There are so many things which I do not understand in our world. I mean, there are so many things that are so, so BAD for us, but for some reason we agree with them.
Something that I completely do not understand is flat money. Why the hell do we agree with it? Why are we so stupid? Dont we learn anything?
The politicians tell us "not to worry". And we do not worry. We do not do anything about it. And what does this small operation mean for the average UK person?
Let's assume that the total domestic product of the UK = 100. This is the value of all the real goods/services created in the economy. People pay taxes on this goods. Let's assume that these are like 50% of their income (in a lot of countries this is true). So I earn 50, government gets 50. I got 50%, gov 50% of money. Government increases the monetary supply by 5%. We have 105 money. I have 50, gov 55. So I have 50/105 = 47,6%. They fucking robbed me out of 2,4% of my money!!!
Why is deflation discouraged? Why are prices always rising? Inflation is just another hidden tax... Why do we agree on that?
Maybe this will solve the problem of falling prices on the housing market... e.g. in Zimbabwe, the prices have increased by few million %...
What is the "base" of euro? What is backing up Euro? The dollar? = nothing?
*** Government bonds - the "safest instrument there is". I dont know much about the USA, but in Poland they said that the "Czar's bonds were the safetest security" before 1914. After the war they were cheap toiler paper.
Between 1918-1939, government bonds and bonds of governemts of other countries were the "safest". After the war they were cheap toiler paper.
During the communism, we had "PKO" (Polska Kasa Oszczednosci), something like a version of a "safe deposit plan". After 1989 - cheap toilet paper.
Now, we are told to invest into "us bonds"...
*** The question is - can we do something about it? I expect many views and no replies - as most people are stupid lemmings. But perhaps we could gather few people and create some sort of an informational leaflet about this - and then post it on other forums. Then we could try making an organization, that would post this in press.. and then maybe we could "change" things.
You make some pretty ignorant statements. You watch zietgeist?
You can't use random facts from history to really make your arguments and it's not like people have actually printed out seventy-five-billion pounds of paper money, it's all just numbers on computers. Also everything in Poland got turned into toilet paper after the War, the entire world was pretty much broke.
Unless your country is hit by hyper-inflation, bonds are a decent investment. In USA and Canada where the dollars are relatively stable, there's not much risk of it becoming worthless in the few years they take to mature.
Obama being a "communist/[socialist]" (not facist rofl, socialist, much much different) is a good thing. America just has a stupid stigma against them because of stupid propaganda and shitty television.
The market will restabalize itself and greener, cheaper energy will be in the future. Right now shit sucks cause food is going up world wide essentially because of high energy problems. New technology should make things cheaper and everyone being broke as fuck and not buying houses will make the house-market swing more into place.
I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
You're right that it is just printed money, but money isn't valued because of what it is made of. Same with gold. Really, gold has very little industrial application compared to a lot of other materials, but it is absurdly expensive. Most modern day non-cash assets, wether they be stocks, commodities, homes, etc have reached the point where they are practically as fluid and as easy to "print" as money. This is the by product of an increased overall market size (each individual home, each individual ounce of gold occupies a tiny part of the total market size), increased technology (allowing more perfect information, and lowering transaction costs), and increased legal/political flexibiliy on what can be done with these assets.
As for your specific points, in the 1930s, there was very little understood about economic theory and monetary policy. Many governments printed money as a short term solution to their problems without really understanding the long term implications. Most central banks now have a pretty good idea of what they're doing now as do many investors.
What happened in 1970 is a perfect example of increased understanding compared to 1930. You're right in that the USD was de-pegged from the gold standard, but you have to understand that the rest of the world wasn't really on the gold standard. The USD was kind of the defacto currency for which all other currencies were pegged to after WW2. Pegging the USD to gold was really just to boost the confidence of everybody else. In 1970, after decades of strong Western Europe growth and Japanese growth, excessive us spending, inflated unionized labor wages, the USD was put under tremendous pressure externally and internally. If the US has kept with antiquated monetary policy and forced the gold standard and/or printed tons of money, the effect would have been disasterous.
In your example of Poland, for both situations in 1919 and 1989, there was no bond measuring standard for Polish bonds. There is an established system to rate the riskiness of bonds now (that is, the likelihood of default) and the information is relatively easy to access. You won't really see the large scale failures in heavily traded markets (like the UK, USA, etc) because with so many transactions, all assets are pretty much valued at real time. It usually takes many years and decades of build up for somethign as monumental as a country's bonds to collapse.
You can't use random facts from history to really make your arguments and it's not like people have actually printed out seventy-five-billion pounds of paper money, it's all just numbers on computers.
Can you explain me the difference then, please?
