Economic Storm Clouds Gather, but Ending the Fed Provides Hope

[econ4every1]

Apologies in advance for the length. There was a lot to address.

http://ronpaulinstitute.org/archive...ouds-gather-but-ending-the-fed-provides-hope/

Just a comment on the quote. While I agree that government reporting of unemployment, specifically the "official" U6 figure is not indicitive of the true state of unemployment, I'd like to point out that "Shadow Stats" should be taken with a grain of salt.

This is from the Shadow Stats site:

The ShadowStats number—a broad unemployment measure more in line with common experience—is my estimate. The approximation of the ShadowStats “long-term discouraged worker” category—those otherwise largely defined out of statistical existence in 1994—reflects proprietary modeling based on a variety of private and public surveying over the last two-plus decades. Beyond using the BLS U.6 estimate as an underlying monthly base, I have not found a way of accounting fully for the current unemployment circumstance and common experience using just the monthly headline data from the BLS.

[emphisis mine]

Source: http://www.shadowstats.com/article/c810x.pdf

I'm neither going to confirm or deny Mr. Williams claim about the actual unemployment rate as I have no particular insights into it, I would, however, tend to agree that the way the government reports unemployment is very misleading. I'm inclined to agree the reality is somewhere between the "official number and Mr. Williams estimate. Another category I didn't see mentioned when it comes to unemployment is "underemployment". People who are specifically trained in a particular job, but take one that pays less because they cannot find a job in their chosen field or find/ afford training in a new line of specialized work. I think this is also a very big problem.

Anyone remember Stiff the Fed?

Personally, I'm unfamiliar with that.

I think this may only be half of the solution that is absolutely necessary to stabilize the money system. Most people, including far too many Libertarians do not fully understand how our money system works.

Totally agree

It is not their fault.

Disagree.

People that do not understand are not supposed to understand.

I'd say that it's not a question of supposed to or not supposed to, rather economics is a difficult subject that does not lend itself to people's intuition about it. Unfortunately, too many people cling to their own intuitive ideas rather than taking the time to question their own assumptions and learn.

It is that very confusion that creates an opportunity to hide in secrecy, just as JFK warned us about. Let's explain this clearly so that everyone can understand how our money system works without confusion.

Can you link me something to What Kennedy said? Personally, I'm unfamiliar with that.

Whether it is accurate or not, we have all heard the term the "govt just prints money". It is a half truth because it is greatly oversimplified. To understand what really happens, the Terms need to be more easily explained for everyone.

• Monetary Policy - Print the money (yes, oversimplified)
• Fiscal Plicy - Destroy the money (Federal Income Tax)

I'd disagree with that assessment. If I were to oversimplify it as you've done I'd define it like this:

• Monetary policy - Responsible for setting the cost of money. This is largely carried out by the Fed.
  
  
• Fiscal policy - Responsible for spending so the government can provision itself and taxes to offset (some or all) spending. This is determined by Congress.

In order to maintain "balance" in this type of system, the money that is "printed" must also be destroyed. If you have a bucket of water, and just continue to pour more and more water into the bucket, it will overflow and water will be wasted. What also happens is that the value of each smaller measurement of water is devalued, the purchasing power continues to go down.

I definitely like the bucket analogy, but I'd suggest that you've left a few things out of your analogy and therefore doesn't reflect economic reality.

Let's define the terms....

If the size of the bucket represents the nations potential output, too little water in the bucket would result in unused capacity (unemployment) and too much water results in the bucket overflowing (inflation).

To be clear, inflation is a rise in prices. Prices rise when demand for goods and services exceeds supply.

Fiscal and monetary policy can both affect the size of the bucket and the amount of water in the bucket but in different ways.

Fiscal Policy is a system that is designed to reduce the total volume of money.

Fiscal policy carried out by Congress increases and decreases the supply of bank reserves via spending and taxing.

Again, refer to the bucket of water. If you remove as much water from the bucket as you put in, you have a "balance".

However, you haven't identified everything that adds to or removes "water from the bucket".

For example, if you live in a nation that is a net exporter, then water (money) is added to your economy (bucket). How this is accomplished is fairly complicated and depends on several variables I'd be happy to expand on.

