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Originally posted by DOOMBOT I'm pretty confidant that if you adjust his net worth in the 19th century and adjust it for inflation he would have been considered a billionaire today.

You adjust the goalposts so frequently that it's actually quite funny when you pick and choose a battle and lose.

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Originally posted by Lebezniatnikov You adjust the goalposts so frequently that it's actually quite funny when you pick and choose a battle and lose.

So you admit to not understanding what adjusted for inflation means.

This argument is as good as saying that no one in the roman empire was as wealthy as people are today, simply because they didn't have a printing press.

Last edited by DOOMBOT on Sep-17-2009 at 14:15

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Originally posted by DOOMBOT Simple, you spread out what you are trying to buy into fixed payments. How do you think houses and cars, for example, are bought? Look at Brazil, their dollar is so weak that they resorted to this exact type of system for buying goods that us US citizens would consider very common purchases, such as clothing or electronics. Funny because as I write that, we have resorted to this type of payment for some electronics as well.

that's still not inflation. The money supply has expanded dramatically over the past 12 months, HOWEVER we have seen a rather drastic DECREASE in certain consumer prices (i.e., DEFLATION). I believe that the broad based CPI has remained at around 0% for a few months. Explain that one please!

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Originally posted by DOOMBOT It can definitely be the cause of inflation. If a banks lending practices are loose and the interest rates are low, you've just made money very easy and cheap to come by. So when the loan is made, the money supply increases, otherwise known as inflation.

An increase in money supply is not inflation. Inflation, again, is an increase in CONSUMER PRICES. In theory, the increase in money supply should cause an increase in prices because there is more money chasing the same amount of goods, but that ignores other macroeconomic factors.

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Originally posted by DOOMBOT I'm more concerned with why, when the question "What is inflation" is asked, people answer with "rise in consumer goods", without thinking further, or, how that is made possible.

Your statement was that inflation caused consumers to fuel the economy. That's simply wrong. Inflation has been at historically low levels for a very long time, and high inflation generally has a negative impact on the economy (see the recession of 81-82). Noone here is denying that inflation has many causes, one of which is the expansion of money supply. If your statement, instead, was that the expansion of cheap financing lead to our consumer fueled economic growth i would be in total agreement.

you have to distinguish between (1) inflation, which is a rise in consumer prices that has many factors one of which may be an increase in money supply, and (2) the steps that increase money supply. They are lightly connected, but certainly not the same thing. Your argument is very imprecise.

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Originally posted by DOOMBOT If you dig deeper you find that it happens because the money supply was increased and if it is increased too much, you have what happened Argentina or Zimbabwe take place, to name a couple examples.

you can't compare the US to argentina or zimbabwe. First, neither of those countries were issuing debt in their currency (as the US does). So, when those countries defaulted on their debts (something that is almost inconceiveable because the US can print US dollars to repay the US dollar debt, so it must consciously default by will), the world lost confidence in their overall economy and the depreciation in their currency was largely a result of the traders in the fx markets.

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Originally posted by jerZ07002 that's still not inflation.

I wasn't defining inflation with that response. You asked "How can we reduce purchasing power and increase consumerism?"

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The money supply has expanded dramatically over the past 12 months, HOWEVER we have seen a rather drastic DECREASE in certain consumer prices (i.e., DEFLATION). I believe that the broad based CPI has remained at around 0% for a few months. Explain that one please!

You're seeing a decrease in asset prices that were never in high demand in the first place. Housing, for example. Take energy prices though and you will see that they have been rising. There is a real demand for energy, where there was an artificial one in housing.

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An increase in money supply is not inflation. Inflation, again, is an increase in CONSUMER PRICES. In theory, the increase in money supply should cause an increase in prices because there is more money chasing the same amount of goods, but that ignores other macroeconomic factors.

See my dictionary.com link and quote.

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Your statement was that inflation caused consumers to fuel the economy. That's simply wrong. Inflation has been at historically low levels for a very long time, and high inflation generally has a negative impact on the economy (see the recession of 81-82). Noone here is denying that inflation has many causes, one of which is the expansion of money supply. If your statement, instead, was that the expansion of cheap financing lead to our consumer fueled economic growth i would be in total agreement.

We are simply disagreeing on what inflation is. You believe that inflation is the rise in consumer goods and I believe it is the increase in money supply. Again, see my dictionary.com definition of inflation.

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you can't compare the US to argentina or zimbabwe. First, neither of those countries were issuing debt in their currency (as the US does). So, when those countries defaulted on their debts (something that is almost inconceiveable because the US can't print money, so it must consciously default by will), the world lost confidence in their overall economy and the depreciation in their currency was largely a result of the traders in the fx markets.

You've lost me. The US can't print money?

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Originally posted by DOOMBOT We are simply disagreeing on what inflation is. You believe that inflation is the rise in consumer goods and I believe it is the increase in money supply. Again, see my dictionary.com definition of inflation.

unfortunately for you, you can't unilaterally change the universally accepted definition of inflation.

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Originally posted by DOOMBOT You've lost me. The US can't print money?

that was a mistake that i corrected, apparently after you already quoted my post. Initially i was going to say that zimbabwe and argentina can't print money to repay their debt (because it would result in decreasing the value of the peso and whatever is used in zimbabwe) as can the US. But i decided to state it in the affirmative (that the US can print money to repay its debt), but i goofed and didn't remove the 't

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Originally posted by jerZ07002 unfortunately for you, you can't unilaterally change the universally accepted definition of inflation.

I can live with the fact that a lot of people still believe it is the rise of prices, without understanding why or how that happens. You may want to contact dictionary.com and let them know they have it all wrong, while you're at it.

Well thank God for dictionaries. I don't know how we'd understand economic concepts without them.

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Originally posted by Brahman You must be a gullible character.

you are stupid.

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Originally posted by Kinezi you are stupid.

If you don't have anything to add to the forum, get the fuck out..

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WORSHIP!

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Originally posted by DOOMBOT So to go back to my main point, our over consumption came from the increase in the money supply. Without fractional reserve banking, we simply wouldn't have had the ability to consume as much as we do or did, as a nation. People wouldn't have bought houses they couldn't afford without the loans that they received. They wouldn't have had the ability to buy 3 cars, without the ability of a loan as well. And what does a loan, in our current banking system, do? Increases the supply of money, also known as, inflation.

Loans are an issue with money supply. I'm not sure if they were considered correctly in the past. In Dec. 2008 the Federal Reserve discussed the capital reserve ratios of banks in thier meeting, reported in the Financial Times in January after the release of the minutes from the Dec. meeting.

In March 2009 Alan Greenspan came out and said he flet the tier one capital reserve ratio's should be increased from to 12-13 % for all banks.

Most recently the OECD and the G20 have released reports covering the topic (which I have not read), that was earlier this month.

Finally there was a meeting of central bankers around the end of August which had capital reserve ratios as one of the major topics (another thing I've yet to read).

...

oh, and at the start of Dec. 2008 yours truely suggested to the Fed. that they up the reserve ratio's of banks to 12-14%.

Yeah, I beat Greenspan by 4 months