Inflation. Is it so bad for the AVERAGE American?

[NoDrama]

You got quite pithy. I never attacked you - but I find it amusing that right after you say "there is no need to attack me" you follow up with calling me "whack" "wrong" "get over trying" and "god damn people and their precious fucking egos."

Thanks for explaining that you did not author the article. Unlike your lack of ability to answer a question which is willful; I don't know your legal name or psyudonyms so for all I know you could have authored the article - Sorry for the confusion; when I said "your model," I was reffering to the model that "you" chose to cite.

LOL Thanks for the laugh. You didn't answer any of them; either because you can't with your limited knowledge or because you would have to admit that I am right. Is your ego getting in the way?

Telling someone they have a lack of understanding when you think that the world would be able to function with the same unaltered money supply from the times of Jesus is more than laughable.

It is amazing that you can deduce my lack of knowledge of a topic when you seemingly do not understand the effect of a double shifting supply and demand curve.



LOL again - Do you just make assumptions that since they have inflation that precious metals are the only way to conduct transactional business? Is that what Ron Paul and Peter Schiff have told you happens?

So good I must quote twice.
"they only accept gold/silver for the majority of your day to day must have items like food." LOLOLOLOLOLOLOL!!!

You are a absolute fool if you believe that statement. They barter!!! Enlighten yourself and your ego with this article. http://www.npr.org/templates/story/story.php?storyId=97393070

A bunch of links here you can read all about gold use in Zimbabwe. Since you only provided one example I will assume thats all you could find. I will post just a couple here for you to enjoy. I mean you may as well enlighten yourself also,right? I mean especially since you just said that they do not use gold for anything, but instead only use commodidties to barter with.

http://allafrica.com/stories/200906300765.html

http://www.sokwanele.com/thisiszimbabwe/archives/486

http://www.guardian.co.uk/world/video/2009/feb/11/zimbabwe-gold-panning-starvation-food

http://www.newsfromafrica.org/newsfromafrica/articles/art_869.html

http://www.insiderzim.com/decjan92gold.html

http://mountainsteps.blogspot.com/2009/03/zimbabweans-are-panning-for-gold-to.html

I got all these links from Ron Paul. He has 100's more.

At least we all know your either a Keyensian or a Milton Friedman fan, defijnitely not from the Austrian School of thought.

 

[tnrtinr]

A bunch of links here you can read all about gold use in Zimbabwe. Since you only provided one example I will assume thats all you could find. I will post just a couple here for you to enjoy. I mean you may as well enlighten yourself also,right? I mean especially since you just said that they do not use gold for anything, but instead only use commodidties to barter with.

http://allafrica.com/stories/200906300765.html

http://www.sokwanele.com/thisiszimbabwe/archives/486

http://www.guardian.co.uk/world/video/2009/feb/11/zimbabwe-gold-panning-starvation-food

http://www.newsfromafrica.org/newsfromafrica/articles/art_869.html

http://www.insiderzim.com/decjan92gold.html

http://mountainsteps.blogspot.com/2009/03/zimbabweans-are-panning-for-gold-to.html

I got all these links from Ron Paul. He has 100's more.

At least we all know your either a Keyensian or a Milton Friedman fan, defijnitely not from the Austrian School of thought.

You are putting words in my mouth, I NEVER said they ONLY barter.

I said

"LOL again - Do you just make assumptions that since they have inflation that precious metals are the only way to conduct transactional business? Is that what Ron Paul and Peter Schiff have told you happens?

So good I must quote twice.
"they only accept gold/silver for the majority of your day to day must have items like food." LOLOLOLOLOLOLOL!!!

You are a absolute fool if you believe that statement. They barter!!! Enlighten yourself and your ego with this article."

Funny that you quoted Ron Paul after I specifically named him. Interesting decision.