In the same way, if your nation (the US for example) is a net importer, that means US dollars are being funneled into accounts of foreign interests that aren't subject to significant taxation if any at all. As it stands today, the foreign sector has accumulated $10 trillion dollars of our money (water). So if you try, in the US, to "balance" the water level in the bucket by having taxes=spending the bucket will drain because the foreign sector is net taking money (about $700 billion per year) and in return is supplying goods and services.

When you hear most people refer to Fiscal Policy, it is both expressed and thought of by most people as "Taxation" which means to "collect money".

That's part of it.

There are major problems with the way that people understand this. First, the Federal Government does NOT use Federal Income Tax to fund its expenses. What is collected by the Federal Income Tax is NOT used to fund the Federal Government. Not One Cent. Period. Second, the currency that has been collected by Federal Income Tax does NOT stay in circulation. Since the government does not use Federal Income Tax to fund any expenditures at all, that money (non tangible such as a checking acct balance) is quite literally destroyed.

Wow, quite right. Few people understand this.

The next major misconception that causes confusion is that the IRS is a part of the Federal Government. It is not. The IRS is the counterpart to the Federal Reserve Bank, which, despite the confusion inferred by the name is also not a part of the Federal Government. The Federal Reserve Bank is no more Federal than Federal Express.

Completely disagree.

Being granted independence from Congress is not the same as saying that the Fed is independent of Congress.

I'd be happy to enumerate all that I understand about the relationship between the Fed and Congress (the body that created the Fed and the Body that can dissolve it), but I'll wait as this post is already very long.

Both the money creation and money destruction are part of the designed system.

Yes, getting back to the bucket analogy, money enters the economy via a "faucet" (spending) and exits via a "drain" (taxes) in the bucket (as examples). THus the faucet and the drain are not connected. However, there's another property of the bucket that is hard to imagine in intuitive terms.

The size of the bucket. Historically the bucket increases in size. Remember that the size of the bucket is meant to represent the productive capacity of the economy. There are a few major factors that influence the buckets size.

The number of people that work in an economy.
How efficient an economy is on a per-capita basis or how much work a person can do.

So for example, in 1980 there were 100 million fewer people and more people, at the time, did bookkeeping in paper ledgers for businesses.

Today there are 100 million more people in the US than in 1980, but as a percentage of the population, thanks to increased efficiency (computers), there is a tiny fraction of people responsible for doing a companies books. Some of this labor shifted into the building, marketing, selling, transporting computers and the rest into other things), but since computers can do more than just accounting (a LOT more), overall efficiency increased and the number of people needed to do work in accounting (and overall) relative to 1980 has decreased thanks to increases in efficiency. So even if the population and more specifically the number of people in the workforce remained exactly the same as 1980, the bucket could get larger because of per-person productivity increases thanks to technology. Of course today we have both increases in technology AND increased the population soi the bucket is larger for two reasons.

Thus, when looking at your bucket, if you balanced spending with taxes (the water level) the water level would stay in the same place, but relative to the size of the bucket would get lower as the bucket got larger thanks to population and efficiency and the water level would actually decline thanks to the nation being a HUGE net exporter.

So for example, below we see the water (dotted line) level is the same, but thanks to more people and increased per-person productivity, potential output (above the line) is greater. Thus maintaining the "water level" will only result in lost productivity and unemployment as fewer people will be able to do the same level of work.

Both the Federal Reserve Bank and the IRS were created by the 16th Amendment, and both are needed to "balance" the system. If you have too much currency in the system, the purchasing power of each individual dollar decreases by a proportional amount to the increase in the money supply.

The amount of dollars in the system is a variable when determining the value of money, because no business owner sets their prices based on the quantity of money in the economy because no one knows on any given day how much money is created, how much is destroyed how much is moved into foreign and domestic savings.

The value of money, in the simplest terms, is based on what can be obtained with and what can be obtained with it is subject to the supply and demand of goods and services. As long as overall supply keeps pace with overall demand and prices are stable, the value of the dollar is maintained.

