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Originally posted by Q5echo i trust him as a Congressman. and if i were pregnant, maybe my mid-wife. other than that he seems like an honest guy.

yeah, honestly retarded and willfully ignorant. yay.

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Originally posted by pkcRAISTLIN the irony of course is that it is (in part) INDIVIDUAL ECONOMIC FREEDOM that has been responsible for some of the economic problems we are seeing

lol, quote of the CENTURY. More oppression is the answer. Go PK Go!

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Originally posted by Capitalizt lol, quote of the CENTURY. More oppression is the answer. Go PK Go!

no, im pointing out that a component of the economic instability the US is experiencing right now is down to individual free (bad) choice, and not the machinations of the evil central banks.

the ultimate irony being that without central banks the "innocent victims" of economic downturns would be far greater in number, and they would be affected far more often.

honestly, i would expect students of economics (like yourself) to have a better grasp of his ridiculous bullshit.

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Originally posted by pkcRAISTLIN im not sure i can find the words to describe what a fucking moron he is. yeah, let's return to the gold standard. what a fuckwit. that's nothing but a bunch of empty, erroneous rhetoric that doesn't actually say anything.

You don't like the gold standard. We get it. And we know you aren't a U.S. citizen, so you don't care much about the dollar..but the fact is Ron Paul's comments are DEAD ON BALLS ACCURATE in regards to entitlement spending, the welfare state, and dollar devaluation. We have been printing dollars like mad the past few decades and exporting our inflation to the rest of the world. We've been able to do that because we had the "reserve currency" of the world. Today however their are stronger alternatives and the US is not the only powerhouse. Other countries are becoming reluctant to hold our rapidly declining dollars, so they are dumping them on the open market which is exacerbating the problem of inflation. Our federal reserve which is supposed to be controlling inflation is instead sitting on it's ass doing absolutely NOTHING to protect the purchasing power of the dollar. They are doing quite the opposite in fact...leaving interest rates at record lows and pumping billions of newly created paper into the system every week.

You may call this being "flexible", but I call it a massive corporate bailout. The fed is protecting irresponsible corporations that made bad loans and bad decisions. Rather than letting the free market work so these failed companies can be bought out and reorganized, the feds interve. They inflate the money supply and provide cheap credit to prop up failed enterprises. Ron Paul is right about this; Low rates and easy money benefit VERY FEW (those who get to use it first), and ends up hurting the many...those of us who must live with the higher prices. Workers and retirees are punished severely by inflation. And Americans aren't the only ones...Remember that oil is priced in dollars, and because the dollar has crashed, prices have soared on the world market. You can blame capitalism all you want. The fact is that capitalism has NOT BEEN ALLOWED to work in these areas. There is no free market when it comes to interest rates, energy, healthcare, etc. The government has an iron hand over these sectors of the economy, and that is the root of most of our problems today.

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Originally posted by Capitalizt You don't like the gold standard.

neither does any self-respecting economist of the last few decades.

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Originally posted by Capitalizt And we know you aren't a U.S. citizen, so you don't care much about the dollar..

i love how the US is crying about their poor dollar weakening. welcome to the real world guys. youre just experiencing what every other country has had to deal with since they floated their currency. diddums.

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Originally posted by Capitalizt but the fact is Ron Paul's comments are DEAD ON BALLS ACCURATE in regards to entitlement spending, the welfare state, and dollar devaluation. We have been printing dollars like mad the past few decades and exporting our inflation to the rest of the world. We've been able to do that because we had the "reserve currency" of the world. Today however their are stronger alternatives and the US is not the only powerhouse. Other countries are becoming reluctant to hold our rapidly declining dollars, so they are dumping them on the open market which is exacerbating the problem of inflation.

but this isn't a failure of either fiat money or evil banks. its bad government management. this has absolutely nothing to do with the system and everything to do with how it is being managed.

