The Declining Dollar Erodes Personal Savings

[camberiu]

Quote:

Originally Posted by brewer12345 Really? I seem to recall some truly ****ing gut-wrenching recessions and obviously runaway growth periods before the creation of the Federal Reserve. You know, like that minor episode in Merkin history known as the Great Depression?

You need to review your history. The Federal Reserve was created on 1914. The Great Depression came to be in 1929. Also, two economy nobel prize winnes (F.A. Hayek and Milton Friedman) and even the current Fed chairman, Ben Bernanke, made some very compelling cases that it was the actions of the newly created Federal Reserve that CAUSED and/or EXTENDED the Great Depression of 1929 in the first place.

[laurence]

Brewer touched on the key point here. *They aren't operating in synch with reality. *Wouldn't socialism be great? *Each according to his need, yadda yadda, world peace, lovely. *Except people are human, greed exists, the desire for power will not be extinguished. *

Democracy is the worst system of government, except for all the others

Capitalism is the worst economic system, except for all of the others

The Fed? It's fun to demonize, but imagine where we would be if nobody had confidence to store their money in a bank. *Where would investment and innovation be if everyone kept their money (or gold coins) in a jar buried in the back yard? FDIC, the Fed, the SEC, these things add stability and confidence to the markets. *Markets hate uncertainty, and I am convinced we would have had another 1929 stock market crash if they didn't exist. *It took a generation for people to begin investing again, how much growth would have been lost if we had 1929 rev 2.0?

[brewer12345]

Uhoh, the filthy moetarist cabal has gotten to Laurence, too. Don't let him near your gold coins or tinfoil hat.

[justin]

I have a gold hat.

[Maximillion]

Canada has No Defecit has a Policy of paying off its' Debt with Suplus,a nd all Governments are required to balance their budget.

I am always amused by American's who utter "Socialism" as if it some bad word, pronounce themselves as proud Capitalists, then discuss Medicaire and Social Security, as well as Welfare and Government Housing.

A National Daycare Programme, One Year Maternity/Paternity Leave, these are bad ideas??

A visitor to TO once asked where all the Street people were, the answer was they are put in cupboards after 8 o'clock.

[brewer12345]

Quote:

Originally Posted by Maximillion A visitor to TO once asked where all the Street people were, the answer was they are put in cupboards after 8 o'clock.

Not true. They are actually made into stew and served at the gummint run daycare centers.

[ladelfina]

"The Road to Serfdom" is an excellent book that should be in everyone's library. Laurence, I don't know why you are bringing socialism into it. Hayek was an ANTI-socialist.

I can't really understand why you are all ganging up on camberiu?!? I have no idea who Ron Paul is but I think it's funny that so many ER's or ER-wannabes think deficit spending is somehow necessary on a government level, while every third post on this board is about the general public's massive personal debt, overspending, undersaving, and general ignorance of basic finance.

Interestingly, the Euro zone (with the Maastricht treaty) put a deficit cap at 3% of GDP. Admittedly, countries have gone over their limits, but this is generally viewed as a "bad thing". Meanwhile, would anyone disagree that even this fig-leaf of deficit control has allowed the euro to outpace the dollar?

As far as Japan goes, they have debt probems worse than ours:

[brewer12345]

Without a doubt, the USD is going to be under pressure as long as we keep borrowing so much from overseas. But that doesn't mean that gold, gold!, GOLD!!! is the answer.

[laurence]

ladelfina, I'm not calling anyone a socialist, if fact my point was that if human nature could be relied upon, socialism could work. But alas that's not people.

I have a lot of thoughts on this, but I'd have to dig out my Econ books I kept from college and do some fact checking, and explain my explanations, etc. and I'm just not up to that.


For the record, camberiu seems like a perfectly nice guy, I just disagree with him. These types of arguments were brought up back in the late 70's and early 80's, then we had 20 years where they were forgotten as we had unprecedented success with our current system. Now that we have another challenging time, everybody blows the dust off the old manuscripts and starts preaching again.