Now, as I said, creating and spending more money can cause the value of money to decline as the demand for goods and services increases relative to supply, but the economy has become pretty good at dealing with fluctuations in demand. The best example of this is Christmas. Demand is high yet prices are the same or lower (sales). This is because increases are predicted and output and inventories are expanded in anticipation of increased demand because the potential for increased output does not require large-scale financed spending for "plant and equipment" (capital resources).

The economy as a whole has a certain amount of elasticity to it, thus short-term changes, if predicted and even some unpredicted have minimal impact.

People borrow money over Christmas (increasing the amount of money circulating in the economy), but that increased money is met with increased or greater output, resulting in the same or lower prices.

Every dollar on a credit card is potential spending, does the amount of potential money affect the value of the dollar?

No, of course not, because sellers set prices based on the demand for their goods relative to the supply not based on the number of dollars.

By way of analogy, it would be incorrect to assume that auto accidents are caused by the motion of a car, yet, you cannot have an accident unless your care is moving. Would it be correct to assume that motion causes accidents? No, because we know cars can move without crashing. Thus, movement, or more specifically the rate of movement relative to external variables determines the risk of crashing, in the same way, you cannot have inflation without money, but it's not correct to say that money causes inflation (price inflation). The amount of money relative to external variables causes inflation. Thus, you must define the state of the external variables (conditions) before it can be concluded that an increase in money caused an increase in overall prices.

If you have a total volume of 100 dollars and print up one new dollar, that new dollar gets its value from the existing currency, causing the value of the existing currency to go down. Thus, with a total of 101 dollars, the purchasing power of each dollar drops to 99 cents. The way to balance the system here would be to "Tax" one dollar out of circulation, reducing the total volume of money back to 100, and in theory, cause the existing currency to retain its purchasing power.

That would only be true if productive output were fixed. However, as we both know it's not.

The big problem is that there are two systems in place that work together. Removing only one part of the system unbalances the entire system. Remove just the IRS and the money supply increases.

While the IRS is the organization that collects taxes, why not just say "taxes"?

Remove just the Federal Reserve Bank and the money supply decreases.

The Fed does not determine the money supply. The Fed influences the cost of money via open market operations. This adds to or reduces the supply of banking reserves. However, the system as it existed between 1974-2008 was undone thanks to the GFC. I don't want to make this any longer than it is, so I'll skip, for now how the new system works, however, let me be clear, banks DO not determine the total amount of money in the economy because every single dollar a bank creates is offset with an equal liability. That liability must be settled by destroying real money that already exists in the economy (*again, something I'd be happy to explain in a follow-up).

Abolishing the IRS is part of the solution, but what no layman is ever taught is that they need to focus just as hard on removing and replacing the Federal Reserve Bank, and its banknotes with US Treasury bank notes.

We can address this in a follow-up.

Despite anything that Zippyjuan will say, this is what makes Central Banks more dangerous than standing armies to the long-term survival of all nations.

I'm not Zippy, but I disagree as well.

Please note that I have purposefully oversimplified the functions and have not factored in Interest at all.

You'd have to explain why you think it matters.

This is Keynesian Economics at its most simple form, and in theory, it works. Does it work in practice? You tell me. Take a look around. Tell me if this money system frees the ordinary man from the clutches of the money manipulators, or enslaves them?

Keynes was a smart guy, but the money system has changed significantly since he wrote and commented on the economy. You have to know what has changed and how it changes the conclusions he made.

Calling people in the US economic "slaves" is an insult to those who suffer real economic slavery thought the world. People in the US experience one of the highest levels of living in the world, especially when you factor in the size and diversity of our population. Certainly, I would agree that the system, the way it's employed right now benefits people, like myself, at the higher end (I'm not rich by any sense of the imagination, but there is nothing that anyone could offer me that I need. I am fortunate that I have only wants and many of those are fulfilled.

You tell me if a small business will be granted a loan, not based solely on their credit reputation, but on the intended function of the business. You tell me if a mom and pop publication would be granted a loan to print information that discredits our entire banking and money system.

I did not achieve economic independence via business ownership, so perhaps someone here can correct me, but most businesses raise capital by attracting investors, sometimes individuals, but I imagine there are businesses that represent groups of investors in order to diversify and minimize risk. If a person is to risk their money, should they not have some say in what they are willing to risk it in? Shouldn't the incentives to lend be based mostly on profit and not political motivation at least in the private sector?

