The Economics of Deflation | Jörg Guido Hülsmann

[Tracywithafacey]

I love how he mentions "if there is global warming" and puts it under natural not man made causes ;)

[sultanchamp]

Great lecture!

[HunterfromtheFuture]

Mises Institute FTW!

[pirucreek]

I wanted to see the other side of the coin. I was looking for an hour long talk by someone like Krugman on deflation and why it is bad. There are none, the more I think about it they are crooks not idiots.

[charronfamilyconnect]

A gold standard worked well in the agrarian age. Now were in the modern age. We dont need paper money nor metal money anymore. We can use a system of credits to transfer our money electronically, only it doesnt come into existence as a debt/loan but rather a unit of account to account for a good or service based on the markets value placed on it. To me that is a step in a better direction. Why store away a metal that is at risk to theft, and death of your family? Its time to evolve as a society

[cabgt]

@charronfamilyconnect In your evolved money society scenario do i have a claim to gold or silver anytime i want it or are you saying that the money will be backed by nothing? Will there be central banking etc? You mention that having metals would mean i'm at risk to theft etc. For starters, the govt already steals from me (inflation)! Secondly, i don't recall reading in history books of great theft and murder occurring in U.S. society in the 1800's and early 20th century due to gold.

[charronfamilyconnect]

Has Anyone here checked out Tom Greco? He has a system of monetary exchange that seems to make the most sense. It has natural check and balances built into the system with full accountablity and no chance of abuse through inflationary or deflationary measures. It seeks to find that happy medium afterall money is a medium of exchange not something to speculate on or pump out of the mill. Money = labour/energy and as long as money is created when energy is created and the inverse than it works.

[TheManiacalSatanist6]

I don't know who this dude is. but he sounds Russian.

[rsobies]

@TheManiacalSatanist6

he is german

[TheManiacalSatanist6]

@rsobies Hmm. Interesting. Considering the inflation panic that Germany had way back, having a German economist talk about inflation/deflation is interesting.

[LordDyhalto]

hmm... I learned stuff =9

[charronfamilyconnect]

My observation of the Keynesian economics vs austrian econmoics is equivalent of the schools of thought advocating Inflation vs. schools of thought advocating deflation like as if either theoretical philosophy(not necessarily practical) leads to the best economic outcome.. I feel that inflation and deflation leads to the same outcome namely few wealthy people and many hardworking slaves(working to either pay taxes to government or interest to money lenders/changers to perpetuity.

[Scottnice]

@charronfamilyconnect

Yeah but deflation helps out the poor working class and inflation doesn't.

[DigitalShaolin]

@charronfamilyconnect Keynesian vs Austrian is more about free market vs government intervention than inflation vs deflation. Actually I don't know of any Austrians who advocate monetary deflation. A gold standard would likely result in price decreases, but not monetary contraction (this is what most refer to when talking about deflation). New gold is mined every year so under a gold standard you would have slight monetary inflation, but also decreasing prices as productivity increases.

[charronfamilyconnect]

@DigitalShaolin You seem to think more mining of that shiny metal combined with the toxis environmental agents of mercury is a good thing? Have you truly thought it through? I have family in South america suffering with all kinds of ailments because of mans greed for Gold! As for decreasing prices theory why would producers produce something with diminishing returns in such abundance instead of creating something new that has a higher ROI afterall the persuit of profits is mans main goal!

[DigitalShaolin]

@charronfamilyconnect I didn't say anything about whether we should or should not mine more gold. It makes no difference either way economically. I was just stating how much is mined on average as it would relate to inflation. You have reading comprehension problems.

[charronfamilyconnect]

@DigitalShaolin I wasn't just looking at the face value of the words you wrote but went a little deeper. Typical Austrian Idealists think that mining levels would pretty much balance out the inflation of money like as if it would function as a natural equilibrium. That is just theory not reality in my humble opinion!

[joepeeler34]

@charronfamilyconnect It's my understanding that if cash demand holdings increased, then the purchasing power of money would necessarily increase. Less money chasing same amount of goods in other words. The increased purchasing power of money (i.e. gold/silver prices rising) would spur production of gold/silver mining. This makes sense to me. It's true that there would be a lag that isn't present with paper, but this one minor drawback to commodity money is more than offset by the benefits.

[joepeeler34]

@charronfamilyconnect Why didn't you watch the video instead of trolling?

Gold and silver aren't just "shiny metals." They are natural monies for following reasons:

1) High unit value per measure of weight (portable)

2) Divisible in that they don't lose value when divided

3) Have non-monetary uses

4) Durable yet malleable so as to fashion into coins

5) Finite but enough exists to function as media of exchange

6) Non-corrosive so make ideal storehouses of value

[charronfamilyconnect]

@joepeeler34 Seems to me that your Divinity is the old Golden Calf(say didn't moses smash that cash to bits?) LOL! Honestly,I am invested in Silver and some gold(25% of my net worth). The rest of my net worth is in arable farmland and real estate. I think it woudn't be fair(since you dont know me) to say I dont worship and paper deity. I have no problem with gold and silver. I just dont believe we have to back our money with it necessarily. Why monopolize the form of money with a metal?

[DigitalShaolin]

@charronfamilyconnect Wrong. Fiat currency, whether electronic or not, is the easiest to steal. They can steal your money through inflation. Most of the currency that exists today is already in the form of electronic bits on a computer system. Inflation is a hidden tax that steals our money on a daily basis.

