Don't think that the economy actually recovered until after WWII. Drafting 11M men is not the same as full employment, and there was still strict rationing all through the economy. It wasn't until 1946 that the government finally dropped much of the depression and wartime controls and freed the economy.
@adhocrat1 You're correct; not only did they drop the controls you mentioned, but they cut spending 60% and taxes 30%. They did the exact opposite of what political economists insist government has to do to fix the economy, and the next couple of years were very prosperous.
@shanedk here is where i disagree where money supply has no bearing,, if the money supply falls, that means prices should fall also. But they didnt, contrary to popular belief, prices never were allowed to adjust to money suppley level. The government used tactics like NRA( national rec act.) and protective tariffs which ultimately made us much poorer and causing the depression.
@shanedk You and I, and Tom Woods, know this. Why don't our politicians?
Rhetorical question, but still a good one. It leads to the thought that maybe politicians don't much care about truth and reality. And they certainly don't have our interests in mind when they pass legislation.
Not only is the amount that prices rise an inflation tax, but also the amount that prices didn't fall is also included in the inflation tax. Due to improvements in productivity, more goods are created so prices should be falling. On the gold standard, prices fell and the economy boomed.
@thesilverjournal Correct. As I said in the video, deflation is only when prices fall because of the money supply. If prices fall because productivity is more efficient, then capital is freed up and everybody's paycheck goes further. The Monetarists who strive for price stability are misguided in this way; creating money to get prices back up causes the exact same harm that inflation does.
I'm going to start only commenting on your political and economic opinions.....Perhaps it won't be as much fun, because cock stroking never is......But I agree with your political and economic views 110%..... ;) Great videos!....But I still say that you and Virgil are a team!... ha/ha.... I've been thoroughly enjoying my ShaneD movie marathon, btw......Keep up the good work....
A biggest public campaign has started to end fractional reserve banking, look at the POSITIVE MONEY website and support the campaign ...and spread the word.
Will you be doing a video on the Austrian school anytime soon? Over 90% of all YouTube videos on Austrian economics are more or less bundles of lies put up by leftists.
Your videos are incredibly informative and this one is no exception.
It seems apparent that if the only significant way money comes into existence is by way of loans, then debt is essentially necessary in order for this (fractional reserve lending of perpetually inflated currency, backed by nothing ) monetary system to operate. The function once provided by gold is now provided by debt.
@tubeboy8 As I explained in my video "How Fractional Reserve Banking Increases Inflation," that's a multiplier effect. There needs to be a previous creation of money for it to have something to multiply.
That creation itself can be in the form of debt, like when the Fed tries to drive down interest rates by creating money and loaning it to banks. But it can also be in the form of government creating money instead of taxing people.
@shanedk You are right. I would like to add that creating money, means issuing new notes that represent a value that is given by citizen faith in that value. PxY = vxM this simple and known formulae can be understood in different ways depending on the context and the assumptions. It is false to say that whenever the gov make an expansionary monetary policy, this necessary leads to inflation.
If the price of the widget dropped because of using cheap third world labor, that displaced domestic industries. Domestic workers loose their jobs, cheap labor drives the prices of widgets down, unemployed people cannot buy the cheap product at any cost. Outsourced manufacturing create a large abundance of labor, which drives wages down. So if the economy is used only to retail products and the product is made by offshore cheap labor. The only supply and demand is the abundance of labor.
@louiethegreater "If the price of the widget dropped because of using cheap third world labor, that displaced domestic industries."
No, it didn't; it freed up domestic capital which can now be used to increase productivity elsewhere. Blame the government, not the companies, for the destruction of domestic industries. They lose their jobs because of government regulation and monetary policy.
@shanedk Yes it free up capital, but not for investment in the U.S. the investment goes to Asia where the cheap labor lives.The cycle continues, the U.S. is just a large retail market, for those who no longer considers themselve American, but citizens of the world. They would gladly trade their U.S. citizenship for a global one. We cannot continue to be consumers, we will have to make things, and supply at least some of our own needs. Tariffs are needed to protect domestic industries.
@louiethegreater "Yes it free up capital, but not for investment in the U.S."
Yes, it most certainly does! You need to learn the dynamics of how markets work (not to mention the basics of economics). Jacob Spinney has some very good videos on this subject.
@shanedk No you need a course in partiorism 101, not to mension, you need to come to grips with the economic theory you have learned is just theory. For example Free trade is a theory only it has never been implemented anywhere in the world. If the government checks were not mailed out each month, to the various supported groups, our economy would fail in 90 days. It is simple, we do not have labor intrensic manufacturing, what we manufacture is highly automated products, using little labor.
@vspqbd Check fletchforfreedom's main page. I'll also post the PM he sent out to those who had encountered Louie that went over 'lilouie's' bogus claims one by one.
@Virgil0211 Oh, Virgil you come out of the closet on fletches home page didn't you. Shouldn't you get the gender issue worked out before you start advising others.
@shanedk Yet we have allowed 20 million illegal immigrants, who are uneducated, unskilled workers to beat wages even lower. You need to learn what has made america work for 200 years. Protectionist policies, protected domestic industries from the cheap lobor of the world, and sent a clear signal to multinational... want-a-bes that their chaeap labor products would be tariffed. It wasn't untill globalizaion, and neo-liberals bought Washington that our downhill spiral began.
@louiethegreater Why was that not the case with the Irish immigrants? Why was that not the case with the Chinese immigrants? They were uneducated and unskilled. Yet, the more of them came, the more America prospered.
What made America great is NOT protectionism--it was when America DIDN'T have protectionism. The big corporations WANT protectionism, and they lobby the government hard to get it--because they know it'll result in them making massive profits by keeping the competition down.
@shanedk At the turn of the century we needed manual labor, now we do not, the US cannot provide jobs for its own citizens less on illegal immigrant. You should be reminded of what " illegal" means. Ellis Island meant legal didn't it. You mean General Electric lobbys wasington for tariffs, or Walmart lobbys for tariffs, or maybe Toyota. We owe it to our domestic industries, and workers to protect them, Multinationals using Cheap third world labor needs, 100% tariffs on their products.
@louiethegreater Again, the reason WHY we don't have our own jobs is because of government regulation and monetary policy. And these trillions of dollars in "bailout" and "stimulus" money did NOT help.
@shanedk The reason we don't have our own jobs is because, back in the 1960 globalist and neo-liberals decided we should become a service economy, and they..... the globalization crowd..... decided that 300% profits were better than the 20% profits, so outsourcing began, than the race to the bottom began, because we would not protect our domestic industries. I will ignore your statement about creationist and treat the statement like a joke. Don't call me a jackass again you ignorant little twirp
@shanedk absence of gov regulation will lead to all the benefits of free trade, but will globalize also the absence of labour rights that have been awarded by trade unions in developed countries during the last decades and were very expensive in human lives terms.
