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Bourgeois
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Inflation and Broken Window Fallacy
Dec 14th, 2013 at 7:53pm
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With all of Shiva's statist posts lately, we need a good thread about Austrian Econ, and our understanding of it.

Inflation basically makes things more expensive for everyone. Let's say a black person wants to buy grape soda. One day it costs it $1, but the next day it is $2. How could this happen?! Well it couldn't, in a free market. However, with the federal reserve churning out paper money, the price of goods inflates. Only people at the top (bankers and politicians) reap the benefits of the new money, while niggers and middle class are SOL. If the nig wanted to go swimming, it couldn't, because it wouldn't know how, but it would also cost it more money now.

As far as the broken window fallacy, let's say a coon wants to break into a store and steal dem watermelons. Well, this would be a net detriment to the economy as a whole, rather than a net benefit to, say, window repair guys. This is because the white store owner could have spent the money fixing the nig's destruction, on something else. Another example of the broken window fallacy in action is a black boi simply being shot for ONLY carrying iced tea and skittles (the ingredients of purple drank). This hurts all of society, because I'm sure Trayvon would have grown up to be a successful scientist or something. /s (Actually Zimmerman's trial is a real embodiment of the BWF, as it was a waste of time and taxpayer money, on a man who wasn't guilty, and contributed to society by killing a violent thug).

Thoughts?
  

"The government is a greedy piglet that suckles on a taxpayer's teet until they have sore, chapped nipples."

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Josh
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Re: Inflation and Broken Window Fallacy
Reply #1 - Dec 14th, 2013 at 8:20pm
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The argument for inflation as a positive thing, as was recently covered in another thread, would be that people spend more money due to the declining value of the dollar. So if the black knows that a grape soda will cost him $1 today and $2 tomorrow, he is more likely to buy it today. However, this is only beneficial in the short-term. Perhaps the black really wanted to stop off at KFC, but he knows that since the dollar is constantly declining, he mine as well just spend the money immediately on grape soda. Yes, more money is circulating toward the grape soda company, but if the black's real desire is fried chicken, less demand will be for KFC and they will have to cut supply not according to the black's true desire but according to the inflationary manipulation of pricing.

The broken window fallacy is another important topic to bring up. I think you covered it in simple terms -- one a Keynesian wouldn't understand, who would argue that the black in this case was helping the economy because the store owner would have to compensate someone to replace the watermelon he lost and the broken window. In reality, when the black destroys the window, the economy is down one window. This is common sense when applied to a larger extent: what if the black were to burn the entire place down? Would this be stimulus toward the economy? Obviously not, but the Keynesian/mainstream economist would argue otherwise.
  

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bonfire
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Re: Inflation and Broken Window Fallacy
Reply #2 - Dec 14th, 2013 at 11:11pm
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lol at racism
  
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Bourgeois
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Re: Inflation and Broken Window Fallacy
Reply #3 - Dec 15th, 2013 at 2:34am
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bonfire wrote on Dec 14th, 2013 at 11:11pm:
lol at racism

I'm confused. Don't stray from the topic. This is about inflation and the broken window fallacy. Stay on task good man.
  

"The government is a greedy piglet that suckles on a taxpayer's teet until they have sore, chapped nipples."

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Re: Inflation and Broken Window Fallacy
Reply #4 - Dec 15th, 2013 at 5:09am
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Way to derail the thread, bonfire.
  
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bonfire
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Re: Inflation and Broken Window Fallacy
Reply #5 - Dec 15th, 2013 at 10:23am
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if you don't want me to laugh, stop saying funny things  Cool
  
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LibertariCAN
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Re: Inflation and Broken Window Fallacy
Reply #6 - Dec 15th, 2013 at 11:13am
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Yes, generally speaking artificial inflation is a robbery of people's wealth; it is especially criminal because those who reap the benefits of the initial credit and money expansion usually do their activities before the inflation kicks in at full swing.

However, inflation could indeed happen in a free market, but so could deflation, and these are just things the market would adapt to and deal with when they naturally occur.
  

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Bourgeois
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Re: Inflation and Broken Window Fallacy
Reply #7 - Dec 15th, 2013 at 12:34pm
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bonfire wrote on Dec 15th, 2013 at 10:23am:
if you don't want me to laugh, stop saying funny things  Cool

I don't see anything funny about a post concerning inflation. Do you think inflation is funny??!?
  

"The government is a greedy piglet that suckles on a taxpayer's teet until they have sore, chapped nipples."

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Shiva_TD
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Re: Inflation and Broken Window Fallacy
Reply #8 - Dec 15th, 2013 at 12:57pm
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Bourgeois wrote on Dec 15th, 2013 at 2:34am:
I'm confused. Don't stray from the topic. This is about inflation and the broken window fallacy. Stay on task good man.


If the thread is on inflation then why was blatant racism a major part of the initial OP? Don't like racism then don't be a blatant racist is a simple rule of thumb.

As for "inflation" there is a fundamental misunderstanding of what it is.

Federal Reserve notes are promissory notes issued by the Federal Reserve that "promise" redemption in "Lawful Money" of the United States which are currently American Eagle coins which are species money.

Like all other "promissory" notes they are discounted in the market based upon the ability of the holder to redeem the note in that which it promises. For example a "mortgage" was typically discounted by about 6% when it was traded between lending institutions as it was secured by "property" while a credit card note was typically discounted by about 50% because it represented unsecured debt that was much harder to collect by the holder of the note.

Because a person cannot walk into a Federal Reserve bank and redeem a $50 Federal Reserve note for a $50 American Gold Eagle the discount rate is currently about 97%. The less likely it becomes that we'll ever be able to redeem a Federal Reserve note the greater the "discount" of the note as it changes hands in our economy. When there is "no hope whatsoever" is when "hyper-inflation" occurs but we're not quite there yet.

"Inflation" is ulitmately nothing more than the discounted trading rate between Federal Reserve notes and "American Eagle" coins that are the lawful money of the United States. The actual purchasing power of the lawful money of the United States (i.e. species gold and silver coins produced by the US Mint) has not changed much over the last 100 years. It does fluctuate but not all that much when we check the actual purchasing power.


  
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Shiva_TD
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Re: Inflation and Broken Window Fallacy
Reply #9 - Dec 15th, 2013 at 1:04pm
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[quote author=2E2D2A2E2B7577440 link=1387068783/0#0 date=1387068783]Actually Zimmerman's trial is a real embodiment of the BWF, as it was a waste of time and taxpayer money, on a man who wasn't guilty, and contributed to society by killing a violent thug).

Thoughts?[/quote]

The "State" trial of Zimmerman was sort of a waste of taxpayer money in that the State cannot prosecute based upon federal laws. Zimmerman unquestionably violated the Right to Life of Trayvon Martin as he racially profiled Martin as a "criminal" because Martin was a young black person in the neighborhood and that racial profiling ultimately lead to Martin's death.

I continue to hope the DOJ will file charges against Zimmerman as the 911 call clearly provides the evidence that Zimmerman was racially profiling Martin which is a civil rights violation under federal law because Martin lost his life due to the racial profiling.

Martin had no criminal history of violence unlike G Zimmerman that had a previous arrest record for assaulting an officer. The State eventually dropped the charges of assaulting a police officer against Zimmerman but not because there wasn't evidence to support the arrest but instead because the evidence was not "beyond a reasonable doubt" necessary for a conviction.

Of course a racist doesn't want to know the truth related to the Zimmerman/Martin case.


  
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