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Originally posted by Capitalizt Our federal reserve which is supposed to be controlling inflation is instead sitting on it's ass doing absolutely NOTHING to protect the purchasing power of the dollar. They are doing quite the opposite in fact...leaving interest rates at record lows and pumping billions of newly created paper into the system every week.

firstly, inflation isnt, in and of itself, a bad thing. a growing economy is going to have some inflation. i also dont think this situation is nearly as clear-cut as you seem to think. its not as if the fed are doing "nothing" because they're evil; they're doing some things whilst not doing others, in an attempt to balance the competing economic interests/concerns, such as stagflation. call me a noob, but wouldnt a sharp increase in the cash rate combine rather badly with an economy on the tip of recession?

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Originally posted by Capitalizt You may call this being "flexible", but I call it a massive corporate bailout.

actually, isn't it the bush admin's measures that can be considered the 'bailout'? also, what happened to you giving a shit about those poor innocent people ron seems to care so much about? these problems dont end with business, there are millions of people that are also caught up in it.

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Originally posted by Capitalizt The fed is protecting irresponsible corporations that made bad loans and bad decisions.

oh, but it wasn't the bad decision of individual borrowers? are they somehow free of guilt in this particular scenario?

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Originally posted by Capitalizt Rather than letting the free market work so these failed companies can be bought out and reorganized, the feds interve.

like i have already said, sometimes the free market is fine, other times it needs intervention. to believe otherwise is contrary to the history of economics. i wont posit an idea here about whether they are doing the right thing or not because i simply dont know. but even if they can be shown to be doing the wrong thing, this is a problem with the management of the federal reserve, and not an indictment against the system of having a central bank.

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Originally posted by Capitalizt They inflate the money supply and provide cheap credit to prop up failed enterprises. Ron Paul is right about this; Low rates and easy money benefit VERY FEW (those who get to use it first), and ends up hurting the many...those of us who must live with the higher prices.

that's completely over-simplified. the people down the bottom benefit from low interest rates. i happen to be one of those. im smart with my money so i dont get fucked over by an economic system i barely understand.

i really feel that youre looking at this problem in a very short-sighted fashion. as if the economic problems of today are somehow new and unusual. they're not. and i still havent seen a workable and sensible alternative presented by paul.

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Originally posted by Capitalizt Workers and retirees are punished severely by inflation. And Americans aren't the only ones...Remember that oil is priced in dollars, and because the dollar has crashed, prices have soared on the world market. You can blame capitalism all you want.

right. so please explain to me the alternative you believe would fix the problem of inflation. i cant wait to hear this!

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Originally posted by Capitalizt The fact is that capitalism has NOT BEEN ALLOWED to work in these areas. There is no free market when it comes to interest rates, energy, healthcare, etc. The government has an iron hand over these sectors of the economy, and that is the root of most of our problems today.

hahahahahaha. nonsense. if you think the american government is more powerful than all the economies of the world then you are kidding yourself. the rising price in oil for instance, isn't just due to the devaluing dollar. prices are rising because people in the free market are willing to pay more for it. any other analysis is just conspiracy bollocks.

this is capitalism at work mate.

incidentally, how do you think interest rates should work? im intrigued. how can you combat the very real evils of uncontrolled inflation if you dont have a central bank? or do you really favour a return to the gold standard?

id like to hear what you think the answers are to all the evils of central banking and fiat money.

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Last edited by pkcRAISTLIN on Jul-04-2008 at 07:33

also, the way he represents "globalisation" just sounds fucking childish. i mean seriously, how can you be a libertarian and then go around bashing globalisation? doesnt make sense.

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Last edited by pkcRAISTLIN on Jul-04-2008 at 08:01

PK, to all of your questions about how things should be "managed" and how interest rates SHOULD work, there is a simple answer:

Supply and Demand.


Radical idea...radically different from the system we have today. The "boom-bust" cycle you mentioned earlier is actually caused by fiat money creation and contraction. The artificially low rates under Greenspan let to the boom-bust of the Nasdaq bubble, then the housing bubble we are in now. Artificially low rates may be great for some (if you are one of those, more power to you)...but in the long run they do cause "bust" cycles. When there is no market-based rate of interest, nearly everyone has access to cheap money..even those who shouldn't. This leads to increased (and irresponsible) risk taking, malinvestment and wasteful spending that would not take place had there been a more natural cost for that money set by the marketplace.