@louiethegreater how do you explain the price of a pair of running shoes made by Adidas or Nike in china that only cost a couple of bucks to make yet have increased in price to over $100 a pair? Where is evidance that outsourcing has driven down prices here? Often I see so called good quality brand name products go up in price yet go down in quality(cheaper materials and cheaper labour). How you explain that? I say its cause greedy corporations are raking in the bucks cause of a name.
@charronfamilyconnect I agree with you, the cost is in marketing the product here in the U.S. Michael Jorden is paid more than Nike's entire Vietnam workforce.
@charronfamilyconnect Your problem is you're looking only at the supply side and ignoring the demand side. You can buy shoes that are MUCH cheaper than Nikes and are very good--and often they're made in those very same factories! People demand brand names. If they didn't, everyone would be buying the off-brand ones.
@louiethegreater Once again, I point out a rational problem with your argument, and once again, you react like a stupid, whiny little child because you can't handle your pathetic world-view being challenged.
oil prices have skyrocketed, tuition has skyrocketed, healthcare costs have skyrocketed, housing prices [were] skyrocketing, the price of gold has skyrocketed.
the only thing that hasn't skyrocketed is inflation and interest rates, hmmmmmm....
Oh, and how CONVENIENT the gov't doesn't use ANY of those things to calculate the annual rate of inflation. What prices have been increasing by 3% exactly?
Many Questions: 1) I always thought the deflation was caused by all the banks failing, reducing the money in circulation, not the other way around.
2) you said in your depression video that FDR devalued the dollar 40%, how could he do that without creating new money?( Unless when you say "new money" you mean gold, not paper). 3) Why couldn't FDR use the gold to fund his New Deal instead of waiting till WWII?
@interstate317 1) The reason why they failed was because they didn't have enough money, and the reason they didn't have enough money was the Fed's deflationary policy.
2) That was after the banking failures, when it was too late. All he was doing at that point was inflating a down economy. ALWAYS a bad idea.
@shanedk If the government hadn't bailed out the banks, would it lead to deflation? Isn't that what Obama means when he says" if we hadn't bailed out the banks it would lead to a depression"
@interstate317 The banks would have failed because they made loans that were too risky. Instead of deflation, it would actually have been a correction to the inflationary bubble. Instead, what we got was REAL deflation as the confidence in loans dropped through the floor. (It also didn't help that Congress allowed the Fed to start paying interest on reserves, essentially paying the banks NOT to loan out money.)
@shanedk okay so under the gold standard as we experienced deflation, the dollar gained value, so countries sold gold in exchange for dollars, except we never printed the extra dollars, is that right?
I just want to point this out, Creating inflation IS what manipulates the interest rates. If interest rates are 0% and there are no savings = there is a lot of money printing. This also means a lot of malinvestments and bubbles, they appear when the rates raise.
@Keyguya I recognize the situation you describe. I know of two examples offhand: The Wiemar Republic in about 1931, and Zimbabwe in about 2008. I'm sure there are others, although likely few as bad.
@evensgrey Oh, plenty of others, and yes they were bad: America after the Revolutionary War; America after the Civil War; Brazil in the 1990s; Yugoslavia in the '90s (probably the worst one in history); the Soviet Union; ancient Rome, LOTS of them...
@helpAmerica1 That wasn't what happened; housing was overvalued before and the market is trying to adjust. The government is fighting the market, trying to make a new bubble, just as they created a housing bubble to replace the tech bubble.
@Denon3333 Overvalued by the housing bubble. That's what bubbles do. And yes, it was partly caused by the Fed lowering interest rates, partly by Fannie & Freddie, partly by the CRA.
your not supposed to bury your money you idiot. You could have used that 10k and waited for the fed to lower interest rates and easily doubled it you idiot.
@shanedk Yeah, since the fed creates fiat money, that 10 k would have eventually depreciated. And by the time the fed artificially lowers interest rates, the money may have come down to almost nothing.
if you want to know whats causeing currency pairs to do what they are doing. It is caused by TECHNICAL ANALYSIS. Most traders trade based on TECHNICAL ANALISIS, thus fullfiling itself. there are also FUNDAMENTAL things like NEWS, ECONOMIC DATA, look at the EMPLOYMENT DATA, EMPLOYMENT DATA or any other HIGH TIER data can have a profound effect on MARKETS. look at CONSUMER SENTIMENT. the guy on the video is nuts. Inflation is not caused by normal middle class white people rioting in banks.
if you guys try to speculate in currency markets with what this noob tells you will will take it in the arse big time. If you want to learn what really causes currencies to change value then message me. Dont worry no ""magic rainbows across america"
wow 1 big factor in inflation is CENTERAL BANKS. Other things are like economic data ect effect the value of a currency. dont see what "a magic rainbow across America" has to do with that. How are "magic rainbows" related to inflation anyway?
lol i dont think the markets will respect you. Do you even have advanced calculus memorized? You should if you want to talk about inflation in everyday terms for the illiterate. So they can rely on what they are told so the markets will respect what they learned.
good points. We need a gold standard and monetary stability. The great depression was also perpetuated by government spending and involvement just like now.
Is deflation as bad as inflation? would deflation be a progressive tax that helps the poor? Also in you're video on the Great Depression, you said that under FDR the value lost 40% of its value from 1933-36. But in 1929 deflation was taking effect, does this explain why GDP droped in '29 but rose in '33? You often say that GDP is a useless measure.
@imre1000 Well said, with the caveat (explained in the video) that it's a different case if the prices fall because the Fed removes money. In the cases that you mentioned (and I pointed out in the video), the falling prices mean that capital has been freed up and can now be used for other purposes, increasing wealth. That's different from deflation, where it's just gone.
That's why I say it's a mistake to go for price stability. The money supply should be at market equilibrium.
@imre1000 The market can actually do it quite nicely, if you have a commodity based currency, and the commodity is something in a limited, but not too limited, supply, is fungible, holds value well, and can be easily exchanged. (Commodity based money is really just certificates that can be exchanged for a specified quantity of the commodity on request from from specified brokers.) Gold does all this very nicely.
Complete drivel. How can inflating money supply cause increase in prices if beforehand does not increase purchasing power? Inflating money supply must first increase incomes and only then can it generate price increase in good and services measured by CPI assuming supply of those same goods and services is not elastic enough to cover increasing demand. Those neoclassical “economists” are peddling such complete crap it newer fails to amaze me how many people fall for it.
@Fernoe Not only that, but wages are "stickier" than prices. Prices can fluctuate week to week, day to day, or even sometimes minute to minute. How many people can negotiate a new wage every week, day, or minute? They'll always be lagging behind.
This is a good explanation on inflation... The most important quote here is "The government should not be striving for price stability, but monetary stability".
