Pliny Posted June 27, 2011 Report Posted June 27, 2011 (edited) Fiat money works just fine as long as people continue to have faith and confidence in its value. The "math" takes care of itself. Ponzi schemes all work fine for awhile too. No one likes the final result but some get to live high on the hog for awhile. Fiat currencies are necessary for the crises that government's create. They are excellent reason's for the justification of government and how else could we pay for them? I mean, we would all be German's now if it weren't for fiat money? Oh...but Abe Lincoln would not have been able to finance the civil war without it and we would still have slavery in the south. Edited June 27, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
Pliny Posted June 27, 2011 Report Posted June 27, 2011 Fiat money can't work, the maths isn't there to support it. Human behavior doesn't support it. Any agency with control of the money supply will eventually abuse it and make it worthless. That's the math of it. The reason it is decreed by law is so to protect us from those that would attempt to pass off counterfeit money, or from bankers that have written too many receipts for their deposits (created too much credit), or from forms of money that they could not correctly calculate how much tax should be paid - bartering being frowned upon or using any other form of black market trading that distorts the true GDP in constant dollars. Quote I want to be in the class that ensures the classless society remains classless.
bush_cheney2004 Posted June 27, 2011 Report Posted June 27, 2011 Ponzi schemes all work fine for awhile too. No one likes the final result. Fiat currencies are not a Ponzi scheme, which has a specific definition. And many do like the final result, if they got in early. Quote Economics trumps Virtue.
ToadBrother Posted June 27, 2011 Report Posted June 27, 2011 Fiat currencies are not a Ponzi scheme, which has a specific definition. And many do like the final result, if they got in early. Be careful not to underscore the Paulite belief of fiat currencies. Paul and his followers/adherents/worshippers would have everyone believe that fiat currency is simply a collective fantasy. It is not, it's in part that fiat currencies are based on something more than the value of precious metals that in no way in and of themselves represent the actual economic activity of a nation. Quote
Pliny Posted June 27, 2011 Report Posted June 27, 2011 Fiat currencies are not a Ponzi scheme, which has a specific definition. And many do like the final result, if they got in early. If you look at them, they are a form of Ponzi scheme. The people who get the newly created money have the greatest benefit of it and the people who get it last pay higher prices for everything. This will continually get worse and become more visibly apparent when teh point of hyperinflation occurs. The poor will suffer the most under these conditions, the politicians benefit the most but everyone loses when the currency finally collpases. They also enable government to legislate ponzi schemes in the form of entitlements such as social security, health care and welfare. There is an immediate benefit and people are encouraged to support the idea, the do and may even realize some beenfit themselves, then the entitlement starts to get too costly and more money is necessary to support it. This will continue to the point where it cannot be sustained economically. That point is inevitable. We are getting close. Even while environmentalists are calling for increased taxation and further government intervention. Quote I want to be in the class that ensures the classless society remains classless.
bush_cheney2004 Posted June 27, 2011 Report Posted June 27, 2011 If you look at them, they are a form of Ponzi scheme. The people who get the newly created money have the greatest benefit of it and the people who get it last pay higher prices for everything. Sorry, your analogy is flawed, since the "people who get the newly created money" is not limited to a greatest benefit. Entry and exit is voluntary. Prices can/have deflated under certain conditions. Fiat currency is not a Ponzi scheme. They also enable government to legislate ponzi schemes in the form of entitlements such as social security, health care and welfare. There is an immediate benefit and people are encouraged to support the idea, the do and may even realize some beenfit themselves, then the entitlement starts to get too costly and more money is necessary to support it.... Social security and health care are not Ponzi schemes either, because they do not have as their root design secretive and outright fraud for investers. Further, the very public design of the "schemes" are subject to review and changes to keep them viable. It may be cheeky and cute in the wake of the Bernie Madoff affair, but it is intellectually lazy to refer to any of these government programs as "Ponzi" schemes. Quote Economics trumps Virtue.
dre Posted June 27, 2011 Report Posted June 27, 2011 Fiat money can't work, the maths isn't there to support it. I understand how fiat currencies works, I don't hold on to mine. Wages never keep up with inflation. Thats a bold statement. You think a Carpenter or a factory worker has less purchasing power than they did 60 years ago then? Quote I question things because I am human. And call no one my father who's no closer than a stranger
dre Posted June 27, 2011 Report Posted June 27, 2011 You are saying then that our current system has in no way "stifled, stopped or even reversed", technological progress? Perhaps it has just diverted it? No its been a huge boon for it actually. The fractional reserve system has resulted in about 10 times as much money being available for businesses and entrepreneurs and also governments. Trillions apon trillions of dollars that have been spent on building the modern world and invested in human progress. We are decades ahead of where we would be if you ran the show. Quote I question things because I am human. And call no one my father who's no closer than a stranger
bush_cheney2004 Posted June 27, 2011 Report Posted June 27, 2011 ...We are decades ahead of where we would be if you ran the show. Agreed, but anyone feeling otherwise is free to go back to trading beaver pelts or goats. Good luck! Quote Economics trumps Virtue.