You tell me if JP Morgan pulled funding from Nikolai Tesla who intended to create free electricity for everyone.

So you don't believe it's because "free energy for everyone " was a bad idea from an investors point-of-view and that's why they pulled funding?

You tell me if a cheap cancer cure would be funded, or denied in favor of more expensive and less effective medical treatments. You tell me if the direction of our country is determined by a small group of dominant men or not, who control that direction by issue of credit and currency.

You tell me if our money system is Honest.

Ironically, eliminating the Fed would put Congress in control of both Monetary and Fiscal policy. At that point, the government, incentivize by politics, would determine winners and losers, rather than banks, which are motivated by profit.

Respectfully,

E4E1

 

[NorthCarolinaLiberty]

If you don't agree with the consensus here, does that mean you aren't welcome? Is this forum intended to be an echo chamber for those that agree with each other, or do people invite others to challenge their ideas?

There are people paid to post here. Sometimes they look like this:

Usually, they look like this:

The dishonesty irritates me more.

Impossible! I've read the user profiles of our paid members!

 

[econ4every1]

You just can't take it personally. People gonna disagree.

I didn't and I don't, I was just curious what the consensus he was. Some forums are echo chambers others are not. Glad that's not the case here. Should make for interesting conversation.

 

[econ4every1]

Yes. We are here to build coalitions, not debate with liberal trolls.

Is there a difference between a "Liberal" and "Liberal Troll"? Just curious.

 

[angelatc]

Is there a difference between a "Liberal" and "Liberal Troll"? Just curious.

Nope.

 

[NorthCarolinaLiberty]

Hmm; The return of Christopher A Brown?


LOL

 

[econ4every1]

Hmm; The return of Christopher A Brown?


LOL

No, but it's ironic as my name is Christopher Brown, only my middle initial is S, not A.

Dam, you mean there's more than one Christopher Brown? Dam I thought I was the only one!

LOL

 

[DamianTV]

I'm curious as this is literally my first post. I have a question for anyone willing to answer it. If you don't agree with the consensus here, does that mean you aren't welcome? Is this forum intended to be an echo chamber for those that agree with each other, or do people invite others to challenge their ideas?

Respectfully,

E4E1

As long as you have an open mind and can understand the current system hurts many people badly, we are all for welcoming you here. Except Zippy who will always tell you that the Gold Standard we had before was bad, and Ron Paul is wrong on everything economic.

 

[econ4every1]

As long as you have an open mind and can understand the current system hurts many people badly, we are all for welcoming you here. Except Zippy who will always tell you that the Gold Standard we had before was bad, and Ron Paul is wrong on everything economic.

Iat the risk of coming of as a fence sitter....I agree there are problems with the system and there are problems with people's understanding of how it works.

 

[dannno]

No, but it's ironic as my name is Christopher Brown, only my middle initial is S, not A.

Dam, you mean there's more than one Christopher Brown? Dam I thought I was the only one!

LOL

Are you a surveyor?

 

[econ4every1]

Nope. I'm in Information Technolgy.

 

[DamianTV]

Iat the risk of coming of as a fence sitter....I agree there are problems with the system and there are problems with people's understanding of how it works.

Dont be afraid to ask questions. Its the person that doesnt question that is the most dangerous.

One question that will weigh in my mind is whether or not your acct is legit, or intended to support a Keynesian Economic stance that Zippy adheres to. There are two possibilities, either you are or are not. Questions can be just as misleading to others not involved in a conversation. I will entertain both ideas without either blindly accepting or rejecting them. Many of us here have a sneaking suspicion that the Zippy acct is paid to discredit the ideas of Austrian Economics in favor of Keynesian Economics. You might be part of Zippy's crew, and you might not be. You'll have to earn the trust of the people here. Zippy is a traitor, his words are poison, and actions are tantamount to treason against the people that long for freedom above all else. His big long red bar shows that the should not be trusted, at least as far as his expressed ideas on Economics. That is the real reason that we have a Reputation System. People that have RED Reputation Bars should have their expressions given more question than those who have Green Bars. That system only represents the support of the community in which they are active, so posting on a different type of website, those Reps might be completely opposite. I might have a big long red bar because people disagree with any questioning of authority, while they only offer support to those that think just like them. The Group Think mentality that most people have is the dangerous mentality as typically it is only one idea that the entire group adheres to. Most of us on the Ron Paul Forums have a propensity for questioning the ideas of our leaders, which is why we have come together, here, and remain here, even if Dr. Paul is no longer running for president.

