112 replies to this topic

[Mathijs]

And you'd really want to live like that? I sure as hell wouldn't.

[Tom]

It's obvious that if you remove the idea of money from the nation all together and replace them with rations, people will strive to work so they can eat and drink, thus making the government flourish, money isn't always needed. If a family has to many rations, they can choose to give up some for starving people, or exchange food and drink for items (I.E. Consumer Goods)/ different food/drink, if Socialism or Communism would revolve around the ideology it would easily succeed.

Simply replace Money with Rations, and you'll no longer have greedy people, you'll have people who work hard for basic daily needs.

This is slavery, forced slavery at that. Exactly what I said in my post above. This is what a monopoly on power can do. When you remove the power from the individual and community and replace it with the state, this is the sort of ridiculous ideas you get. All you will receive then is slavery of the masses and mass corruption of the public officials. At least in free society you can isolate the corrupt aspects of it by exposing it and deal with it that way.

Durandel, my question to you now is why do you feel that it is necessary to enslave people in the name of whatever you call it? Ideology? Progress?

[Allathar]

To an extent yes. I am for monetary reform. No, I have no problems with paper money or electronic money; it just has to represent something and should be moderated correctly. Inflation should be seen as what it is, a TAX on the wealth of a population. If inflation is necessary for any reason then yes, the government should announce it but remove the inflation at a later time, if it is to mean continued prosperity. At the moment we have inflation with no oversight and it is manipulated for the benefit of a few powerful bankers... if continued it is going to end very very badly indeed.

It looks like you don't really understand what causes inflation. Inflation is, when the prices of goods get higher. This is mainly caused by the higher costs of the producing companies, who need to adjust their prices because of that. Usually, free market itself will simply balance the inflation to an acceptable % a year through simple economic processes, but most of the time when a leftist government is involved it's getting out of hand. The leftist governments demand that the loans of the people rise too to compensate for the inflation, resulting in higher costs for the producing companies (who have to pay their employees more), so they have to raise the prices again to compensate the higher loans. Resulting in people demanding higher loans, higher costs again, etc. So no, inflation can't be 'removed' at a later time , it can be 'balanced' however, and don't forget the government can't handle it most of the time when there are other nations involved (i.e. when a nation is importing from another nation, and the prices of the imported products rise)

It's obvious that if you remove the idea of money from the nation all together and replace them with rations, people will strive to work so they can eat and drink, thus making the government flourish, money isn't always needed. If a family has to many rations, they can choose to give up some for starving people, or exchange food and drink for items (I.E. Consumer Goods)/ different food/drink, if Socialism or Communism would revolve around the ideology it would easily succeed.

Simply replace Money with Rations, and you'll no longer have greedy people, you'll have people who work hard for basic daily needs.

Hahahahahahaha. You meant that serious? Imagine if we live in that 'ration-world' of yours, and you want to go to the shop to buy something. How the hell were you gonna do that?! Also, there'd be no luxury in that world of yours... Everyone would just work to get enough food and drink.

Edited by Allathar, 02 May 2009 - 11:33 AM.

[Vortigern]

Durandel, what you described sounds like bad communism. You have to work hard for your bread, and still everything sucks. Who wants to live like that? Life should be determined by happiness, not necessity.

[Tom]

It looks like you don't really understand what causes inflation. Inflation is, when the prices of goods get higher. This is mainly caused by the higher costs of the producing companies, who need to adjust their prices because of that. Usually, free market itself will simply balance the inflation to an acceptable % a year through simple economic processes, but most of the time when a leftist government is involved it's getting out of hand. The leftist governments demand that the loans of the people rise too to compensate for the inflation, resulting in higher costs for the producing companies (who have to pay their employees more), so they have to raise the prices again to compensate the higher loans. Resulting in people demanding higher loans, higher costs again, etc. So no, inflation can't be 'removed' at a later time , it can be 'balanced' however, and don't forget the government can't handle it most of the time when there are other nations involved (i.e. when a nation is importing from another nation, and the prices of the imported products rise)

I think you do not fully understand what I am saying. I am fully aware of inflation and what it is, but what I am talking about is MONETARY inflation. When more digits of money are entered into a system, each individual digit is worth less. This is monetary inflation / the increase of the money supply without any real value. The price rise across the board is just a result of it as each digit of that currency becomes worth less. Look at Weimar Germany or if you want a modern day example look at Zimbabwe. When you print money that isn't backed by commodity, you get inflation of the money supply. Of course the first lot of people who receive the money (namely the banks or the government) get it at its full value, but by the time it has circulated into the system you get inflation of the currency.