Obama being a "communist/[socialist]" (not facist rofl, socialist, much much different) is a good thing. America just has a stupid stigma against them because of stupid propaganda and shitty television.
It's quite funny that we completely change the subject, but did socialism ever succeed anywhere? Perhaps in Sweden, but Im not really sure if this can even be called socialism (+ they have a lot of resources). In all other countries it failed miserably.
The market will restabalize itself and greener, cheaper energy will be in the future.
Im not sure if you are trolling or not, first you write about socialism and then about market restabilizing itself? It's quite contraditory.
If the US government ever wanted to solve the problem of bonds, they should have bought the houses, not the "investment vehicles". This way: a) houses would be owned by government b) people would be repaying money to the government (via banks) c) people would still live in their houses ("welfare") d) banks would get money that they lost at securities and could stop whining about "crisis on real estate market"
Right now shit sucks cause food is going up world wide essentially because of high energy problems.
In Zimbabwe, the food prices went up too... by few million %. Maybe it's the same in US, but just by few %?
The other explanation that comes to my mind is the fact that USA and EU decided to go green energy and instead of using fields for crops, we use fields for plants that are later turned into fuel.
New technology should make things cheaper and everyone being broke as fuck and not buying houses will make the house-market swing more into place.
wow, just wow :O
It's quite funny that new technology makes things cheaper, but for the last 10 years or so, you had to pay $1000 for a good computer. Of course, zilog z80 processor costs probably less than a dollar today, yet, I dont see you browsing the internet using a zx spectrum.
You also seem to misunderstand the concepts of inflation and deflation. Real inflation should just be a reflection of real economic growth. One of the objectives of most central banks is inflation targetting--that is printing money to match the level of growth. The idea behind this is that you keep the same level of fluidity. For example, if you have a basis of 100 units of production and 100 USD, you have a 1:1 ratio. If your economy grows 3% for 30 years, you'll have 2.43 units of production for every 1 USD. Each USD comes to represent a lot more units of production, which makes things a lot harder to trade. Every time you want to trade units, you're forced to trade in units of 2.43. Now imagine this on a very large scale of trillions of dollars and you have the basic idea behind what the point of printing money is. Fluidity makes for lower transaction costs and more accurate, consistent valuation of assets.
On the same note, deflation is discouraged because it shows that your economy is contracting. Also, if your currency is deflating, people will keep all their savings underneath their mattress. From a government's perspective, this is bad news beacuse you want to encourage people to spend. Spending creates growth, it creates jobs. Cash underneath the mattress creates nothing.
On April 05 2009 20:54 closed wrote: If the US government ever wanted to solve the problem of bonds, they should have bought the houses, not the "investment vehicles". This way: a) houses would be owned by government b) people would be repaying money to the government (via banks) c) people would still live in their houses ("welfare") d) banks would get money that they lost at securities and could stop whining about "crisis on real estate market"
Um, no. The free market is a lot better at managing homes than the government is. Have you ever seen what happens to government housing? There's a a reason why "the projects" in any major city are notoriously known as the most crime infested, drug dealing areas.
And also, the government bought the investment vehicles because nobody really knows the actual value of these investment vehicles. The government wasn't looking to be manager for every aspect of the market. They are simply holding these assets until they can figure out how much they are actually worth.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings, and so far the US has been far more liberal with its internet than most other Western countries.
The only decent point you made was about consolidating the banks, but you followed it up by posting an editorial by a Fox News host.
I share much of the same sentiments as OP. Inflation is a phenomenon that bothers me greatly but people have accepted it as an unavoidable event. It is such an easily preventable action - just stop increasing the printed money supply at such a high rate. Sure deflation has some drawbacks, but inflation has its own share of disadvantages. I would rather live in a silght deflationary economy than an inflationary one. Just the concept of my money withering away its value in my pocket is conceptually disturbing to me, as it is to many others.
The problem is that governments as they are currently structured are too immobile and bulky to quickly adopt new economic policies. Nor am I saying they should necessarily - it would be very risky to those under their control. I am waiting for the day of radical reform when someone can really fix things up.
Where: a) the ratio of the supply of goods to printed money decreases, or b) demand for all goods increase substantially in contrast to constant or decreasing supply.
Deflation:
Where: a) the ratio of supply of goods to printed money increases, or b) demand for all goods decreases substantially in contrast to constant or increasing supply.
All of these are pretty bad. But the difference between growth of an economy and just printing money is the difference between a and b. The economy doesn't grow if you print shitloads of money: it's just lying with numbers-printing 90 zillion dollars and causing your nation's GDP to increase to 90 zillion doesn't grow the economy.
And for people who are about to bring up the "Socialism has never been instituted properly" argument, I suggest that one reads The Road to Serfdom by F. A. Hayek. He won the nobel prize, so he must have been doing something right.
