improve? Be more specific than just saying "it puts money in the economy", please.

>>3753290

Well yeah, it's a bit like that.

>>3753297
I am and have been using the USA as a case study for this argument, so I will continue to

When the USA started, it started with everybody's interests in a positive light because they were all in it together. Today, it is still like that, but it has separated and people don't tend to believe it anymore because thigns have grown so much.

They aren't fully transparent, but any transparency is better than a central bank (none.)

Yes it could lead to corruption, and a lot does, but the fed is the hallmark of corruption. Instituted by people in the government because they wanted more money for themselves. They needed the fed to get mroe money because it's just not possible to get that much money with the system I described. yes, it is literally the reasont he fed and all of the national centralized banks before it int he USA have come about. More. Money. For. Themselves. This very nature of the institution only furthers my point and lessens yours.

I don't know anythinga bout other functioning keynsian economic systems, just how attrocious mine is, and that there is a guaranteed 5% to FAIL. Perhaps the nordic countries did so well that they sent their 5% to the USA, that's my best guess. It's literally int he books, it's also literally *how it works*.

Failfare is just one part of a larger system that libertarians and people with brains that function well and can think independently and properly want phased out, for good reason. However, it practically exists to cover the asses of the 5% created by keynsian economy, so sadly, it all must go, or nothing will go. social security sucks, and it will single handedly drag the country into the dirt about 20-40 years after the "debt crisis" has any chance to. It's that severe - but its the american way to just forget about it until its a problem. I hate it.

Conditions improving

I couldn't really spout all the venues which would suddenly prosper because there are thousands, and I can't think of any in particular that are more worth mentioning than the others because the impact would be so great - instead, look to the american revolution. We were doing it just like that, govt ctrld money, and it was so good that it rapidly pissed England off. They demanded we pay them a portion of the profits we were making, it was such good money. The end result of that was many battles and a great war fought for our independence. That's how amazing it is. The Central Bank of London DEMANDED the King impose the Coin Act on the United States of America because it generated so much money and was un-taxed by England, or any bank for that matter. it was a concept unheard of for several th ousand years because banking prior to USA was by and large completely defunct, corrupt and in control by the illuminati (jokingly of course, but not really) aka banking families. Robin hood was a fairy tail that just depicted exactly what I'm trying to explain is the awful result of centralized banking.