maple_leafs182 Posted June 28, 2011 Report Posted June 28, 2011 Thats a bold statement. You think a Carpenter or a factory worker has less purchasing power than they did 60 years ago then? I agree, that was a bold statement. I honestly don't have the proof to back up that argument. However if you look at the income growth of a CEO of a big corporation or bank, it has grown at a substantial rate compared to the Carpenter. Quote │ _______ [███STOP███]▄▄▄▄▄▄▄▄▄▄ :::::::--------------Conservatives beleive ▄▅█FUNDING THIS█▅▄▃▂- - - - - --- -- -- -- -------- Liberals lie I██████████████████] ...◥⊙▲⊙▲⊙▲⊙▲⊙'(='.'=)' ⊙
Pliny Posted June 28, 2011 Report Posted June 28, 2011 (edited) Sorry, your analogy is flawed, since the "people who get the newly created money" is not limited to a greatest benefit. It certainly is. Entry and exit is voluntary. Prices can/have deflated under certain conditions. Fiat currency is not a Ponzi scheme. What conditions. Inflation and defaltio are entirely monetary phenomena. Social security and health care are not Ponzi schemes either, because they do not have as their root design secretive and outright fraud for investers. Further, the very public design of the "schemes" are subject to review and changes to keep them viable. We'll prop them up for as long as we can but like in any ponzi scheme you'll just wind up wondering where your money went. It may be cheeky and cute in the wake of the Bernie Madoff affair, but it is intellectually lazy to refer to any of these government programs as "Ponzi" schemes. Suit yourself. Edited June 28, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
Pliny Posted June 28, 2011 Report Posted June 28, 2011 (edited) No its been a huge boon for it actually. And we are close to the huge bust. The fractional reserve system has resulted in about 10 times as much money being available for businesses and entrepreneurs and also governments. Trillions apon trillions of dollars that have been spent on building the modern world and invested in human progress. And the US government alone is 14 trillion in debt. They forgot to create the money but if they did do that it would be worthless so they have to defer it to future production. Creating currency only means prices go up. Double the amount of currency and prices double. Halve the amount of currency and prices halve. It is an illusion to think you are gaining anything by printing paper currencies. Once again you have it backwards. You think the money creates the wealth. The wealth and the production is what enables government to increase the currency supply. Economic growth still regulates how much they believe they can safely print. If what you say is true why don't we just make everyone millionaires and print whatever we want. We are decades ahead of where we would be if you ran the show. I used to think that myself. All that money creation allowed us to make ourselves rich. It's funny to me now. We would definitely be in a different place and some places would be behind like tax accountants but in most instances I think we would be further ahead. Edited June 28, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
bush_cheney2004 Posted June 28, 2011 Report Posted June 28, 2011 We'll prop them up for as long as we can but like in any ponzi scheme you'll just wind up wondering where your money went. Another reason why your comparison is flawed....even if nothing changes, social security funding and payments will not make all of my money disappear. The principal invested amount from payroll taxes will easily be returned and adjusted upward for inflation, plus whatever additional benefit is provided. Ponzi schemes just don't do that. Quote Economics trumps Virtue.
Pliny Posted June 28, 2011 Report Posted June 28, 2011 (edited) Thats a bold statement. You think a Carpenter or a factory worker has less purchasing power than they did 60 years ago then? I believe research will show they have around the same purchasing power but they have a wider choice of things to purchase today. They probably have a much larger line of credit as well. 60 years ago a carpenter could have a mortgage of 12 or 14 thousand and if he was working steadily could probably afford a new car for 3 or 4 thousand. A case of beer was $2.65/doz.,coffee and pie was $.25. Take your kid out to a meal at MacDonald's today and it will cost around $10-15. I remember when a hamburger at Macdonald's was $.25. You and your kid would be stuffed for $2.00. If we keep producing they can keep printing money and they like to print it at around a 2-3% inflation rate over economic growth. Edited June 28, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
Pliny Posted June 28, 2011 Report Posted June 28, 2011 Another reason why your comparison is flawed....even if nothing changes, social security funding and payments will not make all of my money disappear. The principal invested amount from payroll taxes will easily be returned and adjusted upward for inflation, plus whatever additional benefit is provided. Ponzi schemes just don't do that. They do for awhile. They last until the return on investment is doubtful and an unwillingness to continue paying - or call it "investing" - arises. Well, nothing is guaranteed for sure but if you follow the history of fiat paper currencies they all disappear through over production. It's hard to determine what people will use for money but they should be the ones making that decision. Government only does it because they wish to have power over their revenue sources and the removal of money from the system is similar to the removal of guns from the citizenry. It is a necessity to the centralization of power. Quote I want to be in the class that ensures the classless society remains classless.