Most people behave foolishly with access to cheap money. The government provides it to prevent recession, but they are fighting the inevitable...propping up a sick economy again and again in order to avoid political pain. They are only postponing the day of reckoning and guaranteeing it will be worse when we finally face it. We saw the results of inflationary policies in the 1920's, the 1970's, and apparently again right now.

I won't pretend to have a perfect alternative to the fed, but I do know the current system is doing more harm than good. A good start for change would be much greater oversight and openness to the public. If people realized just how much intervention was taking place, how many companies were being bailed out, and how much their paycheck is being devalued every month, they would likely be shocked and put serious pressure on congress to keep the fed in check. I think it's time the fed stopped f*cking around with everything and let bad businesses fail...let irresponsible borrowers go bankrupt. It sounds harsh and I'm sure you will scream "heartless capitalist!", but this is the medicine our economy desperately needs.

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Originally posted by Capitalizt The "boom-bust" cycle you mentioned earlier is actually caused by fiat money creation and contraction.

oh come now, let's be serious shall we? cyclical economic conditions is part and parcel of capitalism. could you tell me how fiat money contributed to the 'bust', the Great Depression?

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Originally posted by Capitalizt The artificially low rates

technically speaking, there's no such thing as "artificially low" rates. rates are rates are rates.

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Originally posted by Capitalizt under Greenspan let to the boom-bust of the Nasdaq bubble, then the housing bubble we are in now.

i dont know enough about this to comment, but i do know that the australian federal reserve is managed quite well, and i dont see why the US would be any different.

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Originally posted by Capitalizt Artificially low rates may be great for some (if you are one of those, more power to you)...but in the long run they do cause "bust" cycles.

again, define for me "artificially low".

banks are free to set their interest rates at whatever they wish, regardless of anything the central bank does. sure, you wont find corporate banks offering lower rates than the fed, but they are more than free to have them higher if they wish. indeed, virtually all of australia's banks have a higher interest rate than the one set by the reserve bank.

even if we accepted that greenspan et al could have predicted the ensuing chaos of this "artificially low" interest rate, that isn't a problem with the system, and is part of the issues with management.

tell me how one controls inflation without a central bank (indeed, who is measuring the inflation if not the central bank?)

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Originally posted by Capitalizt When there is no market-based rate of interest,

could you explain to me a bit more on how this would work? or how it is even different to what we have now? i have already pointed out that banks can set 'market-based' rates of interest independently of the central authority.

again i want to ask how inflation is kept under control without a central bank?

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Originally posted by Capitalizt nearly everyone has access to cheap money..even those who shouldn't.

i think your underlying assumption here- that central banks foster climates where too many people have access to credit, and that a 'market-based' approach would help eliminate this problem- to be incredibly naive.

fact: corporate banks are predators and they will be shafting people for money with or without the fed. there will always be those that do not understand the consequences of their actions, especially when complicated economics are concerned.

how can you prove to me that the (early) interest rates that the fed had were artificial? and why do you think the fed made it impossible for the banks to act and raise their own rates in the face of economic danger, which seems to be the system you're advocating? why is it the fed that's getting the blame from you rather than the rest of the banks that did the lending (considering it is these very banks you now trust to provide 'market-based' interest rates)?

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Originally posted by Capitalizt This leads to increased (and irresponsible) risk taking, malinvestment and wasteful spending that would not take place had there been a more natural cost for that money set by the marketplace.

haha, that's simply not true. you seem to possess a rather idyllic impression of capitalism, capitalists and the invisible hand. capitalism is a system of stratification that rewards and encourages self interest. there will always be problems like this occuring in a free market, or supposedly in your case- a 'freer' market. its called market failure.

