Monetary Madness

[Esoparagon]

Destroy wealth creation for the sake of a flatter graph. It's not worth it. The economy doesn't need to be controlled. It's megalomaniacal and authoritarian to want to control it.

[justnotcricket]

I wish you were my grandad :)

Anyway, we have a property bust every 15/17 years over here. Having grown up during the madness that is a property bubble, has impressed upon me the seeds of the idea that 'free markets' are a politically constructed nonsense...

...which leads me to ask: what makes you think policy makers want economic stability, let alone think it a virtue?

[junior00bacon00chee]

I am convinced that economics cannot possibly be a natural science (and is rather a logical science like mathematics or geometry). This is because the degree to which people value things cannot be measured in any objective way (experience is private). Since a natural science requires objective measurement, economics cannot be a natural science.

Rather, the entire corpus of economic science can actually be deduced from a single axiom (and one postulate).

[junior00bacon00chee]

Oscillations in price are the inevitable result of living in a dynamic world. Over longer timescales however the overall trend should be for prices to decrease as the scarcity of goods decreases relative to the money supply. The large oscillations are the result of the controllers distorting the market by manipulating certain prices, such as the interest rate (which means supply and demand can get moreso out of synch).

Centralized control of markets leads to economic chaos and depotism.

[artynz]

I don't see any reason why scarcity should decrease. Population rises and resources shrink. Malthus worked this all out centuries ago. But no-one wants to know. Everyone expects endless economic growth. Long term that is distastrous.

I agree that centralized (attempts at) control of markets leads to all manner of problems.

[junior00bacon00chee]

Productive capacity increases thanks to the global division of labor, capital accumulation (savings), and technological advancements.

As the population grows the demand for scarce food increases, and, all things being equal, puts an upward pressure on food prices, which incentivizes greater food production (b/c of the higher profit margins).

[junior00bacon00chee]

As long as there are no forced barriers to entry on markets, the profit margins will tend to diminsh towards zero (but never reach it) as more entrepreurs shift capital towards food production and away from other areas. So, the increased production as a response to demand will put a downward pressure back on the prices.

What we see today is that population levels actually level off and become slightly negative in developed countries, as far as i understand.

[junior00bacon00chee]

So I believe that if the economies of the world were actually aloud to develop under the prevailing condition of human freedom, that population levels would initially increase rapidly in underdeveloped areas but then level off the as the global standard of living tended to equalize and increase for everyone.

Under oppressive centralized regimes capital accumulation becomes capital destruction, and w/o savings they lack the means to actually raise their standard of living.

[essmatl]

artynz wrote "I am surprised that no-one has realized this before."

Mayhap someone did, but had no voice. Mass media simply reports orthodoxy. YouTube, Google video, and the like, allow the unorthodox to be heard. That is what has been changed by the Internet.

I believe my fixed-income financial future is doomed, as I believe hyperinflation is a likely possibility on the reverse swing of the economic pendulum.

[artynz]

Essmatl, I agree that internet has allowed people to speak on things like never before. We don't know how long it will last with a small number of companies buying up everything.

Although there will be some follow on from the present crisis, I don't believe that we are in a situation that is anything like the great depression as some people think. The medium term outlook is good I think.

[shrunkensimon]

Ray, i agree with what the other two posters have put, although i would say it is more like they are pushing the swing as you described it, at correct moments. This amounts to conspiracy, and it is undeniable IMHO.

You can't fully control the economy. Its a organic system. However, if you control media, industry and the education system, you don't need to be able to control the economy 100% to create the illusions you wish.

[artynz]

These remarks would be more relevant to the video I posted the day before this one, dealing with the financial crisis.

I agree that you cannot fully control the economy. This video is aimed at explaining that you cannot achieve much of use to anyone with moneterism as a matter of mathematical and scientific fact. I am surprised that no-one has realized this before.

[Psychogenius018]

The world economic crisis is not the result of things going "wrong". This crisis took years to engineer and has gone very right. Banksters made billions selling illegitimate and illegally rated derivatives and then printed up billions more for themselves for "bailouts" as they bought up the world markets they subsequently crashed for pennies on the dollar. BRILLIANT!!!!!!

[artynz]

You are arguing for conspiracy rather than incompetence. There may well be a large element of that. See my video posted yesterday which is more related to the financial crisis.

This one is about the complete impossibility of moneterism working. That applies at all times and in all countries and so goes beyond whether theer is conspiracy or not.

[linuxaddict11111]

so what you're saying is that the US economy has instability built right into the system? to me this lends credibility to the idea that what we are now experiencing is a controlled financial demolition, 9/11-style. i enjoy your posts. -la

[artynz]

All economies are perturbed by external events. They have some degree of natural stability and will mostly return to a neutral position and oscillate a bit after a nudge. Much like the case of bumping someone on a swing. But the government actions prevent the oscillations dieing down. And they waste trillions of dollars doing that. Such a sad thing to do.