Dow 40,000

phreddyp

Well-Known Member
Well that gets into a whole other bag of worms…

The question of how fiat money has value is the source of loads of conspiracy theories and Gadsden Flags all across America.

My thoughts on that: our currency has value because of the government’s ability to levy an income tax denominated in that currency.

When we hear of a new government spending program, we ask, “But how are we going to pay for it — by raising taxes of course.”

What that really means though is: by how much do taxes need to be raised to remove enough money from the economy such that we don’t create more inflation than we need to given extant constraints. Our taxes don’t really fund a damn thing directly. Our federal income tax dollars are just data in a spreadsheet that gets destroyed when we settle up every April.

So while I understand the example you’re using to demonstrate your point, it ignores the role of the income tax. Of course, I realize it’s just a scenario do demonstrate a point, but the role of the income is vital to how this apparent house of cards works.
I believe that you are missing a major component of the whole economy, a lot of what goes on in the economy is not beholden to taxes or income
cash flow is what hides many of the economy's ills.
 

SamSpade

Well-Known Member
So while I understand the example you’re using to demonstrate your point, it ignores the role of the income tax. Of course, I realize it’s just a scenario do demonstrate a point, but the role of the income is vital to how this apparent house of cards works.
I remember my Douglas Adams, from HItchhiker's Guide - when the idiot Golgafrinchans - who became our ACTUAL ancestors - settled on this planet, they settled on the LEAF as their form of currency - but since there were already so many leaves, they chose to burn down the forests in order to increase their value.

(shrug) It just seems that by itself - you can't make everyone a billionaire by printing the money and giving it away - because if you could, that's a simple solution that would end poverty and land everyone in eternal luxury. It's not JUST a scenario, it illustrates what I think we agree upon - things have value, and currency is how we measure it. Increase the currency, value doesn't change, currency loses value, stuff coss more.
 

HemiHauler

Well-Known Member
I remember my Douglas Adams, from HItchhiker's Guide - when the idiot Golgafrinchans - who became our ACTUAL ancestors - settled on this planet, they settled on the LEAF as their form of currency - but since there were already so many leaves, they chose to burn down the forests in order to increase their value.

(shrug) It just seems that by itself - you can't make everyone a billionaire by printing the money and giving it away - because if you could, that's a simple solution that would end poverty and land everyone in eternal luxury. It's not JUST a scenario, it illustrates what I think we agree upon - things have value, and currency is how we measure it. Increase the currency, value doesn't change, currency loses value, stuff coss more.

I follow.

A contemplated near-constant inflation rate is a desired feature of the economy - it encourages investments — both in securities and assets, etc. in order that consumers and participants in our economy can BEAT inflation. And save for retirement as a result.

In an economy as large and dynamic as ours, sometimes inflation soars, other times it shrinks. It’s just the nature of the beast.

This sort of introduces another thread on the matter, but the role of the USD as the primary reserve currency all around the globe results in a near-constant overvaluation. This is the primary cause of our trade deficit and the continuing cause of the destruction of our industrial base.

Add to that, the US central bank isn’t allowed to hold reserve currency and there are few meaningful controls on foreign investment in the US. That leaves tariffs as the only useful lever in preventing the complete destruction of our industrial base but is also a significant contributor to inflation.

I’d love to be introduced to some good ideas as to how to mitigate the effects of the overvaluation of our currency as the global reserve. Until something exists, this is our economic experience.
 

Kyle

Beloved Misanthrope
I remember my Douglas Adams, from HItchhiker's Guide -
so many of the observations he used in that book seem to be in play these days, I’m not sure whether to be amused or frightened.

damn,… Now, where did I leave my towel.
 

Makavide

Not too talkative
And everything costs more because … wait for it. EVERYONE IS SPENDING MONEY.

Come on man!
Yup, everyone is spending money - the 10 million extra people let in over the past three years are spending money. these extra 10 million people are helping to decrease the supply chain - causing the costs to go.

But you know who is not spending money -
the smash and grab people taking what they want with no consequences.
the organized shoplifting groups, taking what they want with no consequences.
just the plain 'ol shoplifters taking what they want with no consequences.
all helping to lower the supply chain, plus causing the retailors cost to increase (and their insurance).

So what is left cost more for those preferring to live by the rules and suffer with higher inflation.
 

HemiHauler

Well-Known Member
Yup, everyone is spending money - the 10 million extra people let in over the past three years are spending money. these extra 10 million people are helping to decrease the supply chain - causing the costs to go.

But you know who is not spending money -
the smash and grab people taking what they want with no consequences.
the organized shoplifting groups, taking what they want with no consequences.
just the plain 'ol shoplifters taking what they want with no consequences.
all helping to lower the supply chain, plus causing the retailors cost to increase (and their insurance).

So what is left cost more for those preferring to live by the rules and suffer with higher inflation.

You have the genesis of a PhD thesis here. Flush out your ideas a bit more. I think you’re on to something.
 

somdwatch

Well-Known Member
Without the consumption component, money press going brrrrrrrrrrrrrrrrrt cannot alone create inflation. Inflation is “too much money chasing too few goods”; ergo with out consumption… well never mind. You’re clearly too stupid to grasp.

Let me guess: public education?
If you paid for yours, I would send the degree back. You were over charged.

History has repeated itself; one only needs to remember what Carter did back in the day.

The problem with your idiot vs. Carter is it is Self Inflicted and living by the economic rules of what you're espousing. So as I said, you really need to go pull your head out of your A$$ and set the roid free.
 
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LightRoasted

If I may ...
For your consideration ...

Oh look .... Inflation. In the things industry needs to make and build things. Higher prices coming to an appliance, electronic, home, etc. you might need.

Actually this chart represents the continuing gross devaluation of the fiat Federal Reserve Note, aka the US dollar.

GOA-BqmXMAAjau_
 

HemiHauler

Well-Known Member
If you paid for yours, I would send the degree back. You were over charged.

History has repeated itself; one only needs to remember what Carter was did back in the day.

The problem with your idiot vs. Carter is it is Self Inflicted and living by the economic rules of what you're espousing. So as I said, you really need to go pull your head out of your A$$ and set the roid free.
You and makavide should collaborate!
 

Hessian

Well-Known Member
FED will still hold out until closer to the election...then sometime in August/Sept they will lower the rates for an artificial bump to the markets to convince people that Bumbling octogenarian Joe Dementia has the economy roaring with Build Back Better II.
Will Purple states fall for it? Probably...and thus they will not have to cheat as hard as they are planning.
 
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Kinnakeet

Well-Known Member
Yup, everyone is spending money - the 10 million extra people let in over the past three years are spending money. these extra 10 million people are helping to decrease the supply chain - causing the costs to go.

But you know who is not spending money -
the smash and grab people taking what they want with no consequences.
the organized shoplifting groups, taking what they want with no consequences.
just the plain 'ol shoplifters taking what they want with no consequences.
all helping to lower the supply chain, plus causing the retailors cost to increase (and their insurance).

So what is left cost more for those preferring to live by the rules and suffer with higher inflation.
shoot THEM ON SITE
 
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