[Allathar]

Ah, monetary inflation, misunderstanding of mine there. It's often caused because of people loaning too much money from the banks (not counting mass making new money like in Weimar or Zimbabwe, since no 'sane' nation would do that), so in theory it can be quite easily solved by increasing the interest of the loans the banks have from the central bank of a nation, which will result in higher interest rates for the loans of the people, which will lead in people loaning less money and saving more > less money in circulation. Free market should be able to solve it as well, with interest as price for supply/demand in the market of money, although that's kind of a problem since the central banks are property of the government.

Also, don't forget that the total amount of money in circulation can rise as well when there is more export than import in a country, leading to a higher exchange rate. Because of this, the total amount of money in circulation will rise, while there is no real production growth to support this, there is merely more money because of the valuta market. Although this will again balance itself eventually, you can't do much about it.

[Tom]

Banks like the Federal Reserve are partially private with the interest on the national debt going to private bankers. It needs to be fully public and have oversight for the government to be able to have a sustainable monetary policy. The federal reserve basically runs itself without no government oversight. Not all central banks are owned by the government; at least not fully anyway.

You say no sane nation would allow that type of inflation, but what if you have no control over your actual money supply? Government may not want it, but if the fed starts running the presses then mass inflation could set in. Most western countries are bankrupt due to these policies and therefore their solution is to follow more Keynesian economics. This involves printing money to cover areas with deficits. Well unfortunately our deficits are huge and getting bigger. More money is needed and printing is how it is going. I think it is a possibility (not a certainty) that we could see some crazy inflation in the next few years if this is not challenged. What will the solution to that be? More international oversight?

The End the Fed rallies in the US have gone very far to try and achieve this and Ron paul now has around 110 co-sponsors of his H.R. 1207 Federal Reserve Transparency bill. If this gets passed it will be interesting to finally see what the Fed has been up to all these years.

Plus the theory of increasing interest rates does not work; if the central bank is the main source of currency, how can a nation ever afford to pay back its debt to a central bank if the amount it has to pay back is larger than the money supply? In theory anyway, that could be the case. I am aware government mints and other government forms of monetary policy still operate but a mass majority of our currency comes from central banks at interest. 10k + 1% interest means we have to pay back more than 10k. The only ways this can be paid back is by real wealth, commodities or infrastructure, or what the government currently does, with bonds, basically IOUs on labour.

Much of the problem also comes down to Fractional Reserve Banking. Can you believe we even allow a 9:1 ratio of newly created money from down payment. Multiple that by the amount of times that people deposit their loans and allow new loans to be created to 9:1, we inflate the money supply numerous times over from an original loan of 10k.

I can't pretend I know the full solution, but I know where it is not.

[Spectre]

It's obvious that if you remove the idea of money from the nation all together and replace them with rations, people will strive to work so they can eat and drink, thus making the government flourish, money isn't always needed. If a family has to many rations, they can choose to give up some for starving people, or exchange food and drink for items (I.E. Consumer Goods)/ different food/drink, if Socialism or Communism would revolve around the ideology it would easily succeed.

Simply replace Money with Rations, and you'll no longer have greedy people, you'll have people who work hard for basic daily needs.

This is slavery, forced slavery at that. Exactly what I said in my post above. This is what a monopoly on power can do. When you remove the power from the individual and community and replace it with the state, this is the sort of ridiculous ideas you get. All you will receive then is slavery of the masses and mass corruption of the public officials. At least in free society you can isolate the corrupt aspects of it by exposing it and deal with it that way.

Durandel, my question to you now is why do you feel that it is necessary to enslave people in the name of whatever you call it? Ideology? Progress?

It isn't Slavery, Slavery is not paying them one cent for deeds, we're paying them with rations, we'll pay them enough rations to live for 2-3 days, if you stockpile every day, you'll be able to eat what you want. That's why you'd put up a trading system, if someone doesn't like an item, they can trade it for another. Every idea has a back-fire, but slavery isn't the backfire.

[Tom]

It is slavery. Slavery without bars and chains is still slavery. You are forcing people to be a slave to ideology to "restrict corruption." It is completely insane.