Ron Paul himself is really nothing more than a Torchbearer for the simple human concepts of Liberty and Freedom, which includes Economic Freedom. The ideas that Zippy shows support for, by his constant efforts to discredit anything that might represent an Honest Money System, have been recognized to be dangerous to the wellbeing of all people except a few very rich and sociopathic men.

The thing is, Perception is everything. Perception, not just related to Economics, but to everything, is one of the most powerful weapons of manipulation and control of people. I have often said that there are three things that Rulers use to divide and conquer the masses of people, Belief (Perception), Money, and Violence. In order to offer and relate to different perceptions drawing dramatically different conclusions, I will sometimes avoid a specific idea in question and give other examples. My goal is to open the minds of as many as I can, and not to force them to accept only my judgement. With economics, we both see that there are major problems from our current system. I have made my decision for myself and for myself alone, while offering challenges to the existing ideas. The people that I really get pissed off at are those who are completely unwilling to entertain different ideas, but that doesnt necessarily mean that I will not communicate with them. Zippy is not one of the people that just refuse to change, his actions are different as they are indicative of subversive manipulations and tactics. He is dangerous because he represents the Enemy of Freedom, yet, wears our clothing, speaks our language, which makes him somewhat difficult to spot. If we were a small village, under ordinary circumstances, he would not stand out. But online, it is ideas that stand out more than anything else. He knows to play heavily on the Perceptions of people, and how the perception of others about him affects how much influence he has.

I believe I have earned and maintained the trust and respect of the majority of the people here. It is just as much my job to earn your same trust and respect of newcomers (entertaining the idea you arent related to Zippy or his crew) as it is for the senior members of this community. The ideas I express are different ways to arrive at a same universal truth. There are a lot of different ways to do math that allows you to put the number 10 on one side of an equals sign. The principle of that idea may be expressed differently, such as Romans would use an X to represent 10, but Roman Numerals did not include the concept of 0, so to them, 10 may have no meaningful value. The methods used to arrive at that mathematical solution are different, and ways of expressing that conclusion are also different, but 10 apples in the physical world is 10 apples, a universal objective truth.

You should always question my ideas just as you question the ideas of others. I have no higher respect to offer people who have the ability to question everything around them as I have no desire to demand authority, or obedience of the mind of others. This offers those people a genuine choice, to respect me, or not respect me, based on their own understanding of who and what I am. And just as I truly appreciate those that question, I also play Devils Advocate a lot of times, to challenge the minds of others and prevent Blind Trust. Do not ever blindly trust me, or that I have all the right answers. I dont. I do feel that it is worth the time of people to entertain my lies, as my goal there is to shoot myself in my own foot on purpose. By flat out lying at times, what is being taught is to understand how the lie itself works, which castrates my ability to lie and distort truths as I see fit. Thus, if you understand how I lie, which is the real lesson, then the lies and misperceptions of others hold no sway over you. It is an idea that can spread in the minds of others like wildfire, but many people are so hopelessly inept at thinking that they will not be able to comprehend how the method of the lie works on the minds. Authoritarian Rulers do not like people who are able to think critically about ideas. They expect the masses to think only what they are told to think, and no further.

Here is an example of how I lie, so this IS a lie. Pay attention. Together, a ball and a bat cost $1.10. The Bat costs $1.00 more than the ball. How much does the ball cost? End of Lie. The statement exploits the way the mind works by pandering to the snap judgement to simply subtract $1.00 from the total of $1.10, making you think that the ball costs $0.10. The answer is wrong because $1.00 - $0.10 is $0.90 cents, which is definitely the wrong answer. The actual answer is that the ball costs $0.05 cents and the bat costs $1.00 MORE than the ball is simply $0.05 + $1.00 so the bat costs $1.05. Standard mathematical misperception, and the manipulation is carefully built into the phrasing that exploits the psychological loopholes. Most people dont critically think, and will maintain the idea that the bat only costs $1.00, which is one of the many ways that people can be taken advantage of to believe a Lie.

