Who else resents USAians for causing this finanical crisis?

[KrazyHorse]

Originally posted by Unimatrix11


That´s just KrazyHorse´s ´style´, as i learned. He seems to have no issue with assuming people would be free of the ´money illusion´ (meaning they always account for futrue inflation - and that at the correct rate it´s gonna be - like everyone was a sage or something), but OTOH call everyone who disagrees with him stupid. It would be interesting to discuss the inflation rates for the next 10 years with him. He´d probably call everyone who is off his assumption by more than a percent or so stupid, and still assume, people would be ´smart´ enough to assume inflation rates correctly.

Wow. Way to confuse individuals with aggregates.

This is the first post of yours that I've ever seen. From its quality I think we'd all be better off if you would go back to not posting.

kthxbye

[KrazyHorse]

HalfLotus' view of both AS and the Austrians is like the Cliffs notes version.

[KrazyHorse]

Oh, and if it's not already obvious, I'm going to suggest that if Unitard really thinks that market predictions of inflation are off by significant amounts then he should go bet on the TIPS spread (short TIPS, long Treasuries if he thinks inflation will be lower than expected, short Treasuries, long TIPS if he thinks inflation will be higher than expected).

[Unimatrix11]

See ?

[KrazyHorse]

See what, ****?

I have no problem with people disagreeing with me. They just have to do it in an interesting, intelligent and cogent way. You have failed thus far.

[KrazyHorse]

Also, why the **** would you edit a post that's a half-hour old, more than tripling its length?

Do you also write code that has loads of goto commands scattered through it?

[Unimatrix11]

Actually i used to - back in the 80´s... but in this case i didnt expect such a quick answer, and the added length might give you an idea, as to why there´s 30mins between initial post and editing time stamp... some people think about what they are writing - throwing around insults post after post subsequently might be a lot faster. It´s just not what decent people do (cause thats called ´spamming´)...

And you do think, that calling me names, helps your case and is more ´interesting, intelligent and cogent´ ?

Edit: BTW, I didnt even disagree with you, i just critized the fact, that you are exercising a very poor manner of discussion here, by calling people names. And that was why i said ´see ?´ - cause you had just done it again. If you dont agree with a statement, then try to debunk it. Calling it (or even the author) ´stupid´ is absolutely worthless and worst of all possible answers. I may note, that i refrain from doing it to you, even now...

[KrazyHorse]

Originally posted by Unimatrix11
Edit: BTW, I didnt even disagree with you

You did something far worse than disagree with me; you falsely represented my viewpoint. This was obviously not purposeful; it's indicative of your lack of comprehension. I have at no point made the claim that individuals are anything other than stupid or short-sighted. In aggregate they tend to be less stupid and short-sighted. In fact, in aggregate they tend to be less stupid than any individual is.

And your commentary, such as it is, on my style of "discussion" is based on false assumptions regarding my objectives. My goals in posting on Apolyton are to (in decreasing order of importance):

1) Amuse myself by pwning n00bs and *****
2) Educate myself and clarify my thoughts to myself by pwning n00bs and *****
3) Participate in serious discussions
4) Amuse others by pwning n00bs and *****
5) Educate others by pwning n00bs and *****

I'll give you one guess as to whether or not I'm doing (3) when I talk to people like Kid, HalfLotus and you (though your edit gains you slightly more credit)



And as far as your edit goes, it suffices to say that you have drawn a false dichotomy between growth in the money supply due to central bank action and no growth in the money supply. You might want to ask yourself how the money supply supports an increase in the total nominal value of transactions in the economy, i.e. does inflation without central bank action result mainly from a spontaneous increase in the velocity of money or from an increase in the expected real interest rate received by lenders. There is every reason to believe that it is mainly the latter. It is also demonstrable that to a fairly good approximation, without a shift in the production function of the real economy such an increase is unsustainable over anything other than the short term.

[Unimatrix11]

So let´s call off the childish blame-game. I assume, You will stop insulting people from now on and behave on a scale with everyone else.

Originally posted by KrazyHorse
I'm interested to know why, if commodity price inflation is mainly due to an increase in the money supply, we have not also seen concommitant inflation in other sectors (namely, the labour market, in which unit labour costs have been remarkably stable). Labour shows nowhere near the same amount of resistance to upward change as it does to downward (there is still some stickiness on the upside, but MUCH less).

Of course labour prices are less flexible to the lower. That has very practical reasons: You need to earn this much money in order to feed yourself and your family. There is a natural limit to how deep loans can drop. And nominally, this limit rises with the rate of inflation: The real income (deflated) has to be enough for the working force to reproduce itself (and nobody is willing to take a chance on this one by anticipating a deflation). What you are saying by ´labour costs have been remarkably stable´ is that real income did not rise in the past decades (this has recently been shown in a study here in Germany as well). The economy grows by x percent each year, but real income does not rise - so where does the wealth go (and Germany´s population shrinks - even more so the working force) ? And where it goes, does it create demand there ? Or is it being horded ? And if it does create demand, does this demand always relate to ´utility´ or may it sometimes be the case, that things, or options on things, are being bought just to sell them later at a better price ? And even if it relates to utility, can we treat the market, as if it consists out of a single good ? Or is it rather, that for example, luxuries are rather demanded by rich people and a rise in that demand does not neccessarily have to punch through to all the other goods on the market. And if any of this does occur, can we then talk about the ´invisible hand´, guided by supply and demand, to always give us the ´equilibrium´ prices of things at any given time ? ... IMHO economical theories may give a good approximate for occuring tendencies, but to assume they were always right is bound to create blind spots.

