We are on the Verge of Economic Catastrophe

[RVonse]

Two observations.

First, the monetary value of any asset is determined by the interplay of demand and supply of that asset. The only ways an asset can have a stable value is to have stable demand and supply or have exact offsetting changes in one determinant when the other determinant changes.

Second, looking at the change in purchading power of currency requires also looking at what one can purchase. $ 1000 in 1900 or 1950 couldn’t purchase a cellphone or laptop computer or effective

No argument there. All I would ask is for our fed (with central bankers) to stop printing more currency! Stop depreciating the same currency I have to use out in the real world. That way, when individual assets do go up and down in value we will know that those price changes were due to the real market and not our government with their hands on the scale.

 

[scombrid]

Are you blaming "the fed"?

Yes. The fed prints (counterfeits) more dollars into circulation causing the existing dollars to be worth less (inflation).

Wrong. The Fed delivers paper money to (or more commonly, credits accounts of) its Member Banks in exchange for lawful U.S. money or for Treasury obligations purchased openly at the market price. Most U.S. "money" (as measured by M2) is created by private banks.

A nation can not be a world class producer without an honest currency that does not continually inflate itself away. Producers and business need this stability to know for certain what their real costs and overhead is.

Wrong again. The U.S. Fed has set a target inflation rate of 2.0% (on CPILFESL) and, with a few exceptions, has done a good job of adhering to that target rate. Businesses know this is the target rate and plan accordingly. Inflation did exceed 4% during 1967-1971, 1973-1983, 1989-1991, and 2021-2023. Fluctuations in price levels were much more severe than this during the Gold Standard era. I've attached an image to help you appreciate that. Annual deflation of 4% to 10% or more was common during the first half of the 19th century. Inflation was huge during the Civil War and during WWI -- and these periods were during the Gold Standard era! See from the graph that beginning in the mid-1980's we live in an era of relatively stable prices. (Again: PREDICTABLE low-level inflation, e.g. 2%, IS stable.)

By way of comparison, Japan's annual CPI inflation exceeded 20% throughout the mid 1970s while U.S. inflation barely exceeded 11% during this time.

By the way, Brent crude oil was $21 in 2001 and $139 in 2008. Other commodities have also shown sharp fluctuations. This leads us to ... Spoiler alert: prices fluctuate independent of any conspiracy of Hillary's deep state or Jewish bankers or wtf you or Alex Jones think controls prices.

Now 2% inflation is NOT the same as 0% inflation. A prudent saver might try to seek a 2% safe return rather than keeping his banknotes under his mattress. The advantages of 2% compared with 0% have been explained to you over and over and over and over and over and over. If you are STILL confused about this, ask us to suggest some search terms, or for help composing an AI chatbot query.

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If you are wanting to be technical then inflation starts with the fed and gets implemented by the banks. And if this is your idea of 2% inflation I do not want any part of it:

The Purchasing Power of the Dollar -What is $100 worth in 1913 over time?​

1913: $100
1923: $57.89
1933: $76.15
1943: $57.23
1953: $37.08
1963: $32.35
1973: $22.30
1983: $9.94
1993: $6.85
2003: $5.38
2013: $4.25
2019: $3.87

And if I have a dollar today why do I even want to worry about earning more than 2% interest just to stay even? I would rather put it in the bank and have it be worth more tomorrow with deflation (despite all the nay saying you will give us here). Or better and simpler yet. Just put a dollar in the bank so I have exactly a dollar to spend when I become too old to work. Is a stable currency too much to ask for from a government who wants to help everyone else on the planet except for the middle class?

*It should be noted that we got the horrible creation of the fed in 1913.

You prefer the volatility of the 19th and early 20th centuries? You think anything the GOP is doing right now is helping us plebes? Really?

 

[scombrid]

Judging by his repeated interjections, RVonse has an abiding fascination with finance and monetary theory.

No. I have a total disregard and loathing for our oligarch controlled government that has made savings for retirement a difficult task at best so that certain actors can flourish at the cost of the average wage earner.

Yet you support Trump/Musk/HeritageDeVos?

 

[Jimmy Higgins]

Two observations.

First, the monetary value of any asset is determined by the interplay of demand and supply of that asset. The only ways an asset can have a stable value is to have stable demand and supply or have exact offsetting changes in one determinant when the other determinant changes.

Second, looking at the change in purchading power of currency requires also looking at what one can purchase. $ 1000 in 1900 or 1950 couldn’t purchase a cellphone or laptop computer or effective

No argument there. All I would ask is for our fed (with central bankers) to stop printing more currency! Stop depreciating the same currency I have to use out in the real world. That way, when individual assets do go up and down in value we will know that those price changes were due to the real market and not our government with their hands on the scale.

For someone complaining about inflation, you don't seem to have a good grasp on the causes of it.

 

[laughing dog]

Two observations.

First, the monetary value of any asset is determined by the interplay of demand and supply of that asset. The only ways an asset can have a stable value is to have stable demand and supply or have exact offsetting changes in one determinant when the other determinant changes.

