What gives paper money its actual value - lol

[Zippyjuan]

I don't concern myself with these formal metrics (beyond noting them to be fraudulent). If anything, a person might consider how prices affect their own personal cost of living. That might be useful.

I do not trust the figures generated by Shadowstats. The value of Shadowstats, in my opinion, is not the alternate values for CPI and other metrics he generates. After all, he presents several different values each generated using different methodologies. Which is correct? The value of his work, in my opinion, is that it shows how easily these metrics can be manipulated, and how the official figures are being manipulated. I believe his work shows that governments can (and do) generate such metrics for political purposes. Governments other than the U.S. are often more brazen about it. There is no a priori justification for placing faith in governments - indeed, all evidence suggests this to be unwise.

In my opinion, the official figures warrant consideration only to the extent that others are persuaded by these numbers. If enough people believe bullshit, then this will affect policy. Indeed, I argue this to be the fundamental purpose for generating the figures - to manipulate public perception.

Thank you for elaborating on your position. "Personal perceptions" are valid but can also be wrong. People see for example that the price of bananas went up by ten cents a pound. They notice that because they buy bananas often. This may lead to the perception by them that all prices are rising quickly. But bananas are only a tiny part of what they spend their money on. At least one third of the typical household goes into rent/ mortgages. Those tend to rise much more slowly than food prices but take a much larger chunk of the family budget. Food is closer to ten percent of the budget. They see food rising but don't see that other things they really spend most of their money on are not rising as quickly as food so they will over-estimate how much their overall costs are really rising.

 

[buenijo]

Thank you for elaborating on your position. "Personal perceptions" are valid but can also be wrong. People see for example that the price of bananas went up by ten cents a pound. They notice that because they buy bananas often. This may lead to the perception by them that all prices are rising quickly. But bananas are only a tiny part of what they spend their money on. At least one third of the typical household goes into rent/ mortgages. Those tend to rise much more slowly than food prices but take a much larger chunk of the family budget. Food is closer to ten percent of the budget. They see food rising but don't see that other things they really spend most of their money on are not rising as quickly as food so they will over-estimate how much their overall costs are really rising.

True. Many people are likely unable to generate a weighted average of prices necessary to quantify changes in their cost of living. However, people don't have a need for this, and most people couldn't care less. If prices rise beyond a certain point, then a person will adjust their spending accordingly. In any case, the price changes an individual experiences is more practical a consideration than an abstract figure generated by government bureaucrats.

The purpose of CPI, GDP, and other metrics generated by government is to provide tools for public policy. Therefore, these tools are subject to political pressures. Their value is limited primarily to how they affect public perception, as are all political phenomena. Attributing value to these metrics beyond the political realm is wishful thinking and posturing by pseudo-intellectuals.

 

[buenijo]

Why is the dollar predictable and how is inflation managed? The latter portion of that question being more pertinent than the former. Inflation is kept under head by the policy of exporting by and large worthless dollars for goods. There is a policy of recycling in which countries are afforded aid in the form of cheap credit or foreign aid (with strings attached, obviously) and the understanding that the 'money' will come back to corporations here. Saudi Arabia is afforded loans for energy substations. American companies are awarded no bid contracts to build and protect them. The price of the dollar is not rightly felt. Aside from the dollars coming back home they often are circulated throughout a larger globalized economy. If the price per dollar was to be felt solely by Americans, they would not be able to keep up whatsoever. It also would not be "predictable" as the more drastic steps they took in their failed social planning experiment, the more volatile the dollar would become. People would lose trust quite quickly and even with the entirety of their hegemonic, imperialist kingdom of socialist schemes and propaganda, it would come crashing down rather quickly.

There are folks who are aware of the situation who are not too keen on the continual acceptance of printed dollars for goods. There are people annoyed with the United States' heavy handed policies (and to be clear, it must be that way with this immoral, debt based, empire... it would fall apart else wise). It cannot go on forever.

I just wanted to note that I've come to consider this perspective as having merit. I noted in other posts that I perceive that, while the purchasing power of the dollar has decreased dramatically over the decades (and that anyone who argues otherwise is, well, not the sharpest tool in the shed - or just being evasive), it remains true that in general the value for labor in the U.S. has increased over the same period - at least marginally. I have also lamented the effects of malinvestment, that the effects are cumulative over time, and that it's unlikely for the value of labor to continue its advance due to these effects. I tend to believe that the conditions in the U.S. economy would have collapsed long ago without the special status of the dollar in the global markets. This status affords the ability, as kcchiefs notes, to export some of the effects of monetary expansion (including price inflation and malinvestment) to the rest of the world. The political interventions on the system prevent many economic consequences from becoming manifest. In the end, the system is sanctioned and enforced by military actions, and this provides a strong disincentive for many countries to introduce alternatives. Certainly it seems clear to me that considering economics without politics will not provide a complete picture.

 

[Zeeder]

I prefer he get a note that says "One year's salary", so I get it in today's dollars, because apparently salaries have no risen.

Yes it would be nice for your great grandfather to be a magical wizard, who could cause his dollars to multiply in your hand when you wanted it!!

. Or maybe he could have saved the money for you in gold. I don't think you understand what devalued even means. Stable currency is also eluding your grasp.

Let's do everything like we did 5000 years ago [/QUOTE=PRB;5575683]

What an assinine comment.