Then again, it sounds like a devolved version of the system we have now, a very primitive version at that. What the hell do you think people do when they exchange money for goods?

[Rafv Nin IV]

I have not yet taken Economics, so I might sound a bit naive here.

It is my understanding that inflation, so long as it doesn't go Zimbabwe-esque, is actually beneficial to a free-market economy. If I have $1000, and inflation is at a rate of 5%, then next year it will only be worth $950. This encourages me to spend my money now, when it is worth more. If I buy $1000 worth of gold, provided the price of gold does not decrease, I will have more gold than if I had waited and spent $1000 the next year, because it's only worth 95% of what it used to be. I could only buy 95% as much gold.

Inflation, then, prompts people to buy now. Spending is merely the transfer of money for goods. The man who receives the money then spends it on what he wants to buy, ad infinitum. This results in the transfer of goods from those who don't want them to those that want them. In other words, the man who makes shoes gets rid of his extra shoes, and gets some hamburgers instead.

However, if economic policies promote deflation, then the value of money increases. If I have $1000, and deflation is at a rate of 5%, then next year I will have the equivalent of $1050. This encourages me to keep my money, because my money is increasing in value. This means people save more and spend less. In a free-market economy, the flow of goods depends on the flow of money, and since deflation causes people to stop buying, goods stop circulating. The man who makes shoes doesn't buy any hamburgers, so the man who makes hamburgers doesn't have enough money to buy shoes.

In this way, it is my understanding that mild inflation is beneficial to a capitalist society.



@ Durandel: 1984, anyone?

Edited by Rafv Nin IV, 03 May 2009 - 02:59 AM.

[Phil]

In this way, it is my understanding that mild inflation is beneficial to a capitalist society.

It is, but really only in a mild form. If the rate gets too high, it will render peoples' and companies' savings worth less (or worthless), which destabilises the economy. Also, those trends can easily get out of hand and develop a momentum that is very hard to control again (a vicious cycle). Once you're getting near hyperinflation, the monetary system is basically destroyed because people simply lose trust in those pieces of paper, so the economy definitely goes to hell.

Deflation, on the other hand, is usually considered a lot more dangerous, even if very small.

[Allathar]

It isn't Slavery, Slavery is not paying them one cent for deeds, we're paying them with rations, we'll pay them enough rations to live for 2-3 days, if you stockpile every day, you'll be able to eat what you want. That's why you'd put up a trading system, if someone doesn't like an item, they can trade it for another. Every idea has a back-fire, but slavery isn't the backfire.

Hmmm... it'll be a lot easier if we have items which represent the value of the goods we want to trade. That way, I won't have to look for someone who wants to trade a shoe for a hamburger so I can trade it for an I-phone, which I can trade for a table. Oh, wait, that item is already there, it's called 'money'.

Wow, so that means people can work for money, which they can spend on anything they want! So that means if I work very hard, I can get more money and spend it on anything I desire! That way people will want to work, and people can buy anything with the reward for it! That system sounds awesome, let's implant it in the society! Oh wait, it already is, it's called 'capitalism'.

@ Rafv Nin: What DLotS said. And the truth is, with the crisis, we're closer to deflation than we are to inflation, thanks to the media convincing everyone it's crisis and people need to watch out with consuming.

@ Tom: true, but you are forgetting production growth to support the larger amounts of money in circulation. Inflation, in a mild form, is necessary to keep the economy 'running'. You'll always have the loan/interest problem, but that shouldn't be that big of an issue as long as we don't do it en masse with a ridiculous interest rate.

And our friend Keynes... his theories sound wonderful, but he supports a large role for the government in the economy, to help in a time of low conjuncture. Practically it's nearly impossible, due to the government, which can't form a single 'plan' for the economy without going into endless debates, and the timing of the government investments, which is hard to decide.

Edited by Allathar, 03 May 2009 - 10:08 AM.

[duke_Qa]

And our friend Keynes... his theories sound wonderful, but he supports a large role for the government in the economy, to help in a time of low conjuncture. Practically it's nearly impossible, due to the government, which can't form a single 'plan' for the economy without going into endless debates, and the timing of the government investments, which is hard to decide.

It can be hard, but as long as the majority of voters show that they want a government that has safety measures against these situations it's quite possible. Naturally if the people have alot of distrust to the government from before, it's not likely to happen overnight. So, for example, it's going to be a long time before we see this being done in the US, considering the amount of distrust they got towards their government.