Ben Bernanke is doing the opposite,,, he's striving for Price stability... Ben Bernankes policy will end in disaster....
when you say monetary stability and not price stability, do you mean that there should be no money printing at all or no expansion of money supply? wouldn't that lead to nominal price decrease of goods over time? and if that happens, how do u measure say, the success of a business, which depends very much on comparing nominal figures? i think keeping nominal prices stable is important for simplicity's sake, and of course to make your balance sheets look better.
@tetleydidley Supply and demand works for money, too. The price and quantity of money should be allowed to seek equilibrium, just like everything else in the economy. That's why a gold standard works so well.
@shanedk but gold, like any other resources are limited too, and i must say much more limited than paper. how do you seek equilibrium then with something such as gold, where the supply is often limited, and new supplies can only be obtained by mining new gold. paper money is good - because there are plenty, just overprinting it is not. don't you think? or do i not get the gold standard concept?
@shanedk i may need to learn basic economics but you need to learn common sense. the fact is gold is used for other things and if you turn it into money then you're competing with those uses. also gold can't be turned into small denominations as easily as paper. gold is heavier than paper.
@tetleydidley Appeal to Common Sense is a fallacy. If you knew how the gold standard works, you'd know that you WANT your commodity to be useful for somethings other than money.
@shanedk i also don't think that there's enough gold to buy all stuffs on earth, unless gold becomes much much much more valuable than it is now, thereby competing with other more useful uses of gold, such as in electronic components, jeweleries etc.
@shanedk there's one and only one value that everything has when attached to everything else, not just gold. why do you think I can exchange two oranges with a bottle of water? and you didn't answer my question. you pretend that gold is all good. paper is plenty yes but it is not unlimited. gold is very limited sooner or later you just won't have enough gold. jeez..
@shanedk i don't know how many bits it can support but recently i read in the paper that ATMs in Zimbabwe showed integer overflow error when someone tried to withdraw his/her money. LOL. electronic money is even better, cheaper and more efficient. anyway my point is no matter what money you use, paper or metal, you just can't grow the supply too fast or too slow. you say gold is good but you don't say why or how it could work. appeal to nonsense is an even bigger fallacy. make a video bout it.
This is the most truth however it is missing one element how this inflation effects the rest of the world and not just American people. I am Canadian and well when your government goes to the press to produce money which doesn't exist your dollar becomes worth less. They can't pay back the national deficit either. They in fact can't even make your interest payments. They are borrowing right now to pay the interest on what they owe to other countries like Canada and especially China and Japan.
@lucy9359 Anyone still owes money to Japan? I though they liquidates pretty much all their overseas investments when they had the meltdown caused by the phony accounting and suddenly had to pay back all the stolen money.
@lucy9359 Well, if they DO happen to hold any valid securities, then they ARE due repayment. You don't just renege on a commitment because the other party is composed of crooks. Not reneging on deals is an important difference between the crooked and the honest.
"Many people predict inflation due to the recent bailouts, stimuli, and record money printing by the Fed. Yet, some of these same people predict continued depreciation in residential real estate."
It might not depreciate in nominal (dollar-valued) terms, but it is likely to depreciate in real terms (that is, it is less valuable relative to other goods and services in the economy).
It is likely to depreciate because it was highly overvalued due to the asset bubble inflated by the fed.
@Omnywrench They don't teach much in 8th grade in most places. They COULD (I'm pretty sure you should be able to teach calculus to most 5th graders if you taught them math in a reasonable way) but that doesn't suit the government agencies that like to grow their systems.
Think of what it takes to raise prices. Gas stations can do it several times a day. Restaurants have to print up new menus, so they only do it every few weeks. How often do you negotiate a new salary with your employer? Do you meet every morning to discuss your salary for the day? Do you go to him every hour and discuss your pay for the next hour?
"why do wages/salaries rise slower than prices during inflation?"
In general, new money enters the economy in the credit markets (through federal reserve loans and commercial bank money creation) or through government spending, so it raises prices for "hard" assets first, followed by prices, for goods produced with those assets, and only after a while reaching the wage-earners. As a result, inflation tends to put wage-earners on a treadmill, constantly fighting an inflationary disadvantage.
I live in Canada and what he is talking about has already happen here. There fore I get it. I am an employer. The wages can't go up in fact you lay off as you don't have any money because you have had to borrow it all just like he said. The average house price here since 1980 went from $68,000 to $306,000 while the average wage hasn't changed. Groceries tripled in price in the last year. What you could buy for $1.00 then costs $2.43 now. There fore where are we as employers suppose to get money?
Remember that inflation is a monetary thing, not a price thing. It makes perfect sense that inflation--which steals wealth from most people, particularly the poor and middle-class--would result in reduced demand for that kind of service. People want reliable forms of wealth storage, like gold.
Just a clarification - if it's addressed elsewhere feel free to yell at me =)
'money' is obtained through the federal reserve as a loan. So it is already worth less than its nominal value. On top of that, there is interest to be paid off. Now, I watched 'zeitgeist addendum' and was a bit lost when it claimed that loans need to be paid off with new loans, perpetuating a problem similar to paying credit card debt with credit cards.
My question is this: paying off the national debt and its interest doesn't have to solely rely on further loans, right? Because if it does, the loan can never be paid off.
I was wondering how the GDP factors into this. My hypothesis is that increasing production of goods/services for export has the benefit of...how should I phrase this: shifting the debt to other countries. That way the national debt can be paid off without new loans.
It depends. Most of the national debt is held by the government to itself. The government can just forgive its own debt and tear up the bonds anytime they want to.
It's bonds held by others that are the problem, but since bonds are negotiable all they have to do is buy them at the market rate and then destroy them, thereby absolving themselves of the future obligations.
To add to your point about the Great Depression's deflation, we were also on fractional reserve banking (Government backed), which meant that as people withdrew their money, for every dollar they took out, ten dollars were effectively taken out of circulation, making the problem even worse.
It kind of depends on how you define "inflation". Classical economists recognized inflation as an increase in the money supply, and price "inflation" of certain goods as a possible consequence (if the amount of money increased faster than the output of said goods).
Btw, I think you can still see confederalsocialist's video on free market money on the the channel CSMIRROR.
The long-run demand for money is relatively constant, provided that there isn't massive monetary uncertainty. The demand for money might slightly increase as the rate of real economic growth relative to money supply increases, but in general the long-term demand for money is fairly constant.
OK, I just did some math, and found that assuming that the decrease in prices was due exclusively to the freeing up of capital, it would mean an average yearly growth rate of about 4.6%, which makes sense.
I think I finally understand. The less money in circulation the more valuable and more purchasing power it has, but less people have it. Which means less jobs? If you inflate the currency prices go up and more people have it? (Assuming the real value is constant)
KEYNES:
You too only see what you want to see.
The spending on war clearly goosed GDP.