Another example of Lying is to Lie by Exclusion. So again, this is another Lie. In the 1960s, a Russian newspaper reported that the Russian runner came in 2nd place, but the American runner came in second to last place. The misperception here is that the Russian runner had finished the race before the American runner. This is Lying by Exclusion. What was excluded is that this was only a Two Man Race. 2nd place in a Two Man Race is LAST PLACE. It changes the perception of the outcome completely. Second to last, the position -1 in a Two Man Race IS First Place. The reality is the American runner beat the Russian runner. When you understand how the lie works, you can see how the MSM uses this technique often to distort the perceptions of gun violence. They dont talk about a home owner fending off intruders, but talk constantly about a gang shooting or school shooting. Their goal is to remove guns from honest people. Criminals will always have access to guns, and the Law can only hold them accountable after the fact. The weight of protection from gun violence can only occur when the honest man is armed. The law has no power to prevent people from being shot. Mainstream Media distorts the perception in the way they present information so that very specific conclusions are drawn. That discussion will carry on forever and probably best not discussed in this thread.

The two methods I have used to Lie to you should immunize you when I try to Lie again, as well as all others from Lying to you also. The latter being much more important. Think critically about the information you are presented, just as you also question the statistics of Shadow Stats AND the Federal Govt. The truth may be some where in the middle.

Now, as far as Ideas themselves, I am all for challenging and exploring new ideas and concepts all the time. In the 1600's, Sir Isaac Newton laid down the foundation for physics, based on the observable world during that era. Those fundamental ideas held true for three and a half hundred years, until Albert Einstein challenged the notions of standard gravity with the new fundamental concept of Spacetime. Most physics, even today, stil relies on Newtonian Physics but not Einsteinian Physics. This is a concept that has caused astronomers and astrophysicists to draw many inaccurate conclusions about how the universe works. A few people are working hard at updating those fundamental ideas to factor in the concepts that Einstein had discovered and proven, which alters the way we see the universe. A standard truth in physics is that we should not attempt to change the universe itself to fit our understanding of it, but change ourselves to see the universe for what it truly is. At its core, the main difference between Newtonian Physics and Einsteinian Physics is that in Newtonian Physics, mass is gravity. Newton had no way of realizing the distortions in Time. Einsteinian Physics introduces a profoundly new idea that replaces and eliminates gravity as a force entirely. "Things fall where Time flows slowest." The ability to understand that Time itself can be completely twisted, reshaped, and even stop causes all of our fundamental thinking of astrophysics to require an update to the math and models. If we are not factoring in the distortions of time on very large scale models of the universe, then those models are inaccurate. Understanding why they are inaccurate allows us to see the universe anew, as it is we who have grown to better understand what the universe is. The effects of Time Distortion have led to small inaccuracies that we try to adjust by math or include abstract ideas to solve for those inaccuracies, such as Dark Matter. The thing is, these small inaccuracies are cumulative in their effects and cause us to think incorrectly about how the universe works. We just tend to see things based on our own experiences, and subconsciously see the entire universe, except for confusing black holes, as all flowing through time at the exact same rate. Its those cumulative inaccuracies that cause great deal of trouble reconciling quantum physics with astro physics.

All ideas, when not held to based on emotion, but by logic need to be challenged. I will try to reply to your longer post when I get a chance, as this is definitely enough for now.

And, welcome to the Forums.

 

[econ4every1]

DamianTV, thank you for the long introduction.

Allow me to, right up front to set the record straight. I am an agent of no one. If I agree with anyone on this forum, I assure you, it's simply because we share like minded ideas, not because I was sent here to do the bidding of others.

I also confess that I am not a Libertarian nor do I believe in the Austrian theory of economics. Having said that, I respect some if not most of the Libertarians I come across. In many of my interactions, my impression is people guided by what I take to be an honest assessment of principle. Even if I don't always agree.