bush_cheney2004 Posted June 28, 2011 Report Posted June 28, 2011 They do for awhile. They last until the return on investment is doubtful and an unwillingness to continue paying - or call it "investing" - arises. No...you are avoiding the obvious technical flaw in your comparison. Returns on investment are different from principal. There is no "unwillingness" to keep paying as of today. Well, nothing is guaranteed for sure but if you follow the history of fiat paper currencies they all disappear through over production. Something else will replace paper currencies, and this is already well underway. I do not need paper currency for 95% of my transactions. It's hard to determine what people will use for money but they should be the ones making that decision. Government only does it because they wish to have power over their revenue sources and the removal of money from the system is similar to the removal of guns from the citizenry. It is a necessity to the centralization of power. OK...you are now in tinfoil territory and anything is possible there. Quote Economics trumps Virtue.
dre Posted June 28, 2011 Report Posted June 28, 2011 (edited) I believe research will show they have around the same purchasing power but they have a wider choice of things to purchase today. They probably have a much larger line of credit as well. 60 years ago a carpenter could have a mortgage of 12 or 14 thousand and if he was working steadily could probably afford a new car for 3 or 4 thousand. A case of beer was $2.65/doz.,coffee and pie was $.25. Take your kid out to a meal at MacDonald's today and it will cost around $10-15. I remember when a hamburger at Macdonald's was $.25. You and your kid would be stuffed for $2.00. If we keep producing they can keep printing money and they like to print it at around a 2-3% inflation rate over economic growth. I believe research will show they have around the same purchasing No research will show that inflations adjusted wages in places like the US and Canada have increased dramatically over the last 80 years. Take your kid out to a meal at MacDonald's today and it will cost around $10-15. I remember when a hamburger at Macdonald's was $.25.You and your kid would be stuffed for $2.00. So what? When a burger cost 25 cents wages were 1/4 of what they are now. The ammount of work you have to trade for the ammount of money required to buy a burger has stayed roughly the same or decreased. Theres a graph here with inflation adjusted wages. http://www.shadowstats.com/article/consumer-liquidity-special-report Edited June 28, 2011 by dre Quote I question things because I am human. And call no one my father who's no closer than a stranger
bloodyminded Posted June 28, 2011 Report Posted June 28, 2011 (edited) Agreed, but anyone feeling otherwise is free to go back to trading beaver pelts or goats. Good luck! I'm not rich, but that sounds like a likely downgrade to my standard of living. I think I'll pass for now, with the option to re-negotiate if things ever actually fall apart. but it is intellectually lazy to refer to any of these government programs as "Ponzi" schemes. Yeah, that term has become very much in vogue since Bernie got caught. This is the biggest overreaction since Joe Pesci shot Spider. Edited June 28, 2011 by bloodyminded Quote As scarce as truth is, the supply has always been in excess of the demand. --Josh Billings
GostHacked Posted June 28, 2011 Report Posted June 28, 2011 It may be cheeky and cute in the wake of the Bernie Madoff affair, but it is intellectually lazy to refer to any of these government programs as "Ponzi" schemes. Madoff himself called the whole economics system a ponzi scheme. I'd believe him because he seems to know exactly what a ponzi scheme is. Quote
Pliny Posted June 28, 2011 Report Posted June 28, 2011 (edited) No research will show that inflations adjusted wages in places like the US and Canada have increased dramatically over the last 80 years. So what? When a burger cost 25 cents wages were 1/4 of what they are now. The ammount of work you have to trade for the ammount of money required to buy a burger has stayed roughly the same or decreased. Theres a graph here with inflation adjusted wages. http://www.shadowstats.com/article/consumer-liquidity-special-report Do you actually do any studying of the things you post? Minimally, households have been seeing lower inflation-adjusted income for a decade or so. Yet, as suggested by the CPI-U-deflated median household income (and the SGS deflation of both series), real income has been an increasing problem for consumers since before the 1973 to 1975 recession. Consider the following graph of the annual level of average weekly earnings, shown in 2008 dollars, as deflated by the CPI-W (CPI for Urban Wage Earners and Clerical Workers, a somewhat narrower measurer than the CPI-U, used by the BLS in deflating average weekly earnings). As of 2008, real earnings were down 15.8% from their 1972 peak. I guess research bears out the point that purchaisng power is less now than before. By the way, any significant thing occur around '72 when real earnings were at their peak? Edited June 28, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