Like breathing? Or maybe walking? Or maybe eating? Or maybe dancing and smiling? Seems to me things that work over a long perioed of time you keep, and things that have failed you don't. But based on your comment I think I'm done here. You want to keep what doesn't work. Fiat money and destroying savings.

 

[PRB]

Yes it would be nice for your great grandfather to be a magical wizard, who could cause his dollars to multiply in your hand when you wanted it!!

. Or maybe he could have saved the money for you in gold. I don't think you understand what devalued even means. Stable currency is also eluding your grasp.

Or perhaps a house, or perhaps a few cars.

Let's do everything like we did 5000 years ago [/QUOTE=PRB]

What an assinine comment.

Like breathing? Or maybe walking? Or maybe eating? Or maybe dancing and smiling?

No, more like not having electricity, women not having rights, allowing slavery.


Seems to me things that work over a long perioed of time you keep, and things that have failed you don't. But based on your comment I think I'm done here. You want to keep what doesn't work. Fiat money and destroying savings.[/QUOTE]

 

[heavenlyboy34]

no, tell our founding fathers.

The FFs just exchanged one evil for a (seemingly) lesser one (and turned out to be wrong).

 

[PRB]

The FFs just exchanged one evil for a (seemingly) lesser one (and turned out to be wrong).

heretic!

 

[heavenlyboy34]

heretic!

Guilty as charged. The State/Constitution/FF cult is rather creepy IMO...

 

[youngbuck]

Back to the OP question - what gives the greenback its actual value? Back in the day, it was backed by gold. Now, it's backed by the US military. I present to you: The Greenback, Illustrated

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[heavenlyboy34]

Back to the OP question - what gives the greenback its actual value? Back in the day, it was backed by gold. Now, it's backed by the US military. I present to you: The Greenback, Illustrated

Pssh. FRNs can only aspire to be as decent a debauched currency as greenbacks.

 

[oyarde]

what if you can't predict inflation?

Brandon makes a good point , this is also a good point , when I was younger and less senile I bought land , weapons ,lead , copper, silver , gold , now , I just go all in on beer, lol

 

[oyarde]

I managed to dump all the FRN's I got the past 9 days for some other things . Gasoline , feed , bricks , pick axe , set of Uncirculated 1952 -1982 copper cents , 1936 Canadian silver dollar ,1918 D silver dime in Very Fine , a 1920 silver dime , claw hammer , 1961 silver Canadian dime , 1952 silver Canadian quarter , two masterlocks with extra keys , couch , Zippo tape measure , Snap On wrench , two pipe wrenches , another wrench , a set of wrenches , a deep well socket , a spark plug , three silver War nickels , tool box , five silver Walking Liberty Halves , a California gold quarter dollar , tire plug kit , bird feeder , batteries ,another hen house , two livestock feeders , Natural Gas , Water , Half inch drive set , net bill ,16 , mostly Archaic and Paleo Native American Artifacts , three screwdrivers , new set of screwdrivers, pd the life ins , lol

 

[PRB]

I managed to dump all the FRN's I got the past 9 days for some other things . Gasoline , feed , bricks , pick axe , set of Uncirculated 1952 -1982 copper cents , 1936 Canadian silver dollar ,1918 D silver dime in Very Fine , a 1920 silver dime , claw hammer , 1961 silver Canadian dime , 1952 silver Canadian quarter , two masterlocks with extra keys , couch , Zippo tape measure , Snap On wrench , two pipe wrenches , another wrench , a set of wrenches , a deep well socket , a spark plug , three silver War nickels , tool box , five silver Walking Liberty Halves , a California gold quarter dollar , tire plug kit , bird feeder , batteries ,another hen house , two livestock feeders , Natural Gas , Water , Half inch drive set , net bill ,16 , mostly Archaic and Paleo Native American Artifacts , three screwdrivers , new set of screwdrivers, pd the life ins , lol

why just now? found new money? somebody inspire you?

 

[oyarde]

why just now? found new money? somebody inspire you?

I do this all of the time.

 

[heavenlyboy34]

I do this all of the time.

This is true^^ My uncle Oyarde can regale us every day with stories of what he bought on any given day.

 

[oyarde]

Managed to do well again today by not keeping any paper currency , dumped $1690 of it. LOL

 

[heavenlyboy34]

Managed to do well again today by not keeping any paper currency , dumped $1690 of it. LOL

Do you keep any FRNs on hand in case of emergencies or if you need something from someone who only accepts FRNs?

 

[oyarde]

I would disagree, then offer to accept all your paper money. Seriously, of course it has value. What's important to consider is how it manages to maintain its value over the years. Force and fraud are necessary to prop up the system. I've come to call it "Financial Feudalism".

Well , you insulted me with your neg rep , but fact remains , I keep no paper money , nor are you the only ill mannered person I have ever meet .

 

[PRB]

Do you keep any FRNs on hand in case of emergencies or if you need something from someone who only accepts FRNs?

I will laugh if he says no. Or "Why would I ever need to do that? I already bought everything I need, even a doctor"

 

[oyarde]

I will laugh if he says no. Or "Why would I ever need to do that? I already bought everything I need, even a doctor"

My Dr and Dentist are pre paid , but of course they are not surgeons , I have ins for that , it is pre pd too , hope I never need the sawbones . If I need a real Dr , I can go by the Amish Dr or the Mennonite Dr , they take donations , the Mrs will make that and drive me, so I can just watch the scenery .