The mistake that you are making is that you use absolutes. You use ALWAYS and ONLY. If the fed makes 1 penny right now and puts it in to circulation right now without anyone knowing about it (completely off the books) will that cause inflation? Then your statement that increasing the Money Supply ALWAYS creates inflation is wrong (and so are the Austrians).

Ill match your 100's more and I will raise you 72,900 articles about bartering in Zimbabwe.
http://lmgtfy.com/?q=zimbabwe+barter
You do realize there is more going on in Zimbabwe than just inflation?

 

[TheBrutalTruth]

You are putting words in my mouth, I NEVER said they ONLY barter.

I said

"LOL again - Do you just make assumptions that since they have inflation that precious metals are the only way to conduct transactional business? Is that what Ron Paul and Peter Schiff have told you happens?

So good I must quote twice.
"they only accept gold/silver for the majority of your day to day must have items like food." LOLOLOLOLOLOLOL!!!

You are a absolute fool if you believe that statement. They barter!!! Enlighten yourself and your ego with this article."

Funny that you quoted Ron Paul after I specifically named him. Interesting decision.

The mistake that you are making is that you use absolutes. You use ALWAYS and ONLY. If the fed makes 1 penny right now and puts it in to circulation right now without anyone knowing about it (completely off the books) will that cause inflation? Then your statement that increasing the Money Supply ALWAYS creates inflation is wrong (and so are the Austrians).

Ill match your 100's more and I will raise you 72,900 articles about bartering in Zimbabwe.
http://lmgtfy.com/?q=zimbabwe+barter
You do realize there is more going on in Zimbabwe than just inflation?

This coming from some one that can clearly ask questions, but can't debate worth a damn.

The Austrians are wrong?

How so?

It's not the Austrians that are responsible for the failure of FDRs inane ignorant policies, or for Carters' screw ups, or the Greenspan/Clinton screw ups that lead to the bubble in internet stocks. It's not the Austrians that are responsible for the Greenspan/Bush Housing Bubble, which was pumped up by Greenspan/Bernanke after they turned their back on Austrian Economics.

It is not Austrian Economics that is responsible for giving trillions away to private corporations against the free-market principles held by the Austrians. That goes straight to the inane insipid policies pursued by Friedman and his big government fans.

A strategy that can be pointed out to be flawed based on how little those imbeciles from Obama down have actually done with the hundreds of billions in stimulus spending they rammed down the countries throat.

It wasn't Austrian Principles that governed the bail out of that colossal failure AIG.

Or the bail out of the morally deficient GSEs.

Or the spineless entities known as GM and Chrysler.

There's nothing in Austrian Economics to support the theft of billions of public money for the benefit of politically connected bankers by politicians. The failure of 2000 and of the current recession lays plainly at the feet of those that support big government policies and inflationary supply.

The blame for this crisis lies at the feet of those imbeciles that believe that some inflation is warranted, mostly because they and their friends benefit from the money that is created out of thin air.

The supporters of inflationary monetary policies are invariable the supporters of corruption, sloth and laziness, as under their system those attributes are rewarded when money is created.

 

[tnrtinr]

This coming from some one that can clearly ask questions, but can't debate worth a damn.

The Austrians are wrong?

How so?

From wiki
"Austrian economists maintain that inflation is by definition always and everywhere simply an increase in the money supply (i.e. units of currency or means of exchange), which in turn leads to a higher nominal price level for assets (such as housing) and other goods and services in demand, as the real value of each monetary unit is eroded, loses purchasing power and thus buys fewer goods and services."

I have spent the majority of my posts on here showing why that is wrong.

Ask me another question.

 

[kubrickzghost]

First I want to say that this is my first time posting a thread in this forum. I have been lurking for quite some time and I am amazed at the thoughtfulness of all of your responses. I respect all of your responses.

So here it goes.

Old numbers - but you get the idea.
http://www.gather.com/viewArticle.action?articleId=281474976753606

"According to USA Today and bankrate.com, the average debt of the American household is $84,454 and one out of every 73 of those households had to file for bankruptcy protection in 2003. The average credit card debt is around nine thousand dollars, triple what it was in 1990."