Second, looking at the change in purchading power of currency requires also looking at what one can purchase. $ 1000 in 1900 or 1950 couldn’t purchase a cellphone or laptop computer or effective

No argument there. All I would ask is for our fed (with central bankers) to stop printing more currency! Stop depreciating the same currency I have to use out in the real world. That way, when individual assets do go up and down in value we will know that those price changes were due to the real market and not our government with their hands on the scale.

The Fed prints money to replace worn out currency. As Swammerdami and others have repeatedly pointed out, most money (90% +) is private sector generated and maintained.

More importantly, the reduction in purchasing power from inflation is independent of the inflationary source: a 5% “market driven” inflation causes the same decrease in the purchasing power of currency as a 5% “Fed” inflation. So I don’t understand your concern.

 

[bilby]

I have no problem what so ever reading from AI but in this case the data simply regurgitates what the prevailing economists (of our day) have said.

AI only ever regurgitates stuff other people have said. It's a search engine pretending to be clever - no different from some clueless nerd using google in his mom's basement, other than in its ability to use grammar correctly and make fewer spelling errors.

It looks up a huge body of text, and spits back what it finds, with ZERO consideration for the accuracy thereof.

As such it is worse than useless as a source; If you know enough to know when it gets things wrong, it is valueless; If you don't, it is dangerous.

 

[ZiprHead]

Judging by his repeated interjections, RVonse has an abiding fascination with finance and monetary theory.

No. I have a total disregard and loathing for our oligarch controlled government that has made savings for retirement a difficult task at best so that certain actors can flourish at the cost of the average wage earner.

And yet you voted for Trump.

 

[RVonse]

The Fed prints money to replace worn out currency. As Swammerdami and others have repeatedly pointed out, most money (90% +) is private sector generated and maintained.

More importantly, the reduction in purchasing power from inflation is independent of the inflationary source: a 5% “market driven” inflation causes the same decrease in the purchasing power of currency as a 5% “Fed” inflation. So I don’t understand your concern.

My concern is supply versus demand. When the fed (with the central banks) deliberately puts more dollars in circulation the rest of the currency becomes 2% more worthless each year and according to their design. And that is what inflation means, inflating our actual supply of currency by 2% each and every year. If anyone else did this we would call them a counterfeiting criminal.

But if prices go up or down that might not be an inflation situation at all IMO. Maybe the neighborhood got better and your house became worth more.....I wouldn't call that inflation that is just a higher price for your home. Or maybe Saudia Arabia decided to quit pumping oil and our gasoline price went up.....that is not inflation either because it would be a price change brought on by market conditions.

The point is that the 2% inflation is a deliberate debasement of our currency by counterfeiting its supply. Similar to what the PRC is famous for when they make a centralized government decision for what they say is for the "good of the people". And that is not how our country was founded.

 

[Jimmy Higgins]

The Fed prints money to replace worn out currency. As Swammerdami and others have repeatedly pointed out, most money (90% +) is private sector generated and maintained.

More importantly, the reduction in purchasing power from inflation is independent of the inflationary source: a 5% “market driven” inflation causes the same decrease in the purchasing power of currency as a 5% “Fed” inflation. So I don’t understand your concern.

My concern is supply versus demand. When the fed (with the central banks) deliberately puts more dollars in circulation the rest of the currency becomes 2% more worthless each year and according to their design.

When does the Fed give away this money? I'd like to schedule an appointment.

And that is what inflation means, inflating our actual supply of currency by 2% each and every year.

*sigh*

But if prices go up or down that might not be an inflation situation at all IMO. Maybe the neighborhood got better and your house became worth more.....I wouldn't call that inflation that is just a higher price for your home. Or maybe Saudia Arabia decided to quit pumping oil and our gasoline price went up.....that is not inflation either because it would be a price change brought on by market conditions.

The point is that the 2% inflation is a deliberate debasement of our currency by counterfeiting its supply.

They aren't pumping money into the system every year to create 2% annual inflation. 2% annual inflation in the economy is the goal to maintain pricing stability. They manage that through the Fed lending rate to banks. That controls how much it costs to have debt. Cheaper debt means more spending of money you don't have.

 

[RVonse]

When does the Fed give away this money? I'd like to schedule an appointment.

You did not get a stimulus check during the pandemic? Where do you think that currency came from....the money tree?

But the fed prints and gives away far more money than that to people with money and power. You just don't know it because you aren't in the club.

 

[RVonse]

They aren't pumping money into the system every year to create 2% annual inflation. 2% annual inflation in the economy is the goal to maintain pricing stability. They manage that through the Fed lending rate to banks. That controls how much it costs to have debt. Cheaper debt means more spending of money you don't have.

How about just leaving the money supply alone. Laughing Dog says they replace defective currency and I'm fine with that if they just don't add more.

If the economy does need a boost with sales, do it without debasing the currency. Use tax breaks or some other means.