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Very Hot Topic (More than 25 Replies) Currency is a Non-Excludable Good (Read 798 times)
SkyChief
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Re: Currency is a Non-Excludable Good
Reply #50 - Aug 12th, 2019 at 11:19am
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Jacob wrote on Aug 12th, 2019 at 11:17am:
I think he means that it's a fantastic thing if you are the Fed

oh.     never mind, then.    Smiley

Grin
  
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Jacob
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Re: Currency is a Non-Excludable Good
Reply #51 - Aug 12th, 2019 at 11:21am
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yamcha wrote on Aug 12th, 2019 at 10:36am:
These are not progressives Jacob.  They are not even political.  So what are they?


If you're still referring to Jews, of course they are political!
Some support Israel, others don't.
Some are liberal, others conservative, some are probably libertarian. We're talking about people, not some Nazi/KKK Boogeyman.
  
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Re: Currency is a Non-Excludable Good
Reply #52 - Aug 12th, 2019 at 11:27am
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No Jacob.  The central bank is not political.  They set up different countries to look in order to give the illusion of politics.  Thinking that America and China are enemies is like thinking that Hulk Hogan and the Rock are real enemies.

Do you think progressives know anything about any economy?

Maybe someone can help Jacob out here.  As you see I have tried.
  
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Jacob
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Re: Currency is a Non-Excludable Good
Reply #53 - Aug 12th, 2019 at 11:40am
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See that's where this gets funny:

You mentioned in another post that Iran and NK were being targeted because they don't have central banks, but China and the USA have really had an unfriendly relationship over the South China Sea.

Excuse me for thinking you meant your pet scape goat for everything wrong with the world.

I can accept that the Central Bank itself is non-partisan.
Whoever is in charge of the ship makes a huge difference.

No, I don't believe that progressives know anything about economics, as the history bears out so far.
  
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Re: Currency is a Non-Excludable Good
Reply #54 - Aug 12th, 2019 at 11:54am
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Oppo,

can you help him out? Chief?
  
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Re: Currency is a Non-Excludable Good
Reply #55 - Aug 12th, 2019 at 3:18pm
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yamcha wrote on Aug 12th, 2019 at 11:54am:
Oppo,

can you help him out? Chief?
Here a couple of quotes that help us understand a central bank's motivation and rationale:

"Permit me to issue and control the money of a nation, and I care not who makes its laws!"  - Mayer Amschel Rothschild



"The Federal Reserve is an independent agency, and that means, basically, that there is no other agency of government which can overrule actions that we take. So long as that is in place and there is no evidence that the administration or the Congress or anybody else is requesting that we do things other than what we think is the appropriate thing, then what the relationships are don't, frankly, matter. "   - Alan Greenspan, Fed Chairman
  
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Re: Currency is a Non-Excludable Good
Reply #56 - Aug 12th, 2019 at 4:24pm
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Jacob wrote on Aug 11th, 2019 at 1:12pm:
In other words, a public utility.

I'm taking a stand based on idea from Economics for Dummies, one of my introductory books of choice for economics.

I'm making my stand here in favor of fiat currency (not for inflation mind you) because I also want to hear your arguments in case you favor a gold or silver standard instead.

Quote from the text:
"... A lighthouse provides warning services to all ships in the vicinity regardless of whether they pay the lighthouse keeper. Because every ship knows that it can get the service without having to pay for it, the private lighthouse quickly goes bankrupt because only a few ships are fair-minded enough to pay for the service."

I think that currency itself is a public good. Everyone has to have access to it in order to facilitate trade. If the money supply is restricted by a limited resource like gold, only a few people benefit from having lots of it, with everyone else having to fend for their own stash of gold in a shoebox.

Again, I am not defending deliberate inflation, which only increases the price of goods in response to the artificially supply of money. While a gold standard does answer the problems of inflation, it doesn't answer to the fact that money itself has to be more accessible than everyone owning their own vault and security system to protect literal hunks of metal.


Hello Jacob, nice to meet you (so to speak!)

What you write sounds reasonable, but I think there has to be a distinction between short-term and long-term issues.  In the long term, we want a system that doesn't have incentives for the elites to issue too much money and debt (which creates inflation and blows bubbles, etc.)

That is, we want a system that rewards true productivity (ie activities get started because there's real demand for them, not because investors and governments are throwing too much created money around.)  This would be the only way to healthy growth.

In the short term, if the money supply is tightened, some people could be really screwed.  There really are no good solutions to this problem.  Once you have inflated and distorted the system, people become dependent on the distortion.

That is, it's a classic case of addiction.  If you keep going, you'll only crash harder.  If you stop, it's painful.  At a philosophical level (the only level we're really qualified to speak at,) all we can say is, don't get addicted.
  
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Re: Currency is a Non-Excludable Good
Reply #57 - Aug 12th, 2019 at 5:36pm
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BobK71 wrote on Aug 12th, 2019 at 4:24pm:
Hello Jacob, nice to meet you (so to speak!)

What you write sounds reasonable, but I think there has to be a distinction between short-term and long-term issues.  In the long term, we want a system that doesn't have incentives for the elites to issue too much money and debt (which creates inflation and blows bubbles, etc.)

That is, we want a system that rewards true productivity (ie activities get started because there's real demand for them, not because investors and governments are throwing too much created money around.)  This would be the only way to healthy growth.

In the short term, if the money supply is tightened, some people could be really screwed.  There really are no good solutions to this problem.  Once you have inflated and distorted the system, people become dependent on the distortion.

That is, it's a classic case of addiction.  If you keep going, you'll only crash harder.  If you stop, it's painful.  At a philosophical level (the only level we're really qualified to speak at,) all we can say is, don't get addicted.


Hi Bob, thanks for the thoughtful reply!

I think it would be better we got "clean" though.
Once everything balances back out, people will be ok.
  
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Re: Currency is a Non-Excludable Good
Reply #58 - Aug 12th, 2019 at 6:06pm
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The Opposition wrote on Aug 11th, 2019 at 7:36pm:
I guess I'm the lucky 1/3000. Banks essentially get to create money.

The government gives $10 to the bank. The bank may now lend out $100. $90 just poofed into existence.

The bank charges interest on all those loans. This means that even though there is only $100 in circulation, the bank is owed (let's say) $110.

Regular people can't poof up money, so this guarantees the bank will be able to seize real assets.

I do not find any aggression in this.


holy shit is this true!?
  
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Re: Currency is a Non-Excludable Good
Reply #59 - Aug 12th, 2019 at 8:46pm
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Industry wrote on Aug 12th, 2019 at 6:06pm:
holy shit is this true!?


Yes Indy, that is how it works with FRB.  They print out fake money based on nothing and loan it out.  However, if you can't pay them back with that fake paper then they want something real of yours that is of equal values such as your house, your gold and your kids.  Getting something for nothing!

However, if everyone were to go to the bank at once to close their account and the bank because of FRB can't pay up then they just declare bankruptcy and that is it.  Hopefully, if that happens, you have less than 250k in there.
  
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