"For instance, medical debt is the cause of one in every 20 bankruptcies. The average medical debt for someone that files bankruptcy for that reason is around $25,000."

"If you knew that a $1,000 charge on a credit card would take almost 22 years to pay off, and would cost over $2,300 in interest in you only made the minimum payments would you only make the minimum payments? Most people do."

http://moneycentral.msn.com/content/SavingandDebt/P70581.asp

"Consumers owe nearly $2 trillion
American consumers owed a grand total of $1.9773 trillion in October 2003, according to the latest statistics on consumer credit from the Federal Reserve. Thats about $18,654 per household, a figure that doesnt include mortgage debt. The number is up more than 41% from the $1.3999 trillion consumers owed in 1998."

The average American is in debt. And we hear that inflation is bad and how the fed and their wild printing presses are going to cause inflation. But is it bad for the average American? Inflation kills the value of savings but debt is the best hedge against against inflation. Could inflation actually ease the burden of the average American by effective reducing the percentage of debt to income ration?

http://truthfullending.com/debt-hedge-against-inflation/

Hope I did a good job for my first thread in this forum. Please discuss.

This site is a piece of shit. I just wrote a very informative response for an hour and a half with links and facts. The fuckin site logged me out and wiped away my post.

It was titled "You've seen Nothing Yet". Only very few on here would understand what is going on right now.

Inflation is nothing. There will be a depression. There's going to be a total breakdown of the society. You guys are soooo in for a shock in about 9 months. Many deaths. Many killings. Martial Law. Revolution. It is that bad guys.

I'm sorry RIU wiped away my message.

 

[kubrickzghost]

From wiki
"Austrian economists maintain that inflation is by definition always and everywhere simply an increase in the money supply (i.e. units of currency or means of exchange), which in turn leads to a higher nominal price level for assets (such as housing) and other goods and services in demand, as the real value of each monetary unit is eroded, loses purchasing power and thus buys fewer goods and services."

I have spent the majority of my posts on here showing why that is wrong.

Ask me another question.

Very simple.

You have 5 guys with $1 each stranded on a desert island. Another guy swims over from another island with ten apples he's selling for $5 each. One guy asks the others to pitch in and buy one apple, but no one else wants an apple. So the one guy copies his $1 four times to create $5. He basically just created it out of thin air. He swims over to the next island and buys the apple and enjoys it. The next day the guy does it again, and buys another apple. After a week, the other guys do the same thing and they buy up to 5-10 apples per day with the money they create on their island. But the island they live on has no food, and they don't produce anything of value, relying on making money and buying everything they need. But the guy on the other island growing the apples realizes after a while that the money he received from the 5 men doesn't add up in value to the apples because the 5 men cannot trade anything for that money except more of their own money. And no other island will accept the men's money because it doesn't represent anything of value. It's paper value. A thought up value, driven by the price of the apple.

So the next time the men swim across to buy an apple., how much do you think that apple will cost?

 

[Rob Roy]

Very simple.

You have 5 guys with $1 each stranded on a desert island. Another guy swims over from another island with ten apples he's selling for $5 each. One guy asks the others to pitch in and buy one apple, but no one else wants an apple. So the one guy copies his $1 four times to create $5. He basically just created it out of thin air. He swims over to the next island and buys the apple and enjoys it. The next day the guy does it again, and buys another apple. After a week, the other guys do the same thing and they buy up to 5-10 apples per day with the money they create on their island. But the island they live on has no food, and they don't produce anything of value, relying on making money and buying everything they need. But the guy on the other island growing the apples realizes after a while that the money he received from the 5 men doesn't add up in value to the apples because the 5 men cannot trade anything for that money except more of their own money. And no other island will accept the men's money because it doesn't represent anything of value. It's paper value. A thought up value, driven by the price of the apple.

