What do people usually mean when they say "control inflation?"

[Paul Or Nothing II]

You are sounding more like a geologist, than a monetary economist. The idea gold would be produced at parity with economic growth is a stretch. You make a huge leap with that one. And, to suppose that going off to find gold would make up for excess labor? I'm not with you.

So you don't think gold's price is dictated by it's cost of production? Is that a joke?

And let me tell you what's a "stretch" - to believe that ANYONE who has a coercive monopoly will have the best interest of the people in mind NO, be it government, Fed or whoever, they're all made up of self-interested individual so you confer them a monopoly over money & they'd necessarily misuse their power to their benefit

Anyways, let's go over it again You do concede that prices/wages would fall under gold-standard, right? WHY? It's because supply goods & services is increasing at a faster rate than supply of gold What does it mean? It means that it would take fewer expenses to extract it, meaning the difference (margin/profit) between cost of production & sale-price will've increased, which NECESSARILY means that those engaged in extracting it will have a higher incentive to extract more of it than they usually would simply due to higher profit-motive & they'll continue to do that until the said profit-motive is reduced due to increased supply

This has very little to do with geology but everything to do with economics of supply & demand & profit-motive
It exists everywhere, let's say potatoes, when there's a short supply, the difference between cost of production & sale-price will be higher due to high demand & thereby buyers bidding up the price which will necessarily incentivize producers to invest more & produce more until the profit-incentive is reduced due to increased supply

Moreover, what does mean to have moneysupply growing "in relation to economic growth"? In relation to WHAT? Should the MS grow along with supply of oil? How about Cars? How about grains? Or should the moneysupply DECREASE along with price of technology products to "avoid deflation"? The fact is that all products in the economy DON'T grow at specific rate, they all grow at varying rates & certainly some products will necessarily reflect "deflation" while others mayn't & that in itself makes the whole concept of "moneysupply should grow with economy" argument a complete hogwash!

Fractional reserve systems brake down under either condition, and without one, I wouldn't have my house..........but some of us like being able to borrow, don't mind paying banks interest, and enjoy both the comforts of home, and the opportunity to pay back our debts with nominally cheaper dollars.

You will still be able to borrow under a full-reserve-system since time-deposits will still be lent.
Right now, under fractional-banking, you & all those who borrow are essentially STEALING purchasing-power from people who've no way to opt of this legalised theft (for example, if we'd complete free-banking, full-reserve & fractional-reserve could still co-exist as each bank would issue it's own notes & thus people would be free not to accept FRB-banks' notes)[/QUOTE]

I'm no longer a net-debtor, so suppose I should change my tune to gold. However long this debate rages, I think the real beef is with the infiltration of government, and the fed, by banks over matters of QE and regulation.

Oh yeah, we just need some honest, uncorrupt omniscient angels who'll run the whole system "just right" without using it to benefit themselves & their buddies, right? Sounds like an easy issue to resolve I guess

I would rather be discussing the quality of capital that denominates modern reserve requirments. It's garbage things like "goodwill" and the present value of "deferred tax assets", or items which effectively have no value in times of distress.

Yea - Fed and Fractional Reserve banking.
Boo - CDO's, CDS, SIVs, ARS, TOBs, conflicts, fraud, failed renegotiation, ulimited naked shorts, and flash trading.

Do you realize that the root of the whole problem was Fed & FRB? If you don't then you should & that's exactly why Ron Paul was able to predict the housing-bubble YEARS IN ADVANCE while all the honest, omniscient angels running the Fed were saying "everything is fine" until the bubble actually burst - http://www.youtube.com/watch?v=48Gfzgxh3ZQ

Again, CDO, CDS, & whatever have very little to do with anything, the ROOT CAUSE is Fed & the government-regulations & if people don't understand this then there's nothing we'll have learned from all the disaster (they talk about derivatives too) - www.youtube.com/watch?v=v_LPB9pT58U

Usually it means 'I want to be Ben Bernanke' and 'if only we could get Ben to spray money our way, for our political group'. To those who are mindful of liberty, it means "End the Fed!"

Since inflation as we experience it could be ended and cured over night, the problem are its addicts who wouldn't change a thing.

So true, people just keep going - "if only, we'd right people running the system" But until they realize that there's no free lunch & there are no "right people" & that people are self-interested; not much will change

You're saying wouldn't people stop working if their purchasing power increased 2% every year? How is that different from 4% inflation every year and earning 6% interest? Do people stop working in that case?

Similarly, people know that next year's phones are going to be cheaper or more powerful than this year's, so they have incentives to not buy now. But do people buy a shiny new phone this year or wait?

Just because purchasing power increases doesn't mean people will stop working or stop buying now.

+1

I mean it just can't be more obvious than that but I suppose when people are stuck in a paradigm, they might miss the obvious things!