Another question is the one you brought up: Why did we not see rise in labour costs during the past decades ? Because, if labour gets too expensive here, things will simply be produced somewhere else. And how i see it, its like this: If the industrialized nations like the US and most of the EU-members would not hold some importance as a market, the companies would (not be able to) give a damn, about ´reproducing the workforce´ - our loans would plummet to the level of third world countries (whereupon we might be allowed to work again - so much for absurd realities)

A more fundamental quesion would be: Why is it desirable that everyone is in payed labour (full time) ? Now the econmist will come up with graphs and such, to show why. And he will never doubt, that it has to be this way. The very simple and obvious idea, that higher productivity should enable us to afford to work less is simply shunned aside. Instead we need to grow, grow, grow. Why is that ? An economist simply takes it as a given and never questions this assumption. To him, it is, as if it was natural, god-given so to say... Well, it is not. In fact, it is only natural that a system that constantly has to grow will not be sustainable over an infinite amount of time.

A final word, since i am playing BioShock right now:
´From Andrew Ryan´s great chain will always emerge a man like Fontaine.´

[KrazyHorse]

Originally posted by Unimatrix11
So let´s call off the childish blame-game. I assume, You will stop insulting people from now on and behave on a scale with everyone else.

When the **** did I say I was going to do that? I said precisely the opposite.

Stop putting words in my mouth.

[KrazyHorse]

Originally posted by Unimatrix11

Of course labour prices are less flexible to the lower. That has very practical reasons: You need to earn this much money in order to feed yourself and your family.

This makes absolutely no sense, and if you would bother to think for a moment before posting you might be able to avoid looking foolish. This is a discussion of NOMINAL price movements.

[Aeson]

Originally posted by Lancer
Yeah. It was my fault, sorry.

/me resents you

(Actually I'm more interested in who to blame for all the anti-fiats showing up lately. I think it's KH's fault cause they all started coming out of the woodwork when he showed back up.)

[KrazyHorse]

Originally posted by Unimatrix11
What you are saying by ´labour costs have been remarkably stable´ is that real income did not rise in the past decades

No, I'm saying that NOMINAL UNIT LABOUR COSTS did not change greatly over the last couple of years as NOMINAL COMMODITY PRICES shot through the ****ing roof. If a huge increase in the money supply drove NOMINAL COMMODITY PRICES skyward then NOMINAL UNIT LABOUR COSTS would also be expected to increase sharply.

The fact that there was a huge change in labour costs RELATIVE to commodity prices means that there was a shift in the RELATIVE demand/supply curves.

[KrazyHorse]

Originally posted by Aeson


* Aeson resents you

(Actually I'm more interested in who to blame for all the anti-fiats showing up lately. I think it's KH's fault cause they all started coming out of the woodwork when he showed back up.)

It's because I call them ***** and they all rush to defend each other.

[Unimatrix11]

Well in response to your last post (173): Yeah, in the demand-pull defintion i wasnt quite precise, if thats what you mean: The money supply is increased, of course, not neccessarily by the central bank, but by the active business of the ´private banks´. It´s called a demand pull, because money is being demanded. People want to invest. More than they have liquid if possible. So they go borrow some. This increases the money supply (which is funny enough, and not known by, well, lets just say, ´most´, people).

Well, to be very precise, one might ask, if this really increases the money-supply. Cause if one is overly precise, it is not money, that is being generated this way, but ´almost-money´ - cause the number you have on your bank-account, isnt really money. It´s close to it, but it is not money. Only the money made by the central bank is real money, legally. And those bank accounts (giral-money) are just one form of ´almost-money´. A philosopher might come to the conclusion that everything is money and money is nothing.

But well, lets leave that aside... So we got more ´money´, because it is a good time to invest (or regarded as such by the ´aggregate´). Usually in those times, interest rates are high. What is cause and what is effect regarding money supply and interest rates, or if one is affecting the other at all even, is, as far as i read, still a matter of debate between the various ´schools´.

But to counter your counter: If the private banks expand their active business (e.g. expand the value of the ´giral money´ on their accounts by lending (what they dont have)), they need to cover it at the CB with a certain minimum of CB-money. What if they have to much giral-money (or other money-substitues) for their backing ? Well, i guess, we all know now... In the end, a given ammount of giral money should correspond to an according supply of CB-money.

So wether by directly ´printing´more money, or by lowering the minimum reserve required for the private banks´ active business, the CB has quite an influence on the money supply and thus on inflation.

Studies have shown that the circulation speed of money is pretty much constant btw - except in hyperinflation where it sky-rockets of course...