Meet the next President of the United States

[Ash2k7]

Before paper money governments would just debase their coinage - claiming that the coin was 100% gold or silver while being very much not.

Spain destroyed its economy by capturing vast amounts of precious metals in its colonies - even in a world where precious metals are the currency you can still get hyperinflation if you increase your money supply too rapidly.

A little bit of inflation works as lubricant to the economy. Too much or too little makes for very rough times.

Besides all of this, gold is just another form of fiat money. Its utility as "hard" money only lasts so long as it remains difficult to process - something which is likely to go away in the near future. Aluminum used to be a precious metal, bars of it were displayed beside the French crown jewels in the 1850s after a process of isolating it was discovered. Then electrolytic separation was discovered and aluminum became cheap siding for cheap houses.

[Herschel Yamamoto]

What, there was an alchemical apparatus cranking out infinite gold coins 24/7?

The system where Team Red and Team Blue of the progressive party are trying to out-spend the printing press is a 20th century invention. Republicans had a bit of a hiccup with the whole Tea Party nonsense, but they seem to be back to the usual mode now.

I was referring to the boom/bust cycle. That happens under commodity money just as much as it does under fiat money.

Also, there's a great myth among the Paul crowd which you seem to be espousing, that the printing press has paid for the US government. This is simply untrue. Historically, the US has printed about 1% of the money that the federal government has spent, borrowed about 8%, and taxed the other 91%. You didn't think that your 1040s went into a big pile to be burned, did you?

Apparently all fiat currencies have a limited lifespan anyway, and the most successful fiat currency (the pound) has lost almost all of its original value.[1]

[1]Some BBC thing off NPR I heard.

There's no inherent reason for a limited lifespan, but yes, a pound sterling used to refer to a pound(weight) of sterling silver, which is now worth about 380 British pounds. So yeah, it's lost 99.74% of its original value - though over its 1200+ year history, that still works out to a pretty tolerable 0.5% average inflation rate. Similarly, the USD has lost about 95% of its value over the last two centuries, for an average of about 1.3% inflation.

Before paper money governments would just debase their coinage - claiming that the coin was 100% gold or silver while being very much not.

Spain destroyed its economy by capturing vast amounts of precious metals in its colonies - even in a world where precious metals are the currency you can still get hyperinflation if you increase your money supply too rapidly.

A little bit of inflation works as lubricant to the economy. Too much or too little makes for very rough times.

Besides all of this, gold is just another form of fiat money. Its utility as "hard" money only lasts so long as it remains difficult to process - something which is likely to go away in the near future. Aluminum used to be a precious metal, bars of it were displayed beside the French crown jewels in the 1850s after a process of isolating it was discovered. Then electrolytic separation was discovered and aluminum became cheap siding for cheap houses.

Debasing is one option, another(used more commonly) was to simply alter the weights of the coins. There's an amusing discussion in The Wealth of Nations on inflation, where Smith discusses a period of French history where the coinage was debased by a factor of close to seventy...all while on a commodity-money standard. That actually works out to a rate of inflation higher than a well-managed modern fiat currency(if I recall the math I did on the topic correctly, it was about 5-6%), and vastly less predictable, which has obvious consequences on the functioning of financial markets.

[Dark 0men]

Also, there's a great myth among the Paul crowd which you seem to be espousing, that the printing press has paid for the US government. This is simply untrue. Historically, the US has printed about 1% of the money that the federal government has spent, borrowed about 8%, and taxed the other 91%. You didn't think that your 1040s went into a big pile to be burned, did you?

"Historically", the US government held some pretense of fiscal responsibility. What's stopping the government from printing and borrowing ever-increasing amounts of money? I wish I could do that with my personal budget.

Debasing is one option, another(used more commonly) was to simply alter the weights of the coins. There's an amusing discussion in The Wealth of Nations on inflation, where Smith discusses a period of French history where the coinage was debased by a factor of close to seventy...all while on a commodity-money standard.

Gosh, that must really suck. Much better to have a system where the Federal Reserve can magic up a trillion loldollars any time it wants.

[Aea]

"Historically", the US government held some pretense of fiscal responsibility. What's stopping the government from printing and borrowing ever-increasing amounts of money? I wish I could do that with my personal budget.

Gosh, that must really suck. Much better to have a system where the Federal Reserve can magic up a trillion loldollars any time it wants.

The same thing keeping our government from committing genocide against illegal Mexican immigrants I suppose.

[Tellenta]

It's not magic, also

pre·tense Noun /ˈprēˌtens/
1. An attempt to make something that is not the case appear true.
2. A false display of feelings, attitudes, or intentions.

If you are going to try to refer to history to try to prove your point don't use words that sabotage your effort.