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Originally posted by Capitalizt Most people behave foolishly with access to cheap money.

but you seem to assume that the fed provides access to cheap money, when that isn't quite true. the banks do. it is THEIR decision how much they lend their (our) money for, and ultimatelyits their responsibility.

in your example, exactly how would things be different when the so-called 'market value' of interest was comparably low? its exactly the same situation. greenspan didnt keep the rates low all by himself.

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Originally posted by Capitalizt The government provides it to prevent recession, but they are fighting the inevitable...propping up a sick economy again and again in order to avoid political pain.

that's not true. that's like saying an economy is perpetually sick, when in reality economies are in states of flux; needing more or less intervention depending on various circumstances.

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Originally posted by Capitalizt We saw the results of inflationary policies in the 1920's, the 1970's, and apparently again right now.

jesus...and youre an economist? the countries that suffered most during the 20s were those nations that were tied to their gold standard:

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The current judgment of economic historians (see, for example, Barry J. Eichengreen, Golden Fetters) is that attachment to the gold standard played a major part in keeping governments from fighting the Great Depression, and was a major factor turning the recession of 1929-1931 into the Great Depression of 1931-1941.

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# Countries that were not on the gold standard in 1929--or that quickly abandoned the gold standard--by and large escaped the Great Depression # Countries that abandoned the gold standard in 1930 and 1931 suffered from the Great Depression, but escaped its worst ravages. # Countries that held to the gold standard through 1933 (like the United States) or 1936 (like France) suffered the worst from the Great Depression

http://www.j-bradford-delong.net/Po...ldstandard.html

the problems not really caused by "inflationary spending" as you seem to describe it. indeed, it was increased spending that saved the economies of those countries.

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Originally posted by Capitalizt I won't pretend to have a perfect alternative to the fed, but I do know the current system is doing more harm than good.

i havent seen you prove that in the slightest. certainly not when you include examples from all the other nations (and there are many) that have a central bank. someone must be doing something right

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Originally posted by Capitalizt A good start for change would be much greater oversight and openness to the public.

they are hardly secret meetings. they get together, discuss the economic health of the country/world, sometimes decide to alter interest rates. what else do i, john citizen, need to know? they are subject to oversight by congress, if you dont trust congress to keep an eye on things then that's a whole other problem.

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Originally posted by Capitalizt If people realized just how much intervention was taking place, how many companies were being bailed out, and how much their paycheck is being devalued every month, they would likely be shocked and put serious pressure on congress to keep the fed in check.

could you explain to me how the fed is 'bailing out' companies? i am unaware that they're giving away free money ugh, the point being that the person's paycheck every month/year etc is also increasing. indeed, part of inflation is generated by higher wages.

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Originally posted by Capitalizt I think it's time the fed stopped f*cking around with everything and let bad businesses fail...let irresponsible borrowers go bankrupt. It sounds harsh and I'm sure you will scream "heartless capitalist!", but this is the medicine our economy desperately needs.

sorry, fact is absolutely nothing would change. nothing. well, except perhaps that a huge economic (global) meltdown could ensue. seriously, i find the complaint that "how much their paycheck is being devalued every month" to be rather disingenuous when simultaneously you dont give two shits if they lose their job or their life savings. not particularly consistent!

without sensible monetary policy, and sensible government spending, capitalism can be an awfully dangerous un-tamed beast. i think you love the market a little too much and flippantly ignore problems inherent with it.

if youre around and can be bothered occrider we'd love to hear your take on the matter

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This is one of the reasons why you wanna stay on the gold standard.


Here are lots of lectures in mp3 about gold in anyone is interested.
http://mises.org/media.aspx?action=search&q=gold

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Originally posted by robstar This is one of the reasons why you wanna stay on the gold standard.

irrelevant.

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Not in Zimbabwe,

I was skimming tru your response I saw this

quote:

indeed, part of inflation is generated by higher wages.

Maybe there's two different schools on this or you made a mistake?
I always thought higher wages was the result of inflation, not the other way around.