Austrian econ, on the other hand, is an understanding of econ that I think existed at one time. Most of my disagreements about how Austrians see the economy is based mostly on changes to the money system since 1974 that Austrians fail to recognize or do not grasp the implications of. But there is time for that later.

I am not a Keynesin but admit I agree with much of some of what he writes. I'm certain I agree with Zippy on somethings and will disagree on others just as I have agreed and disagreed with you.

I won't peddle my personal political ideology, at least until I've had the chance to take part in some econ talk. I find announcing a political affiliation just distracts from the meaningful conversation. Honestly, I follow ideas not political winds anyway. So I don't really self-identify with a group as I like the freedom to agree or disagree with anyone and everyone.

As far as firearms, I am an avid owner shooter and the son and brother of retired Marines. I grew up in both a very rural and very urban environments in the 1970's and 1980's. I've experienced more than some and less than others. I don't believe in gun bans nor do I think that unrestricted freedom is the answer either. However, having seen the culture difference first hand I recognize the folly of trying to tell people in Helena Montan or Cheyanne Wyoming what a person in Washington DC thinks they should do with there arms is a mistake. Firearms were apart of my young life and the culture I grew up in and I'm sympathetic to that culture and admonish those on the left for actions taken without understanding that, in some places, firearms cannot be easily separated from the cultures of the people that own them. Firearms have a deep and rich history in the US and the problem must be addressed in cultural terms, not necessarily legal terms.

Anyway, thanks for the intro, looking forward to an interesting discussion.

Respectfully,

E4E1

 

[DamianTV]

DamianTV, thank you for the long introduction.

Allow me to, right up front to set the record straight. I am an agent of no one. If I agree with anyone on this forum, I assure you, it's simply because we share like minded ideas, not because I was sent here to do the bidding of others.

I also confess that I am not a Libertarian nor do I believe in the Austrian theory of economics. Having said that, I respect some if not most of the Libertarians I come across. In many of my interactions, my impression is people guided by what I take to be an honest assessment of principle. Even if I don't always agree.

Austrian econ, on the other hand, is an understanding of econ that I think existed at one time. Most of my disagreements about how Austrians see the economy is based mostly on changes to the money system since 1974 that Austrians fail to recognize or do not grasp the implications of. But there is time for that later.

I am not a Keynesin but admit I agree with much of some of what he writes. I'm certain I agree with Zippy on somethings and will disagree on others just as I have agreed and disagreed with you.

I won't peddle my personal political ideology, at least until I've had the chance to take part in some econ talk. I find announcing a political affiliation just distracts from the meaningful conversation. Honestly, I follow ideas not political winds anyway. So I don't really self-identify with a group as I like the freedom to agree or disagree with anyone and everyone.

As far as firearms, I am an avid owner shooter and the son and brother of retired Marines. I grew up in both a very rural and very urban environments in the 1970's and 1980's. I've experienced more than some and less than others. I don't believe in gun bans nor do I think that unrestricted freedom is the answer either. However, having seen the culture difference first hand I recognize the folly of trying to tell people in Helena Montan or Cheyanne Wyoming what a person in Washington DC thinks they should do with there arms is a mistake. Firearms were apart of my young life and the culture I grew up in and I'm sympathetic to that culture and admonish those on the left for actions taken without understanding that, in some places, firearms cannot be easily separated from the cultures of the people that own them. Firearms have a deep and rich history in the US and the problem must be addressed in cultural terms, not necessarily legal terms.

Anyway, thanks for the intro, looking forward to an interesting discussion.

Respectfully,

E4E1

That is definitely +Rep worthy

No one is perfect. We can only strive to be better than our former selves, when those improvements do not come at the expense of others. To quote Mark Twain, it isnt what we dont know that gets us in trouble, its what we do know that simply aint so. Im am just as willing to abandon ideas and philosophies that do not work in favor of ideas that work for all, fairly and equally.

 

[NorthCarolinaLiberty]

No, but it's ironic as my name is Christopher Brown, only my middle initial is S, not A.

Dam, you mean there's more than one Christopher Brown? Dam I thought I was the only one!

LOL

Well, you look like him, too. Except with less hair now. lol Not that I really care, dude. It was just obvious you've been around. The Christopher A Brown account used to send me the most incoherent PMs. I could never figure out what the hell he was ever talking about.