So the next time the men swim across to buy an apple., how much do you think that apple will cost?

If the guys buying the apples were on a desert island and they managed to swim off it to a place with apples why would they swim back to the deserted island?

 

[jfgordon1]

If the guys buying the apples were on a desert island and they managed to swim off it to a place with apples why would they swim back to the deserted island?

They were anti-social

 

[TheBrutalTruth]

From wiki
"Austrian economists maintain that inflation is by definition always and everywhere simply an increase in the money supply (i.e. units of currency or means of exchange), which in turn leads to a higher nominal price level for assets (such as housing) and other goods and services in demand, as the real value of each monetary unit is eroded, loses purchasing power and thus buys fewer goods and services."

I have spent the majority of my posts on here showing why that is wrong.

Ask me another question.

About what I would expect from some one that has no skill in debating.

The idea is that you actually counter the more serious charges, not the minor charges. Your belief in Friedman's Socialist Economics rivals that of a child's belief in Santa Claus in its intolerance and lack of backing.

And all you did was define what Austrian Economics was, and you've yet to convince me that inflation is not inflation. Any increase in monetary supply is inflation as any increase in monetary supply by the government or by the Federal Reserve alters market dynamics, destroys the value of already existing money, and thus deprives people of the value of their savings, regardless of the type of savings, because they will all ultimately be converted into currency prior to being spent.

 

[NoDrama]

You are putting words in my mouth, I NEVER said they ONLY barter.

I said

"LOL again - Do you just make assumptions that since they have inflation that precious metals are the only way to conduct transactional business? Is that what Ron Paul and Peter Schiff have told you happens?

So good I must quote twice.
"they only accept gold/silver for the majority of your day to day must have items like food." LOLOLOLOLOLOLOL!!!

You are a absolute fool if you believe that statement. They barter!!! Enlighten yourself and your ego with this article."

Funny that you quoted Ron Paul after I specifically named him. Interesting decision.

The mistake that you are making is that you use absolutes. You use ALWAYS and ONLY. If the fed makes 1 penny right now and puts it in to circulation right now without anyone knowing about it (completely off the books) will that cause inflation? Then your statement that increasing the Money Supply ALWAYS creates inflation is wrong (and so are the Austrians).

Ill match your 100's more and I will raise you 72,900 articles about bartering in Zimbabwe.
http://lmgtfy.com/?q=zimbabwe+barter
You do realize there is more going on in Zimbabwe than just inflation?

I'll see your 72,900 articles and raise you 4,410,000 articles about " Food for gold in Zimbabwe" which by the way is a much much narrower search criteria than "bartering in zimbabwe"

sorry just couldn't resist that one.

You don't really believe Ron Paul sent those links to me do you? You were the one who brought him up originally, not me. I thought it was funny, obviously you thought it was in spite, not tongue in cheek.

And I didn't deal in absolutes either, I said MAJORITY, which does not mean ALL, but only the largest group, which by the looks of it, 4,410,000 is the majority when compared to 72,900.


anyway, for you I have this parting gift

now laugh ......just look at that kids face! Its funny, lighten up a bit.

 

[tnrtinr]

About what I would expect from some one that has no skill in debating.

I am all about debating - nobody has provided a well thought out rebuttal other than regurgitating and posting links "teaching" me about inflation. Show me a well thought out rebuttal and I promise you that I will respond. Lets start here. I await your retort.

I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation (which you reluctantly admitted were correct). I have said that a MS that increases by too much proportional to the economy will cause inflation. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation.

I guess if someone reads a well laid out argument that and still replies with an absolute "Any increase in monetary supply is inflation" either too lazy too think to think or is so entrenched in their view that they could never admit that their logic is flawed. Prove me wrong. Tell me what is wrong with my logic.

