the fact is when you just print more money to account for spending the value of said money decreases and all that old money loses value as well, so actually the rich would get poorer unless there money is in other items such as silver and gold. Lets just say i know this isnt the case but when they decided to give everyone there $600 stimulus check now there wasnt a surplus that this money was payed out of so lets say bush says fuck it people will be happy getting money so he authorizes $600 to be printed for each person to cash there check now there is an influx of new non backed currency flooding the market and all those “rich” people with money in bank accounts not stocks or gold just cold hard cash that they have been saving or inherited that money loses value therefore making them poorer.
Also correct. This is the opposite end of the spectrum.
The Keynesian cycle would tell us that when inflation started rising because of the oil crisis, raise interest rates, cut back on the money supply, and let things re-balance themselves. However, the credit crunch needed lower interest rates to keep the pump flowing, or else everyone would have simply hoarded money and we get recession. The credit crunch won over the oil crunch, and we got inflation. If they had chose to raise interest rates to deal with the oil, inflation wouldnt be as bad but credit and housing would be a worse mess, and that could even be a bigger economic threat. This was a perfect storm for economic fuckitude, and one more side effect of our economy relying on a foreign product priced in our currency.
slowtalon…
I did not mean to blame the entire problem on the fat asses, just some of it. most of the problem is that people don’t have a clue whats going on and are not doing anything about it, that was my point.
As far as you “knowing everything about me” because of my post… you don’t know shit about me so keep your mouth shut and don’t ever think you can put me in a financial category when you have no idea who I am or what I do. Don’t be such a dickhead because I said nothing about you.
yeah, but the housing market would not have been allowed to get to the level it was at because there would not have been all the risky loans given out with no regard thanks to fractional reserve banking.
Also, my understanding is that a lot of the problem has to do with bad bets in the derivatives market. With the gold standard the business cycle does not exist to the same extent, so you don’t have to worry about the huge crashes.
By all means if you can explain to me why the gold standard is bad I will change my opinion.
i’m with you because i think without houses and cars being sold the economy will slow
how exactly do you plan on changing the economy to a gold standard? Making everyones money in america worthless would probably cause some kind of chaos wouldnt it…
Portions adapted from an ecomonics text, I attempted to change them to plainspeak:
The current system might, in theory, allow a bad government to create inflation or unemployment, but it also allows the government to fight inflation and unemployment. Because of that, not one nation around the world using Keynesian monetary policy has experienced a depression in the last six decades. We eliminated depressions when we eliminated the gold standard.
It hasn’t been for lack of opportunities. In 1987, the U.S. stock market crashed, in a meltdown that was even worse than the Crash of 1929. But the Federal Reserve had learned its lessons from the Great Depression, and this time it responded correctly: with a huge expansion of the money supply. And not only was there no depression, but there was no recession either. in fact, the remarkable economic boom of the 80s continued without even a bump. Under a gold standard, the Fed would not have had this weapon and we would have been in big trouble.
The amount of money has to be optimal, not too much, but not too little, to support the natural amount of trading that goes on. Economists need to measure a lot of economic indicators: when inflation starts rising, cut back on the money supply, and when unemployment starts rising, expand the money supply. Keynes is the famous economist that started this. But when the money supply is determined by some completely arbitrary factor, like the amount of gold that happens to be mined, then the odds that the money supply will match the amount needed are zero. Insufficient money causes recession. Overabundant money causes steep inflation.
An insufficient money supply is not the only thing that can cause a recession. Recessions commonly occur when people start hoarding money. In normal economies, there is a circular flow of money, as my spending becomes part of your earnings, and your spending becomes part of my earnings. But for some reason, you may see tight times ahead, and decide to save your money to get through them. But this only makes things worse on me, because I am depending on your spending. So I respond to tight times by hoarding my money also. The result is a drop in economic activity, rising unemployment, and recession. Keynesian monetary policy calls for expanding the money supply, which puts more money in the hands of consumers, restores their confidence, and encourages them to begin spending again. When they overspend and start triggering inflation, you cut the money supply and curb it.
Fiat money gives economists a chance to tie the appropriate size of the money supply to what’s actually happening in the economy. The amount of gold a nation has is completely irrelevant to its level of economic activity. Gold is a commodity that experiences price swings. A change in dentistry or gold plated electronic connections is enough to change the entire market. To see how unrelated it is, since the U.S. dropped the gold standard in 1971, the price of gold has risen tenfold, but consumer prices have risen only two and a half times. If the U.S. had instituted a full gold standard in 1971, we would have worst deflation since the Great Depression. And considering that widespread unemployment is usually the result, not deflation, the Gold Standard = Depressions.
Now i have a question. Has anyone ever looked at credit card companies, and loan institutions as the culprits? Not to mention everyones “i want it now but want to pay later” attitude.
The seccond the first Visa card was issued the train started rolling. Thats just my humble oppinion.
And I dont mean that this is the main culprit for all the problems in the US but I do think that in a way that is responcible for most current events.
Also i havnt researched this to much, but it seems alot of people try to blame oil costs for alot of these problems we are having, but isnt it true allthough oil prices have been going up it hasnt been increasing at the rate everyone thinks. In fact it seems like oil has been quite stable but the fact our money is worth less means we pay more so even if lets say oil prices never went up at all in the global market we would still be paying more. Look at it like this lets say the us canadian exchange rate was still $1.60 now take into account gas prices going up from $3 per gallon to $4per gallon if you had your money in euros or canadian currency that $1 differnece wouldnt be that much actually. I dont know if that was to comprehensable but it makes sense in my mind but if each of our dollars were worth $.60 or even $.40 more the oil would be much cheaper so those $100 barrels would actually still be $60 barrels.
