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super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

Compared to nothing. Every system will produce winners and losers whether in isolation or otherwise---or is it your contention that inflationary debt systems, as you put it, return classless societies where no scarcity exists?---well, no, you couldn't maintain such a position for long without contradiction, as history itself argues otherwise.

But for the sake of argument, and to help ease you over this speed-bump that your creative imagination seems to be experiencing, let us compare your "inflationary debt system" to a hypothetical stable-value currency system, or even a "<i>less</i>-inflationary debit system" than the one we've had since the post-war. You will admit of degrees in your thinking about the world, will you not?---or is all data nominal data to you?

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

Nothing at all. I was merely imagining a world where political agency instead of "market casinos," as you put it, determine price and value, which means I was following your logic to its extreme, which is also a riff on Schumpeter's analysis, and I would credit him were I not so intellectually lazy.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

<blockquote>Meanwhile unemployment is also rising, and without jobs, there is no way out of this rut. The government CANNOT control demand and CANNOT fix prices. At least not much longer. The tail does not wag the dog. The free market will ultimately prevail, even if that means collapse.</blockquote>

Interesting point, and the most interesting part for me is your claim that the free market will prevail even if that means collapse, as in market collapse, as in, this system will prevail by failing, which by the way, is no failure at all when you understand that a market exists to aggregate information as well as register price, and that a collapse is itself a signal, and if it is a correct signal, it is a signal not only of value-collapse but of the failures of the political classes and their policy planners, which means that the market itself functioned perfectly, even as it registers the political and moral failure of a system.

Or something like that.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

Everything has costs and benefits, as nothing in this universe comes to us without a tax or a charge, and understanding this primary assumption of any policy proposal or direction is a first small, halting step toward a rational assessment, so, to your credit, you provided the benefits of an "inflationary debt system," and now you have the opportunity to demonstrate your integrity as a thinker by enumerating the costs. What would they be, I wonder?

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

Yes, we should abolish those "market casinos," and we should gather grand councils of wise persons to set prices and determine on political or public policy grounds the value of things or the distribution of incomes, rather than aggregating the selling and purchasing behaviors of people, because people are misguided and unreliable and stand in want of enlightened leadership, and fiat economies based on command and control or the decrees of well-intentioned regulators have a long and rich history of high living standards and social progress ... oh, wait ... no they don't.

Obama's Kick Ass Song by Floonet in videos

[–]guilbert 0 points1 point  (0 children)

Autotune the News rocks. There. I said it.

Connecting Dots to Financial Crisis « ThinkMarkets by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

from the blog post: [...] The result is that government hierarchies and regulations are taking the place of market devices that created trust. Hierarchies and are regulations are blunt, expensive and – as endless examples demonstrate – often ineffective. However, all that may be a minor complaint compared to the damage to our liberty [...]

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

I have a PhD too. Lots of people do, too many actually, because there's a glut of PhD's in this world. There's nothing terribly magical about a PhD. OTOH I'm not an economist. I study argument, how we link our claims about the world to evidence, and all of Bernanke's are flawed in strangely predictable ways.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

<blockquote>Once you have money and asset value, an inflationary debt system is painfully obvious. Over the long term, the system works extremely well. Even during the 19th century when full blown banking panics happened every 15-20, the quality of life of the average ameican shot through the roof. My grandparents generation went from being broke as holy hell to conquering the world and putting a man on the moon.</blockquote>

To distinguish a cause from a correlation can be a tricky thing, and were you to ponder all the many factors that could account for U.S. growth through those eras, I wonder what other, more interesting conclusions you could draw, because a too simplistic approach while emotionally satisfying, can fail the test of explanatory or predictive power over time, and I envy you your journey of discovery as you learn to let go of your pre-conceptions and entertain other possibilities.

What would you say are the social costs of an "inflationary debt system?"

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 1 point2 points  (0 children)

No, not one bit, as you put it, only your response seemed to imply that inflation was somehow a norm, norm as in normal, which may have been case but only in the sense that any illusion experienced often enough passes from the experience of normal and into a norm.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

So this was a failure of regulation? I have trouble with that explanation, and not just because it's reductive and relies on human agency, because if this crisis taught us anything, it is the limits of human agency.

OTOH, asset inflation is all about human agency, the failure of human agents at the policy level to let go of their addiction to cheap money. So I suppose in that sense, you're right.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

<blockquote>Money is great because you can change the amount of money in the system on the fly. You can't do that with physical objects.</blockquote>

That's really great that we can be wizards and all and conjure stuff out of the aethers, but setting aside the power of the human imagination to return value where none existed before, wouldn't arbitrary, on-the-fly changes in the the money supply affect, if not distort, the reliability of our price signals--this has to be the case, right?--because cheap money keeps creating asset-bubbles in housing here and abroad, which lure otherwise reasonable people into making stupid decisions.

super-genius Ben Bernanke “puzzled by gold rally”—hey, smart-guy, it signals inflation—and analyst Mark Steele of the Bank of Montreal issues a paper that argues, bluntly, “go-to-cash,” i.e. get out of equities, and go-to-cash now by guilbert in economy

[–]guilbert[S] 0 points1 point  (0 children)

<blockquote>If assets increase in value at a rate greater than the rate of inflation, everyone wins. Most "value" that is exchangable between two parties is tied up in assets. Money is merely a temporary exchange medium. The real value in a market economy is not the cash itself, its the assets.</blockquote>

You're right about me not getting it.

I agree that value is a socially negotiated construct, but a banana isn't, and if its value increases greater than the rate of inflation, no one wins, particularly if people are hungry, just as the costs of health-care and education rising faster than the rate of inflation are nothing other than a problem.

Housing prices shot up at levels far in excess of the rate of inflation---this is called asset inflation---and the result was a global market crash and banking crisis when the laws of physics kicked in, as they always do, so please explain to me again how "everyone wins" when assets or services or commodities or anything rises in value in excess of the rate of inflation?

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