 

[BigTitLvr]

inflation is bad, all the way around. the few bits of advantages the average american gets from minor inflation (ei: the value of your home increases and debt to income ratio swings in our favor) are dubious, at best.

in reality, it will still make us poorer, and the people connected to the government who actually received the money first, printed 'from thin air', are the only truly enriched ones- receiving the full value of the money.

worse, american isn't in for a 'minor' inflation. the 12 trillion or so dollars the Fed has been unscrupulously handing away to their banker and business friends will undoubtedly bring about a (contrived, in my opinion) hyper-inflation. The dollar will plummet to a fraction of a cent's worth. this will pave the way for a new currency to be hailed as the savior. it will be called the Amero. and it will be accompanied by larger political changes as well.

you don't really think these bankers are so stupid as to be fucking up right now, do you? they're fucking geniuses without consciences (the most dangerous enemy imaginable). this 'crisis' is planned people. the agenda is on target.

i don't even mind, so much, a one world government; as long as the people are taken care of. but you should take these early warnings as a sign to be prepared. save silver and gold- objects with real barter power for the near future. your greenbacks will be worthless after this.

 

[TheBrutalTruth]

I am all about debating - nobody has provided a well thought out rebuttal other than regurgitating and posting links "teaching" me about inflation. Show me a well thought out rebuttal and I promise you that I will respond. Lets start here. I await your retort.

I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation (which you reluctantly admitted were correct). I have said that a MS that increases by too much proportional to the economy will cause inflation. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation.

I guess if someone reads a well laid out argument that and still replies with an absolute "Any increase in monetary supply is inflation" either too lazy too think to think or is so entrenched in their view that they could never admit that their logic is flawed. Prove me wrong. Tell me what is wrong with my logic.

You haven't shown anything. You're under the incorrect assumption that inflation is a good or at worse a neutral thing, when the truth is that it is a destructive force that creates a continual feedback loop due to the illogical support of inflationary policies such as minimum wage laws, which do nothing but create another inflationary cycle.

The failure of Keynesian Economics is self-evident through the disasters of the 30s, late 70s, and this most current crisis. To argue for an economic philisophy with such an amazingly high failure rate is irrational. You argument is flawed because you are ignoring the fact that money has a value outside of its usage, and thus quantity decreases its value, because it decreases its rarity.

The problem with your view is that it is the view of some one that hasn't the slightest idea what money is, nor what it should be.

 

[tnrtinr]

You haven't shown anything. You're under the incorrect assumption that inflation is a good or at worse a neutral thing, when the truth is that it is a destructive force that creates a continual feedback loop due to the illogical support of inflationary policies such as minimum wage laws, which do nothing but create another inflationary cycle.

The failure of Keynesian Economics is self-evident through the disasters of the 30s, late 70s, and this most current crisis. To argue for an economic philisophy with such an amazingly high failure rate is irrational. You argument is flawed because you are ignoring the fact that money has a value outside of its usage, and thus quantity decreases its value, because it decreases its rarity.

The problem with your view is that it is the view of some one that hasn't the slightest idea what money is, nor what it should be.

You are off point AGAIN. Please just tell me why what I said below that is incorrect.

I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation because the currency will get more rare as there are more people demanding the same amount of currency. I have said that a MS that increases by too much proportional to the economy will cause inflation because the there would not be a scarcity of money. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation because there would be adequate money to facilitate economy (not scarce - not abundant).

 

[TheBrutalTruth]

You are off point AGAIN. Please just tell me why what I said below that is incorrect.

I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation because the currency will get more rare as there are more people demanding the same amount of currency. I have said that a MS that increases by too much proportional to the economy will cause inflation because the there would not be a scarcity of money. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation because there would be adequate money to facilitate economy (not scarce - not abundant).

The value of money is not fixed by its "availability" it is fixed by its rarity. What you are attempting to say is that if the amount of gold was doubled with the population doubling its value would not fall. The problem is that the value of gold would fall, because not everyone would want gold, just like not everyone wants money. Increasing money supply is always inflationary, because more people would mean an increase in the velocity of the money supply, at least up until its taxed out of existence by Keynesians. Increased Population, Increased Velocity.