It's quite funny that we completely change the subject, but did socialism ever succeed anywhere? Perhaps in Sweden, but Im not really sure if this can even be called socialism (+ they have a lot of resources). In all other countries it failed miserably.
why do we care about gold? what value does gold have on its own? it's worth just as much to me as a piece of paper. i don't really think it makes sense to back up currency with metals. maybe someone can explain that to me.
And for people who are about to bring up the "Socialism has never been instituted properly" argument, I suggest that one reads The Road to Serfdom by F. A. Hayek. He won the nobel prize, so he must have been doing something right.
This is pretty irrelevant. Hayek clarifies that what he means by socialism is government led markets (Britain) and not massive social programs (Sweden), although he believes the latter is eventually harmful. The purpose of Road to Serfdom is not to propose an economic solution, it's a political critique to avoid collectivism and eventually authoritarianism. His critique is good, but his solution (statutory policy) in Constitution of Liberty is flawed.
Socialism will never be instituted properly (for good reason) but that doesn't mean social-democracy can't be successful. It certainly has short comings but it's basically as Churchill said - it's the worst form of government except all others.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings
since when?
and regarding the civillian security force, I believe he means Xe/Blackwater, which is very scary IMO.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings
The civilian national security force is in the process of being set up and I'm pretty sure it's illegal for the US army to operate on American soil, that's what the National Guard is for.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings
and I'm pretty sure it's illegal for the US army to operate on American soil
not anymore! thank the bush administration for this one, too. + Show Spoiler +
The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.
Now they’re training for the same mission — with a twist — at home.
Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.
It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.
But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.
It's a civilian service corps, not a paramilitary. The term 'national security' can be used to describe anything from strict military procedure to economic provisions. Even something like language training (which I believe they're going to emphasize) constitutes a national security program.
It's a poor phrasing and certainly every conservative nutjob has jumped on it, but it has nothing to do with paramilitary operations. Look at the actual DoD press release and the context he uses it in.
“No technology, no matter how smart, can stop the spread of nuclear weapons,” the president said. “No army, no matter how strong, can eliminate every adversary. No weapon, no matter how powerful, can erase the hatred that lies in someone’s heart.”
Institutions like the National Defense University, with its mix of military and civilian students, are needed to help leaders understand the new world and the new threats that come with it, Obama said.
“That's how we will find new pathways to peace and security,” he said. “That is the work that we must do.”
The U.S. armed services will retain their military dominance, the president assured the students, but “we also need to look beyond this conventional advantage as we develop the new approaches and new capabilities,” he said.
The Army and Marines will grow, and the services will develop new capabilities, Obama said, and the Defense Department must invest in skills to help troops succeed in the unconventional mission that they now face.
“We must understand different languages and different cultures,” he said. “We must study determined adversaries and developing tactics.”
The president also delivered his pitch for the use of all elements of national power. “We cannot continue to push the burden onto our military alone, nor leave dormant any aspect of the full arsenal of American capability,” he said. “That's why my administration is committed to renewing diplomacy as a tool of American power, and to developing our civilian national security capabilities.”
Civilian employees of all agencies must join to help allies enhance governance, develop economies and advance opportunities, Obama said. “We have to enlist our civilians in the same way that we enlist those members of the armed services in understanding this broad mission that we have,” he added.
The Pentagon statement has nothing to do with putting a standing army in the US (although the army does obviously train in the US.) The National Guard operates under the Pentagon, even though governors are Commanders in Chief, and they're the units the new policy is actually addressing.
The Pentagon's plan calls for three rapid-reaction forces to be ready for emergency response by September 2011. The first 4,700-person unit, built around an active-duty combat brigade based at Fort Stewart, Ga., was available as of Oct. 1, said Gen. Victor E. Renuart Jr., commander of the U.S. Northern Command.
If funding continues, two additional teams will join nearly 80 smaller National Guard and reserve units made up of about 6,000 troops in supporting local and state officials nationwide. All would be trained to respond to a domestic chemical, biological, radiological, nuclear, or high-yield explosive attack, or CBRNE event, as the military calls it.
There are fair criticisms:
The American Civil Liberties Union and the libertarian Cato Institute are troubled by what they consider an expansion of executive authority.
Domestic emergency deployment may be "just the first example of a series of expansions in presidential and military authority," or even an increase in domestic surveillance, said Anna Christensen of the ACLU's National Security Project. And Cato Vice President Gene Healy warned of "a creeping militarization" of homeland security.
"There's a notion that whenever there's an important problem, that the thing to do is to call in the boys in green," Healy said, "and that's at odds with our long-standing tradition of being wary of the use of standing armies to keep the peace."
