Who else resents USAians for causing this finanical crisis?

[HalfLotus]

Originally posted by KrazyHorse


The real problem is that these commodities regularly undergo enormous price swings.

At least with Federal Reserve Notes, we always now which direction they are going....DOWN.

[KrazyHorse]

Yes, and? Most people don't hold large portions of their wealth in currency. At least those who are not retarded don't.

[KrazyHorse]

Jeebus save me from the 2% annual decline in the real value of currency!

Instead we should denominate value in some commodity which can change value by 30% in a year.

[Kidlicious]

Originally posted by HalfLotus
At least with Federal Reserve Notes, we always now which direction they are going....DOWN.

I'm sure you don't realize how beneficial it is for people to have a reasonable expectation of interest rates.

[HalfLotus]

Originally posted by KrazyHorse
Jeebus save me from the 2% annual decline in the real value of currency!

Try 17%.

http://www.dailyreckoning.co.uk/economic-forecasts/the-real-us-inflation-rate.html

If your living expenses are really rising at 2% annually, please tell me where you live so I can move there. One-way ticket to Fantasy Land please!

[Arrian]

Originally posted by Agathon


Do I get a cookie?

http://www.apolyton.net/forums/showt...hreadid=181505

Indeed you do. A ZOG operative provide it to you (when you least expect it!).

-Arrian

[KrazyHorse]

Originally posted by HalfLotus


Try 17%.

http://www.dailyreckoning.co.uk/econ...tion-rate.html

Maybe if you spend half your money on gasoline.

[Imran Siddiqui]

I think I'm a Mooslim Joo.

[Kidlicious]

Originally posted by HalfLotus
Try 17%.

Oh I guess we are in a hyperinflation period, eh?

No, prices are pretty stable, and where they aren't it's because of supply constraints, not too much money.

Here's the problem with the gold standard, prices aren't predictable, which discourages investment. Imagine how volitile food prices would be if we were on a gold standard. ****, people would be starving to death because of it!

[Impaler[WrG]]

Instead we should denominate value in some commodity which can change value by 30% in a year.

Part of the volatility of Commodities is that of the money they are priced under, also I stipulated that a basket of commodities would be used, possibly hundreds of commodities could be combined so that no single one would be more then a few percent of the total basket value. Each commodity of the basket is priced in units OF baskets because the basket is the money. In essence its ratios of one commodity to another is being determined directly rather then using gold or a fiat currency as an intermediary. If the basket is broad enough it should be very stable.

[KrazyHorse]

Inflation was probably higher than usual last year because of increased commodity prices (due to increased demand...and yes, demand outlook). The US is a commodity-importing nation, thus it is hurt by increased demand for commodities. It doesn't matter what the US uses to denominate its currency. That is a real effect.

Now, you can take the hit (change in real value of commodities relative to everything else) in two ways: increased nominal commodity prices or decreased nominal prices for everything else (most importantly labour). The Fed intelligently chose to take the hit as increased commodity prices, i.e. price inflation on all goods and services which have commodities as input. Why is this intelligent? Because otherwise we require that nominal labour prices decrease. Labour STRONGLY resists nominal wage decreases. What is the result? The marginal cost of labour increases far above the marginal utility of labour. What does this mean? Businesses fire large numbers of employees.

Gee, that sounds great.

[KrazyHorse]

Originally posted by Impaler[WrG]


Part of the volatility of Commodities is that of the money they are priced under,

That part is much smaller than the inherent volatility of commodities relative to other things, the most important of which is the unit price of labour.

also I stipulated that a basket of commodities would be used, possibly hundreds of commodities could be combined so that no single one would be more then a few percent of the total basket value. Each commodity of the basket is priced in units OF baskets because the basket is the money. In essence its ratios of one commodity to another is being determined directly rather then using gold or a fiat currency as an intermediary. If the basket is broad enough it should be very stable.

No, commodity prices are HIGHLY correlated. It is demonstrably false that any naive basket of commodity prices relative to other things (again, take labour) is stable. There may be some basket of commodities which can be demonstrated to be relatively stable (would have to be both long and short different commodities) but such a construction is complex, and historic data may not be sufficient to build it. It seems to me to be much easier to have a central authority which is able to control the money supply so as to maintain a stable price level than to trust a static model to give us a stable price level.

[Impaler[WrG]]

Apparently this commodity basket idea is nothing new, some respected economists had it during the great depression. Here is a site ware you can find some books on it.

http://bufferstock.org/main.htm

[HalfLotus]

Demand...right. So there is a 15-30% increase in demand for energy and food over the past couple of years? That is absurb. Please don't tell me this economic discussion is going to devolve into a naive application of supply and demand. You realize that supply and demand has no bearing on the price of crude oil?

It is far more likely that recent inflation is caused by the Fed's enormous increase in the money supply over the last several years. And why they stopped publishing M3 data to conceal that massive increase.

Since the Fed no longer publishes honest money supply data (as if they ever did, considering their CPI numbers don't include food or energy costs, LOL), we rely on private sources which estimate the increase in the money supply in the 10s of trillions of Dollars.

[HalfLotus]

DP