mises.org— How Much Money Inflation? Due to a policy of allowing banks to reclassify checking deposits as savings deposits, the Fed increased the money supply 70% from May '08-May '09. The increase in M1 is "only" 16%.
Jul 1, 2009View in Crawl 4
@Darkstar, it wouldn't matter if 1000 G$ still redeemed 1 Oz. gold, and 1500 F$ now redeemed 1 Oz. gold. Fort Knox would be holding that gold, the citizen of G country goes into his bank, cashes in 1000 of G$, and says "I want 1500 of F$ instead of gold." They make the transaction and all is fine. Or he walks out with 1 Oz. of gold. Either way, F country has devalued their fiat currency and G hasn't - The value of gold hasn't changed, it stayed the same. In G country 1000 G$ still buys you a new suit, shoes, and a tie. In F$ country, you can only get the shoes and tie with 1000 F$. And if the resident of G country goes to F country with his Oz. of gold or his 1500 F$, he gets the full suit, shoes, and tie because inflation only affected F$.1 month later, F country sells their gold reserves to bring F$ back to 1000 for 1 Oz. gold. The circle is complete. I don't see the problem. In fact, the United States worked that way until the 20th century. There was indeed inflation, but it was almost nil.You see, the problem with Keynesian economics is that it relies on a constantly expanding economy. If the economy craters, the entire system implodes and a huge vacuum destroys everything around it. So since it relies on constant growth the government thinks it's their duty to constantly grow the economy. It then therefore has to create the perception that "everything is sunny" when it's actually dismal and bordering on the edge of collapse. That perception can only be created with lies.So we can say that Keynesian economics produces a morally bankrupt government. The system is majorly flawed, and when it collapses look for about $500 trillion in unaccounted derivatives, $50 trillion in promissory notes, and $12 trillion national debt.. Plus interest. When the legs come off this thing holding it up, it will be like a nuclear explosion. All economies will be sucked in like a star going super nova.Don't be afraid of a free market economy. Laissez-faire, "let it happen." Let the market correct itself instead of the government trying to tweak it. They will fail, you can't defy physics. They will fail, and we, the people, will be the victims as usual.
dude, e-gold and liberty dollars were scams. and no, i do not get economics advice from the media, that would be more retarded than getting economics advice from digg. i happen to have my bachelors degree in the subject.
You all are failing to include the trillions lost in home equity within the past year. It never truly existed but it was in circulation none the less. Lordmike has a point in that regard. We may have added trillions to the system but thats because trillions of dollars were suddenly taken out of the system... That is partly why we have actually experienced deflation over the past year.
tonylocneJul 3, 2009
Who said bartering is against the law?
Closed AccountJul 3, 2009
@Darkstar, it wouldn't matter if 1000 G$ still redeemed 1 Oz. gold, and 1500 F$ now redeemed 1 Oz. gold. Fort Knox would be holding that gold, the citizen of G country goes into his bank, cashes in 1000 of G$, and says "I want 1500 of F$ instead of gold." They make the transaction and all is fine. Or he walks out with 1 Oz. of gold. Either way, F country has devalued their fiat currency and G hasn't - The value of gold hasn't changed, it stayed the same. In G country 1000 G$ still buys you a new suit, shoes, and a tie. In F$ country, you can only get the shoes and tie with 1000 F$. And if the resident of G country goes to F country with his Oz. of gold or his 1500 F$, he gets the full suit, shoes, and tie because inflation only affected F$.1 month later, F country sells their gold reserves to bring F$ back to 1000 for 1 Oz. gold. The circle is complete. I don't see the problem. In fact, the United States worked that way until the 20th century. There was indeed inflation, but it was almost nil.You see, the problem with Keynesian economics is that it relies on a constantly expanding economy. If the economy craters, the entire system implodes and a huge vacuum destroys everything around it. So since it relies on constant growth the government thinks it's their duty to constantly grow the economy. It then therefore has to create the perception that "everything is sunny" when it's actually dismal and bordering on the edge of collapse. That perception can only be created with lies.So we can say that Keynesian economics produces a morally bankrupt government. The system is majorly flawed, and when it collapses look for about $500 trillion in unaccounted derivatives, $50 trillion in promissory notes, and $12 trillion national debt.. Plus interest. When the legs come off this thing holding it up, it will be like a nuclear explosion. All economies will be sucked in like a star going super nova.Don't be afraid of a free market economy. Laissez-faire, "let it happen." Let the market correct itself instead of the government trying to tweak it. They will fail, you can't defy physics. They will fail, and we, the people, will be the victims as usual.
Closed AccountJul 3, 2009
geekee just made and ironic statement, I would recommend diversifying your sources
ganjamonstaJul 3, 2009
dude, e-gold and liberty dollars were scams. and no, i do not get economics advice from the media, that would be more retarded than getting economics advice from digg. i happen to have my bachelors degree in the subject.
feldonJul 4, 2009
Federal Reserve isn't Federal it a Private company.
teichenauerJul 6, 2009
The Federal Reserve is akin to Freddie Mac in that it receives special benefits other business organizations don't. The solution is to eliminate the special monopoly.<a class="user" href="http://www.opencongress.org/bill/111-h833/show">http://www.opencongress.org/bill/111-h833/show</a>Federal Reserve Board Abolition Act - 111th Congress<a class="user" href="http://endthefed.us/">http://endthefed.us/</a>
biotchJul 7, 2009
You all are failing to include the trillions lost in home equity within the past year. It never truly existed but it was in circulation none the less. Lordmike has a point in that regard. We may have added trillions to the system but thats because trillions of dollars were suddenly taken out of the system... That is partly why we have actually experienced deflation over the past year.
johnnysoftwareJul 25, 2009
I thought M1 was any liquid assets. Seems like checking account funds would certainly qualify.