[Herschel Yamamoto]

"Historically", the US government held some pretense of fiscal responsibility. What's stopping the government from printing and borrowing ever-increasing amounts of money? I wish I could do that with my personal budget.

Gosh, that must really suck. Much better to have a system where the Federal Reserve can magic up a trillion loldollars any time it wants.

What stops them is the fact that if they do, the entire country will go to shit, and everyone knows it. (Yeah, they did back in 2008, but they took special care to make sure that the money never actually entered circultion, and it seems to have worked)

[Dark 0men]

What stops them is the fact that if they do, the entire country will go to shit, and everyone knows it. (Yeah, they did back in 2008, but they took special care to make sure that the money never actually entered circultion, and it seems to have worked)

Yeah, we totally aren't having recessions every year and every urban area is not turning into Detroit.

[Lusulpher]

Don't laugh at his Faith...in Capitalism...it's unbecoming.

[Tellenta]

Yeah, we totally aren't having recessions every year and every urban area is not turning into Detroit.

So what you are saying is that it is the national debt that caused the recession? Also I do believe you don't quite understand the circumstances that lead to Detroit being Detroit.

[Nicholai Pestot]

So what you are saying is that it is the national debt that caused the recession? Also I do believe you don't quite understand the circumstances that lead to Detroit being Detroit.

An early symptom of the underlying cause of Americas financial difficulties. Off-shoring jobs and mishandling the effects of increasing automation.

[Dark 0men]

So what you are saying is that it is the national debt that caused the recession? Also I do believe you don't quite understand the circumstances that lead to Detroit being Detroit.

I'm saying it's impossible to borrow and spend our way out of the recession, but we'll sure as hell keep trying.

Do you perhaps think Detroit is an isolated example? Every major urban center has blighted areas where even cops wouldn't go.

[Tellenta]

I'm saying it's impossible to borrow and spend our way out of the recession, but we'll sure as hell keep trying.

Do you perhaps think Detroit is an isolated example? Every major urban center has blighted areas where even cops wouldn't go.

I think you have good points but hide them behind shit analogies and poor research.

[Lusulpher]

I'm saying it's impossible to borrow and spend our way out of the recession, but we'll sure as hell keep trying.

Do you perhaps think Detroit is an isolated example? Every major urban center has blighted areas where even cops wouldn't go.

We spent our way out of the Great Depression[mostly war contracts/infrastructure building]. Nowadays it's about restoring all that infrastructure, thereby creating blue-collar jobs and boosting that consumerism they say they like.[lies]
And then there are the Green infrastructure markets, pricey, but essential for demand of technical jobs from all our non-Ivy League colleges...

Detroit is not going to be the last situation like Detroit. People are ignoring Capitalism's penalties as hard as they can...until they get laid off.[by then their unions have also shriveled and they at the mercy of a tycoon]

[FatFreddy]

People are ignoring Capitalism's penalties as hard as they can...until they get laid off.

Best Lusulpher statement ever, exactly on point.

[Loire]

People are ignoring Capitalism's penalties as hard as they can...until they get laid off.

I think in actual fact people accept the bust because generally it comes with a boom.

[Exortius]

Yeah, we totally aren't having recessions every year and every urban area is not turning into Detroit.

You're right, only Detroit is turning into Detroit

Are there any other cities going similarly to shit outside of the rust belt? I honestly can't think of a single one.

[Don Rumata]

People are ignoring Capitalism's penalties as hard as they can...until they get laid off.

...and then it's a fault of socialist muslim President.

[XenosisReaper]

This shit is still going?

[tarsyris]

I love how people talk about money as if it has any sort of value beyond the things you can buy with it. Here's my counter point: every pound sterling on the planet couldn't buy you decent antibiotics in 1800 but some minor amount of them can today. Therefore for someone with TB or a random infection a modern day pound is worth p much infinitely more than an old timey pound.

The value of money is the things it can buy. Nothing more, nothing less. This is also why I think most talk about the stagnant incomes of the world middle class are horse shit. In electronics alone advancements in tech have produced access to hardware and software for even poor people in the developed world that would have been considered extraordinarily luxurious 20 years ago(or would not have existed).

Inflation is complicated. Value of money is complicated. Dumb(or willfully ignorant) people like Paul try to oversimplify so they can sell gold to other stupid people.

[El Capitano]

The value of money is the things it can buy. Nothing more, nothing less. This is also why I think most talk about the stagnant incomes of the world middle class are horse shit. In electronics alone advancements in tech have produced access to hardware and software for even poor people in the developed world that would have been considered extraordinarily luxurious 20 years ago(or would not have existed).

That's all well and good, but the concern about stagnant wages is that the cost of living is taking up a larger and larger proportion of family income. A few quid buying you an iPad doesn't mean much when you can't afford to eat.