McHale stressed that the response units will be subject to the act, that only 8 percent of their personnel will be responsible for security and that their duties will be to protect the force, not other law enforcement.
But ultimately, SOMEONE has to create a plan to deal with attacks. DHS didn't have a plan to deal with Katrina and it caused a great deal of avoidable damage. The same applies here. There won't be standing armies, there will be up front training and then emergency response teams.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings
and I'm pretty sure it's illegal for the US army to operate on American soil
not anymore! thank the bush administration for this one, too. + Show Spoiler +
The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.
Now they’re training for the same mission — with a twist — at home.
Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.
It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.
But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.
On April 05 2009 20:12 fight_or_flight wrote: I don't really have a problem with socialism. However, consolidating the banking system in favor of large private banks, putting troops in the streets, commandeering the internet, creating a civilian national security force just as powerful as the military is not socialist, its fascist and I do have a problem with it.
There is no civilian national security force, and it's not new for the military to run exercises in the US or serve in particular security settings, and so far the US has been far more liberal with its internet than most other Western countries.
The only decent point you made was about consolidating the banks, but you followed it up by posting an editorial by a Fox News host.
Not yet but they are moving in that direction. Obama clearly stated his intentions on the campaign trail, and they've already passed a mandatory volunteer service for students. Its pretty clear what direction they are going.
Also it doesn't matter what editor wrote an article. The take-over of Washington Mutual was a good example of whats going on. Now we come to find that they are refusing returned TARP money....this has clear implications. Tax money is supposed to be used in emergency bailout situations, and the government should go to great lengths to recoup that money.
Also, I'll keep saying it, breaking the Posse Comitatus Act is blatantly fascist. It is a very valid point.
It's not, and the Insurrection Act was restored in 2008. gwho or rpf or one of those idiots brought up his "intentions" during the campaign and I ran over their argument back then.
It's not blatantly fascist, if you understood what national security actually means. It doesn't just mean armed forces. He specifically talks about diplomacy as a natonal security tool, and the civilian corps is to strengthen that. The Peace Corps is a national security project in that regard. Anything dangerous about Peace Corps?
On April 06 2009 06:46 Jibba wrote: It's not, and the Insurrection Act was restored in 2008. gwho or rpf or one of those idiots brought up his "intentions" during the campaign and I ran over their argument back then.
It's not blatantly fascist, if you understood what national security actually means. It doesn't just mean armed forces. He specifically talks about diplomacy as a natonal security tool, and the civilian corps is to strengthen that. The Peace Corps is a national security project in that regard. Anything dangerous about Peace Corps?
I called the 20,000 troops by 2011 blatantly fascist. The mandatory volunteer service is a completely different entity. It all depends on it this force has weapons or not.
I think its too early to know for sure what his plans are. Once the framework is in place, he could very easily write an executive order or get a small amount of additional legislation passed to allow him to draft certain people into the military. It would be less difficult than a draft or military conscription.
This is similar to the internet legislation they want. Besides giving the president control of all networks deem critical in times of emergency, it mandates running standardized security software, certification of network professionals, licensing, and standardized testing. While it seems harmless, it would be very easy to implement a national firewall and filters once everything has been standardized and the government already certifies everything. Things are always incremental.
Also, anytime there is mandatory service to the leader, of any type including sitting in an office, that is implicitly more authoritarian in nature compared to no service. I'm arguing it is a step in that direction from where we are now. Current events set future trends.
"Finland underwent severe economic depression in 1990-93. Badly managed financial deregulation of the 1980s, in particular removal of bank borrowing controls and liberation of foreign borrowing, combined with strong currency and fixed exchange rate policy led to a foreign debt financed boom. Bank borrowing increased at its peak over 100% a year and asset prices skyrocketed. The collapse of the Soviet Union in 1991 led to a 70% drop in trade with Russia and eventually Finland was forced to devaluate, which increased the private sector's foreign currency denominated debt burden. At the same time authorities tightened bank supervision and prudential regulation, lending dropped by 25% and asset prices halved. Combined with raising savings rate and worldwide economic troubles, this led to a sharp drop of aggregate demand and a wave of bankruptcies. Credit losses mounted and a banking crisis inevitability followed. A number of companies went down by 15%, real GDP contracted about 14% and unemployment rose from 3% to nearly 20% in four years.[2] Although economic growth has been fast since the depression, mass unemployment never really went away and fourteen years after the depression the unemployment rate still stood at 7%.[3]"
The fact that people approve such programs with the words "mandatory volunteering" makes me seriously consider moving to Singapore. At least they're honest about not letting you do anything.
On April 06 2009 10:32 Caller wrote: The fact that people approve such programs with the words "mandatory volunteering" makes me seriously consider moving to Singapore. At least they're honest about not letting you do anything.