You also completely ignore the growth in production capacity inherent in the growth of population which leads to real price declines (deflation) as the cost of producing goods drops, leading to an increase in the average quality of life, and an increase in production goods. Instead of focusing on growing the pie you're focused on trying to divide it into smaller and smaller slices when such an action is not necessary as it already takes place through processes that are outside the control of the central bank.

Even the initial births of the population lead to increased velocity of the money supply as the people that have children have to spend money for their upkeep, so adding more money ignores the natural tendency for velocity to increase and leads to the opposite happening which leads to stagnation of money and inflation.

 

[tnrtinr]

The value of money is not fixed by its "availability" it is fixed by its rarity. What you are attempting to say is that if the amount of gold was doubled with the population doubling its value would not fall. The problem is that the value of gold would fall, because not everyone would want gold, just like not everyone wants money. Increasing money supply is always inflationary, because more people would mean an increase in the velocity of the money supply, at least up until its taxed out of existence by Keynesians. Increased Population, Increased Velocity.

You also completely ignore the growth in production capacity inherent in the growth of population which leads to real price declines (deflation) as the cost of producing goods drops, leading to an increase in the average quality of life, and an increase in production goods. Instead of focusing on growing the pie you're focused on trying to divide it into smaller and smaller slices when such an action is not necessary as it already takes place through processes that are outside the control of the central bank.

Even the initial births of the population lead to increased velocity of the money supply as the people that have children have to spend money for their upkeep, so adding more money ignores the natural tendency for velocity to increase and leads to the opposite happening which leads to stagnation of money and inflation.

Lets try this again. You have given me lots of information but JUST focus on these points. This should be VERY easy for you to ONLY tell me the flaw of each individual point - please stop adding exogenous variables / information to the situation that I am presenting to you.

1. I have already made the point and provided examples that show that not expanding (fixing) the MS to will cause deflation because the currency will get more rare as there are more people demanding the same amount of currency.

2. I have said that a MS that increases by too much proportional to the economy will cause inflation because the there would not be a scarcity of money.

3. I then used logic to explain how a money supply that expands with the growth of the economy as well as shrinks with contraction of the economy (what that measure / formula / indicator is - I don't know) would not cause inflation because there would be adequate money to facilitate economy (not scarce - not abundant).

 

[superhighme]

Im thankful every day that I wasn't an idiot and didn't fuck up my credit. Proud to have an almost 800 FICO score and only an $800 Credit balance for which I pay about 15 times the minimum payment on. If you're stupid enough to pay a minimum payment then its your own damn fault it takes you 10 years to pay off $1000 and pay all that interest.

The bankruptcy for people with huge medical bills is just sad because people cant find affordable healthcare and then something terrible happens and they have no choice but to take on that debt and it pretty much ruins everything. Hopefully at some point the government will figure out our healthcare system, so that in turn we are able to avoid the 1 in 20 bankruptcies happening because of healthcare not being available.

For people who are just bad with their money....I dont feel bad for them. don't be stupid.

 

[jrh72582]

For people who are just bad with their money....I dont feel bad for them. don't be stupid.

Amen. Preach the truth.

As an addendum, I do think economics should be mandatory for at least two years of high school education. Some people aren't so much stupid with money - they're just ignorant until they make that first mistake. If they were taught gooder (hehe), then maybe they'd know better.

 

[NoDrama]

Amen. Preach the truth.

As an addendum, I do think economics should be mandatory for at least two years of high school education. Some people aren't so much stupid with money - they're just ignorant until they make that first mistake. If they were taught gooder (hehe), then maybe they'd know better.

Absolutely!! Not only economics, but maybe some Finance also. Only in the Finance classes does someone really understand the Fed Reserve and how money is created out of nothing.

 

[NoDrama]

What tnrtnr is proposing has nothing to do with inflation, it has to do with supply and demand, which is different.