[brewer12345]

Yeah, I am mostly just pulling camberiu's tail because I am A) sick of working on big spreadsheets while it is nice outside and B) somewhat tired of hearing about how gold can cure cancer.

[HFWR]

So, if you have a fixed amount of currency, tied to gold/beaver cheese/kayaks, and the economy grows larger, it means you have fewer "dollars" chasing more goods/services. What doth that wrought?

[johnlw]

Just to add a little more fuel to the fire, let’s establish that Alan Greenspan is also a member of the “tinfoil hat brigade” :

http://www.usagold.com/gildedopinion/Greenspan.html

[Maximillion]

For the record, this has been one of the more intelligent posts at this site.

Well thought out and reasoned arguments without too much scurrilous behavior.

brewer, Gold, Muskets, Scotch whiskey, the important thing is that some measure must be installed to protect us against Politicians who just want to print money to buy their jobs.

[laurence]

Quote:

Originally Posted by HFWR So, if you have a fixed amount of currency, tied to gold/beaver cheese/kayaks, and the economy grows larger, it means you have fewer "dollars" chasing more goods/services. What doth that wrought?

You get deflation, and people hoarding their dollars in anticipation of cheaper goods tomorrow, and nobody willing to invest in any business or industry, and a halt of growth....

[d]

Quote:

Well thought out and reasoned arguments !?

is this in reference to the various posts in this thread? if so, I think you're about 50% right correct.

[camberiu]

Quote:

Originally Posted by Laurence You get deflation, and people hoarding their dollars in anticipation of cheaper goods tomorrow, and nobody willing to invest in any business or industry, and a halt of growth....

According to this logic, no one should be buying computers and electronics (everyone holding their dollars in anticipation of cheaper goods tomorrow) and companies like SONY, Compaq, HP and IBM would not be investing on cheaper and faster computers, video games or larger LCDs. After all, the computer/electronic business are in constant state of "deflation". Please read "The Blessings of Deflation" by Llewellyn H. Rockwell Jr. for a different point of view.

[Maximillion]

No Laurence, you get more production of the things that money will buy.

[perinova]

that's the big problem about deflation. people staying oin the sideline.
but the problem is the opposite for inflation.

what you do depends on how you anticipate the prices to be tomorrow (just like stocks).

everyone knows about the computer deflation. since they are always coming with better stuff the new one is more expensive, production costs are high and there are people out there willing to pay premium for the latest stuff.
older products are discounted at low margins for the tighwads.

I personally wait a bit before getting the latest technology. while fun those new things always break down more and do not always run smoothly.

deflation is not quite the same thing as obsolescence and new technology introduction: it is due to overproduction (thanks Maximillion) and companies desperate to offload products.

[camberiu]

Quote:

Originally Posted by perinova everyone knows about the computer deflation. since they are always coming with better stuff the new one is more expensive, production costs are high and there are people out there willing to pay premium for the latest stuff. older products are discounted at low margins for the tighwads.

It is not quite like that. There is REAL deflation on the computer business. This is what killed companies like Sillicon Graphics, Cray and it is what is killing Sun Microsystems. There is hardly any need for high end computers anymore, since the low end stuff is almost as powerful (if not more). Computers used to be a VERY high margin business, today even the most expensive top of the line ones are a little more than a commodity. It is so true the the Playstation and Xbox are sold at a LOSS. The manufacturer "hopes" the recoup the money via software sales. Very different from the late 80s when SNK would sell its Neo-Geo system for the price of a Yugo and have a 45% profit margin.

[perinova]

camberiu
we pretty much said the same thing. I personally would not call that deflation because there is still high demand for products just not the same one. the new products are more expensive and there is no over production (or is there? - I don't follow the computer industry that much)

there sometimes overcapacity for specific high tech products when competitors abound (ie wireless or optoelectronics industry post 2000)