Unemployment was over, almost down to zero.
That’s why I’m the master. That’s why I’m the hero.
HAYEK:
Creating employment is a straight forward craft
when the nation’s at war and there’s a draft.
If every worker were staffed in the army and fleet
we’d have full employment and nothing to eat.
pythor2 3 weeks ago
Don't think that the economy actually recovered until after WWII. Drafting 11M men is not the same as full employment, and there was still strict rationing all through the economy. It wasn't until 1946 that the government finally dropped much of the depression and wartime controls and freed the economy.
adhocrat1 3 weeks ago
@adhocrat1 You're correct; not only did they drop the controls you mentioned, but they cut spending 60% and taxes 30%. They did the exact opposite of what political economists insist government has to do to fix the economy, and the next couple of years were very prosperous.
shanedk 3 weeks ago
@shanedk here is where i disagree where money supply has no bearing,, if the money supply falls, that means prices should fall also. But they didnt, contrary to popular belief, prices never were allowed to adjust to money suppley level. The government used tactics like NRA( national rec act.) and protective tariffs which ultimately made us much poorer and causing the depression.
krillin876 3 weeks ago
@krillin876 I never said it has no bearing. Look at my video on the Great Depression.
shanedk 3 weeks ago
@shanedk You and I, and Tom Woods, know this. Why don't our politicians?
Rhetorical question, but still a good one. It leads to the thought that maybe politicians don't much care about truth and reality. And they certainly don't have our interests in mind when they pass legislation.
adhocrat1 3 weeks ago
Not only is the amount that prices rise an inflation tax, but also the amount that prices didn't fall is also included in the inflation tax. Due to improvements in productivity, more goods are created so prices should be falling. On the gold standard, prices fell and the economy boomed.
thesilverjournal 3 weeks ago
@thesilverjournal Correct. As I said in the video, deflation is only when prices fall because of the money supply. If prices fall because productivity is more efficient, then capital is freed up and everybody's paycheck goes further. The Monetarists who strive for price stability are misguided in this way; creating money to get prices back up causes the exact same harm that inflation does.
shanedk 3 weeks ago
Isn't government and the FED really great.? They stick us and we smile.
TheDano1947 4 months ago
I'm going to start only commenting on your political and economic opinions.....Perhaps it won't be as much fun, because cock stroking never is......But I agree with your political and economic views 110%..... ;) Great videos!....But I still say that you and Virgil are a team!... ha/ha.... I've been thoroughly enjoying my ShaneD movie marathon, btw......Keep up the good work....
ninjacatmagic 7 months ago
A biggest public campaign has started to end fractional reserve banking, look at the POSITIVE MONEY website and support the campaign ...and spread the word.
PositiveMoneyUK 7 months ago
O Jesus, son of Mary! Is thy Lord able to send down for us a table spread with food from heaven?
jesussonofmary1432.blogspot.com
_
ahmd1431 8 months ago
Dumbass, inflation is caused by new money ie printed money
johammbass 9 months ago
@johammbass When did I say otherwise?
shanedk 9 months ago
This has been flagged as spam show
Really enjoyed you video informative. When you have time come visit my channel!
pheromoneaction 10 months ago
Will you be doing a video on the Austrian school anytime soon? Over 90% of all YouTube videos on Austrian economics are more or less bundles of lies put up by leftists.
ThePyro3825 1 year ago
Your videos are incredibly informative and this one is no exception.
It seems apparent that if the only significant way money comes into existence is by way of loans, then debt is essentially necessary in order for this (fractional reserve lending of perpetually inflated currency, backed by nothing ) monetary system to operate. The function once provided by gold is now provided by debt.
tubeboy8 1 year ago
@tubeboy8 As I explained in my video "How Fractional Reserve Banking Increases Inflation," that's a multiplier effect. There needs to be a previous creation of money for it to have something to multiply.
That creation itself can be in the form of debt, like when the Fed tries to drive down interest rates by creating money and loaning it to banks. But it can also be in the form of government creating money instead of taxing people.
shanedk 1 year ago
@shanedk You are right. I would like to add that creating money, means issuing new notes that represent a value that is given by citizen faith in that value. PxY = vxM this simple and known formulae can be understood in different ways depending on the context and the assumptions. It is false to say that whenever the gov make an expansionary monetary policy, this necessary leads to inflation.
juampitrento 1 year ago
@juampitrento But in reality, the only time it doesn't is when there's a credit crunch.
shanedk 1 year ago
If the price of the widget dropped because of using cheap third world labor, that displaced domestic industries. Domestic workers loose their jobs, cheap labor drives the prices of widgets down, unemployed people cannot buy the cheap product at any cost. Outsourced manufacturing create a large abundance of labor, which drives wages down. So if the economy is used only to retail products and the product is made by offshore cheap labor. The only supply and demand is the abundance of labor.
louiethegreater 1 year ago
@louiethegreater "If the price of the widget dropped because of using cheap third world labor, that displaced domestic industries."
No, it didn't; it freed up domestic capital which can now be used to increase productivity elsewhere. Blame the government, not the companies, for the destruction of domestic industries. They lose their jobs because of government regulation and monetary policy.
shanedk 1 year ago
@shanedk Yes it free up capital, but not for investment in the U.S. the investment goes to Asia where the cheap labor lives.The cycle continues, the U.S. is just a large retail market, for those who no longer considers themselve American, but citizens of the world. They would gladly trade their U.S. citizenship for a global one. We cannot continue to be consumers, we will have to make things, and supply at least some of our own needs. Tariffs are needed to protect domestic industries.
louiethegreater 1 year ago
@louiethegreater "Yes it free up capital, but not for investment in the U.S."
Yes, it most certainly does! You need to learn the dynamics of how markets work (not to mention the basics of economics). Jacob Spinney has some very good videos on this subject.
shanedk 1 year ago
@shanedk No you need a course in partiorism 101, not to mension, you need to come to grips with the economic theory you have learned is just theory. For example Free trade is a theory only it has never been implemented anywhere in the world. If the government checks were not mailed out each month, to the various supported groups, our economy would fail in 90 days. It is simple, we do not have labor intrensic manufacturing, what we manufacture is highly automated products, using little labor.
louiethegreater 1 year ago
@louiethegreater Yeah, it's "only a theory"...let's see, who else makes that argument?
shanedk 1 year ago
@shanedk I don't know who makes that argument. If no one does it doesn't change the fact that it is theory and is not science.
louiethegreater 1 year ago
@louiethegreater "I don't know who makes that argument."
CREATIONISTS do, jackass!
"If no one does it doesn't change the fact that it is theory and is not science."
Sigh...
shanedk 1 year ago
@shanedk don't bother with this guy. Fletchforfreedom already trounced him.