There are so many holes in that text though. I see where it is coming from but I cannot agree with it on so many levels.
First off, we were not on a real gold standard during the great depression. We were on a fractional reserve gold standard. The money supply in the 20’s was inflated because of this and when the money supply contracted, the depression resulted. If the fractional reserve system was not in place, then wouldn’t the money supply not originally inflated and therefor not been contracted?
Is there any other time in history that a nation was on an actual gold standard and suffered a depression?
Second:
Yes gold has risen ten fold to the US dollar because the US dollar lost that much buying power. And it says consumer prices have only risen two and a half times? Where can I buy a new car for $6000 new? Even if that were the case, increased productivity and technology contributes to lower prices.
To say that the US would have had the worst deflation since the great depression is a ridiculous claim that does not take into account any variables except for the two presented in the statement.
I dont have any idea who you are or what your financial situation is but from experience most if not all people with the same outlook as you have no idea what they are talking about and just think there hard earned tax money is being used primarily to fund public assistance programs like welfare, medicaid, disability and are pissed they have to work for there money and pay for there own insurance. when the fact of the matter is there taxes barely go towards these programs and they should be wanting to pay these people more to have more kids and not ever enter the job market, because if they did the influx would lower there pay and ultimately make there jobs worthless, because lets face it that degree dont mean shit when you have someone willing to work for minimum wage and can be trained to preform allmost any job in a few weeks. You can say “oh my jobs requires someone highly educated” and while that may be correct in some jobs but for the most part someone applying for a certain job that doesnt strive for promotion and is happy just doing there job and getting payed can be put in a specialty traing program in a matter of weeks or months and be profeciant in any job. I dont care how badly you think your company needs you if you have thousands of people entering the job market someone else will be able to do your job cheaper and probably better.
As for you telling me to keep my mouth shut cuz i dont know shit i think most people will agree that my assuption of what you posted is pretty accurate and have heard the same from at least one other person in there life, “Lazy welfare recipients living off my tax money go get a job like me and work for a living” well next time think before you make one of these generic comments, think about what the repercussions would be if your generalized and ignorant comments came to fruition and the effects it would have on a declining society.
i cant click things just once /life
double post again oops
This is true but also very stupid the people who just hoard there money cuz there afraid to lose it, and they just leave it in the bank are still losing money because when the money is not in circulation then the government once again has to print up more to make up for the lost money not being circulated and keep people working. Well by doing this your basically killing yourself because when you hoard money and hope to ride it out the money loses value because of the extra being printed up. Think of it historically if you had lets say $200,000 in a bank account (lets not worry about intrest here) but say you had that money in 1950 well youre pretty well off you live like a miser spending nothing and just saving for 50 years well then in 2000 youre $200k isnt shit because of all the extra money thats been printed and circulated. I hate when republicans say tax breaks for buisness’ and the rich will help the economic situation because it will bring in more jobs and therefore give people money to spend and circulate. well fact is with the economy like it is the money they would of put in stocks to help these buisness hire more people wont be put in stocks because they will be afraid of a crash and dont wanna lose it. When the fact of the matter is giving the blue collar worker the tax breaks and the extra money they are going to spend it in the economy causing a need for new jobs and an influx of money in the economy. Lets face it the guy who is a millionare will sit on money cuz he probably has everything he needs and doesnt wanna lose it while the working class person needs new furniture, electronics, things for there house and the need for these things creates need for jobs and more people spending more money.
The working class spending keeps the economy alive, not the millionares only intrested in making more money for themselves.
ok…again I am not blaming the entire issue on welfare, just part of it. My point is that people are not doing anything about whats going on, they are sitting around waiting for someone else to do it for them. Hence are current economic problems.
Secondly, I OWN my business so yes, without me the business goes away and the 37 people that work here are screwed so quite making assumptions about my business or my education because of your experience. I don’t care about your experience, because it has nothing to do with me. If you actually read my comments maybe you would see my point (which I’ve had to make twice now) and see that it is not ignorant so pull your head out of your ass, open your eyes, read what I wrote and stop being a dickhead.
bottom-up economics always beats trickle-down in terms of benefit to the economy overall. Unfortunately a lot of the politicians care more about benefit to their donors.
And most economic scares are self-fulfilling. People are scared of a recession so they hold their money and cause a recession. People are scared about oil prices rising so they speculate long on oil and causes oil prices to keep rising.
BINGO
The problem isn’t that we won’t do anything about it, it’s that we can’t do anything about it. All big business is in this together to make as much money as possible and there’s nothing you or I can do until it all falls apart. That’s it. All we can do is ride out the storm.
America only cares about wealth, envy and gluttony. There’s no honor left. Everyone lost their morals somewhere down the line and the hard-working man that once was the pinnacle of the American economy is now deemed as a low-life slob and the crooked salesman that was once seen as a slug is now the choice man to look up to.
Just wait out the storm and hope that you have the skills to get you through it.
That is true in a service economy, but not an economy with a strong manufacturing and export base.
I have nothing against bottom up economics. You have less taxes on everyone and there is that much more money in the economy at a much more productive level than how the government would use it.
Whole lot of drama in here over an article from a site that would greatly benefit by people believing the article and wanting to invest in silver and gold coins.
Just sayin.