Quote: (01-30-2013 12:36 PM)n0000 Wrote:
The idea that deflation is bad is pure keynesian propaganda spread by the central banks and establishment economists.
yeah, except no.
Quote:Quote:
Deflation is the natural and beneficial condition that occurs when the quantity of goods in the economy increases.
Yup that's true, but behaviour changes when you move beyond a barter economy.
Quote:Quote:
The same amount of money is chasing around more goods, leading to an increase in the buying power of the dollar.
OK.... but the point about deflation is its impact on producers, particuarly with long time frames.
The point is if petroleum for your car is $1.80/gal today...and $1.30/gal next year.. winner!!!.
Except for the organisationh that outlays $10 billion and spends 8 years building a oil producing facility from scratch.
After 8 years, your scenario sees $0.55 /gal, and they'll never recoup their money.
So they don't build extra production facilties.
Deflation inhibits production, the argument has nothing to do with consumer setiment towards lower prices.
Quote:Quote:
In a free market, where money is probably going to be gold based and deflation is the norm, you don't have to venture out into the risky stock/bond market to save for retirement. All you do is hold cash and your buying power appreciates as the economy grow and is able to produce more goods.
More goods don't appear if producers are disincentivised.
Quote:Quote:
Falling prices are the wages of a prosperous, free economy.
No they aren't, constant prices in an economy with increasing wages are propserous.
Quote:Quote:
The idea that individuals "hording" money or hiding it in their mattress is bad is also nonsense. If you take money out of the money supply and bury it in the ground it is a deflationary act. Everyone elses buying power increases because of the decrease in the money supply.
When nobody buys stuff, thus production stops and people lose their jobs, their buying power becomes zero.
Quote:Quote:
We should have government posters encouraging people to lock their money away in the mattress.
If you want to fuck government over, you should barter. it can't be taxed.
Quote:Quote:
The federal reserve is a government backed institution with a monopoly on the printing of money. The legal tender laws restrict the species that are valid for use in contracts. I cannot write a contract to buy a car and pay in gold, only federal reserve notes. The purpose of the federal reserve is to provide as a lender of last resort so banks can print money, causing inflation and decreasing the buying power of the dollar.
Well that's its current mandate. mandates can change.
Quote:Quote:
Austrian economics describes reality.
No, Austrian economics is based on cynicism, and wants to eliminate all structures that can be manipulated.
Quote:Quote:
Keynesian economics is fantasy
The keynesian era was 1945 - 1975, its was first disrupted in 1971 with Nixon going off the U.S. gold exchange standard, and put down with Reagan pursuing the Milton Friedman-esque fantasy.
The 1945-75 era of the west was to most prosperous era in human history. The middle class burgeoned to a greater size that ever sen before, technical progress was unparalleled and 'all boats rose' with every person getting a claim.
Since the scholl of Chicago started making the rules, we've seen 3 major global contractions in 1982, 1991 and 2007. One may argue the one in 1982 was a residual effect from things changing.. but the other 2 were worse than anything that ever happened in the keynesian era, the worse being 1961.
Quote:Quote:
and is the basis of the welfare/warfare state and out of control government spending that is occuring today.
yeah, but no.
that is not the basis of it all, considering keynesian policies were dismantled 30 years ago.
Quote:Quote:
Want to know why the US has gone to war so much as of late without raising taxes? It is because of the ability of the government to run unlimited deficits because of the ability to print money.
So the same method of the confederacy in 1861-1865..... 70 years prior to keynesian policies being invented?
history shows printing money is not a keynesian invention.