Virgil0211 1 year ago
@Virgil0211
May I have a link to the place where said trouncing happened?
vspqbd 1 year ago
@vspqbd Check fletchforfreedom's main page. I'll also post the PM he sent out to those who had encountered Louie that went over 'lilouie's' bogus claims one by one.
Virgil0211 1 year ago
@Virgil0211 Hey, how many channels do you..... OTHERS..... meaning genders, operate. How many does it take to get your point across.
louiethegreater 1 year ago
@vspqbd In the forums, I mean.
Virgil0211 1 year ago
@Virgil0211 Oh, Virgil you come out of the closet on fletches home page didn't you. Shouldn't you get the gender issue worked out before you start advising others.
louiethegreater 1 year ago
@shanedk See what I mean?
Virgil0211 1 year ago
Comment removed
louiethegreater 1 year ago
@shanedk Is that all you have shenedk, are you beaten.
louiethegreater 1 year ago
@shanedk Yet we have allowed 20 million illegal immigrants, who are uneducated, unskilled workers to beat wages even lower. You need to learn what has made america work for 200 years. Protectionist policies, protected domestic industries from the cheap lobor of the world, and sent a clear signal to multinational... want-a-bes that their chaeap labor products would be tariffed. It wasn't untill globalizaion, and neo-liberals bought Washington that our downhill spiral began.
louiethegreater 1 year ago
@louiethegreater Why was that not the case with the Irish immigrants? Why was that not the case with the Chinese immigrants? They were uneducated and unskilled. Yet, the more of them came, the more America prospered.
What made America great is NOT protectionism--it was when America DIDN'T have protectionism. The big corporations WANT protectionism, and they lobby the government hard to get it--because they know it'll result in them making massive profits by keeping the competition down.
shanedk 1 year ago
@shanedk At the turn of the century we needed manual labor, now we do not, the US cannot provide jobs for its own citizens less on illegal immigrant. You should be reminded of what " illegal" means. Ellis Island meant legal didn't it. You mean General Electric lobbys wasington for tariffs, or Walmart lobbys for tariffs, or maybe Toyota. We owe it to our domestic industries, and workers to protect them, Multinationals using Cheap third world labor needs, 100% tariffs on their products.
louiethegreater 1 year ago
@louiethegreater Again, the reason WHY we don't have our own jobs is because of government regulation and monetary policy. And these trillions of dollars in "bailout" and "stimulus" money did NOT help.
shanedk 1 year ago
@shanedk The reason we don't have our own jobs is because, back in the 1960 globalist and neo-liberals decided we should become a service economy, and they..... the globalization crowd..... decided that 300% profits were better than the 20% profits, so outsourcing began, than the race to the bottom began, because we would not protect our domestic industries. I will ignore your statement about creationist and treat the statement like a joke. Don't call me a jackass again you ignorant little twirp
louiethegreater 1 year ago
@shanedk absence of gov regulation will lead to all the benefits of free trade, but will globalize also the absence of labour rights that have been awarded by trade unions in developed countries during the last decades and were very expensive in human lives terms.
juampitrento 11 months ago
@louiethegreater how do you explain the price of a pair of running shoes made by Adidas or Nike in china that only cost a couple of bucks to make yet have increased in price to over $100 a pair? Where is evidance that outsourcing has driven down prices here? Often I see so called good quality brand name products go up in price yet go down in quality(cheaper materials and cheaper labour). How you explain that? I say its cause greedy corporations are raking in the bucks cause of a name.
charronfamilyconnect 6 months ago
@charronfamilyconnect I agree with you, the cost is in marketing the product here in the U.S. Michael Jorden is paid more than Nike's entire Vietnam workforce.
louiethegreater 6 months ago
@charronfamilyconnect Your problem is you're looking only at the supply side and ignoring the demand side. You can buy shoes that are MUCH cheaper than Nikes and are very good--and often they're made in those very same factories! People demand brand names. If they didn't, everyone would be buying the off-brand ones.
shanedk 6 months ago
@shanedk Shut up you ignornat moron, can't anyone say anything on your videos without you sticking you nose in, take a break, get a life.
louiethegreater 6 months ago
@louiethegreater Once again, I point out a rational problem with your argument, and once again, you react like a stupid, whiny little child because you can't handle your pathetic world-view being challenged.
shanedk 6 months ago
oil prices have skyrocketed, tuition has skyrocketed, healthcare costs have skyrocketed, housing prices [were] skyrocketing, the price of gold has skyrocketed.
the only thing that hasn't skyrocketed is inflation and interest rates, hmmmmmm....
Oh, and how CONVENIENT the gov't doesn't use ANY of those things to calculate the annual rate of inflation. What prices have been increasing by 3% exactly?
donttreadonmyass 1 year ago
Many Questions: 1) I always thought the deflation was caused by all the banks failing, reducing the money in circulation, not the other way around.
2) you said in your depression video that FDR devalued the dollar 40%, how could he do that without creating new money?( Unless when you say "new money" you mean gold, not paper). 3) Why couldn't FDR use the gold to fund his New Deal instead of waiting till WWII?
interstate317 1 year ago
@interstate317 1) The reason why they failed was because they didn't have enough money, and the reason they didn't have enough money was the Fed's deflationary policy.
2) That was after the banking failures, when it was too late. All he was doing at that point was inflating a down economy. ALWAYS a bad idea.
shanedk 1 year ago
@shanedk If the government hadn't bailed out the banks, would it lead to deflation? Isn't that what Obama means when he says" if we hadn't bailed out the banks it would lead to a depression"
interstate317 1 year ago
@interstate317 The banks would have failed because they made loans that were too risky. Instead of deflation, it would actually have been a correction to the inflationary bubble. Instead, what we got was REAL deflation as the confidence in loans dropped through the floor. (It also didn't help that Congress allowed the Fed to start paying interest on reserves, essentially paying the banks NOT to loan out money.)
shanedk 1 year ago
@shanedk okay so under the gold standard as we experienced deflation, the dollar gained value, so countries sold gold in exchange for dollars, except we never printed the extra dollars, is that right?
interstate317 1 year ago
@interstate317 No, we experienced deflation because we didn't FOLLOW the gold standard. The rest of your post is exactly right.
shanedk 1 year ago
excellent vid shanedk. people have more control over the economy than i thought.
jayarscintilla 1 year ago
1. US is finished
2. Life in US will never be the same
3. Buy GOLD and SILVER to preserve your wealth (if you have any)
quadcatfly 1 year ago
This has been flagged as spam show
Thank you! This is a wonderful presentation. It should be used in every school!
: )
mizlydia 1 year ago
Thank you! This is a wonderful presentation. It should be used in every school!
: )
mizlydia 1 year ago
Very informative. Well done.
MrMaceinyoface 1 year ago
So, is 0% inflation the optimal inflation?