 

[VIDEODROME]

In 2000 I was pulling for Ralph Nader and I think I'm close to him politically, so Zippy's comments don't bother me that much. I liked Ron for a strong stance of anti-corruption or anti-cronyism as well as his foreign policy.

Maybe the only thing about Zippy I'm perplexed about is I don't think he really identifies what his ideology is or if he's just a contrarian. Did he even support a candidate last time?

 

[Danke]

In 2000 I was pulling for Ralph Nader and I think I'm close to him politically, so Zippy's comments don't bother me that much. I liked Ron for a strong stance of anti-corruption or anti-cronyism as well as his foreign policy.

Maybe the only thing about Zippy I'm perplexed about is I don't think he really identifies what his ideology is or if he's just a contrarian. Did he even support a candidate last time?

He voted for Hillary before, and claims to have voted for Gary Johnson in the last election, lol.

 

[VIDEODROME]

I'd like to offer a different perspective.

Your Money and Bucket analogy is actually quite brilliant. So is recognizing that there is a difference in spending money and what it's spend on. However, before I can explain my opinion why, I think we need to establish what value is in an economy (like the US). I apologize in advance if it seems obvious (as I won't be surprised if I'm ridiculed for asking for clarification of this term).

What do you think determines the value of money?

It's often said our currency has money by decree or Fiat.

Another saying is it's backed by the "full faith and credit of the United States.". A crude way to look at this might be to consider these paper notes like 'Stock' in America that we trade.

I mean, what gives paper stocks value? Not a pile of Gold in a vault held by the company. It's a combination of the value of the company itself and it's earnings.

 

[econ4every1]

It's often said our currency has money by decree or Fiat.

Another saying is it's backed by the "full faith and credit of the United States.". A crude way to look at this might be to consider these paper notes like 'Stock' in America that we trade.

I mean, what gives paper stocks value? Not a pile of Gold in a vault held by the company. It's a combination of the value of the company itself and it's earnings.

Sure, but the real question we're dealing with is what gives the nation's currency value if it's created by fiat.

Let me answer the question via an example. Let's say I'm having a yard sale next weekend. If I create my own dollars with a pen, paper, and scissors and announce to my neighbors that the only way they can purchase things at my sale they have to purchase them with the dollars I create. If I have things that people want to buy, where does that value in the dollar I create come from?

Supply/ Demand=Value

That is, the supply of the things I have, divided by the demand for those things, equals the value of the dollars I create. It makes no difference that my dollars, the paper that I scrawl specific denominations on is worthless, what matters is if they can be redeemed for things of real value.

Thier value is extrinsic rather than intrinsic, but it does not change the fact that they have value. Of course, my neighbors could sell me things of value they own in order to earn my dollars, or they can do work for me (mow my lawn?) and after I have taken goods and services (G&S) the whole lot of my stuff can catch on fire making supply=zero and all the dollars I created worthless. So extrinsic money has some risk attached to it.

One more example. Where do promises come from? Do they come from a bucket of promises? Do you have to get promises back before you can make more?

Promises are made from thin air and can be spent just like currency. The fact they come from nothing does not make them worthless, it just induces risk. So if you trade something to me of real value today and I return to you, an IOU, that IOU is a promise. A promise to whoever holds the IOU (let's say its to mow 1/3 of an acre of lawn).

Does the fact that the IOU is made of paper and ink make it worthless? No, only if the supply of the service goes unfulfilled.

The interesting part and something I'm sure to bring up later is, what is the value of the IOU to the person who created it? In other words, when I get the IOU back after providing the services in question, do I now have something of value I didn't have before?

What do you think?

Respectfully,

E4E1

 

[NorthCarolinaLiberty]

Sure, but the real question we're dealing with is what gives the nation's currency value if it's created by fiat.

Manipulation that is less than natural and less than market.

The risk you cite is a big reason why people here like gold. Paper has counterparty risk. Paper can be much more easily manipulated. Gold can't just be printed. It's finite. It's durable. Gold has some great chemical properties. It's timeless. People have naturally chosen gold; from ancient kings to your gold digger girlfriend.