[charronfamilyconnect]

@DigitalShaolin that is because they are allowed to create it without any work behind it. Money represents labour/energy, and not credit created out of thin air representing debt which is what we have with the current system. Its not the form that money takes that is the problem, its the way it comes into existance plane and simple. Compounding the problem is that this debt can only be paid with more debt to infinity which is the causd of the problem we have & why I have gold/silver for now.

[TheBullionBull]

@charronfamilyconnect Just let the market create the money.  Austrians want the market to choose the money, and almost always the market chooses gold, but if your idea is better it will use it instead of or alongside gold.

[charronfamilyconnect]

@TheBullionBull Market being the community right? The biggest problem I see with Prescious metals is the cumbersome and riskiness of lugging it or storing it away. IF Austrians truly want the market to choose the money then I am all for it. I just can't see though that a gold standard will solve the issue of inflation/deflation etc.... Thanks for an open mind by the way to a new possibility whether it works or not will be seen. I guess some people on here however are Gold deity worshippers. LOL

[TheBullionBull]

@charronfamilyconnect "IF Austrians truly want the market to choose the money then I am all for it."

This is the "official" Austrian position. Since the marketplace has almost always chosen gold in the past, many people who follow the Austrian school get confused and think it MUST be this way, but of course the Austrian school is against any use of force other than defensive, so a true Austrian would always allow competition from any other currency, as long as it wasn't fraudulent.

[RKAddict101]

@TheBullionBull I don't think you necessarily have to be a libertarian to be an Austrian, as your post suggests. It wouldn't make much sense if an Austrian wasn't some sort of libertarian or pseudo-libertarian or anarchocapitalist, but the two philosophies are separate. The Austrian school simply refers to a school of thought in economics (whose logic suggests libertarian economic policies would be the best).

[NicosMind]

@TheBullionBull A few years ago i actually had a monetarist tell me that Austrian economics was "market based economics". WHich is 100% true. We want everything to be choosen 100% by the people. Businesses should live or die by consumer choice. Not by the whim of a politician. The money should be controlled by the actions of the millions of us cause that reflects the markets preference and not by some comission who only makes thins worst from their intervention.

I think we have it best

[sbuttgereit]

@TheBullionBull I think you have made a bit of error. The issue of prohibition of non-defensive force is principally a Libertarian point of view and not necessarily Austrian School point of view. The difference lies in that one is a political philosophy and the other is an approach to economics. In the context of the Mises Institute, it's easy to confuse them, but Walter Block himself rightfully pointed out this distinction during a panel Q&A session in a different video.

[cabgt]

@charronfamilyconnect Study the history of inflation/deflation. It will become patently clear to you (or it should) that absent hard money accountability and banks receiving govt priviliges, the severe economic booms/busts etc we have seen the last 90 years would not exist!

[RKAddict101]

@charronfamilyconnect Obviously you misunderstand a lot about the Austrian theory. Storing gold is not a problem because the gold that currently exists is already stored. Certificates for gold could be used instead of physically moving gold around. A digitalized system of transferring gold could also work. Stating the market should take care of the money supply does mean whatever system you are advocating would become the primary system if the market thought it was for the best.

[charronfamilyconnect]

@RKAddict101 Fair enough, your proposal for a digitized accounting system of the gold thats stored.In that case I think the government & the central banks should give back to the american people all the gold they confiscated in 1933 for starters cause as I see it the average person doesnt have any gold in their possession as it was taken from their ancestors from FDR. Maybe we should store all the known gold in the world and divde by world population and divde it up so we are on even ground

[RKAddict101]

@charronfamilyconnect I agree with the government selling the gold back to the people, but dividing by population to be on even ground is a silly idea in my opinion. Gold will flow naturally (as money does) to those that deserve it (those that produce what consumers want the most). Naturally, different countries will have different amount of wealth. It's not as if every country in the world will suddenly agree to a competing currencies standard, so it would be impossible to work out.

[Moragauth]

@RKAddict101 The problem with selling it right now is that those with the most money are those often most connected to the government. We aren't in a pure market order at the moment.

[joepeeler34]

Tell you what, I'll worship my gold calf and you can continue to worship your papier mache one :)

How is the debt-based paper money system working by the way? You might want to find a new deity to worship before that paper calf goes up in flames. Paper burns afterall. People might need it to keep warm in 5 years' time.

[joepeeler34]

@charronfamilyconnect Oh, it's just a "shiny metal." Typical ignorance.

Why would you think the price of gold/silver would be falling in relation to other goods? History hasn't borne that out. From 1788 to 1913 (Fed. Res. Act) the purchasing power of money increased by 13% and even higher by some estimates. This should be expected in an environment of productivyt gains and sound money. When the purch. power of metal money increases, the price of money has risen, i.e. prices fall.

[r44fje]

@charronfamilyconnect Poor people suffer more from price increases than rich people do.

[charronfamilyconnect]

@r44fje That is true! So probably Deflation is the lesser of the two evils. To me as long as people can freely exchange their labour than that is a good thing, but implementing a pure gold standard is not the way to go afterall who owns most of the gold? Maybe the central banks? So they would still control things cause he who owns the gold makes the rules so nothing changes, and they still would control the montetary instrument of exchange. We need to evolve into anew system check out tom greco

[natritious1]

@charronfamilyconnect it used to be you could save your earnings from regular labor and have a very comfortable life