ShwangShwing 1 year ago
@ShwangShwing Long run, yes. Short run, it can go up or down, but never by much; only what's needed to keep the system at equilibrium.
shanedk 1 year ago
@shanedk
"@ShwangSwhing Long run, yes, Short run, it can go up or down, but never by much; only what's needed to keep the system at equilibrium."
And not like the insanity going on now, obviously.
vspqbd 1 year ago
Well look, here we got one who admit one Government scam, but promote another Government scam, the Moon scam.
johnsenkenn 1 year ago
I just want to point this out, Creating inflation IS what manipulates the interest rates. If interest rates are 0% and there are no savings = there is a lot of money printing. This also means a lot of malinvestments and bubbles, they appear when the rates raise.
Keyguya 1 year ago
@Keyguya I recognize the situation you describe. I know of two examples offhand: The Wiemar Republic in about 1931, and Zimbabwe in about 2008. I'm sure there are others, although likely few as bad.
evensgrey 6 months ago
@evensgrey Oh, plenty of others, and yes they were bad: America after the Revolutionary War; America after the Civil War; Brazil in the 1990s; Yugoslavia in the '90s (probably the worst one in history); the Soviet Union; ancient Rome, LOTS of them...
shanedk 6 months ago
This is really messed up. Does it work similarily in Denmark Shane?
Korkzor 1 year ago
Lets burn this motherfucker down
ekeyra 1 year ago
your houses just got deflated, by 50% whom won/ according to you, the government and banks you hit on.
helpAmerica1 1 year ago
@helpAmerica1 That wasn't what happened; housing was overvalued before and the market is trying to adjust. The government is fighting the market, trying to make a new bubble, just as they created a housing bubble to replace the tech bubble.
shanedk 1 year ago
@shanedk Yes, the average price of a house is actually $100k, but before the Great Depression Two, the average price was at $200k.
Denon3333 1 year ago
@Denon3333 Yes, but not because of deflation. It's because the $200k houses were overvalued.
shanedk 1 year ago
@shanedk Overvalued by what? I heard that the government artificially lowered interest rates for loans.
Denon3333 1 year ago
@Denon3333 Overvalued by the housing bubble. That's what bubbles do. And yes, it was partly caused by the Fed lowering interest rates, partly by Fannie & Freddie, partly by the CRA.
shanedk 1 year ago
@shanedk Is there any way to at the least prevent large bubbles from forming? Small ones are fine, but big bubbles' gonna be terrible.
Denon3333 1 year ago
@Denon3333 Yes: get the government to stop monkeying around with the economy.
shanedk 1 year ago
@shanedk So the private sector doesn't make bubbles on their own?
SirPwn4lot 1 year ago
@SirPwn4lot Not without at least a fractional reserve system.
shanedk 1 year ago
@shanedk
"@SirPwn4lot Not without at least a fractional reserve system."
And it helps when said fractional reserve system is supported by the government (1862 Banking Act).
vspqbd 1 year ago
I like this video.
MishuTaste 1 year ago
AEVautomatic has been blocked for false accusations of racism.
shanedk 1 year ago
your not supposed to bury your money you idiot. You could have used that 10k and waited for the fed to lower interest rates and easily doubled it you idiot.
AEVautomatic 1 year ago
@AEVautomatic Okay, you were lying when you said you were an economics expert...
shanedk 1 year ago
@shanedk Yeah, since the fed creates fiat money, that 10 k would have eventually depreciated. And by the time the fed artificially lowers interest rates, the money may have come down to almost nothing.
Denon3333 1 year ago
Git yer gun the stock market is too fast for us elders get yer gold bullion yer"
AEVautomatic 1 year ago
this video is laughable
AEVautomatic 1 year ago
rofl the guy that made this video must be a big John Mcain/ Sara Palin fan.
AEVautomatic 1 year ago
if you want to know whats causeing currency pairs to do what they are doing. It is caused by TECHNICAL ANALYSIS. Most traders trade based on TECHNICAL ANALISIS, thus fullfiling itself. there are also FUNDAMENTAL things like NEWS, ECONOMIC DATA, look at the EMPLOYMENT DATA, EMPLOYMENT DATA or any other HIGH TIER data can have a profound effect on MARKETS. look at CONSUMER SENTIMENT. the guy on the video is nuts. Inflation is not caused by normal middle class white people rioting in banks.
AEVautomatic 1 year ago
if you guys try to speculate in currency markets with what this noob tells you will will take it in the arse big time. If you want to learn what really causes currencies to change value then message me. Dont worry no ""magic rainbows across america"
AEVautomatic 1 year ago
wow 1 big factor in inflation is CENTERAL BANKS. Other things are like economic data ect effect the value of a currency. dont see what "a magic rainbow across America" has to do with that. How are "magic rainbows" related to inflation anyway?
AEVautomatic 1 year ago
this video is weird
AEVautomatic 1 year ago
lol i dont think the markets will respect you. Do you even have advanced calculus memorized? You should if you want to talk about inflation in everyday terms for the illiterate. So they can rely on what they are told so the markets will respect what they learned.
AEVautomatic 1 year ago
super dude
abaks2000 1 year ago
good points. We need a gold standard and monetary stability. The great depression was also perpetuated by government spending and involvement just like now.
casienwhey 1 year ago
Is deflation as bad as inflation? would deflation be a progressive tax that helps the poor? Also in you're video on the Great Depression, you said that under FDR the value lost 40% of its value from 1933-36. But in 1929 deflation was taking effect, does this explain why GDP droped in '29 but rose in '33? You often say that GDP is a useless measure.
interstate317 1 year ago
@interstate317 No, because deflation destroys jobs. The money supply must be kept at equilibrium for everyone to prosper as much as they can.
shanedk 1 year ago
@shanedk, plasma screens cost $10,000 less than 10 years ago. Now shops can barely get $700 for them. Overall, no jobs were destroyed in the process.
Prices fell accross the board on all goods and services during the 19th century in the USA, at the same time the economy boomed.
Falling prices are good. It gives savers more purchasing power and gets rid of their need to speculate on assets in order to keep their money's value.
This clip by I. Schiff explains this well: /watch?v=bFxvy9XyUtg
imre1000 1 year ago
@imre1000 Well said, with the caveat (explained in the video) that it's a different case if the prices fall because the Fed removes money. In the cases that you mentioned (and I pointed out in the video), the falling prices mean that capital has been freed up and can now be used for other purposes, increasing wealth. That's different from deflation, where it's just gone.
That's why I say it's a mistake to go for price stability. The money supply should be at market equilibrium.
shanedk 1 year ago
@shanedk, what does that mean, 'at market eqilibrium'?
Do you think the money supply should be increased?
imre1000 1 year ago
@imre1000 The same thing it always means: at the intersection between supply and demand.
shanedk 1 year ago
@shanedk, farmers & consumers control the supply of wheat. They can make it with their hard work, seeds, water etc.