Pliny Posted June 28, 2011 Report Posted June 28, 2011 (edited) No...you are avoiding the obvious technical flaw in your comparison. Returns on investment are different from principal. Hmmmm....not in a ponzi scheme. Principal is dispersed from new investors as a return on investment to earlier investors. The fraud is in the seeming creation of wealth. There is no "unwillingness" to keep paying as of today. Read my lips! No new taxes! Something else will replace paper currencies, and this is already well underway. I do not need paper currency for 95% of my transactions. A great advancement indeed. Money is just an accounting entry. Very convenient. It certainly facilitates trade. Gets rid of all the bother of having to transfer heaps of paper around between banks as well as between consumers and businesses. So the only problem is in determining how many credits to create to keep prices stable and the economy growing. It isn't really important to determine how it grows, just that it grows so governments can keep inflating the money supply and thus increase it's budget and revenues. A collapse in the economy creates a flurry of government activity to shore things up. Bailouts, subsidies, quantitative easing and a slew of new terms to describe the same old things they always do. OK...you are now in tinfoil territory and anything is possible there. Tinfoil territory means something is suggested as being plausible that has not or cannot be proven and is generally thought of as implausible. I am saying that people should, as they have done since the earliest recordings of social interaction, ultimately decide what they use for money and governments are the last entity that should have any control over it's production and distribution. I guess that's tinfoil territory - it is a highly implausible idea that government would ever relinquish that "entitlement"! Edited June 28, 2011 by Pliny Quote I want to be in the class that ensures the classless society remains classless.
Michael Hardner Posted June 28, 2011 Report Posted June 28, 2011 I am saying that people should, as they have done since the earliest recordings of social interaction, ultimately decide what they use for money and governments are the last entity that should have any control over it's production and distribution. I guess that's tinfoil territory - it is a highly implausible idea that government would ever relinquish that "entitlement"! This sounds strange to me. Babylon had a lot of the same things we have today: Babylonian invention of the steelyard scale allowed precious metals, silver and gold, to be used as money, rather than just ornamentation and a store of wealth. This allowed for a complex economy including contracts and leases, loans at interest, credit accounts with merchants, and even prototype central banking. This is another example of administration rising where there is a need, as we discussed on the 'Mutualism' thread. http://www.gold-eagle.com/editorials_01/mbutler121401.html Quote Looks like someone has a new patronizing catch phrase ! Michael Hardner
bush_cheney2004 Posted June 28, 2011 Report Posted June 28, 2011 Hmmmm....not in a ponzi scheme. Principal is dispersed from new investors as a return on investment to earlier investors. The fraud is in the seeming creation of wealth. There is no fraud in social security....where wealth is not created but transferred instead. Indeed, social security is specifically not invested for highest returns. Read my lips! No new taxes! Again, name another "Ponzi scheme" wherein voter's representatives decide how the program is to be funded and administered. A great advancement indeed. Money is just an accounting entry. Very convenient. It certainly facilitates trade. If it's good enough for the casino floor, it's good enough for me. Tinfoil territory means something is suggested as being plausible that has not or cannot be proven and is generally thought of as implausible. I am saying that people should, as they have done since the earliest recordings of social interaction, ultimately decide what they use for money and governments are the last entity that should have any control over it's production and distribution. People are free to do just that....but they will find it much harder to procure goods or services. I guess that's tinfoil territory - it is a highly implausible idea that government would ever relinquish that "entitlement"! Yet the American dollar remains the defacto world currency.....now how did that happen if governments won't ever relinquish that entitlement. Quote Economics trumps Virtue.
GostHacked Posted June 28, 2011 Report Posted June 28, 2011 Yet the American dollar remains the defacto world currency.....now how did that happen if governments won't ever relinquish that entitlement. When they try, they get their countries invaded. Quote
ToadBrother Posted June 28, 2011 Report Posted June 28, 2011 When they try, they get their countries invaded. Yes yes yes, the US invaded Europe to prevent the dominance of the Euro... Quote
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.