Who or what do you think should control the money supply, and how?
imre1000 1 year ago
@imre1000 The market can actually do it quite nicely, if you have a commodity based currency, and the commodity is something in a limited, but not too limited, supply, is fungible, holds value well, and can be easily exchanged. (Commodity based money is really just certificates that can be exchanged for a specified quantity of the commodity on request from from specified brokers.) Gold does all this very nicely.
evensgrey 1 year ago
@evensgrey, I agree. But I didn't understand if this what the author of the video meant too.
imre1000 1 year ago
@imre1000 AFAICT, that's precisely what Shane means. That's definitely the kind of money he advocates.
evensgrey 1 year ago
@imre1000 Everyone. That's what the gold standard allows us to do.
shanedk 1 year ago
Complete drivel. How can inflating money supply cause increase in prices if beforehand does not increase purchasing power? Inflating money supply must first increase incomes and only then can it generate price increase in good and services measured by CPI assuming supply of those same goods and services is not elastic enough to cover increasing demand. Those neoclassical “economists” are peddling such complete crap it newer fails to amaze me how many people fall for it.
ZoneofA 1 year ago
@ZoneofA 1) Because you have a larger amount of money chasing the same amount of resources.
2) This is COMPLETELY backwards. Inflation goes to wages LAST. That's why it's effectively a tax. The price increases come first.
shanedk 1 year ago
@ZoneofA prices go up first and THEN businesses start increasing their wages they pay to their employees in response to the increase in prices.
Fernoe 1 year ago
@Fernoe Not only that, but wages are "stickier" than prices. Prices can fluctuate week to week, day to day, or even sometimes minute to minute. How many people can negotiate a new wage every week, day, or minute? They'll always be lagging behind.
shanedk 1 year ago
This is a good explanation on inflation... The most important quote here is "The government should not be striving for price stability, but monetary stability".
Ben Bernanke is doing the opposite,,, he's striving for Price stability... Ben Bernankes policy will end in disaster....
bjarnet3 1 year ago
nice explanation are you a teacher lol like the illustrations and subtitles
dedreviil 1 year ago
when you say monetary stability and not price stability, do you mean that there should be no money printing at all or no expansion of money supply? wouldn't that lead to nominal price decrease of goods over time? and if that happens, how do u measure say, the success of a business, which depends very much on comparing nominal figures? i think keeping nominal prices stable is important for simplicity's sake, and of course to make your balance sheets look better.
tetleydidley 1 year ago
@tetleydidley Supply and demand works for money, too. The price and quantity of money should be allowed to seek equilibrium, just like everything else in the economy. That's why a gold standard works so well.
shanedk 1 year ago
@shanedk but gold, like any other resources are limited too, and i must say much more limited than paper. how do you seek equilibrium then with something such as gold, where the supply is often limited, and new supplies can only be obtained by mining new gold. paper money is good - because there are plenty, just overprinting it is not. don't you think? or do i not get the gold standard concept?
tetleydidley 1 year ago
@tetleydidley Learn basic economics: you seek equilibrium with resources that ARE limited. Paper money is bad BECAUSE there's plenty of it.
shanedk 1 year ago
@shanedk i may need to learn basic economics but you need to learn common sense. the fact is gold is used for other things and if you turn it into money then you're competing with those uses. also gold can't be turned into small denominations as easily as paper. gold is heavier than paper.
tetleydidley 1 year ago
@tetleydidley Appeal to Common Sense is a fallacy. If you knew how the gold standard works, you'd know that you WANT your commodity to be useful for somethings other than money.
shanedk 1 year ago
@shanedk i also don't think that there's enough gold to buy all stuffs on earth, unless gold becomes much much much more valuable than it is now, thereby competing with other more useful uses of gold, such as in electronic components, jeweleries etc.
tetleydidley 1 year ago
@tetleydidley Why do you think there's one and only one value that gold has when attached to everything else?
shanedk 1 year ago
@shanedk there's one and only one value that everything has when attached to everything else, not just gold. why do you think I can exchange two oranges with a bottle of water? and you didn't answer my question. you pretend that gold is all good. paper is plenty yes but it is not unlimited. gold is very limited sooner or later you just won't have enough gold. jeez..
tetleydidley 1 year ago
@tetleydidley It's not even paper anymore! It's just numbers in computers! What's the limit on that? 64-bit ints?
shanedk 1 year ago
@shanedk i don't know how many bits it can support but recently i read in the paper that ATMs in Zimbabwe showed integer overflow error when someone tried to withdraw his/her money. LOL. electronic money is even better, cheaper and more efficient. anyway my point is no matter what money you use, paper or metal, you just can't grow the supply too fast or too slow. you say gold is good but you don't say why or how it could work. appeal to nonsense is an even bigger fallacy. make a video bout it.
tetleydidley 1 year ago
@tetleydidley Already have. See my video, "What is money?"
shanedk 1 year ago
This is the most truth however it is missing one element how this inflation effects the rest of the world and not just American people. I am Canadian and well when your government goes to the press to produce money which doesn't exist your dollar becomes worth less. They can't pay back the national deficit either. They in fact can't even make your interest payments. They are borrowing right now to pay the interest on what they owe to other countries like Canada and especially China and Japan.
lucy9359 1 year ago
@lucy9359 Anyone still owes money to Japan? I though they liquidates pretty much all their overseas investments when they had the meltdown caused by the phony accounting and suddenly had to pay back all the stolen money.
evensgrey 1 year ago
@evensgrey That is how evil and crooked this generation of leaders are they will still consider these shiesters worthy of pay back!
lucy9359 1 year ago
@lucy9359 Well, if they DO happen to hold any valid securities, then they ARE due repayment. You don't just renege on a commitment because the other party is composed of crooks. Not reneging on deals is an important difference between the crooked and the honest.
evensgrey 1 year ago
Ok, now that just makes sense. Thanks
grocerygurus 1 year ago
Shane, a comment by nonantianarchist was marked as spam.
Can you unmark it?
Surhotchaperchlorome 2 years ago
For some reason it doesn't show up as spam when I click on "view all comments".
Odd...
Surhotchaperchlorome 2 years ago
"Many people predict inflation due to the recent bailouts, stimuli, and record money printing by the Fed. Yet, some of these same people predict continued depreciation in residential real estate."
It might not depreciate in nominal (dollar-valued) terms, but it is likely to depreciate in real terms (that is, it is less valuable relative to other goods and services in the economy).
It is likely to depreciate because it was highly overvalued due to the asset bubble inflated by the fed.
nonantianarchist 2 years ago
I learned more in this video than I did during all of eighth grade economics class.
Omnywrench 2 years ago
@Omnywrench They don't teach much in 8th grade in most places. They COULD (I'm pretty sure you should be able to teach calculus to most 5th graders if you taught them math in a reasonable way) but that doesn't suit the government agencies that like to grow their systems.
evensgrey 1 year ago
This is a good video, but I have one question, why do wages/salaries rise slower than prices during inflation?
BloodiCheeseCake 2 years ago
Think of what it takes to raise prices. Gas stations can do it several times a day. Restaurants have to print up new menus, so they only do it every few weeks. How often do you negotiate a new salary with your employer? Do you meet every morning to discuss your salary for the day? Do you go to him every hour and discuss your pay for the next hour?
shanedk 2 years ago
"why do wages/salaries rise slower than prices during inflation?"
In general, new money enters the economy in the credit markets (through federal reserve loans and commercial bank money creation) or through government spending, so it raises prices for "hard" assets first, followed by prices, for goods produced with those assets, and only after a while reaching the wage-earners. As a result, inflation tends to put wage-earners on a treadmill, constantly fighting an inflationary disadvantage.
nonantianarchist 2 years ago
In short, because it reaches the waged and salaried workers last.
:P
Surhotchaperchlorome 2 years ago
@Surhotchaperchlorome
More or less.
nonantianarchist 2 years ago
And what Shane said, too.
nonantianarchist 2 years ago
I live in Canada and what he is talking about has already happen here. There fore I get it. I am an employer. The wages can't go up in fact you lay off as you don't have any money because you have had to borrow it all just like he said. The average house price here since 1980 went from $68,000 to $306,000 while the average wage hasn't changed. Groceries tripled in price in the last year. What you could buy for $1.00 then costs $2.43 now. There fore where are we as employers suppose to get money?
lucy9359 1 year ago
Remember that inflation is a monetary thing, not a price thing. It makes perfect sense that inflation--which steals wealth from most people, particularly the poor and middle-class--would result in reduced demand for that kind of service. People want reliable forms of wealth storage, like gold.
shanedk 2 years ago
Didn't Milton Friedmon get the nobel prize for showing that?
Surhotchaperchlorome 2 years ago
Or was that F.A. Hayek?
Aw well, one of those two.
It's such a shame that Ludwig von Mises didn't get the Nobel Prize in Economics.
We all know he was MORE than deserving of it.
Surhotchaperchlorome 2 years ago
Just a clarification - if it's addressed elsewhere feel free to yell at me =)
'money' is obtained through the federal reserve as a loan. So it is already worth less than its nominal value. On top of that, there is interest to be paid off. Now, I watched 'zeitgeist addendum' and was a bit lost when it claimed that loans need to be paid off with new loans, perpetuating a problem similar to paying credit card debt with credit cards.
piecharthosen 2 years ago
My question is this: paying off the national debt and its interest doesn't have to solely rely on further loans, right? Because if it does, the loan can never be paid off.
I was wondering how the GDP factors into this. My hypothesis is that increasing production of goods/services for export has the benefit of...how should I phrase this: shifting the debt to other countries. That way the national debt can be paid off without new loans.
Is this accurate?
piecharthosen 2 years ago
It depends. Most of the national debt is held by the government to itself. The government can just forgive its own debt and tear up the bonds anytime they want to.
It's bonds held by others that are the problem, but since bonds are negotiable all they have to do is buy them at the market rate and then destroy them, thereby absolving themselves of the future obligations.
shanedk 2 years ago
To add to your point about the Great Depression's deflation, we were also on fractional reserve banking (Government backed), which meant that as people withdrew their money, for every dollar they took out, ten dollars were effectively taken out of circulation, making the problem even worse.
Surhotchaperchlorome 2 years ago
Remember that LaughingMan/AnarchistCain dude?
I watched a video with a guy saying that inflation is an increase in the supply of money.
That's only half correct though.
Both this guy and LaughingMan are leaving out the DEMAND portion of it, which you take into account here.
Surhotchaperchlorome 2 years ago
It is true, though, that you don't have long-run inflation without an increase in the money supply.
shanedk 2 years ago
Well, true.
I'm just saying that it is possible to have an increase in the money supply without resulting in inflation.
Case in point: the free banking era, when prices actually dropped while the money supply slowly increased.
(My source was a video by ConfederalSocialist. I'd show it you to if he wasn't banned...)
Surhotchaperchlorome 2 years ago
It kind of depends on how you define "inflation". Classical economists recognized inflation as an increase in the money supply, and price "inflation" of certain goods as a possible consequence (if the amount of money increased faster than the output of said goods).
Btw, I think you can still see confederalsocialist's video on free market money on the the channel CSMIRROR.
nonantianarchist 2 years ago
I define it as it was defined in the video: as an decrease in the value of money.
Surhotchaperchlorome 2 years ago
Thanks for pointing out the video.
I couldn't remember the name. :)
Surhotchaperchlorome 2 years ago
"...you don't have long-run inflation without an increase in the money supply."
Which implies that the long-run demand for money is constant.
Surhotchaperchlorome 2 years ago
The long-run demand for money is relatively constant, provided that there isn't massive monetary uncertainty. The demand for money might slightly increase as the rate of real economic growth relative to money supply increases, but in general the long-term demand for money is fairly constant.
nonantianarchist 2 years ago
Honest question: Then how do we explain this: /watch?v=zzHXH97j2iI ("Free Market Currency" by CSMirror), from about 3:11 onward?
Mainly the figure posted at that time.
Surhotchaperchlorome 2 years ago
OK, I just did some math, and found that assuming that the decrease in prices was due exclusively to the freeing up of capital, it would mean an average yearly growth rate of about 4.6%, which makes sense.
So what are your thoughts on this?
Surhotchaperchlorome 2 years ago
Which video?
nonantianarchist 2 years ago
This has been flagged as spam show
/watch?v=zzHXH97j2iI ("Free Market Currency" by CSMirror)?
Surhotchaperchlorome 2 years ago
Him: Fuck the Federal Reserve.
Me: NO DON'T!
Him: Why???
Me: You don't know where it's been. You might get an STD.
Him: O.o
Me: Or worse, you might get an FTD: Federally Transmitted Disease!
Him: SH*T!!!
:P
Surhotchaperchlorome 2 years ago
your vids are a breath of fresh air. keep expanding my brain brother!
thedelta88 2 years ago 6
we need to just burn the fed to the ground. Evil Devil institution.
Luigi84289 2 years ago
Nah, don't burn it to the ground...sell it and use the proceeds to pay down the National Debt.
shanedk 2 years ago
i really believe that the real cause of depressions is the federal reserve. it creates money out of nothing
allison8914 2 years ago 5
That and fractional reserve banking.
Surhotchaperchlorome 2 years ago
I think I finally understand. The less money in circulation the more valuable and more purchasing power it has, but less people have it. Which means less jobs? If you inflate the currency prices go up and more people have it? (Assuming the real value is constant)
Nogard229 2 years ago